an energy efficiency strategy for new jersey: achieving the energy master plan goals

An Energy Efficiency Strategy for An Energy Efficiency Strategy for New Jersey: New Jersey: Achieving the Achieving the

Energy Master Plan GoalsEnergy Master Plan Goals

Presentation to the:Presentation to the: NJ Board of Public UtilitiesNJ Board of Public Utilities

By: Sue Coakley, Executive DirectorBy: Sue Coakley, Executive DirectorNortheast Energy Efficiency PartnershipsNortheast Energy Efficiency Partnerships

April 16, 2009April 16, 2009

NJ 2020 Energy Efficiency StrategyNJ 2020 Energy Efficiency Strategy

Background Results Report Structure Recommendations Next Steps 20% by 2020

NJ 2020 Energy Efficiency Strategy: NJ 2020 Energy Efficiency Strategy: BackgroundBackground

Governor Corzine’s 2008 Energy Master Plan:

“Place New Jersey at the forefront of a growing clean energy economy with aggressive energy efficiency and renewable energy goals and action items, and the development of a 21st century energy infrastructure.”

20% by 2020Goal 1: Maximize Efficiency - Reduce projected energy

consumption by 20% by 2020

http://nj.gov/nj/trans/http://nj.gov/nj/trans/


Energy Efficiency Strategy Purpose: Achieve the 2020 Master Plan energy savings

goal cost-effectively and expeditiously Develop a “best in class” program portfolio to

overcome market barriers to cost-effective energy efficiency

20% by 2020


Approach: NEEP team of national experts Address all customer sectors, all fuels, all demand side resources Build on experience of successful programs in New Jersey and other

states and regions

20% by 2020 Stakeholders to guide development –

provide data and perspective Cost-effectiveness assessment to

support strategies

NJ 2020 Energy Efficiency Strategy: NJ 2020 Energy Efficiency Strategy: BackgroundBackgroundParticipants:

Stakeholder Comments: Gas and electric utilities + NJUA Office of Ratepayer Counsel Rutgers CEEEP NJ Homebuilders Isles, Inc CMC Energy Associates

20% by 2020

Project Team:• NEEP • Dunsky Energy Consulting• Vermont Energy Investment Corporation• Optimal Energy Inc. • North Atlantic Energy Advisors• Ecos Consulting• Applied Energy Group

NJ Assoc of Realtors NJ Apartment Owners Assoc NAESCo Assemblyman Chivukula Assemblyman McKeon NJ Institute of Technology Fuel Merchants Assoc. of NJ NJ Business & Industry Assoc. Alliance to Save Energy The E-Cubed Company

NJ 2020 Energy Efficiency Strategy: NJ 2020 Energy Efficiency Strategy: ResultsResultsEfficiency Strategy Meets or Exceeds Energy Master Plan Goals

20% by 2020

Energy Master Plan 2020 Goal‡

Energy Efficiency Strategy

Portfolio*

% of EMP Goal

Electric Energy 14,000 GWh 17,800 GWh 127%

Electric Capacity 3,300 MW 6,400 MW 194%

Other Energy 75,000 BBTUs 74,000 BBTUs 99%

‡ EMP energy efficiency program goals ONLY EMP efficiency programs adjusted for the impact of new federal incandescent lamp standards* Considers only efficiency programs and building energy rating policies). Excludes on-site power

NJ 2020 ENERGY EFFICIENCY STRAGEGY: NJ 2020 ENERGY EFFICIENCY STRAGEGY: RESULTSRESULTS

Efficiency program portfolio nearly meets total electric reduction goal. Codes + standards necessary to meet goal.

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GWh

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Cumulative Electrical Energy Savings(and on-site generation)

Homes & Products

14,000 GWh EMP

Efficiency Program

Goal

17,000 GWh EMP Total

Electric Reduction

Goal


Efficiency program strategies can exceed EMP peak reduction goals.

5,700 MW EMP Peak Reduction

Goal


Combined heat and power is important to meet EMP heating savings goal. Codes + standards necessary too.

110 trillion BTUs EMP Heating Savings Goal

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BBtu

Cumulative Non-Electric Energy Savings

75 trillion BTUs EMP Efficiency Program Goal

NJ 2020 ENERGY EFFICIENCY STRAGEGY: NJ 2020 ENERGY EFFICIENCY STRAGEGY: RESULTSRESULTSEfficiency Strategy (w/o CHP) provides NJ consumers $16.8

billion in net savings (present value 2008 dollars).Benefit:Cost = 2.6

$28 billion total

savings

$0

$5 000 000 000

$10 000 000 000

$15 000 000 000

$20 000 000 000

$25 000 000 000

$30 000 000 000

Costs (PV) Benefits (PV)

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Par

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)Direct Societal Costs and Benefits

Business & Government

Homes and Products

$11.2 billion total

investment


Savings from all customer sectors.

