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March 2018
STATE OF NEW JERSEY BOARD OF PUBLIC UTILITIES
IN THE MATTER OF THE PETITION OF : SOUTH JERSEY GAS COMPANY TO : CONTINUE ITS ENERGY EFFICIENCY : BPU DOCKET NO. ______________ PROGRAMS (“EEP IV”) AND ENERGY : EFFICIENCY TRACKER PURSUANT TO : N.J.S.A. 48:3-98.1 :
CASE SUMMARY, PETITION AND TESTIMONY
1
STATE OF NEW JERSEY BOARD OF PUBLIC UTILITIES
IN THE MATTER OF THE PETITION OF SOUTH JERSEY GAS COMPANY TO CONTINUE ITS ENERGY EFFICIENCY PROGRAMS (“EEP IV”) AND ENERGY EFFICIENCY TRACKER PURSUANT TO N.J.S.A. 48:3-98.1
: : : : :
CASE SUMMARY
BPU DOCKET NO. ___________
South Jersey Gas Company (“South Jersey” or “Company”) files this Petition with the
Board of Public Utilities (“Board”) seeking authorization to continue its Energy Efficiency
Programs (“EEPs”) and associated cost recovery mechanism, the Energy Efficiency Tracker
(“EET”), pursuant to N.J.S.A. 48:3-98.1. The Board first authorized South Jersey to offer EEPs,
and to implement the EET, in July 2009. South Jersey’s current suite of EEPs is comprised of
the Residential Home Performance and Finance Energy Efficiency Program, the Non-Residential
Energy Efficiency Investment Program, the Enhanced Residential HVAC Rebate Program, the
Commercial Customer Direct Install Financing Program, and the Social Marketing and
Education Program (OPOWER). These programs were designed to complement and supplement
the offerings of the New Jersey Clean Energy Program, encourage customers to reduce their
overall energy usage and create jobs.
With this Petition, South Jersey is seeking to continue offering its currently operating
EEPs, with modifications, and to implement new programs for a five-year period commencing
upon Board approval and with an overall budget of approximately $195 million. The new
proposed programs include: (1) the Residential Efficient Products Program; (2) the Residential
Home Assessment with Direct Install Program; (3) the Residential Retrofit Weatherization
Program; (4) the C&I Engineered Solutions Program; (5) the Education Program; and (6) the
Emerging Technologies & Approaches Program. South Jersey is also seeking authorization to
2
recover all costs associated with the EEPs and that it be permitted to earn a return on and of
investments associated with these programs through its EET, set forth in Rider “N” of the
Company’s Tariff.
These programs will provide participating customers with increased incentives to reduce
their natural gas consumption, will support and complement the objectives of the New Jersey
Clean Energy Program and the New Jersey Energy Master Plan, and will create jobs.
If approved by the Board, the impact of the proposed EEPs on the bill of a residential
heating customer using 100 therms during a winter month would be an increase of $1.15, or
0.8%.
STATE OF NEW JERSEY BOARD OF PUBLIC UTILITIES
IN THE MATTER OF THE PETITION OF SOUTH JERSEY GAS COMPANY TO CONTINUE ITS ENERGY EFFICIENCY PROGRAMS (“EEP IV”) AND ENERGY EFFICIENCY TRACKER PURSUANT TO N.J.S.A. 48:3-98.1
: : : : :
PETITION
BPU DOCKET NO. ___________
TO THE HONORABLE BOARD OF PUBLIC UTILITIES:
Petitioner, South Jersey Gas Company (“South Jersey” or “Company”), a public utility
corporation of the State of New Jersey, with its principal office at One South Jersey Plaza,
Folsom, New Jersey, hereby petitions the Board of Public Utilities (“Board”) for authorization to
continue its Board approved Energy Efficiency Programs (“EEPs”) and associated cost recovery
mechanism, the Energy Efficiency Tracker (“EET”), pursuant to N.J.S.A. 48:3-98.1, and in
support thereof, states as follows:
I. INTRODUCTION
1. South Jersey is a corporation duly organized under the laws of the State of New
Jersey and is a public utility engaged in the transmission, distribution, transportation, and sale of
natural gas within its defined service territory within the State of New Jersey. Said service
territory includes all or portions of the following counties: Atlantic, Burlington, Camden, Cape
May, Cumberland, Gloucester and Salem. Within its service territory, South Jersey serves
approximately 383,000 customers.
2. South Jersey is subject to regulation by the Board for the purposes of ensuring
safe, adequate and proper natural gas service pursuant to N.J.S.A. 48:2-23.3.
3. Through this Petition and the accompanying Direct Testimony and Schedules,
South Jersey seeks Board approval to continue its current EEP III Extension Program offerings,
2
with modifications, and implement new EEPs for a five-year period commencing on issuance of
a Board Order, with a total budget of approximately $195 million (“EEP IV” or “Program”).
South Jersey also seeks approval to recover costs associated with the EEPs described herein
through the existing EET.
4. The objective of this proposal is to continue supporting and complementing the
objectives and goals of the New Jersey Clean Energy Program (“NJCEP”) by promoting energy
efficiency, providing additional funding for already successful programs, and developing new
programs to allow for greater customer participation, as well as to support the goals of the
New Jersey Energy Master Plan by reducing energy consumption, producing environmental
benefits, and creating green jobs.
II. BACKGROUND
5. N.J.S.A. 48:3-98.1 authorizes an electric or natural gas utility to provide and
invest in energy efficiency and conservation programs in its service territory on a regulated basis
and provides that the electric or natural gas utility may seek cost recovery for any such programs
by filing a petition with the Board.
6. On May 12, 2008, the Board issued an Order (the “May 2008 Order”) establishing
the procedures by which electric and natural gas utilities can seek approval of energy efficiency
and conservation programs on a regulated basis, as authorized by N.J.S.A. 48:3-98.1. The May
2008 Order also set forth certain Minimum Filing Requirements (“MFRs”) to be included with
any such filings with the Board.
7. On January 26, 2009, South Jersey filed a petition with the Board in Docket
Numbers EO09010059 and GO09010057 seeking approval to develop and implement several
3
EEPs that were to be made available to South Jersey customers over a two-year period in order
to promote energy efficiency and conservation while stimulating the State’s economy.
8. At the same time, the Company sought Board approval for an associated cost
recovery rider mechanism, the EET.
9. The EEPs were designed to complement and supplement the then existing
offerings of the New Jersey Clean Energy Program and the Company’s Conservation Incentive
Program (“CIP”), in an attempt to encourage higher levels of participation in energy efficiency
programs in South Jersey’s service territory.
10. Consistent with the focus of N.J.S.A. 26:2C-45 (“Regional Greenhouse Gas
Initiative Legislation” or “RGGI Legislation”), the then existing New Jersey Energy Master Plan
and the Governor’s economic stimulus goals, the EEPs proposed by South Jersey were geared
toward encouraging customers to reduce their overall energy usage. The EEPs also had the
beneficial effect of creating additional jobs in the energy efficiency market.
