New Jersey s Clean Energy Program General Overview Michael

New Jersey’s Clean Energy Program General Overview Michael Winka, Director Lance Miller Chief of Staff New Jersey Board of Public Utilities Office of Clean Energy Clean Air Council Feb 14, 2007

New Jersey’s Clean Energy Program is a statewide program administered by the New Jersey Board of Public Utilities that promotes energy efficiency and renewable energy for all New Jersey ratepayers including residences, businesses, schools and municipalities. Clean Air Council Feb 14, 2007

New Jersey’s Integrated Approach Goals and Objectives • EE (including CHP) and RE will provide energy growth by 2012 • 20% annual increase in electric and natural gas energy efficiency saving • 785, 000 MWh of electricity and 0. 6 billion cubic feet of gas will be saved through EE programs by 2012 • 300 MW of Class I RE facilities by 2008 • 90 MW PV by 2008 Clean Air Council Feb 14, 2007

New Jersey’s New Goals and Objectives • 20% reduction in energy use by 2020 • 20% Class I Renewables by 2020 • 2% or 1500 MW solar by 2020 • 20% reduction in 1990 GHG by 2020 • 50% reduction in 2006 GHG levels by 2050 Clean Air Council Feb 14, 2007

New Jersey’s New Tools • Energy Master Plan (code, standards EE/RE CHP • New Jersey’s Clean Energy Program • Regional Greenhouse Gas Initiative RGGI • State Energy Director • Energy Certificate trading • Energy Star – Zero Energy Buildings USGBC – LEED other Clean Air Council Feb 14, 2007

New Jersey’s Clean Energy Program 01 – 08 Funding Level Non-bypassable fee - all electric and natural gas customers Year 2001 2002 2003 2004 Total ($M) $115 $119 $124 EE ($M) $86. 25 $89. 25 $93 % 75% 75% RE ($M) $28. 75 $29. 75 $31 % 25 25 01 - 04 2005 2006 2007 2008 05 – 08 Total Avg $482 $140 $165 $205 $235 $745 $1, 227 $153. 4 $361. 5 $103 $113 $123 $133 $472 $833. 5 $104. 2 75% 74% 68% 60% 56% 63% 68% $120. 5 $37 $52 $82 $102 $273 $393. 5 $49. 2 25 26% 32% 40% 44% 37% 32% Clean Air Council Feb 14, 2007

New Jersey’s Clean Energy Program 05 – 08 Allocation Bill impact and rate impact SBC Allocation • • • 44% of the SBC allocated for electric Energy Efficiency 17% of the SBC allocated for natural gas Energy Efficiency 37% of the SBC allocated for Renewable Energy Bill Impacts • • $18 per year per the average residential electric customer $14 per year yr per the average residential natural gas customer • • • $14 per year per household for electric Energy Efficiency $5 per year per household for natural gas Energy Efficiency $12 per year per household for Renewable Energy • 1 -2% rate impact over 4 years (2005 – 2008) or 0. 25 - 0. 5% PER YEAR Clean Air Council Feb 14, 2007

NJCE Program 2003 – 2008 Annual Reporting and Goals Year EE Electric EE NG RESolar RE Class I MWh Dtherm MW MW 2003 A 285, 586 408, 583 1. 7 76 2004 A 328, 912 432, 758 2. 1 3. 7 2005 A 382, 845 617, 261 5. 5 15 2005 G 341, 770 489, 305 4 19 2006 G 409, 454 586, 206 14 38 2007 G 486, 958 697, 167 27 66 2008 G 575, 568 824, 028 39 89 Clean Air Council Feb 14, 2007

New Jersey’s Integrated Approach for Renewable Energy • Net Metering/ Standard Interconnections • Capital Cost Incentives/Rebates • Portfolio Standard – Longer term financing Clean Air Council Feb 14, 2007

Renewable Energy Incentives/Rebates Lower the initial capital cost Improve the payback period to 5 -10 years or better – including REC value. 60% of capital cost for up to 1 MW 20% grants - 80% loan for RE Power Plants Clean Air Council Feb 14, 2007

