New Jersey Board Approves $3.75 Billion for Utilities’ Energy Efficiency Initiatives

The New Jersey Board of Public Utilities on Oct. 31 approved the Triennium 2, or T2,  energy efficiency programs to reduce utility costs for residential gas and electric customers. The state’s seven gas and electric utility companies will implement the T2 programs from Jan. 1, 2025, to June 30, 2027, with a collective budget of over $3.75 billion. The programs could decrease annual electricity consumption by 2.3 million megawatt hours, annual natural gas demand by 8.9 million MMBtu, and cut down 1.5 million metric tons of greenhouse gas emissions.

The new energy efficiency programs support the energy savings targets stipulated in the Clean Energy Act of 2018. The act sets energy savings targets of 0.75 percent of the average annual usage in the prior three years for natural gas utilities and 2 percent for electric utilities.

Triennium 2 builds on the Triennium 1, T1, programs, by addressing two new energy use challenges. T2 addresses the first challenge of building decarbonization by encouraging the use of energy-efficient technology such as electric heat pumps and water heaters. The programs address the second challenge of demand response through the use of smart thermostats and control systems to effectively manage demand during peak hours.

T1 programs resulted in financial incentives amounting to $1.25 billion for ratepayers as well as decreasing annual electricity consumption by 3 million megawatt hours and natural gas by 8.5 million MMBtu. Using T1, the state also achieved 1.4 million metric tons of annual greenhouse gas emission reductions.

The new energy efficiency programs at the state level support the national decarbonization initiatives, particularly building decarbonization. Earlier this year, the U.S. Energy Department released the first comprehensive federal strategy to reduce carbon emissions from buildings by 90 percent by 2050. Including New Jersey, nine states have a collective goal to use heat pumps to fulfill at least 90 percent of residential-scale heating, air conditioning, and water heating demand by 2040.