11. In an Order dated July 24, 2009 in Docket No. GO09010059 (the “July 2009
Order”), the Board adopted the terms of a Stipulation entered into among South Jersey, Board
Staff, and the Division of Rate Counsel (“Rate Counsel”) (collectively, the “Parties”), approving
the EEPs and the EET for the recovery of costs incurred by South Jersey.
12. Pursuant to the July 2009 Order, the Company was authorized to recover all
revenue requirements associated with the EEPs. Cost recovery was through creation of the EET,
which consisted of two parts. The first part of the EET allowed the Company to earn a return on
the investment and recover the amortization of the regulatory asset (“RA”) to be created upon
South Jersey’s balance sheet. The second part of the EET allowed the Company to recover
incremental operating and maintenance (“O&M”) expenses associated with the EEPs.
4
13. On May 3, 2012, South Jersey filed a second petition in Docket No. GO12050363
seeking to continue its approved EEPs, with certain modifications, and to implement new EEPs.
14. On June 21, 2013 in Docket No. GO12050363, the Board issued an Order (the
“June 2013 Order”) authorizing South Jersey to offer four EEPs through June 2015 with an
authorized budget of $24 million (the “EEP II Extension Program”), which included: (1) the
Residential Home Performance and Finance Energy Efficiency Program; (2) the Non-Residential
Energy Efficiency Investment Program; (3) the Enhanced Residential HVAC Rebate Program;
and (4) the Commercial Customer Direct Install Financing Program. The June 2013 Order also
authorized South Jersey to continue its EET to recover all prudently incurred costs associated
with the EEPs.
15. On January 20, 2015, South Jersey filed a third petition with the Board in
Docket No. GR15010090, seeking approval to further extend the approved EEPs, with
certain modifications, and to implement a new EEP.
16. On August 19, 2015 in Docket No. GR15010090, the Board issued an Order
(the “August 2015 Order) authorizing South Jersey to continue its Residential Home
Performance and Finance Energy Efficiency Program, Non-Residential Energy Efficiency
Investment Program, Enhanced Residential HVAC Rebate Program, and Commercial
Customer Direct Install Financing Program through August 2017 with an authorized budget
of $36.3 million (the “EEP III Extension Program”). The August 2015 Order also authorized
South Jersey to implement the Social Marketing and Education Program (OPOWER), as
well as to continue its EET to recover all prudently incurred costs associated with the EEPs.
17. On January 25, 2017 (the “January 2017 Order), the Board approved an extended
term of the current EEP III Extension Program to December 31, 2018, with no additional funding.
5
III. PROGRAM DESCRIPTION
18. Pursuant to the January 2017 Order, the Company’s authorization to implement
its EEPs will expire by December 31, 2018. As such, South Jersey proposes to commence the
EEPs described herein upon Board approval in this proceeding, in order to facilitate continued
customer interest and to provide greater certainty to contractors providing energy efficiency
services in South Jersey’s territory.
19. South Jersey proposes to continue implementing its existing EEPs, with certain
modifications, hereinafter renamed and referred to collectively as the following: (1) the NJCEP
Residential Loans/Rebates Program; (2) the NJCEP Commercial Loans Program; and (3) the
Residential Behavior Program.
20. South Jersey also requests approval to implement new EEPs to attract and engage
both residential and commercial customers. The proposed EEPs include: (1) the Residential
Efficient Products Program; (2) the Residential Home Assessment with Direct Install Program;
(3) the Residential Retrofit Weatherization Program; (4) the C&I Engineered Solutions Program;
(5) the Education Program; and (6) the Emerging Technologies & Approaches Program.
21. A detailed description of each of the EEPs identified above is included in the
Direct Testimony of Bruce S. Grossman, Program Manager, Residential Energy Efficiency
included with this filing.
22. Also included herewith is the Direct Testimony of Isaac Gabel-Frank of Gabel
Associates. Mr. Gabel-Frank’s Cost Benefit Analysis (“CBA”) summarized in and supported
by his Direct Testimony demonstrates the quantified beneficial nature of the Company’s
proposal. Mr. Gabel’s testimony also identifies non-quantifiable benefits to the State associated
with all of the Company’s proposed EEPs, which are over and above the CBA.
6
IV. PROGRAM INVESTMENTS
23. South Jersey proposes a total program investment level of approximately $166.7
million over a five-year period and an administrative cost allowance of approximately $28.7
million. The administrative costs, also referred to as O&M expenses, primarily consist of
administration, marketing and sales, training, inspections and quality control, and evaluation
costs to support the delivery of the EEPs.
24. The proposed program cost allocation between investment and O&M expenses is
summarized below:
EEP Budget ($ Millions)
Program Investment Residential Programs $134.1 Commercial Programs $22.8 Other Programs $9.8 Total Program Investment $166.7 Operations and Maintenance Administration, Marketing & Sales, Training, Inspections & Quality Control, and Evaluation
$28.7
Total Investment and O&M $195.4
25. Based on market conditions and the level of market response to each EEP,
South Jersey also proposes that it be permitted the flexibility to transfer funding between EEPs
after the initial year of the EEP IV program, in order to maximize energy savings and program
resources.
V. COST RECOVERY
26. South Jersey requests approval to continue the existing EET rate mechanism to
recover costs associated with the EEPs. As previously approved, the cost recovery will consist
of two parts. One part will allow the Company to earn a return on the investment and recover
7
the amortization of the regulatory asset. The second part of the EET will recover incremental
O&M expenses associated with the EEPs.
27. South Jersey shall earn a return on its net investment based upon an authorized
return on equity (“ROE”) and capital structure including income tax effects. The weighted average
cost of capital (“WACC”) utilized to calculate the return on the unamortized portion of the program
investments and to set rates will be 6.80% (8.77% on a pre-tax basis), which is the WACC utilized to
set rates in the Company’s most recent base rate case in Docket No. GR17010071, updated for
subsequent tax reform changes.
28. The Company proposes to amortize its investments over a sixteen-year period to
better align with the useful life of the measures installed for the proposed EEPs.
29. The cost recovery mechanism and revenue requirements associated with the
EEPs are discussed in more detail in the Direct Testimony of Stefany M. Graham, Manager,
Rates and Regulatory Initiatives.
30. South Jersey requests that the initial revenue requirement for the EEPs and an
associated EET rate commence during the month in which the EEPs and associated EET are
approved by the Board based on projected expenditures for the EEPs.
31. Based on the foregoing, and the information provided in the attached Direct
Testimony and supporting Schedules, South Jersey proposes an initial EET rate associated with
the proposed EEPs of $0.011459 per therm, including taxes. This represents an increase of
$0.011459 per therm to the current EET rate of $0.009144 per therm, for a total combined EET
rate of $0.020603 per therm.
8
32. As a result of these proposed rates, the bill impact for a typical residential heating
customer using 100 therms during a winter month will be an increase of $1.15, or 0.8%, effective
on Board approval.