New Jersey’s Net Metering and Interconnections Standards • Up to 2 MW – 125% of Annual Use • Small Commercial Business Up to 10 MW peak • < 10 k. W Inverter-based - No fee • Reduce barriers • Set timeframes for review Clean Air Council Feb 14, 2007

Onsite Renewable Energy Program Rebates History Solar Electric Systems 2005 PV Rebate per watt 08 -05 -05 08 -05 -06 in in service after by 1/1/06 12/31/05 # of k. W 2003 thru 06 -24 -05 1 to 10 $5. 50 $5. 30 $5. 10 $4. 35 $3. 80 10. 01 to 40 $4. 00 $4. 35 $3. 90 $3. 20 $2. 75 40. 01 to 100 $4. 00 $3. 75 $3. 45 $3. 00 $2. 50 100. 01 to 700 $3. 75 $3. 60 $3. 20 $2. 80 $2. 25 500 to 700 0. 30 Clean Air Council 03 -16 -06 09 -01 -06 $2. 00 Feb 14, 2007

NJ’s. CEP Solar Rebates Installed, in. Construction and Awaiting Approved As of September 2006 Status Number Capacity Rebate Installed with OCE rebate 2, 042 36 MW $147 M Approved for Rebate 511 23 MW $88 M Applications in Queue 1, 412 82 MW $152 M TOTAL 3, 965 141 MW $387 M Clean Air Council Feb 14, 2007

New Jersey Solar Installations & Capacity 4 Q 2006 NJ Solar Market Stats as reported online at NJClean. Energy. com Clean Air Council Feb 14, 2007

Renewable Energy Portfolio Standard RPS • The RPS requires all NJ electric supplier to provide a set percentage of their electricity as Class I renewable (wind, solar or sustainable biomass) • EY 2005 0. 75% including - 4 MW of PV • EY 2009 4. 0% including by 90 MW of PV • EY 2021 20% including 2% solar PV or 1500 MW • Bill cost to the average electric residential customer • EY 2005 -- $1. 40 per year per household • EY 2009 -- $4. 50 per year per household • EY 2021 -- $23. 00 per year per household Clean Air Council Feb 14, 2007

Renewable Energy Portfolio Standard NJ’s RE goals will be achieved through the RPS and financed by RECs Compliance with NJ’s RPS is through Renewable Energy Certificates (RECs) issued and tracked through either PJM’s Generator Attributes Tracking System (GATS) or NJCEP’s Behind the Meter system Each MWh of energy produced by a renewable energy generator creates 1 REC. This REC has a unique serial number. When it is traded and used for compliance, it is matched with a MWh or energy supply and retired. In NJ system RECs have a 1 year life and most be used in the year they are generated plus a 3 month true up period Current prices for RECs: LFG REC $5, Wind REC $15, Solar REC $200 Clean Air Council Feb 14, 2007

Solar Renewable Energy Certificates (RECs) Renewable Generator: Production of Renewable Energy Commodity Electricity Environmental Benefits (S 02, NOX, CO 2 ) Electric Supplier: Retires the REC New Jersey REC or Solar REC Certificates represent the environmental benefits and other attributes associated with electricity generated from a renewable energy generator. May be traded independently of underlying electricity. Clean Air Council Feb 14, 2007

New Jersey’s RPS Value of RECs Year Class 1 – Class 2 and Solar RECs Solar RECS 2005 $ 14, 009, 400 $ 1, 448, 000 2009 2021 $ 48, 746, 600 $ 15, 080, 000 $ 222, 275, 800 $ 126, 000 GHG Credits REC Clean Air Council -> $250 $15 -> $5 ($2. 5) $200 -> $70 Feb 14, 2007

