Ratepayer watchdog contends utility overestimated how cost effective six-year program would be, recouping costs contrary to Clean Energy Act

Tom Johnson reports for NJ Spotlight

The New Jersey Division of Rate Counsel is urging the state to reject a $2.78 billion proposal by Public Service Electric & Gas to invest in new energy-efficiency projects across its territory.

In filings with the state Board of Public Utilities, Rate Counsel’s experts argued the utility overstated how cost-effective the proposed six-year program would be. They also contended a provision to recoup revenues PSE&G would lose due to its energy-saving actions is contrary to the Clean Energy Act (CEA) signed by Gov. Phil Murphy last May.

PSE&G submitted the petition last September, part of a $4 billionfiling, seeking to align its spending with the clean-energy bill signed only a few months earlier. The utility argued the money spent on 22 energy-efficiency programs would save customers more than $5.7 billion over the 20-year life of the program.

NJ’s national energy-efficiency ranking

New Jersey currently ranks 29th nationwide in energy savings, according to the American Council for an Energy Efficient Economy. PSE&G contends its energy-efficiency filing is the right thing to do for its customers and the state, according to Karen Johnson, a spokeswoman for the utility.“The programs we have proposed will save customers billions of dollars in energy costs, create thousands of green jobs in New Jersey, improve air quality, and drastically reduce the state’s carbon footprint,’’ she said.

But Rate Counsel and its consultants argued the company’s filing is premature, since the BPU has yet to wind up its own proceeding regarding the interpretation of the clean-energy law and its requirements.

“PSE&G does not have the authority to impose its own interpretation of the CEA in order to direct billions of dollars of ratepayers’ dollars to its proposed programs,’’ Erza Hausman, a consultant for Rate Counsel argued in a filing.

No exclusive for PSE&G

The Rate Counsel’s consultants also urged the BPU to reject the utility’s bid to become the exclusive agent for regulated energy-efficiency projects within its territory, a controversial proposal given that a competitive private market exists that could offer customers more varied choices in how to reduce energy use.

“I wouldn’t want to see it monopolized,’’ said Rate Counsel director Stefanie Brand. “That’s not good for consumers. There’s a role for utilities, but it’s not necessarily the only game in town.’’

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