The New Jersey Board of Public Utilities has approved a series of energy efficiency programs for the state’s electric and gas utilities, including Atlantic City Electric. The programs bring along with them increased costs to ratepayers.

The programs, dubbed Triennium 2 and announced Oct. 31, are designed to reduce average energy usage by achieving set levels within five years of implementation. A BPU statement announcing the approval says that “collectively over $3.75 billion has been budgeted for the programs and will be implemented over a 30-month period from January 1, 2025, to June 30, 2027.”

BPU President Christine Guhl-Sadovy said, “Today’s approval of the Triennium 2 energy efficiency programs marks a major milestone in our progress toward achieving the goals set out in Governor Murphy’s Energy Master Plan.”

The new Triennium 2 programs come with a cost, and utilities can recoup that cost from ratepayers. In the ACE region, the cost is estimated at $400 million. A company release states that the “typical” customer “using an average of 643 kilowatt hours a month will see gradual bill increases from $0.92 to $5.02 during the program period from 2025 to 2027.”

This will be in the form of one of the fees on a customer’s bill that is not linked to supply or transmission of power. The fee charge for Triennium 1 will fall off, and the new fee will be added.

The BPU announcement makes no mention of a new ratepayer fee even though the fee was part of what the agency approved.

The programs come in the face of an uproar over electricity bills that led to legislative hearings in Trenton and a congressional field hearing organized by Rep. Jeff Van Drew (R-2).

The BPU announcement praises the set of programs that comprised Triennium 1, which ended on June 30, 2024. It claims that Triennium 1 disbursed $1.25 billion in incentives to state ratepayers, resulting in reduced usage and savings on utility bills.

In Cape May County, Atlantic City Electric issued a release that lists five “enhanced programs” as part of the package approved by the BPU.

*Building Carbon Reduction – A program of rebates for residential and industrial customers who choose to switch to electric from fossil fuel-based equipment.

*Time of Use Rate Pilot – A program that uses the smart energy network and installed smart meters to allow customers to reduce their energy bills by conserving energy during peak energy use periods. According to a utility spokesperson, this will be available “to all customers beginning January 2025.” There will be a designated rate offering during off-peak times, but what that will be has not yet been released.

*New Demand Response Programs – The ACE release says this program will provide energy credits to customers who help reduce energy demand during peak energy-use periods. There was no explanation for how this might work. Demand response programs in electric utilities normally involve the utility remotely controlling a customer’s electrical equipment to reduce electric demand during peak hours.

*Business Energy Manager Pilot – With a focus on commercial and industrial customers, this program aids in developing energy-saving strategies and real-time information.

*HVAC Workforce Development Program – This effort offers career opportunities and job training programs, with a goal of creating a diverse energy workforce.

From the initiation of Triennium 1 in 2021 to its end in 2024, the ACE release says, the programs have saved customers 140,000 megawatt hours of electricity.

The energy efficiency programs come as the region is likely to face rate hikes for supply starting on June 1, 2025. The PJM Interconnection 2024 auction for electricity capacity saw prices that were nine times higher than the previous year’s auction.

PJM is the grid operator for 13 states, including New Jersey, and holds the region’s wholesale auction to set supply prices. Each utility, like ACE, then sets transmission prices to cover both operating costs and to recoup capital investments.

While the exact numbers are not yet known, prices for supply and transmission will be going up in 2025.

Calvin Butler, chief executive officer of Exelon, ACE’s parent company, told analysts in a call that prices may rise higher than in 2024, when hikes in electric bills set off involvement by elected officials demanding hearings before the BPU.

Butler also said Exelon plans to spend $35 billion on capital investments in the period from 2024 to 2027, resulting in an expected rate base growth of 7.5%.

When all is added up, 2025 will see supply rate increases due to the PJM auction results, transmission rate increases due to capital investments in the grid, and fee additions to pay for the energy efficiency programs just approved by the BPU.

In October testimony before a legislative committee in Trenton, the New Jersey rate counsel, Brian Lipman, said, “What we are seeing right now is the tip of an iceberg.” He went on to say, “There are even more large increases on the horizon.”

He urged lawmakers to seek other ways to pay “for the change we want for New Jersey.”

Lipman called the “shift of all costs to ratepayers” an attempt by the state to take advantage of a “captive customer.” He concluded that the cost shifts are “inherently unfair.”

Contact the reporter, Vince Conti, at vconti@cmcherald.com.