33. Consistent with its currently approved EEPs and EET cost recovery mechanism,
South Jersey will continue to file with the Board, on an annual basis, a petition seeking to
establish future EET rates and to adjust its EET rates to reflect over and under recoveries.
VI. PROCEDURAL MATTERS AND DIRECT TESTIMONY
34. The May 2008 Order required that a utility must meet with Board Staff and the
Division of Rate Counsel at least 30 days prior to filing a petition requesting approval of EEPs to
discuss the nature of the program and program cost recovery mechanism to be proposed.
35. Accordingly, South Jersey met with representatives of Board Staff and the
Division of Rate Counsel on February 14, 2018 and provided an overview of the relief sought in
this Petition, including a description of the proposed EEPs and the proposed cost recovery
mechanism.
36. A draft Notice of Filing and of Public Hearing is attached hereto as Exhibit A.
37. A Schedule of MFR’s and their location in the Company’s filing is attached
hereto as Exhibit B.
38. Also attached to this Petition, in support of the requests made herein, are the
following Direct Testimony:
Exhibit C: Direct Testimony of Bruce S. Grossman, Program Manager,
Energy Efficiency for South Jersey;
Exhibit D: Direct Testimony of Stefany M. Graham, Manager, Rates and
Regulatory Initiatives for South Jersey; and
9
Exhibit E: Direct Testimony of Isaac Gabel-Frank, Vice President, Gabel
Associates.
39. South Jersey has served notice and five (5) copies of this Petition upon the
Division of Rate Counsel, 140 East Front Street, 4th Floor, PO Box 003, Trenton, New Jersey
08625.
40. South Jersey has also served notice and two (2) copies of this Petition upon the
Department of Law and Public Safety, Division of Law, 124 Halsey Street, PO Box 45029,
Newark, New Jersey 07102.
VII. CONCLUSION AND REQUEST FOR APPROVAL
For the foregoing reasons, as supported by the Direct Testimony attached to this Petition,
South Jersey respectfully requests that the Board issue an Order as follows:
1. Finding that the EEPs are in the public interest and authorizing South Jersey to
implement and administer the EEPs under the terms set forth in this Petition and accompanying
Exhibits, for a five-year period commencing upon Board approval;
2. Authorizing the use of deferred accounting and the recovery of the costs
associated with the EEPs through the EET (Rider “N” of the Company’s Tariff);
3. Approving South Jersey’s request for an increase to its EET rate of $0.011459 per
therm until the Company submits its next annual EET filing or the Board issues an Order
changing such rates; and
4. Granting such other relief as the Board deems just, reasonable and necessary.
EXHIBIT A
NOTICE OF FILING OF PETITION AND OF PUBLIC HEARING
IN THE MATTER OF THE PETITION OF SOUTH JERSEY GAS COMPANY FOR APPROVAL TO CONTINUE ITS ENERGY EFFICIENCY PROGRAMS (“EEP IV”) AND
ENERGY EFFICIENCY TRACKER PURSUANT TO N.J.S.A. 48:3-98.1 B.P.U. DOCKET NO. ___________
NOTICE IS HEREBY GIVEN that on March 27, 2018, pursuant to N.J.S.A. 48:3-98.1, South Jersey Gas Company (“South Jersey”) filed a Petition with the Board of Public Utilities (“Board”) seeking authorization to continue offering Energy Efficiency Programs and to continue its Energy Efficiency Tracker (“EET”). South Jersey requested that the Board permit South Jersey to continue offering its existing programs, with modifications, and to implement new programs for a five-year period commencing at the date of Board approval. The proposed programs include: (1) the NJCEP Residential Loans/Rebates Program; (2) the NJCEP Commercial Loans Program; (3) the Residential Behavior Program; (4) the Residential Efficient Products Program; (5) the Residential Home Assessment with Direct Install Program; (6) the Residential Retrofit Weatherization Program; (7) the C&I Engineered Solutions Program; (8) the Education Program; and (9) the Emerging Technologies & Approaches Program. South Jersey has also requested that the Board permit South Jersey to recover all costs associated with its Energy Efficiency Programs, and that it be permitted to earn a return on and a return of investments associated with these programs, through its EET. These programs will provide participating customers with increased incentives to conserve energy and reduce their natural gas consumption. South Jersey proposes to recover the costs, and an authorized return, associated with the proposed Energy Efficiency Programs through a cost recovery mechanism which will operate in a manner consistent with existing Board-approved mechanisms. The proposed EET Charge associated with the proposed Energy Efficiency Programs would be applied to all customer classes. If approved by the Board, the impact of the proposed programs on the EET Charge for a typical Residential Heating customer and those General Service customers using less than 5,000 therms per year would be: Residential Heating Service (RSG)
Therm Level
Bill as of February 10, 2018 (1) Proposed Bill (2)
Dollar Increase
Percent Increase
25 $43.07 $43.36 $0.29 0.7% 100 $140.31 $141.46 $1.15 0.8% 200 $269.97 $272.26 $2.29 0.8%
General Service (GSG) (Using less than 5,000 therms per year)
Therm Level
Bill as of February 10, 2018 (1)
Proposed Bill (2))
Dollar Increase
Percent Increase
500 $610.17 $615.90 $5.73 0.9% 1,000 $1,186.48 $1,197.94 $11.46 1.0% 2,000 $2,339.12 $2,362.03 $22.91 1.0%
(1) Based upon current Delivery Rates and Basic Gas Supply Service (BGSS) charges in effect
October 1, 2017 and assumes that the customer receives BGSS service from South Jersey Gas. (2) Same as (1) except includes change in EET.
EXHIBIT A
Pursuant to statute, the Board has the authority to approve South Jersey’s Petition in a manner that it finds just and reasonable. Therefore, the Board may authorize Energy Efficiency Programs different than those proposed by South Jersey and may authorize an EET Charge different from that proposed by South Jersey. Copies of the Company’s filing are available for inspection at the Company offices located at One South Jersey Plaza, Folsom, New Jersey 08037, or at the Board of Public Utilities, 44 South Clinton Avenue, Trenton, New Jersey 08625. The Company’s filing is also located on the Company website at https://www.southjerseygas.com/About-South-Jersey-Gas/Regulatory-Compliance-Tariff-Information.aspx. NOTICE is further given that public hearings have been scheduled at the following date, times, and place on the Company’s above-mentioned requests.
_________________ at 4:30 and 5:30 PM
Voorhees Township, Municipal Court 2400 Voorhees Town Center Voorhees, New Jersey 08043
(located directly across from Township Library at 203 Laurel Road) The public is invited to attend and make a statement of their views on the proposed increases. Such comments will be made a part of the final record. In order to encourage full participation in this opportunity for public comment, please submit any requests for needed accommodations, including interpreter, listening devices or mobility assistance, forty-eight (48) hours prior to these hearings. Written requests and public comments may be submitted to the Board addressed to: Aida Camacho, Secretary, Board of Public Utilities, 44 South Clinton Avenue, P.O. Box 350, Trenton, New Jersey 08625-0350.