New Jersey SRECs Clean Air Council Feb 14, 2007

New Jersey RECs Reporting in PJM GATS • PJM – Environmental Information Systems (EIS launched its Generator Attributes Tracking System (GATS) in Oct 2005 for the Mid-Atlantic States • NJ, MD, PA, DE and DC all use GATS for their RPS Compliance Reporting • Feb 2006 GATS reported 14, 282, 070 REC generated during the first 2005 trading period • This represents 2. 02% of PJM total system mix • 82 account holders • 734 generators • More info available at www. pjm-eis. com Clean Air Council Feb 14, 2007

New Jersey’s Transition to an Open Market RECs based System • New Jersey’s 20 % by 2020 Renewable Energy Portfolio Standards (RPS) will require at minimum approximately 4, 400 MW of renewable energy capacity and 1500 MW of Solar capacity. • NJ cannot simply “buy” our way to the RPS goals by providing rebates or grants to construct this capacity. • We must consider other models …. Clean Air Council Feb 14, 2007

New Jersey Residential 10 kw Solar Electric System Installed Cost: $77, 500 Electric cost savings / Net Metering: $1, 500/ yr NJCEP Rebate: $38, 000 Insert Residential Home Federal Tax Credit: $2, 000 Out of Pocket Expense: $37, 500 Total savings : $1, 500 assuming a 12, 000 k. Wh annual energy usage Payback Period: 25 yrs Clean Air Council Feb 14, 2007

New Jersey Residential 10 kw Solar Electric System Installed Cost: $77, 500 NJCEP Rebate: $38, 000 2008 $5. 00/hh/yr Electric cost savings / Net Metering: $1, 500/ yr Insert Residential Home SRECs Income: $2, 400 / yr Federal Tax Credit: $2, 000 2005 $0. 14/hh/yr 2009 $1. 40/hh/yr 2020 $23/hh/yr Out of Pocket Expense : $37, 500 assuming a 12, 000 k. Wh annual energy usage Total savings : $3, 900 Payback Period: 9. 6 yrs Clean Air Council Feb 14, 2007

New Jersey Residential 10 kw Solar Electric System Installed Cost: $77, 500 Electric cost savings / Net Metering: $1, 500/ yr NJCEP Rebate: $0. 00 Insert Residential Home Federal Tax Credit: $2, 000 Out of Pocket Expense : $75, 500 Total savings : $1, 500 assuming a 12, 000 k. Wh annual energy usage Payback Period: 50. 3 yrs Clean Air Council Feb 14, 2007

New Jersey Residential 10 k. W Solar Electric System Installed Cost: $77, 500 Electric cost savings / Net Metering: $1, 500/ yr NJCEP Rebate: $0. 00 Insert Residential Home SRECs Income: $6, 050 / yr Federal Tax Credit: $2, 000 $502/ SREC Out of Pocket Expense : $75, 500 Total savings : $7, 550 assuming a 12, 000 k. Wh annual energy usage Payback Period: 10 yrs Clean Air Council Feb 14, 2007

2001 -2005 Energy Efficiency Programs Residential Program Participants MWh Dtherms Home Energy Analysis Warm Advantage 129, 021 Cool Advantage 129, 021 1, 095, 661 NJ Energy Star Homes 20, 800 376, 554 NJ Energy Star Products Comfort Partners Clean Air Council 12, 328, 739 4, 889, 210 31, 555 12, 883, 376 1, 715, 225 550, 945 6, 729, 837 Feb 14, 2007

Energy Efficiency Programs - Residential Home Energy Analysis is a free online audit to help residential customers understand reduce their home energy use links the audit to our residential rebates Home Performance with Energy Star – In home audit - Contractors certified by the Building Performance Institute work with homeowners to identify sources of energy loses and recommend energy saving improvements linked to utility financing and residential rebates – performed additional incentives for affordable housing up to 300% of the federal poverty level Clean Air Council Feb 14, 2007

2005 Energy Efficiency Programs - Residential Warm Advantage and Cool Advantage Programs Provides rebates and promotes energy efficient heating and cooling systems in homes 27, 510 participants saved 15, 000 k. Wh, 13 MW and 1, 400, 000 therms. Energy Star Homes Provides incentives for energy efficient new construction that target NJ area designated for growth (Smart Growth) 8, 000 participants 20% market share for new homes construction saved 6, 100, 000 k. Wh, 19 MW, and 2, 395680 therms. An Energy Star home certification is acceptable as the local energy code costruction review Clean Air Council Feb 14, 2007

