Op-Ed: RGGI Auction Proceeds Should Be Used to Fund Energy Efficiency Programs

New Jersey is ‘missing a valuable opportunity’ to achieve high-efficiency targets in an equitable and cost-effective manner

Published in NJ Spotlight on 3/5/2020

— Erin Cosgrove, Director of Regulatory Affairs for EEA-NJ

New Jersey’s landmark Clean Energy Act of 2018 sets ambitious targets for the state’s utilities to reduce electricity usage up to 2% annually. Today, fewer than 10 states achieve this level of savings, which is why New Jersey must use all the resources it can to advance energy efficiency efforts. One critical resource will be auction proceeds from the Regional Greenhouse Gas Initiative (RGGI). By not investing RGGI auction proceeds in energy efficiency, New Jersey is missing a valuable opportunity to achieve these high-efficiency targets in an equitable and cost-effective manner. For New Jersey, the Board of Public Utilities (BPU) will receive about $16 million from RGGI auction proceeds that could be invested in energy efficiency, both to further carbon reduction goals and provide the most benefit to energy customers. Each RGGI state chooses how to invest auction proceeds and so far, over half of all RGGI funds have been invested in energy efficiency. These investments have lowered the costs of RGGI participation for residents, achieved greater carbon-reduction goals, created local jobs, and grown the state economy.

What Maine has done

Using RGGI auction proceeds to bolster community programs enables all utility customers to reap the advantages of energy efficiency programs, not just those who directly receive the benefits. In 2017, RGGI energy efficiency programs across the region returned $879.3 million in lifetime energy-bill savings to more than 291,000 households and 3,000 businesses. During the first three years of Maine’s participation in RGGI, the state invested $27 million into energy efficiency projects, which generated $80 million in reduced electric bills and added $92 million to Maine’s economy, as well as more than 900 jobs. One of the projects was Efficiency Maine’s work to replace fuel oil furnaces with modern, efficient heat pumps; so far, the state has replaced more than 5,000 units. These reductions in consumers’ bills means more money in people’s pockets, which boosts the local economy and benefits businesses across the state. RGGI states have also shown that auction proceeds can be a valuable resource in removing barriers to energy efficiency programs, providing access to residents no matter their income level or the condition of their home. Currently, structural issues prevent many homes from being eligible for cost-saving energy efficiency programs — even those specifically targeted to areas where people’s incomes don’t keep up with the costs of necessities. This leaves the most economically vulnerable people in energy-wasting, structurally unsafe, and unhealthy homes.

Programs in Delaware and Pennsylvania

In designing ways to address these barriers, the BPU would not have to start from scratch. Energize Delaware’s Pre-Weatherization Program uses RGGI funds directly to repair Weatherization Assistance Program (WAP) deferrals. In three years, the program has repaired 250 homes. Additionally, the Philadelphia Energy Authority is launching a pilot program this year, Built to Last, that will deliver comprehensive home repair and energy efficiency to low-income households. New Jersey should not put itself in position to miss this opportunity to invest in energy efficiency measures that simultaneously realize substantial economic benefits and address systemic equity issues in the communities most affected by pollution and climate change. This is why the Energy Efficiency Alliance of New Jersey urges the Board of Public Utilities to use RGGI auction proceeds to fund energy efficiency programs — particularly those that will address participation barriers for low- and moderate-income residents of New Jersey.

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