SOUTH JERSEY GAS COMPANY By: David Robbins, Jr. President
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EXHIBIT B
In th
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he P
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For A
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o N
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M
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.S.A
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.1
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tility
sha
ll be
sub
ject
to th
e re
quire
men
ts in
this
and
all s
ubse
quen
t Sec
tions
. If
com
plia
nce
with
Par
t V o
f th
ese
requ
irem
ents
wou
ld n
ot b
e fe
asib
le f
or a
par
ticul
ar p
rogr
am o
r su
b-pr
ogra
m, t
he u
tility
may
requ
est a
n ex
empt
ion
but m
ust d
emon
strat
e w
hy
such
exe
mpt
ion
shou
ld b
e gr
ante
d. E
xam
ples
of h
istor
ical
situ
atio
ns th
at
have
qua
lifie
d fo
r ex
empt
ion
incl
ude
prog
ram
s th
at h
ad a
n ed
ucat
iona
l ra
ther
tha
n eq
uipm
ent-b
ased
foc
us a
nd p
rogr
ams
that
int
rodu
ced
nove
l id
eas
whe
re d
ocum
enta
tion
supp
ortin
g es
timat
ed c
ost/b
enef
its m
ay n
ot b
e ea
sily
prod
uced
.
Exhi
bit E
– D
irect
Tes
timon
y of
Isaa
c G
abel
-Fra
nk
BSG
-1 –
Pro
gram
Des
crip
tions
f. If
the
utili
ty is
filin
g fo
r an
incr
ease
in ra
tes,
char
ges e
tc.,
or fo
r app
rova
l of
a p
rogr
am w
hich
may
incr
ease
rate
s/ch
ange
s to
rate
paye
rs in
the
futu
re,
the
utili
ty sh
all i
nclu
de a
dra
ft pu
blic
not
ice
with
the
petit
ion
and
prop
osed
pub
licat
ion
date
s.
Exhi
bit A
– F
orm
of P
ublic
Not
ice
EXHIBIT B
In th
e M
atte
r of t
he P
etiti
on o
f Sou
th J
erse
y G
as C
ompa
ny
For A
ppro
val T
o C
ontin
ue It
s En
ergy
Effi
cien
cy P
rogr
ams
and
En
ergy
Effi
cien
cy T
rack
er P
ursu
ant t
o N
.J.S
.A. 4
8:3-
98.1
M
INIM
UM
FIL
ING
REQ
UIR
EMEN
TS
FOR
PET
ITIO
NS
UN
DER
N.J
.S.A
. 48:
3-98
.1
LOC
ATIO
N
IN F
ILIN
G
II
. Pr
ogra
m D
escr
iptio
n a.
Th
e ut
ility
shal
l pro
vide
a d
etai
led
desc
riptio
n of
eac
h pr
opos
ed
prog
ram
for w
hich
the
utili
ty se
eks a
ppro
val,
incl
udin
g, if
app
licab
le:
1. D
escr
iptio
n of
pro
gram
2.
Mar
ket s
egm
ent/e
ffic
ienc
y ta
rget
ed
3. D
eliv
ery
Met
hod
4. E
stim
ated
pro
gram
par
ticip
ants
5.
Tot
al p
roje
cted
ann
ual k
Wh/
ther
ms a
nd p
eak
redu
ctio
n 6.
Rel
atio
nshi
p to
exi
stin
g pr
ogra
ms
7. E
xist
ing
ince
ntiv
es
8. P
ropo
sed
ince
ntiv
es
9. A
ntic
ipat
ed jo
b cr
eatio
n 10
. Env
ironm
enta
l em
issi
ons s
avin
gs
11. B
udge
t inf
orm
atio
n 12
. Mar
ketin
g ap
proa
ch (a
s def
ined
in se
ctio
n II(
g))
13. C
ontra
ctor
role
(as d
efin
ed in
sect
ion
II(e)
) 14
. Mar
ket b
arrie
rs (a
s def
ined
in se
ctio
n II(
h))
15. P
rogr
am c
osts
, bro
ken
dow
n in
to th
e fo
llow
ing
cate
gorie
s:
adm
inis
tratio
n; m
arke
ting
and
sale
s; c
ontra
ctor
trai
ning
; in
cent
ives
(inc
ludi
ng re
bate
s and
low
- or n
o-in
tere
st lo
ans)
; in
spec
tions
and
qua
lity
cont
rol;
and
eval
uatio
n. T
o th
e ex
tent
th
at th
e B
oard
dire
cts t
he N
ew Je
rsey
Cle
an E
nerg
y Pr
ogra
m
(“N
JCEP
”) to
repo
rt ad
ditio
nal c
ateg
orie
s, th
e ut
ility
shal
l pr
ovid
e ad
ditio
nal c
ateg
orie
s, as
app
licab
le.
Exhi
bit C
- D
irect
Tes
timon
y of
Bru
ce S
. Gro
ssm
an
BSG
-1 -
Prog
ram
Des
crip
tions
BS
G-3
- Pr
ogra
m E
xpen
ditu
res
b.
Com
paris
on to
in-s
tate
pro
gram
s: T
he u
tility
sha
ll pr
ovid
e a
deta
iled
expl
anat
ion
of h
ow th
e pr
opos
ed p
rogr
am(s
) are
con
sist
ent w
ith
and/
or d
iffer
ent f
rom
exi
stin
g or
pro
pose
d N
ew Je
rsey
Cle
an E
nerg
y Pr
ogra
m o
r util
ity p
rogr
ams
(to th
e ex
tent
pro
pose
d pr
ogra
m
desc
riptio
ns a
re a
vaila
ble)
targ
etin
g th
e sa
me
mar
ket s
egm
ent,
incl
udin
g ho
w th
e pr
opos
ed p
rogr
am(s
) will
com
plem
ent,
supp
lem
ent,
com
pete
with
, and
/or i
mpa
ct e
xist
ing
prog
ram
s be
ing
offe
red
in-s
tate
.
Exhi
bit C
- D
irect
Tes
timon
y of
Bru
ce S
. Gro
ssm
an
BSG
-1 -
Prog
ram
Des
crip
tions
B
SG-4
- C
ompa
rison
of P
rogr
ams
EXHIBIT B
In th
e M
atte
r of t
he P
etiti
on o
f Sou
th J
erse
y G
as C
ompa
ny
For A
ppro
val T
o C
ontin
ue It
s En
ergy
Effi
cien
cy P
rogr
ams
and
En
ergy
Effi
cien
cy T
rack
er P
ursu
ant t
o N
.J.S
.A. 4
8:3-
98.1
M
INIM
UM
FIL
ING
REQ
UIR
EMEN
TS
FOR
PET
ITIO
NS
UN
DER
N.J
.S.A
. 48:
3-98
.1
LOC
ATIO
N
IN F
ILIN
G
c.
