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Off-Set Your Costs for Energy Efficient Projects

February 7, 2012

On January 17, 2012, New Jersey Governor Chris Christie signed into law a bill (A-2528/Chivukula, S-2344/Smith) that allows commercial and industrial ratepayers to take a credit of up to 50 percent of the Societal Benefits Charge (“SBC”) portion of their utility bill to offset the cost of BPU-approved energy efficient projects.

What is the Societal Benefits Charge?

Historically, New Jersey utilities funded programs that provide societal benefits (e.g., low income programs, nuclear decommissioning, and energy efficiency and renewable energy programs) by including the cost of such programs in their rates.  In February 1999, the Electric Discount and Energy Competition Act ("EDECA") was signed into law. The EDECA authorized the Board of Public Utilities (“BPU”) to permit utilities to continue collecting funds for these types of programs through a SBC. Thus, these programs are funded by ratepayers through the SBC that appears on ratepayers’ utility bills.

Credit Against Societal Benefits Charge for Energy Efficiency

This new, supplemental law allows commercial and industrial ratepayers to obtain a credit against the SBC for costs incurred by the commercial or industrial ratepayer for the purchase and installation of approved products and services intended for energy efficiency. The ratepayer who purchases and installs approved products intended for energy efficiency is entitled to a credit of 50 percent of the costs incurred for the purchase and installation of the approved energy efficient products and services, or 100 percent of the SBC for a single calendar year, whichever is less. In other words, the maximum credit that can be applied under this law cannot exceed the commercial or industrial ratepayer’s liability for the SBC that would otherwise be due in a calendar year. However, the credit against SBC charges can be carried over to offset future SBCs for 10 years following the year in which the credit is first applied.

What does this mean for you?

New Jersey currently has a number of Energy Efficiency Programs available to ratepayers (e.g., the Pay for Performance or New Jersey SmartStart Buildings programs). Coupling this new credit for SBC charges with other energy efficiency programs may result in significant cost savings to you.

For more information, please contact:

Robert H. Crespi
Member of the Firm
Phone (973) 530-2060

Stephen A. Kisker
Member of the Firm
Phone (973) 530-2074

Keith E. Morris
Phone (973) 530-2107