2005 Energy Efficiency Programs - Residential Energy Star Products Public education and incentives for home energy efficient appliances and lighting over 1. 2 million rebates provided for room air conditions and compact fluorescents saving 63, 500, 000 k. Wh and 5 MW Comfort Partners Provides 100% installation of energy saving measures to low income customers at no cost to improve their energy affordability linked with our other energy assistance programs. Over 6, 000 customers saving each homeowner on average 880 k. Whs and 76 therms for an annual savings over $200. Clean Air Council Feb 14, 2007

2001 – 2005 & 2005 Energy Efficiency Programs – C&I Smart Start Buildings Program Provides technical assistance and incentives for new and retrofit efficiency upgrades for commercial office buildings, industrial facilities, schools, hospitals and government building owners. Provided rebates to 2, 400 businesses and government building owners that saved 288, 439, 000 k. Wh, 36. 5 MW, and 1, 900, 000 therms saving these building owners over $60, 000 annually. Over the last 5 years 21, 394 participants have saved 10, 858, 892, 000 k. Wh and 68, 853, 920 therms Clean Air Council Feb 14, 2007

Energy Efficiency Programs – C&I Combined Heat and Power Provides incentives up to 30% to purchase and install various types of combined heat and power systems up to 1 MW that have at minimum 68% efficiency and meet all NJDEP State of the Art air quality control limits – provided 10 rebates with commitments of $7. 4 million. Clean Air Council Feb 14, 2007

Energy Efficiency Programs – C&I Larger Projects 50, 000 sq ft - starting in planning stage are eligible for up to $12, 000 in incentives : Three step process to plan in overall energy efficiency into and project in a coordinated approach: Pre-Design Planning Session up to $2, 000 Design Simulation and Screening up to $5, 000 Detailed Analysis of Energy-Efficient Measures up to $5, 000 And…Equipment Incentives Additional Multiple Measures Bonus (Two or More Approved Measures) Clean Air Council Feb 14, 2007

Energy Efficiency Programs – C&I Smaller Projects, or Those Begun After the Design Stage, May Take Advantage of: Project Review and Screening Recommendations for Energy-Efficiency Measures Equipment Incentives Additional Multiple Measures Bonus (Two or More Approved Measures) Clean Air Council Feb 14, 2007

Energy Efficiency Programs – C&I • Categories: – Electric Chillers – Natural Gas Cooling – Desiccant Units – Electric Unitary HVAC Systems – Natural Gas Heating Systems Clean Air Council – Natural Gas Water Heating – Premium-Efficiency Motors – Prescriptive Lighting – Lighting Controls – LED Traffic Signals – Variable Frequency Drives – Ground Source Heat Pumps Feb 14, 2007

New Jersey Smart. Start Buildings® — The Program Customers May Request Technical Assistance and Receive an Incentive for Qualified Energy-Efficient Equipment Not on the Prescriptive Technologies List. Custom Measures • Customer project in New Jersey • Custom Measure application • Screening process • Incentive Up to 80% of measure or 1. 5 year payback Clean Air Council Feb 14, 2007

New Jersey Clean Energy Programs – New Developments • Local Government Energy Audits – up to 90% of cost but will require all cost effective (LT 2 yr PB) to be implemented. • Demand Response – Load Management Incentives Custom Measures • Pay for Performance pilot • Zero Energy Buildings (Energy Star Benchmarking) • Linking EE and RE in congested areas Clean Air Council Feb 14, 2007

Power & Hot Water from Microturbine Free Fuel Waste Heat Natural Gas Micro. Turbine ~26% Clean Air Council + Integrated Heat Exchanger ~45% = Feb 14, 2007 Total Energy Utilization 70%+ PPT 06287 032207