C
ompa
rison
to o
ut-o
f-st
ate
prog
ram
s: T
he u
tility
sha
ll pr
ovid
e a
deta
iled
desc
riptio
n of
how
the
prop
osed
pro
gram
(s) a
re s
imila
r to
and/
or d
iffer
ent f
rom
a sa
mpl
ing
of/e
xam
ples
of e
xist
ing
or p
ropo
sed
utili
ty p
rogr
ams
or p
ilots
in o
ther
sta
tes t
hat w
ere
used
to fo
rm th
e ba
sis
of th
e pr
opos
ed p
rogr
am(s
), w
ith a
ll su
ppor
ting
docu
men
tatio
n.
Exhi
bit C
- D
irect
Tes
timon
y of
Bru
ce S
. Gro
ssm
an
BSG
-4 -
Com
paris
on o
f Pro
gram
s
d.
The
utili
ty sh
all p
rovi
de a
det
aile
d de
scrip
tion
of h
ow th
e pr
opos
ed
prog
ram
com
ports
with
New
Jers
ey S
tate
pol
icy
as re
flect
ed in
repo
rts,
incl
udin
g bu
t not
lim
ited
to th
e pr
evai
ling
New
Jers
ey E
nerg
y M
aste
r Pl
an a
nd th
e gr
eenh
ouse
gas
em
issi
ons r
epor
ts to
be
issu
ed b
y th
e N
ew
Jers
ey D
epar
tmen
t of E
nviro
nmen
tal P
rote
ctio
n pu
rsua
nt to
N.J.
S.A
. 26
:2C
- 42(
b) a
nd (c
) and
N.J.
S.A
. 26:
2C-4
3 of
the
Glo
bal W
arm
ing
Res
pons
e A
ct, N
.J.S.
A. 2
6:2C
-37
et se
q.
Exhi
bit C
- D
irect
Tes
timon
y of
Bru
ce S
. Gro
ssm
an
BSG
-1 -
Prog
ram
Des
crip
tions
e.
The
utili
ty sh
all p
rovi
de th
e ex
tent
to w
hich
the
utili
ty in
tend
s to
utili
ze
empl
oyee
s, co
ntra
ctor
s or b
oth
to d
eliv
er th
e pr
ogra
m a
nd, t
o th
e ex
tent
ap
plic
able
, the
crit
eria
the
utili
ty w
ill u
se fo
r con
tract
or se
lect
ion.
Exhi
bit C
- D
irect
Tes
timon
y of
Bru
ce S
. Gro
ssm
an
BSG
-1 -
Prog
ram
Des
crip
tions
f. Th
e ut
ility
shal
l pro
vide
a d
etai
led
desc
riptio
n of
the
proc
ess f
or
reso
lvin
g an
y cu
stom
er c
ompl
aint
s rel
ated
to th
e pr
ogra
m(s
). Ex
hibi
t C -
Dire
ct T
estim
ony
of B
ruce
S. G
ross
man
g.
Mar
ketin
g –
The
utili
ty sh
all p
rovi
de a
des
crip
tion
of w
here
and
ho
w th
e pr
opos
ed p
rogr
am(s
)/pro
ject
(s) w
ill b
e m
arke
ted
or
prom
oted
thro
ugho
ut th
e de
mog
raph
ic se
gmen
ts o
f the
util
ity’s
cu
stom
er b
ase.
Thi
s sha
ll in
clud
e an
exp
lana
tion
of h
ow th
e sp
ecifi
c se
rvic
e, a
long
with
pric
es, i
ncen
tives
, and
ene
rgy
bill
savi
ngs f
or e
ach
prop
osed
pro
gram
/pro
ject
, will
be
conv
eyed
to
cust
omer
s, w
here
ava
ilabl
e an
d ap
plic
able
.
Exhi
bit C
- D
irect
Tes
timon
y of
Bru
ce S
. Gro
ssm
an
BSG
-1 -
Prog
ram
Des
crip
tions
h.
The
utili
ty sh
all p
rovi
de a
des
crip
tion
of a
ny k
now
n m
arke
t ba
rrie
rs th
at m
ay im
pact
the
prog
ram
(s) a
nd a
ddre
ss th
e po
tent
ial
impa
ct o
n su
ch k
now
n m
arke
t bar
riers
for e
ach
prop
osed
pro
gram
w
ith a
ll su
ppor
ting
docu
men
tatio
n. T
his a
naly
sis s
hall
incl
ude
barr
iers
acr
oss t
he v
ario
us m
arke
ts, i
nclu
ding
resi
dent
ial (
both
si
ngle
and
mul
ti-fa
mily
), co
mm
erci
al a
nd in
dust
rial (
both
priv
atel
y ow
ned
and
leas
ed b
uild
ings
), as
wel
l as b
etw
een
smal
l, m
ediu
m,
and
larg
e co
mm
erci
al a
nd in
dust
rial m
arke
ts.
Exhi
bit C
- D
irect
Tes
timon
y of
Bru
ce S
. Gro
ssm
an
BSG
-1 -
Prog
ram
Des
crip
tions
EXHIBIT B
In th
e M
atte
r of t
he P
etiti
on o
f Sou
th J
erse
y G
as C
ompa
ny
For A
ppro
val T
o C
ontin
ue It
s En
ergy
Effi
cien
cy P
rogr
ams
and
En
ergy
Effi
cien
cy T
rack
er P
ursu
ant t
o N
.J.S
.A. 4
8:3-
98.1
M
INIM
UM
FIL
ING
REQ
UIR
EMEN
TS
FOR
PET
ITIO
NS
UN
DER
N.J
.S.A
. 48:
3-98
.1
LOC
ATIO
N
IN F
ILIN
G
III.
Add
ition
al F
iling
Info
rmat
ion
a.
The
utili
ty sh
all d
escr
ibe
whe
ther
the
prop
osed
pro
gram
s will
gen
erat
e in
crem
enta
l act
ivity
in th
e en
ergy
eff
icie
ncy/
cons
erva
tion/
rene
wab
le
ener
gy m
arke
tpla
ce a
nd w
hat,
if an
y, im
pact
on
com
petit
ion
may
be
crea
ted,
incl
udin
g an
y im
pact
on
empl
oym
ent,
econ
omic
dev
elop
men
t an
d th
e de
velo
pmen
t of n
ew b
usin
ess w
ith a
ll su
ppor
ting
docu
men
tatio
n. T
his s
hall
incl
ude
a br
eakd
own
of th
e im
pact
on
the
empl
oym
ent w
ithin
this
mar
ketp
lace
as f
ollo
ws:
mar
ketin
g/sa
les,
train
ing,
pro
gram
impl
emen
tatio
n, in
stal
latio
n, e
quip
men
t, m
anuf
actu
ring
and
eval
uatio
n an
d ot
her a
pplic
able
mar
kets
. W
ith
resp
ect t
o th
e im
pact
on
com
petit
ion
the
anal
ysis
shou
ld in
clud
e th
e co
mpe
titio
n be
twee
n ut
ilitie
s and
oth
er e
ntiti
es a
lread
y cu
rren
tly
deliv
erin
g th
e se
rvic
e in
the
mar
ket o
r new
mar
kets
that
may
be
crea
ted,
whe
re a
pplic
able
. Th
e an
alys
is sh
ould
als
o ad
dres
s co
mpe
titio
n w
ith o
ther
ent
ities
alre
ady
curr
ently
del
iver
ing
the
serv
ice
in th
e m
arke
t and
new
mar
kets
that
may
be
crea
ted,
whe
re a
pplic
able
.
