Understanding The Transition: Core Versus Non-Core Programs

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A Blog Series Covering How the Clean Energy Act is Transforming New Jersey’s EE Landscape

By EEA-NJ Staff on September 16, 2021

Welcome back to A New Era for Energy Efficiency, a blog series about New Jersey’s transforming energy efficiency landscape. This installment takes a closer look at the “core” utility programs rolling out this summer.

What is a core program, and why are they so important to New Jersey’s EE future? To understand, let’s take a look back at the 2018 Clean Energy Act.

Laying Groundwork: The Clean Energy Act

The CEA laid out several ambitious clean energy and carbon reduction goals. When it came to energy efficiency, the CEA required each electric utility to reduce their annual energy use by 2% and each gas utility to reduce by .75%.

Notably, the CEA said that utilities—not state regulators—should own the programs. The goal behind this transition wasn’t just to switch up who’s in charge, but to grow EE in the state and help achieve the overarching goal of the Clean Energy Act—100% clean energy by 2050.

How does transferring control help that goal? Utilities, many stakeholders argued, are better situated than the state to execute some kinds of EE programs.

Utilities have closer relationships with contractors and consumers. They have access to high-quality data about who uses how much energy. They have the know-how and resources to carry out consumer-by-consumer, building-by-building improvements in their own service areas. Playing into these strengths can help utilities and the state working together achieve better energy efficiency metrics than the state working alone.

Core versus Non-Core Programs

The BPU’s June 10, 2020 order laid further groundwork for these essential programs and differentiated between “core” and “non-core” programs.

The core programs are a standardized, state-wide approach to ensuring vital EE initiatives endure and expand as the utilities take ownership. They cover some of the biggest areas for EE improvement in the state—opportunities for energy savings that are too big to let slip by. All utilities must participate in all core programs, establishing a baseline level of EE programming available across the state. 

The BPU encouraged utilities to launch non-core programs (also called “pilot programs”) exploring other kinds of EE projects. These potentially very impactful pilots include demand management initiatives, “Smart Home” projects, and improvements that don’t rely on electric wires or gas pipes. We’ll talk more about the importance of these non-core programs in a later blog post.

Utilities run core and non-core programs. But in accordance with the June 10 Order, the state still runs many essential EE programs. The New Jersey Clean Energy Program (NJCEP) ​​continues to administer new construction, large energy users, and combined heat and power initiatives. NJCEP will also continue co-administering Comfort Partners, an initiative that helps LMI consumers reduce utility bills.

The Core Programs: What’s Inside

What do the core programs actually do? They cover a range of EE services falling into three broad categories:

Residential programs cover EE services for existing residences. They include appliance rebates, home energy audits, weatherization assistance, and other services targeted at homeowners.

Commercial and Industrial programs cover a broad range of businesses. A food processing plant may use a C&I program to upgrade their freezers to more efficient models. A clothing retailer may create cost-saving lighting displays. In their June 10 order, the BPU emphasized that these programs should utilize a “whole building” approach to energy efficiency. Customized and holistic approaches are key to maximizing energy savings in this diverse user group.

Multifamily programs cover apartment and condominium residents. This group faces unique EE challenges. A condo dweller can’t easily re-insulate a wall they share with a neighbor, and an apartment renter can’t upgrade their kitchen appliances when they don’t own them in the first place. Multifamily program design must wrestle with the “split incentives” issue, whereby the apartment owners bear the cost of the EE structural improvement while the tenants receive the benefit of the improvement in reduced energy bills. Low-to-moderate income (LMI) multifamily stakeholders also face affordability barriers. Multifamily programs need to include whole-building approaches that address the unique challenges of this sector.

How can you find out which core programs can help you? A great place to start is each utility’s website. NJCEP’s transition website has program links for all NJ utilities.

What Comes Next?

NJ’s utilities began launching their core programs on July 1, 2021. If you’re an energy consumer, you can already start saving energy through your local utility. But there’s still plenty of work for utilities, the BPU, and program implementers (like many EEA-NJ members) to finish before program rollouts are complete.

As we covered in the last post, the BPU Working Groups continue to hammer out many essential details in core and non-core programs. EEA-NJ sits on the Equity and Workforce Development Working Groups, where we advocate for our members’ interests. EEA-NJ members can get involved by joining our next ad-hoc committee meeting on October 15, 2021. Email Policy Counsel John Kolesnik (jkolesnik@eeaofnj.org) for more information.

Stakeholders can also participate in the BPU’s monthly energy efficiency stakeholder meetings. While the Working Groups are closed-door, these meetings are open to the public.

Participating in these venues helps ensure the core programs accomplish what they’re supposed to do: save energy, cut energy bills, and boost the state economy. Participation also helps shape what happens during the BPU’s triennial review of core programs—now less than three short years away.

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