Homes40950Small B&G

17637

Large B&G15641

Non-electric Savings by Sector(BBtus/yr in 2020)

Homes5703

Small B&G6390

Large B&G5667

Electricity Savings by Sector(GWh/yr in 2020)

NJ 2020 Energy Efficiency Strategy: NJ 2020 Energy Efficiency Strategy: ResultsResults

Achieving EMP Energy Reduction Goals needs: Large scale effort:

30% savings in 60% of NJ homes and buildings

1.7 million homes

80,000 to 240,000 business and government facilities

Broad participation: All hands on deck A concerted statewide effort:

All fuels – electric, gas, heating oil Programs and policies

20% by 2020

$11.2 billion investment over 12 yearsVisionary, long-term leadership

NJ 2020 Energy Efficiency Strategy: NJ 2020 Energy Efficiency Strategy: ReportReport

Recommendations detailed in: Executive Summary A Foundation for Success Savings in Homes Saving Energy in Business & Government

20% by 2020 On-Site Power & Cross Cutting Strategies

Savings, Costs, Benefits

NJ 2020 Energy Efficiency Strategy: NJ 2020 Energy Efficiency Strategy: RecommendationsRecommendations

#1#1 Establish the New Jersey Energy Efficiency UtilityEstablish the New Jersey Energy Efficiency Utility

NJ BOARD OF PUBLIC UTILITIES NJ STATE ENERGY COUNCIL

Residential Program

Contractors

Clean Energy Advisory Council

New Jersey Energy Efficiency Utility Regulated Gas & Electric Companies Municipal Electric Companies Retail Fuel Oil and Propane Suppliers

Bus. & Gov Program

Contractors

GOVERNOR’S OFFICE

REGULATED GAS & ELECTRIC UTILITIES

Marketing & Evaluation Contractors

Community Initiatives

Rutgers Center for Energy, Economic & Environmental Policy


#2#2 Supportive Regulatory OversightSupportive Regulatory Oversight Long-term view in setting goals Results-oriented: financial incentives Efficiency

as attractive as other regulated investments Remove regulatory barriers to aggressive programs Streamlined regulations - accountability for results

20% by 2020 4-year plans w/ annual reports & plan

updates Budget & program flexibility to meet goals

Active ongoing stakeholder process –

stay informed, provide feedback

NJ 2020 Energy Efficiency Strategy: NJ 2020 Energy Efficiency Strategy: RecommendationsRecommendations#3 Flexible Energy Efficiency Program Strategies

Statewide programs – consistent, integrated, leveraged Serve specific market segments with customer-oriented approach

“sells” energy efficiency: Make efficiency investments attractive, affordable and accessible - cost-effective

“deal customers can’t refuse”. • Targeted marketing • Understand and address customer needs and barriers• Flexible program services and financial assistance• Whole solutions – all fuels, all cost-effective demand-side options

20% by 2020

• Incentives and financing to close the deal, maximize cost-effective savings

Use and expand existing market channels Statewide marketing campaign use social

marketing strategies, consistent messages


#4#4 Aggressive State and Local PoliciesAggressive State and Local Policies Progressive building energy codes – net zero energy as long-

term goal:• Auto update to national energy code updates• Adopt optional advanced “stretch code” • Allow third party certified inspectors

Time of Sale Building Energy Rating and Performance Strong federal and state appliance standards

20% by 2020

State and local government “Lead by Example” (e.g., 21st Century Schools)

Government leveraged financing tools State tax incentives


#5#5 Energy Rates, Prices and Usage InformationEnergy Rates, Prices and Usage Information Rate designs to encourage reduced energy consumption:

• Inverted block rates residential and small commercial • Time of use rates and metering customers with flexible loads

Bill comparisons:• Usage history relative to similar customers• Support building energy rating

20% by 2020

Sub-metering for master-metered buildings “Dashboard” products and building controls that

inform actual usage Pilot “smart” meters and devices for price-

responsive load control (“prices to devices”) Smart Grid to scale-up clean distributed

generation net zero energy buildings


#6#6 Community Initiatives to Scale-UpCommunity Initiatives to Scale-Up Community participation in NJ efficiency programs

• Improve municipal facility energy performance • Social marketing campaigns to encourage program

participation “be part of the solution”• Support door-to-door direct installation initiatives for

residents and small businesses

20% by 2020 Community-wide energy efficiency initiatives

achieve specific energy reduction goals Municipal financing property-owners repay

efficiency loans on property tax bill Community workforce development initiatives –

vocational training, community colleges, CEET


#7#7 Consistent Evaluation, Measurement and Verification Consistent Evaluation, Measurement and Verification (EM&V) (EM&V)