Exhi
bit C
- D
irect
Tes
timon
y of
Bru
ce S
. Gro
ssm
an
BSG
-1 -
Prog
ram
Des
crip
tions
b.
The
utili
ty sh
all p
ropo
se th
e m
etho
d fo
r tre
atm
ent o
f Ren
ewab
le
Ener
gy C
ertif
icat
es (“
REC
s”) i
nclu
ding
sola
r REC
s (“S
REC
s”) o
r any
ot
her c
ertif
icat
e de
velo
ped
by th
e B
oard
of P
ublic
Util
ities
(“B
PU”
or
“Boa
rd”)
, inc
ludi
ng G
reen
hous
e G
as E
mis
sion
s Por
tfolio
and
Ene
rgy
Effic
ienc
y Po
rtfol
io S
tand
ards
incl
udin
g ow
ners
hip
and
use
of th
e ce
rtific
ate
reve
nue
stre
am(s
). Th
e ut
ility
shal
l als
o pr
opos
e th
e m
etho
d fo
r tre
atm
ent o
f any
air
emis
sion
cre
dits
and
off
sets
, inc
ludi
ng R
egio
nal G
reen
hous
e G
as
Initi
ativ
e ca
rbon
dio
xide
allo
wan
ces a
nd o
ffse
ts, i
nclu
ding
ow
ners
hip
and
use
of th
e ce
rtific
ate
reve
nue
stre
am(s
). F
or p
rogr
ams t
hat a
re
antic
ipat
ed to
redu
ce e
lect
ricity
sale
s in
its se
rvic
e te
rrito
ry, t
he u
tility
sh
all q
uant
ify th
e ex
pect
ed a
ssoc
iate
d an
nual
savi
ngs i
n R
EC a
nd
SREC
cos
ts.
Not
App
licab
le
EXHIBIT B
In th
e M
atte
r of t
he P
etiti
on o
f Sou
th J
erse
y G
as C
ompa
ny
For A
ppro
val T
o C
ontin
ue It
s En
ergy
Effi
cien
cy P
rogr
ams
and
En
ergy
Effi
cien
cy T
rack
er P
ursu
ant t
o N
.J.S
.A. 4
8:3-
98.1
M
INIM
UM
FIL
ING
REQ
UIR
EMEN
TS
FOR
PET
ITIO
NS
UN
DER
N.J
.S.A
. 48:
3-98
.1
LOC
ATIO
N
IN F
ILIN
G
IV.
Cos
t Rec
over
y M
echa
nism
a.
Th
e ut
ility
shal
l pro
vide
app
ropr
iate
fina
ncia
l dat
a fo
r the
pro
pose
d pr
ogra
m(s
), in
clud
ing
estim
ated
reve
nues
, exp
ense
s and
cap
italiz
ed
inve
stm
ents
for e
ach
of th
e fir
st th
ree
year
s of o
pera
tions
and
at t
he
begi
nnin
g an
d en
d of
eac
h ye
ar o
f the
thre
e-ye
ar p
erio
d. T
he u
tility
shal
l in
clud
e pr
o fo
rma
inco
me
stat
emen
ts fo
r the
pro
pose
d pr
ogra
m(s
), fo
r ea
ch o
f the
firs
t thr
ee y
ears
of o
pera
tions
and
act
ual o
r est
imat
ed b
alan
ce
shee
ts a
t the
beg
inni
ng a
nd e
nd o
f eac
h ye
ar o
f the
thre
e ye
ar p
erio
d.
SMG
-11
- Pro
form
a In
com
e St
atem
ent a
nd B
alan
ce S
heet
b.
The
utili
ty sh
all p
rovi
de d
etai
led
spre
adsh
eets
of t
he a
ccou
ntin
g tre
atm
ent
of th
e pr
opos
ed c
ost r
ecov
ery
incl
udin
g de
scrib
ing
how
cos
ts w
ill b
e am
ortiz
ed, w
hich
acc
ount
s will
be
debi
ted
or c
redi
ted
each
mon
th, a
nd
how
the
cost
s will
flow
thro
ugh
the
prop
osed
met
hod
of re
cove
ry o
f pr
ogra
m c
osts
.
Exhi
bit D
- D
irect
Tes
timon
y of
Ste
fany
M. G
raha
m
SMG
-10
- Acc
ount
ing
Entri
es
c.
The
utili
ty sh
all p
rovi
de a
det
aile
d ex
plan
atio
n, w
ith a
ll su
ppor
ting
docu
men
tatio
n, o
f the
reco
very
mec
hani
sm it
pro
pose
s to
utili
ze fo
r co
st re
cove
ry o
f the
pro
pose
d pr
ogra
m(s
), in
clud
ing
prop
osed
re
cove
ry th
roug
h th
e So
ciet
al B
enef
its C
harg
e, a
sepa
rate
cla
use
esta
blis
hed
for t
hese
pro
gram
s, ba
se ra
te re
venu
e re
quire
men
ts,
gove
rnm
ent f
undi
ng re
imbu
rsem
ent,
reta
il m
argi
n, a
nd/o
r oth
er.
Exhi
bit D
- D
irect
Tes
timon
y of
Ste
fany
M. G
raha
m
d.
The
utili
ty’s
pet
ition
for a
ppro
val,
incl
udin
g pr
opos
ed ta
riff s
heet
s and
ot
her r
equi
red
info
rmat
ion,
shal
l be
verif
ied
as to
its a
ccur
acy
and
shal
l be
acco
mpa
nied
by
a ce
rtific
atio
n of
serv
ice
dem
onst
ratin
g th
at th
e pe
titio
n w
as se
rved
on
the
Dep
artm
ent o
f the
Pub
lic A
dvoc
ate,
Div
isio
n
of R
ate
Cou
nsel
sim
ulta
neou
s to
its su
bmis
sion
to th
e B
oard
.
See
Ver
ified
Pet
ition
EXHIBIT B
In th
e M
atte
r of t
he P
etiti
on o
f Sou
th J
erse
y G
as C
ompa
ny
For A
ppro
val T
o C
ontin
ue It
s En
ergy
Effi
cien
cy P
rogr
ams
and
En
ergy
Effi
cien
cy T
rack
er P
ursu
ant t
o N
.J.S
.A. 4
8:3-
98.1
M
INIM
UM
FIL
ING
REQ
UIR
EMEN
TS
FOR
PET
ITIO
NS
UN
DER
N.J
.S.A
. 48:
3-98
.1
LOC
ATIO
N
IN F
ILIN
G
e.
