energy efficiency
9909981 A new energy efficient CFL light bulb shines while the old ones fade into darkness. 123rf

Public Service Electric & Gas (PSE&G) has reached a tentative agreement with the state of New Jersey on a $69m energy efficiency programme.The NJ Spotlight, notes that the proposed $69m energy efficiency programme is only a "fraction" of what PSE&G wants to spend on efforts to reduce energy use, apart from other initiatives.

The utility is planning to file a much larger energy efficiency programme. with the New Jersey Board of Public Utilities early next year. Before this happens, PSE&G will request long-sought regulatory changes in current rules, which executives say discourage more extensive investments in such programmes, notes the NJ Spotlight.

The filing of the PSE&G's $69m energy efficiency programme, is just part of an ambitious agenda by PSE&G that involves seeking approval of a five year $2.7bn gas modernisation programme (announced Thursday) and up to $200 million to $300 million in new investments to bolster its distribution system in an extension of its Energy Strong programme (to be filed later this year).

Decoupling mechanism

PSE&G also plans to decouple distribution revenue from sales volume to support large energy investments. The NJ Spotlight explains that "29 states have adopted some sort of decoupling mechanism, often to encourage utilities to invest in energy efficiency even though it erodes their revenue by decreasing gas and electric sales.

"The issue has been debated for years before the BPU and the Legislature, but no consensus has been reached. Two of the state’s gas utilities have approved decoupling programmes."

“PSE&G, as part of the filing, will request approval for a decoupling of distribution revenue from sales volume to support large energy investments,’’ Ralph Izzo, the CEO, president, and chairman of PSE&G said.

“We believe strongly that this latter action will incentivize investments in energy efficiency and help lower participating customers’ bills.’’

Izzo added that the proposal is way to allow energy efficiency to “really take hold in the state," who long supported the ramping up of the utility’s investments in energy efficiency. To date, PS&EG has spent roughly $400 million on such programmes, not counting the program pending now before the New Jersey Board of Public Utilities.