NEEP News
It is not your father's utility company anymore
In today’s NJ Spotlight, “ Does Energy Efficiency Make It Tough for Utilities to Afford Upgrades?“, Mr. Johnson is correct that “it’s not your father’s utility company anymore.”
He is wrong, however, to suggest that energy efficiency is undermining efforts to reduce energy costs and make new investments in energy infrastructure. Forward-thinking utilities and policymakers have recognized that energy efficiency is New Jersey’s cheapest and most reliable source of energy. A few simple facts will help clarify the need for more, not less, investment in energy efficiency:
- New Jersey’s energy efficiency programs in place from 2001-2009 will save 23.6 million MWh of electricity over the life of the measures, saving businesses and residents almost $1.5 billion in energy costs
- Energy efficiency in New Jersey costs about 1.6 cents/kWh as opposed to 13 cents/kWh for retail electricity generation and transmission.
- Energy efficiency programs constitute only about 1.5 percent of the charges on New Jersey’s electricity bills— a small fraction of the taxes and surcharges on a typical residential bill, according to analysis performed by the Rutgers Center for Energy, Economic and Environmental Policy (CEEEP).
The reality is that energy is getting more expensive and simply building more power plants will not remedy this, though it will have negative impacts on public health and the environment. Fortunately, New Jersey recognizes this and has made a strong commitment to energy efficiency programs that generate $2-3 dollars in benefits to the local economy by permanently reducing energy costs and creating local energy service jobs. Rather than undermine proven energy efficiency programs, the smart solution would be to work with utilities to create policies that allow them to benefit from helping residents and businesses save energy and money, including decoupling sales from utility profits and appropriate financial incentives for meeting energy savings’ goals. Otherwise, New Jersey may find itself far behind its neighbors that understand that the future rests with energy efficiency and clean energy.
