The state’s gas and electric utilities are collectively gearing up to spend at least $1.6 billion over the next three years to spur customers to reduce energy use, an investment aimed at driving down the cost of utility bills.
The investments were spurred largely by the 2018 Clean Energy Act, a wide-ranging law that sought to lay out what needs to be done to achieve the goal of the administration of Gov. Phil Murphy for 100% clean energy in New Jersey by mid-century.
For years, clean-energy advocates and even some utility executives have complained that the state is doing too little to invest in energy-efficiency programs that reduce gas and electric use and provide savings to customers at the same time.
The programs differ for each utility, but they largely focus on how to cut gas and electric usage. Programs offer rebates and incentives to residential customers for replacing lighting and appliances with energy-efficient models. Others offer energy assessments for multi-family dwellings and provide other opportunities to install energy-saving measures.
The increased spending reflects the largest ever by some of the seven gas and electric utilities in the state. (Rockland Electric’s program has yet to be approved). Utility executives say it could save customers hundreds of millions of dollars over the three years and reduce carbon emissions by millions of tons per year.
Utility customers will pay
The $1.6 billion will be repaid by utility customers on their monthly bills, some of whom will receive the savings if they choose to participate in the programs.
“This is an amazing step for New Jersey,’’ said Karen Reif, vice president of renewables and energy solutions for Public Service Electric & Gas which is doubling its investment in energy efficiency over the last 12 years.
PSE&G was the first company to win approval from the New Jersey Board of Public Utilities last September for what is still the state’s largest energy-efficiency program, totaling $970 million for both gas and electric customers.
Unlike the other utilities where programs are not expected to begin until July, PSE&G’s energy-saving programs already are being rolled out to customers, according to Reif. “We are seeing really healthy demand with a long list of customers that want to get involved,’’ she said.
BPU President Joseph Fiordaliso, whose agency oversaw development of the program, is happy with the results. “It’s beneficial to the ratepayers; it’s beneficial to the environment,’’ he said. “I really think it is a win-win.’’
So far, the three-year investments pledged by utilities range from PSE&G’s $970 million to $83 million by Elizabethtown Gas. The two primary areas where the companies will focus include more efficient products, such as lighting, appliances, and heating and cooling equipment and multi-family-units.
Praise from many corners
“This is a big change in how New Jersey used to do energy efficiency,’’ said Eric Miller, New Jersey energy policy director for the Natural Resources Defense Council, who has participated in a number of BPU filings to review energy-efficiency programs.
In New Jersey, the new law directed utilities to reduce electric use by 2% per year and gas use by 0.75%, a target many companies argued initially was too ambitious. In the end, the BPU staff adopted more aggressive goals with 2.15% reductions in the electricity sector and 1.10% in the gas sector.
In a bit of a surprise, utility executives went along with the higher goals.
“We are very optimistic we will meet those goals,’’ said Gary Stockbridge, regional president of Atlantic City Electric, which supplies power to a half-million customers in South Jersey. The company’s energy-efficiency programs project it will save customers $550 million over its three years, he said.
Others said more work need to be done. “It is a really important first step,’’ said Rachel Gold, utility programs director at the American Council for an Energy Efficient Economy (ACEEE). “They have lot more work to do.’’
In particular, Gold and others suggested the state needs to do more pilot projects in energy efficiency, such as programs to assess how customers can replace gas heating systems with electric heat pumps.