Energy Efficiency Portfolio Standard (EEPS) and EE Certificates Energy Efficiency: Avoided Energy Use Saved Energy Savings Environmental Benefits (S 02, NOX, CO 2 ) Electric Supplier: Retires the EEC New Jersey EEC Certificates represent the environmental benefits and other attributes associated with electricity generated from a energy efficiency system. May be traded independently of underlying electricity. Clean Air Council Feb 14, 2007

New Jersey’s EEPS Value of EECs Year 2006 2012 2021 Class 1 Res EE Class II C&I EE $ 5, 124, 000 $ 38, 024, 000 $ 84, 900, 000 EEEC $ 5, 124, 000 $ 38, 024, 000 $ 84, 900, 000 2006 -> 2021 Clean Air Council Class III Class IV Clean DG Load Mgmt $ 84, 900, 000 $70 -> $20 Feb 14, 2007

• New Jersey’s Clean Energy Program provides incentives for investments in energy efficiency and renewable energy Jersey’s Clean Energy Program New 2001 -2004 Results – $492 million in energy efficiency investments • These investments help to: – – reduce customers energy bills reduce pollution levels reduce reliance on imported fuels stimulate the local economy and keep energy dollars in the State Clean Air Council Feb 14, 2007

• The programs reduced electrical usage by 1, 216, 403 MWh over 5 years New Jersey’s Clean Energy Program 2001 -2004 Results – 243, 280 MWH of energy savings per year • These savings are equivalent to the electric usage of approximately 135, 000 average homes Clean Air Council Feb 14, 2007

• These savings continue over the life of the New Jersey’s Clean Energy Program measures which averages 15 years 2001 -2004 Results • Savings over the life of the measures: • 14, 888, 209 MWH of energy savings Clean Air Council Feb 14, 2007

• These programs also reduced natural gas usage by 2, 048, 981 Dtherms per year New Jersey’s Clean Energy Program 2001 -2004 Results • These savings are equivalent to the annual usage of over 20, 000 average homes heated with natural gas • Savings over the life of the measures: – 38, 943, 822 Dtherms Clean Air Council Feb 14, 2007

• The programs have also reduced electric demand by 450 MW New Jersey’s Clean Energy Program 2001 -2004 Results • This has eliminated the need to site, build and operate a mid-sized power plant • Reducing demand also improves the reliability of the electric transmission and distribution system Clean Air Council Feb 14, 2007

• Energy efficiency and renewable energy generation also reduce emissions resulting in New Jersey’s Clean Energy Program cleaner air and other environmental and health 2001 -2004 Results benefits • Annual Emission Reductions: – – CO 2: 317, 467 metric tons NOX: 550 metric tons SO 2: 1, 217 metric tons HG (mercury): 15 lbs Clean Air Council Feb 14, 2007

• Cumulative emission reductions over the life of New Jersey’s Clean Energy Program the measures over the five years of the program: 2001 -2004 Results – – CO 2: 13, 190, 265 metric tons NOX: 21, 798 metric tons SO 2: 46, 283 metric tons HG: 558 pounds Clean Air Council Feb 14, 2007

BOTTOM LINE You can either incorporate more energy efficiency (including increased building energy codes and appliance standards) including combined heat and power and clean distributive and renewable energy into the over energy mix or pay for larger and larger transmission lines into NJ that will move your payments to out of state facilities and out of state jobs with the associated transport of out of state emissions contributing to the reasons NJ does not meet its clean air states putting more pressure on existing NJ business to reduce emissions Clean Air Council Feb 14, 2007

New Jersey’s Integrated Approach • • New Jersey’s Clean Energy Program: www. njcleanenergy. com • • Rutgers’ Center for Energy, Economics and Environmental Policy (CEEEP) http: //policy. rutgers. edu/ceeep • Clean Energy Council – Committees • Portfolio Management Work Group • State Energy Master Plan and Energy data management Clean Air Council Feb 14, 2007

Thank you Questions ? ? YOUR POWER TO SAVE Energy, Money and the Environment Visit: NJClean. Energy. com Clean Air Council Feb 14, 2007