“Prove the efficiency resource” Maintain comprehensive multi-year EM&V plan to inform:

• Regulatory oversight of and accountability of ratepayer funding• Program planning, goal setting and budgeting; • Progress towards goals - energy, environmental, economic• Program implementation and resource allocation; • Award of performance incentives• Program participation in PJM capacity markets 20% by 2020

Fund EM&V (3-5% of program costs)Provide statewide:

EM&V protocols, tools, inputsCost-effectiveness protocols, tools, inputs

Coordinate with regional and national EM&V


#8#8 Workforce DevelopmentWorkforce Development Train and credential a wide range of green jobs:

• Engineers, architects, designers• Tradesmen and women, builders, contractors, installers• Auditor, inspectors, building energy raters• Program planners, managers and evaluators• Financial product manager

Use reach of:• Universities, colleges and community colleges• Technical and vocational schools• Community development, trade and professional

associations• Labor unions and employer training programs

Coordinate statewide – e.g., NJ Department of Labor - Industry Workforce Advisory Council

20% by 2020


#9#9 Ongoing Learning and InnovationOngoing Learning and Innovation Give NJ Efficiency Utility goals and budgets to:

• Attract creative ideas• Vet and fund promising delivery approaches • Assess new technologies and program designs controlled

studies and field trials• Improve or discontinue technologies, approaches not delivering

20% by 2020

Efficiency Utility Efficiency Technical Committee:Utilities, academia, state agencies, stakeholders Review, vet new options for cost-effective savingsComplement EMP expansion of Edison Innovation

Fund: Clean Energy Technology Commercialization Fund Clean Energy Manufacturing Fund Energy Institute of New Jersey


#10#10 Regional and National CoordinationRegional and National Coordination Efficiency ramping up across the region from $850 million in 2008 to $2

billion+ by 2011 Manage and leverage this policy convergence to:

• Build market momentum• Facilitate a culture to value increased energy efficiency• Engage the muscle and creativity of the market place• Address increased demand for high efficiency products

20% by 2020 Coordinate with relevant regional and national efforts:

• Consistent messages,• Common standards, specifications, definitions,

protocols • Share learning, R&D costs

• Many vehicles – NEEP, NASEO, CEE, ASERTTI, ASE, etc.

NJ 2020 Energy Efficiency Strategy: NJ 2020 Energy Efficiency Strategy: Transition PlanTransition PlanFinancing the Efficiency Expansion

$11.2 billion over 12 years - $6.8 billion public/ratepayer + $4.4 billion participant cost

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NJ 2020 Energy Efficiency Strategy: NJ 2020 Energy Efficiency Strategy: FundingFunding

Financing the Efficiency Expansion Ratepayer Funding: Efficiency as a Least Cost Resource increase from $16 per

capital to year up to $50 Establish non-regulated heating fuels efficiency charge Access federal funding apply stimulus funding (e.g., oil heat) Direct market-based revenues to fund efficiency

• RGGI• PJM RPM Revenues from efficiency program participation

Utility Financing – on-bill and companion bill financing

20% by 2020 Municipal Financing – “Clean Energy Tax District”

• Bond to create municipal fund for local efficiency investments

• Repayment with property tax bill• Legislation approved in CA and Colorado

NJ 2020 Energy Efficiency Strategy: NJ 2020 Energy Efficiency Strategy: FundingFundingFinancing the Efficiency Expansion Leveraging private investment:

• Energy Service Companies Performance based financing Focus: Institutional and municipal buildings

• Secured, wholesale energy efficiency loan fund Offer attractive wholesale interest rates to retail lenders Sourced by private capital Secured by the State

• Dedicated energy efficiency deposit fund State financial account deposits to a local bank Deposits exclusively fund energy improvements.

• Energy Efficient Mortgages State and Federal Tax Incentives and Credits

20% by 2020

NJ 2020 Energy Efficiency Strategy: NJ 2020 Energy Efficiency Strategy: FundingFunding

2010 as Transition Year Establish the NJ Energy Efficiency Utility concept Adjust BPU program plan, budget filing requirements and

schedules Make financial resources available to implement the plan Develop, approve a Statewide 2010 Program Plan, Goals and

Budget

20% by 2020 Transfer OCE Programs to NJ Energy Efficiency

Utility Expand CEEEP responsibilities and funding to

provide technical support to the BPU Establish a Public Policy Agenda to complement

programs

Thank YouThank You

Northeast Energy Efficiency Partnerships, Inc.

Susan CoakleyExecutive Director

781-860-9177 ext. [email protected]

www.neep.org

mailto:[email protected]

http://www.neep.org/

an energy efficiency strategy for new jersey: achieving the energy master plan goals

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