Th
e ut
ility
shal
l pro
vide
a ra
te im
pact
sum
mar
y by
yea
r for
the
prop
osed
pr
ogra
m(s
), an
d an
ann
ual c
umul
ativ
e ra
te im
pact
sum
mar
y by
yea
r for
al
l app
rove
d an
d pr
opos
ed p
rogr
ams s
how
ing
the
impa
ct o
f ind
ivid
ual
prog
ram
s, ba
sed
upon
a re
venu
e re
quire
men
t ana
lysis
that
iden
tifie
s all
estim
ated
pro
gram
cos
ts an
d re
venu
es fo
r eac
h pr
opos
ed p
rogr
am o
n an
an
nual
bas
is. S
uch
rate
impa
cts s
hall
be c
alcu
late
d fo
r eac
h cu
stom
er
clas
s. Th
e ut
ility
shal
l als
o pr
ovid
e an
ann
ual b
ill im
pact
sum
mar
y by
ye
ar fo
r eac
h pr
ogra
m, a
nd a
n an
nual
cum
ulat
ive
bill
impa
ct su
mm
ary
by y
ear f
or a
ll ap
prov
ed a
nd p
ropo
sed
prog
ram
s sho
win
g bi
ll im
pact
s on
a ty
pica
l cus
tom
er fo
r eac
h cl
ass.
SMG
-1 -
Ann
ual R
even
ue R
equi
rem
ents
SM
G-1
2 - A
nnua
l Rat
e an
d B
ill Im
pact
Sum
mar
y
f. Th
e ut
ility
shal
l pro
vide
, with
supp
ortin
g do
cum
enta
tion,
a d
etai
led
brea
kdow
n of
the
tota
l cos
ts fo
r the
pro
pose
d pr
ogra
m(s
), id
entif
ied
by c
ost s
egm
ent (
capi
taliz
ed c
osts
, ope
ratin
g ex
pens
e, a
dmin
istra
tive
expe
nse,
etc
.). T
his s
hall
also
incl
ude
a de
taile
d an
alys
is a
nd
brea
kdow
n an
d se
para
tion
of th
e em
bedd
ed a
nd in
crem
enta
l cos
ts
that
will
be
incu
rred
to p
rovi
de th
e se
rvic
es u
nder
the
prop
osed
pr
ogra
m(s
) with
all
supp
ortin
g do
cum
enta
tion.
Em
bedd
ed c
osts
are
co
sts t
hat a
re p
rovi
ded
for i
n th
e ut
ility
’s b
ase
rate
s or t
hrou
gh
anot
her r
ate
mec
hani
sm.
Incr
emen
tal c
osts
are
cos
ts a
ssoc
iate
d w
ith
or c
reat
ed b
y th
e pr
opos
ed p
rogr
am th
at a
re n
ot p
rovi
ded
for i
n ba
se
rate
s or a
noth
er ra
te m
echa
nism
.
BSG
-1 -
Prog
ram
Des
crip
tions
BS
G-3
- Pr
ogra
m E
xpen
ditu
res
g.
The
utili
ty sh
all p
rovi
de a
det
aile
d re
venu
e re
quire
men
t ana
lysi
s tha
t cl
early
iden
tifie
s all
estim
ated
ann
ual p
rogr
am c
osts
and
reve
nues
for
the
prop
osed
pro
gram
(s),
incl
udin
g ef
fect
s upo
n ra
te b
ase
and
pro
form
a in
com
e ca
lcul
atio
ns.
SMG
-1 -
Ann
ual R
even
ue R
equi
rem
ents
h.
The
utili
ty sh
all p
rovi
de, w
ith su
ppor
ting
docu
men
tatio
n: (i
) a
calc
ulat
ion
of it
s cur
rent
cap
ital s
truct
ure
as w
ell a
s its
cal
cula
tion
of th
e ca
pita
l stru
ctur
e ap
prov
ed b
y th
e B
oard
in it
s mos
t rec
ent e
lect
ric a
nd/o
r ga
s bas
e ra
te c
ases
, and
(ii)
a st
atem
ent a
s to
its a
llow
ed o
vera
ll ra
te o
f re
turn
app
rove
d by
the
Boa
rd in
its m
ost r
ecen
t ele
ctric
and
/or g
as b
ase
rate
cas
es.
Exhi
bit D
- D
irect
Tes
timon
y of
Ste
fany
M. G
raha
m
SMG
-2 -
Wei
ghte
d A
vera
ge C
ost o
f Cap
ital
EXHIBIT B
In th
e M
atte
r of t
he P
etiti
on o
f Sou
th J
erse
y G
as C
ompa
ny
For A
ppro
val T
o C
ontin
ue It
s En
ergy
Effi
cien
cy P
rogr
ams
and
En
ergy
Effi
cien
cy T
rack
er P
ursu
ant t
o N
.J.S
.A. 4
8:3-
98.1
M
INIM
UM
FIL
ING
REQ
UIR
EMEN
TS
FOR
PET
ITIO
NS
UN
DER
N.J
.S.A
. 48:
3-98
.1
LOC
ATIO
N
IN F
ILIN
G
i.
If th
e ut
ility
is se
ekin
g ca
rryi
ng c
osts
for a
pro
pose
d pr
ogra
m, t
he fi
ling
shal
l inc
lude
a d
escr
iptio
n of
the
met
hodo
logy
, cap
ital s
truct
ure,
and
ca
pita
l cos
t rat
es u
sed
by th
e ut
ility
.
Exhi
bit D
- D
irect
Tes
timon
y of
Ste
fany
M. G
raha
m
SMG
-4 -
Mon
thly
Rec
over
y an
d In
tere
st C
alcu
latio
n
j. A
util
ity se
ekin
g in
cent
ives
shal
l pro
vide
all
supp
ortin
g ju
stifi
catio
n, a
nd
ratio
nale
for i
ncen
tives
, alo
ng w
ith su
ppor
ting
docu
men
tatio
n,
assu
mpt
ions
and
cal
cula
tions
. U
tiliti
es th
at h
ave
appr
oved
rate
m
echa
nism
s or i
ncen
tive
treat
men
t fro
m p
revi
ous c
ases
and
are
not
se
ekin
g a
mod
ifica
tion
of su
ch tr
eatm
ent t
hrou
gh th
e cu
rren
t fili
ng a
re
not s
ubje
ct to
this
requ
irem
ent.
Not
app
licab
le
EXHIBIT B
In th
e M
atte
r of t
he P
etiti
on o
f Sou
th J
erse
y G
as C
ompa
ny
For A
ppro
val T
o C
ontin
ue It
s En
ergy
Effi
cien
cy P
rogr
ams
and
En
ergy
Effi
cien
cy T
rack
er P
ursu
ant t
o N
.J.S
.A. 4
8:3-
98.1
M
INIM
UM
FIL
ING
REQ
UIR
EMEN
TS
FOR
PET
ITIO
NS
UN
DER
N.J
.S.A
. 48:
3-98
.1
LOC
ATIO
N
IN F
ILIN
G
V
. C
ost/B
enef
it A
naly
sis
a.
