On January 22, 2020, New Jersey’s Board of Public Utilities (BPU) released a proposal that would give utilities the opportunity to earn bonuses or incur penalties for beating or failing to meet energy efficiency savings targets.[1] In addition, the proposal would allow utilities to recover lost revenues related to their efforts. The cost recovery proposal follows a straw proposal released in December 2019 that outlined how utility efficiency programs will be managed and suggested implementation of new energy-saving pilots.[2] Both proposals would help implement the changes to New Jersey’s energy system the Governor Phil Murphy (D) signed in May of 2019 which boosted efficiency targets and set a 50% renewable goal by 2030.[3] In addition to addressing how utilities will approach efficiency measures, the cost recovery proposal will help address how utilities will pay for the changes under the Clean Energy Act of 2018. The 2018 law requires electric utilities to achieve annual energy use reductions of 2% or greater within five years of the new rules being implemented which imposes significant costs for utilities.

[1]https://www.bpu.state.nj.us/bpu/pdf/publicnotice/NJBPU_EE_Final_Cost_Recovery_Mechanism_Proposal_1.22.20.pdf

[2]https://www.bpu.state.nj.us/bpu/pdf/publicnotice/EE_%26_Peak_Demand_Program_Administration_Straw_Proposal_122019.pdf

[3] https://nj.gov/governor/news/news/562018/approved/20180523a_cleanEnergy.shtml