| Energy
Issues and Priorities:
Lower Costs | Make the BPU More Business Friendly | The Regional Greenhouse Gas Initiative | The Energy Master Plan
Issues and Priorities:
Lower Energy Costs
NJ is a great state to live and work in. However, recent trends in energy pricing have left many business owners wondering where the expected cost savings are, which were promised from deregulation. With electric prices increasing over the past five years an average of 15 percent a year, NJBIA has set out to help our members and highlight ways the State could help its largest ratepayer segment.
NJBIA, with the help of its member companies, develops policy positions to represent the business community. Included are some of the items we are working on to help lower your energy costs.
TEFA Tax
Since electric deregulation took place in our state, the Board of Public Utilities (BPU) has imposed a transitional energy facilities assessment charge on electric rate payers. These rates were 13% in 1997 and were supposed to be reduced to 8% within 5 years. However, there was a freeze on the reductions and the current rate is 10%. NJBIA is working for business to have an immediate phase out put in place to save ratepayers on their electric bills.
Societal Benefits Charge (SBC)
The Societal Benefits Charge (SBC) was created under section 12 of P.L.1999, c.23 (C.48:3-60) and is divided amongst six policy initiatives, one of which falls under the State’s Clean Energy Program. Currently, the BPU decides the funding dispersal of the Clean Energy Fund between residential and commercial and industrial customers (C&I). Within the C&I money, there is also funding for schools and other public buildings. Commercial and industrial ratepayers consume over 64 percent of the State’s electricity. As a result, they pay significantly more money under the SBC. NJBIA is working towards additional incentives and rebates for commercial and industrial customers to achieve additional energy savings.
RGGI Auction
Commercial and Industrial ratepayers consume 64% of the State’s electricity. The reliability, affordability, and availability of electricity directly impact the price of doing business in New Jersey. NJBIA does not want to give blanket authority to the DEP to set up a cap and trade program since it is critical to the pricing of electricity. The Association believes that clear guidelines need to be established within the legislation as to eligible bidders for the auctions, when the auction occurs in relationship to the BPU BGS auction (which determines electric pricing), safety triggers to protect consumers from escalating prices, federal preemption being established, and that the proceeds from the auction being returned to ratepayers through rate reductions.
Retail Margin
In 2003, the BPU decided that large commercial and industrial ratepayers that remained on electric utility supply service, and are either subject to hourly pricing or have a peak load share (PLS) of 750kw or greater, would be assessed a retail margin of 5 mils/kwh. The BPU has continued to assess customers this penalty if they fail to shop for competitive electric services. NJBIA is opposed to the imposition of the Retail Margin since the funds have not yet been distributed to helping Commercial and Industrial Customers that have paid into the retail margin fund.
For more information, see NJBIA's comments on the Retail Adder (2006), as well as comments from NJBIA's Sara Bluhm from March 2007 and September 2007.
Energy Audits
How to Shop for Electricity
Energy Industrial Technologies Program
The US Department of Energy Industrial Technologies Program works with U.S. industry to improve industrial energy efficiency and environmental performance. The program invests in high-risk, high-value R&D to reduce industrial energy use while stimulating productivity and growth.
Saving Energy
Recent energy price increases have focused industry attention on saving energy. Here you will find the resources to get you started saving energy today.
Qualify for UEZ Manufacturer Tax Exemption
The NJ Commerce, Economic Growth and Tourism Commission has announced the availability of forms for manufacturers to submit for the UEZ energy tax credit. This form allows the determination as to whether a business meets the statutory requirements for exemption. Once a determination has been made, the Commission will notify the Division of Taxation, which issues an exemption certificate specific to the business's energy and utility service purchases for use at the zone location. More.
20 Ways to Save Energy Now for Industrial Customers
Think saving energy will require costly new equipment or complicated changes to your operating practices? Think again! Here are twenty steps you can take this year for little or no cost, using in-house expertise. You'll be amazed to discover how some simple changes can cut your energy bills. More.
Make the Board of Public Utilities more Business Friendly
NJBIA’s recommendations to improve the BPU
NJBIA has been aggressively working with the Board of Public Utilities to make the Board more aware of the concerns of the business ratepayer as well as making the Board more accessible. Since February 2006, NJBIA has been working with the Board to improve operations as well as interactions with our members. We have successfully worked with the Board to set up the Office of the Business Energy Ombudsperson, Create a How to Shop Guide for Electricity, Create a dedicated web area for Commercial Customers, Hold quarterly Business Roundtable meetings with President Fox, and work with Commissioners to understand the need to increase incentives to the Commercial and Industrial ratepayer.
BPU Business Ombudsperson
NJBIA advocated for an Ombudsperson at the Board of Public Utilities and in 2005 this position was created thanks to NJBIA. In an effort to help our members navigate the complex bureaucracy of the Board, the Office of the Business Ombudsperson is available to help the Business ratepayer. Its mission is to assist the state's commercial and industrial energy users in managing their energy costs through a strategic approach to efficiency, renewable technologies and supply purchasing.
Regional Greenhouse Gas Initiative
RGGI - A Mandatory Cap-and-Trade Program
RGGI is a mandatory program for electric generating units with capacity of 25 megawatts or greater that burn more than 50 percent fossil fuel. This applies to behind the fence generators (those not on the power grid) and the grid generators at the moment, although there is an optional amendment to the rules which would exempt behind the fence generators that do not sell more than 10 percent of their electricity.
Facilities covered by RGGI must comply with the RGGI rule or face enforcement by state agencies. Once adopted, the Model Rule will become part of the Title V permit of a facility.
A cap-and-trade program is a flexible, market-based approach to achieving real emissions reductions at the lowest possible cost. The design of RGGI, like any other cap-and-trade program, includes the following basic components:
• The states determine the emissions sources to be covered by the cap.
• The states establish the total amount of emissions to be allowed from all of the sources, commonly referred to as the “emissions cap”.
• Each state issues one allowance for each ton of emissions, up to the amount of the cap, and those allowances are distributed to the generators and the market.
• Every covered source is required to have enough allowances to cover its emissions at the end of each compliance period.
Sources that do not have enough allowances to cover their projected emissions can either reduce their emissions, buy allowances on the market, or generate credits through an emissions offset project. Sources that reduce their emissions and have excess allowances may either bank those allowances or sell them to other sources.
Latest news
NJ’s regulations
RGGI auction
Energy Master Plan
New Jersey is statutorily (EMP statute) required to do an EMP every 10 years and to do updates every three years. The most recent Energy Master Plan was published in 1991 and updated in 1995 in response to the introduction of wholesale competitive electricity markets in the region. A 1987 amendment to the EMP law (itself enacted in '77) mandated a standing committee representing all relevant state policymaking agencies.
Gov. Jon S. Corzine launched the current EMP process in October 2006. NJBIA has been participating in working group meetings and submitted formal comments.
For more information, see NJBIA's comments on the Energy Master Plan from October 2006, as well as comments on energy efficiency (September 2007), or go here for latest updates on the Plan.
NJBIA's Energy Council
The Energy Council brings together representatives of the State's utilities and industrial sector to discuss issues of mutual concern and to meet officials responsible for State energy policies. Council interests include promoting competition in the energy industry, pricing policies for electricity and natural gas, new incentives for power cogeneration, and the activities of the Board of Public Utilities. For more information, e-mail NJBIA's
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