All Hands on Deck! Northeast Energy Efficiency Partnership, Inc. Releases a Report Commenting on New Jersey Energy Master Plan. New Jersey is Primed to Plant Itself as one of the Leaders of Energy Efficient Buildings, but at what cost?

On April 16th, the New Jersey Board of Public Utilities accepted the Northeast Energy Efficiency Partnerships, Inc.’s (“NEEP”) report entitled “An Energy Efficiency Strategy for New Jersey, Achieving the 2020 Energy Master Plan Goals. This report advances an ambitious agenda proposed by NEEP characterized by its statement that “an all-hands-on-deck approach” will be required to achieve the 2020 energy consumption reduction goals proposed by Governor Corzine’s Energy Master Plan. The NEEP report outlined ten strategies to direct New Jersey towards a path of a “new more sustainable energy future.”

In delivering its report, NEEP focuses on the N.J. Energy Master Plan’s goal to “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.” Accordingly, the EMP proposes a reduction in projected energy demand by 20% in 12 years. The report predicts that New Jersey residences, businesses and institutions will realize collectively $16.8 billion in net savings by 2020. However, there will be an investment of $11.2 billion representing funds collected through the BPU rate structure and other sources, and $4.4 billion of direct investment by residents and businesses.

According to NEEP, to achieve the EMP’s savings goals, there must be a 30% improvement in energy performance of 60% of all New Jersey homes and buildings relative to the projected energy use in 2020, and a 35% improvement over today’s building energy code requirements. Thus, NEEP is recommending a portfolio of interrelated programs and public policies to set new standards to build market place capacities and provide assistance to the effected constituents to improve energy performance.

NEEP is proposing that the State tap multiple revenue sources for the over-arching perspective to “use government resources and ratepayer-funding to leverage private investment and financing.” To do this, it is proposing increasing New Jersey ratepayer-funding, impose an energy efficiency surcharge on non-regulated heating fuels, tap market-based revenue sources and finally maximize the use of Federal funding. Other revenue raising ideas are referenced in the report.

Steven S. Goldenberg, Chair of our Energy Group, has pointed out that the prime focus of the EMP and NEEP’s report are new and existing buildings, because they are significant energy consumers and primary sources of greenhouse gas emissions. The EMP’s first goal is to increase energy efficiency in new buildings with a statewide energy code that will make new construction at least 10% more energy efficient than buildings under current state code by the end of 2009.

To achieve the EMP’s goals, NEEP proposes that by 2020 the majority of new homes being built be “micro-load homes”, these are homes that have negligible net energy consumption. Additionally, energy savings ranging from 18% from large private sector buildings to 40% from new existing chains and franchises will be required. It recommends that the state regularly update the building energy code by targeting 30% improvement by 2011 and 50% improvement in energy efficiency by 2016. The report suggests that commercial buildings that are sold or leased meet minimum building energy performance requirements. In essence, NEEP proposes a building energy code for existing buildings. Eventually, time of sale requirements will be imposed with an implementation date of 2015 suggested. These requirements would need to be met as a condition precedent to the sale or lease of residential, commercial and industrial properties.

Without a doubt, New Jersey seeks to assert itself as a national environmental leader. The EMP reflects this competitive landscape “implementing this plan will place New Jersey at the forefront of a growing clean energy economy with aggressive energy efficiency and renewable goals and action items …”. In the concluding paragraph of its executive summary, NEEP sums up the charge: “New Jersey can … establish itself as a national leader in building energy efficiency – a model sorely needed in these times of climate change, economic crises and uncontrollable energy costs.” The rubber will now meet the road – expect regulatory and legislative action to proceed at breathtaking pace.

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