A New Era for Efficiency: Part One

In June 2021, the energy efficiency industry in New Jersey hit a milestone. After years of discussion and negotiations, all of the state’s energy utilities finalized plans to invest in energy efficiency programs. These programs will result in significant savings for New Jersey ratepayers—and significant business opportunities for the energy efficiency industry.

You’d be forgiven for not knowing that these developments occurred over the past few months. Some proceedings before the BPU haven’t been open to the public, and others simply haven’t been covered in the news. But at EEA-NJ, we think they’re important topics for both the general public and EE industry insiders.

That’s why we’re launching a blog series covering what these programs mean and how our members can continue to shape EE policy in New Jersey. Part 1 is a timeline of our involvement in crucial BPU proceedings. Read on to learn: Where Have We Been, and Where Do We Go Now?

Spring 2018: Murphy Signs the Clean Energy Act

Governor Phil Murphy signed the Clean Energy Act in 2018. In addition to enacting one of the nation’s most ambitious renewable portfolio standards, the Act mandated a 2% annual reduction in electricity usage and a .75% reduction in natural gas usage among the state’s biggest utilities. Energy efficiency providers—including many founding members of EEA-NJ—applauded this step towards a more efficient future.

But the devil’s always in the details. And there are a lot of details when it comes to energy efficiency policy. Since 2018, New Jersey’s Board of Public Utilities (the BPU), electricity and natural gas utilities, ratepayer representatives, and other stakeholders have strived to transform the Clean Energy Act’s broad efficiency mandate into specific and implementable EE programs.

2018-2020: EEA-NJ Advocates for the EE Industry

After the Clean Energy Act became law, the BPU started gathering stakeholder input on what these programs should look like. And EEA-NJ started sharing comments and testimony.

Our goal? To ensure that the energy efficiency providers who will do much of the Clean Energy Act’s on-the-ground work have their voices heard. With a broad coalition of ratepayer groups and clean energy advocates, we’ve pushed the BPU and utilities to design efficiency programs that reduce energy use, create jobs, and lower utility bills.

You can read many of the comments we shared with the BPU and the Governor’s office here. Our advocacy focuses during this period included:

• Symmetrical Rate Decoupling. Historically, utilities make the most revenue when they sell the most energy—which disincentivizes their participation in energy efficiency programs. Rate decoupling changes utility revenue structures to incentivize, rather than punish, meaningful participation in efficiency programs.
• Fair Financing for EE Investments. Utilities investing in traditional infrastructure projects, such as replacing a natural gas line, enjoy financing tools that recognize benefits generated across the project’s lifespan. Energy efficiency projects need access to these incentivizing finance terms, too.
• Accurate and Meaningful Performance Indicators. Oversight and evaluation is necessary to determine whether these programs are effective. EEA-NJ advocated for the performance metrics that best measure meaningful energy efficiency progress.

Our participation paid off. Each of these important topics were addressed in the recently released utility settlement documents.

2020-2021: The BPU Issues a Board Order, and EEA-NJ Intervenes

On June 10, 2020, the BPU released a Board Order describing mandatory features for utility EE programs. The utilities got to work. Three months later, they began sharing draft programs in BPU dockets.

EEA-NJ filed motions to intervene in several dockets. Recognizing the stakes EEA-NJ members had in the proceedings, the BPU granted our motion.

EEA-NJ got a seat at the table during months of closed-door legal negotiations between utilities, the BPU, and other stakeholders. We monitored and participated in these negotiations to protect our members’ interests.

Spring and Summer 2021: Utility Plans Are Finalized and Programs Are Launched

By mid-June in 2021, all utilities had settled with the BPU. The resulting settlement documents describe how utilities will operate their energy efficiency programs over the next three years. Some settlement documents from utilities and the BPU will be publicly available. Others are only available to the BPU, utilities, and intervenors like EEA-NJ.

For EEA-NJ and our members, finalizing these settlements has been an occasion to celebrate what we’ve achieved under the Clean Energy Act so far. But it’s hardly time to stop paying attention. There are plenty of opportunities ahead for us to shape energy efficiency programs in New Jersey.

EEA-NJ was invited to sit on two of the four BPU Working Groups assembled to advise on the rollout of utility programs. Through our seats in the Equity Working Group and the Workforce Development Working Group (which are closed to general public participation), we continue to advocate for the energy efficiency industry in New Jersey.

Participation in these groups matters. Their guidance will help determine best practices for the new utility programs, which began rolling out July 1 and continue for the next three years. After that, utilities must file renewed EE programs with the BPU. Input from the Working Groups and stakeholder meetings will help shape standards and requirements for this next round of programs.

What Comes Next:

Anyone who cares about energy efficiency in New Jersey can join monthly meetings of the BPU’s EE Committee. But if you’re an EEA-NJ member, you have other opportunities for participation, too.

We hold a monthly virtual forum for members who do business in NJ. EEA-NJ members use these ad hoc committee meetings to hear the latest on the EE programs and collaborate on recommendations for the Working Groups. EEA-NJ staff use them to share Working Group and program updates, hear member insights and comments, and funnel member feedback to the BPU Working Groups.

Can’t make the next ad hoc committee meeting? Just contact Policy Counsel John Kolesnik (jkolesnik@eeaofnj.org) to share your thoughts.

Not a member? There’s a fix for that, too. Contact Business Engagement Manager John Young (jyoung@eeaofnj.org) to learn about the many benefits of EEA-NJ membership.