The
utili
ty sh
all p
rovi
de a
det
aile
d an
alys
is w
ith su
ppor
ting
docu
men
tatio
n of
the
net b
enef
its a
ssoc
iate
d w
ith th
e pr
opos
ed
prog
ram
(s),
incl
udin
g, if
app
ropr
iate
, an
estim
ate
of it
s pro
ject
ed a
void
ed
cost
stud
y w
ith su
ppor
ting
docu
men
tatio
n an
d w
ork
pape
rs.
This
es
timat
e sh
all i
nclu
de a
void
ed c
osts
ass
ocia
ted
with
, at a
min
imum
, av
oide
d fu
el u
se, g
ener
atio
n, lo
sses
, cap
acity
requ
irem
ents
, tra
nsm
issi
on
and
dist
ribut
ion
costs
, em
issi
ons a
llow
ance
s, R
ECs a
nd S
REC
s, an
d an
y sa
ving
s ass
ocia
ted
with
ene
rgy
and
capa
city
mar
ket i
mpa
cts (
i.e.,
DR
IPE)
of
the
prog
ram
. Th
is c
ost-b
enef
it an
alys
is sh
ould
incl
ude
cons
ider
atio
n of
se
ason
al sa
ving
s and
ene
rgy
pric
es, a
nd sh
all b
e pe
rfor
med
on
a N
et
Pres
ent V
alue
(“N
PV”)
bas
is sp
ecify
ing
all f
inan
cial
ass
umpt
ions
, in
clud
ing
infla
tion
rate
and
dis
coun
t rat
e. T
he v
alue
of t
he a
void
ed
envi
ronm
enta
l im
pact
s and
the
envi
ronm
enta
l ben
efits
and
the
valu
e of
an
y av
oide
d or
def
erre
d en
ergy
infr
astru
ctur
e sh
ould
be
stat
ed se
para
tely
.
Exhi
bit E
- D
irect
Tes
timon
y of
Isaa
c G
abel
-Fra
nk
IGF-
2 - C
ost-B
enef
it A
naly
sis
b.
The
utili
ty sh
all c
alcu
late
a c
ost/b
enef
it an
alys
is u
tiliz
ing
the
Parti
cipa
nt
Cos
t Tes
t, Pr
ogra
m A
dmin
istra
tor C
ost T
est,
Rat
epay
er Im
pact
Mea
sure
Te
st, T
otal
Res
ourc
e C
ost (
“TR
C”)
Tes
t, an
d So
ciet
al C
ost T
est t
hat
asse
sses
all
prog
ram
cos
ts a
nd b
enef
its fr
om a
soci
etal
per
spec
tive
i.e.,
that
incl
udes
the
com
bine
d fin
anci
al c
osts
and
ben
efits
real
ized
by
the
utili
ty a
nd th
e cu
stom
er.
The
utili
ty m
ay a
lso
prov
ide
any
cost
ben
efit
anal
ysis
that
it b
elie
ves a
ppro
pria
te w
ith su
ppor
ting
ratio
nale
s and
do
cum
enta
tion.
Exhi
bit E
- D
irect
Tes
timon
y of
Isaa
c G
abel
-Fra
nk
IGF-
2 - C
ost-B
enef
it A
naly
sis
c.
The
utili
ty m
ust d
emon
strat
e ho
w th
e re
sults
of t
he te
sts
in s
ectio
n V
(b)
supp
ort B
oard
app
rova
l of t
he p
ropo
sed
prog
ram
(s).
Exhi
bit E
- D
irect
Tes
timon
y of
Isaa
c G
abel
-Fra
nk
EXHIBIT B
In th
e M
atte
r of t
he P
etiti
on o
f Sou
th J
erse
y G
as C
ompa
ny
For A
ppro
val T
o C
ontin
ue It
s En
ergy
Effi
cien
cy P
rogr
ams
and
En
ergy
Effi
cien
cy T
rack
er P
ursu
ant t
o N
.J.S
.A. 4
8:3-
98.1
M
INIM
UM
FIL
ING
REQ
UIR
EMEN
TS
FOR
PET
ITIO
NS
UN
DER
N.J
.S.A
. 48:
3-98
.1
LOC
ATIO
N
IN F
ILIN
G
d.
R
enew
able
ene
rgy
prog
ram
s sha
ll no
t be
subj
ect t
o a
cost
/ben
efit
test
but
th
e ut
ility
mus
t qua
ntify
all
dire
ct a
nd in
dire
ct b
enef
its re
sulti
ng fr
om
such
a p
ropo
sed
prog
ram
as w
ell a
s pro
vide
the
proj
ecte
d co
sts.
The
utili
ty m
ust a
lso
dem
onstr
ate
how
such
a p
ropo
sed
prog
ram
will
supp
ort
ener
gy a
nd e
nviro
nmen
tal s
tate
wid
e pl
anni
ng o
bjec
tives
, suc
h as
at
tain
men
t of t
he R
enew
able
Por
tfolio
Sta
ndar
d an
d an
y em
issi
on
requ
irem
ents
.
Not
app
licab
le
e.
The
leve
l of e
nerg
y an
d ca
paci
ty sa
ving
s util
ized
in th
ese
calc
ulat
ions
sh
all b
e ba
sed
upon
the
mos
t rec
ent p
roto
cols
app
rove
d by
the
Boa
rd o
f Pu
blic
Util
ities
to m
easu
re e
nerg
y sa
ving
s for
the
New
Jers
ey C
lean
En
ergy
Pro
gram
. To
the
exte
nt th
at a
pro
toco
l doe
s not
exi
st o
r an
alte
rnat
ive
prot
ocol
is p
ropo
sed
for a
file
d pr
ogra
m, t
he u
tility
mus
t su
bmit
a m
easu
rem
ent m
etho
dolo
gy fo
r the
pro
gram
/or c
onte
mpl
ated
m
easu
re fo
r app
rova
l by
the
Boa
rd.
Exhi
bit E
- D
irect
Tes
timon
y of
Isaa
c G
abel
-Fra
nk
f. Fo
r cos
t eff
ectiv
enes
s ca
lcul
atio
ns, t
he u
tility
sha
ll al
so e
stim
ate
and
refle
ct in
the
ener
gy a
nd c
apac
ity s
avin
gs a
ny fr
ee ri
der a
nd fr
ee d
river
ef
fect
, i.e
., sa
ving
s as
soci
ated
with
par
ticip
atin
g cu
stom
ers
who
wou
ld
have
impl
emen
ted
ener
gy e
ffic
ienc
y or
rene
wab
le e
nerg
y m
easu
res
with
out N
.J.S.
A. 4
8:3-
98.1
ben
efits
or i
ncen
tives
.
Exhi
bit E
- D
irect
Tes
timon
y of
Isaa
c G
abel
-Fra
nk
EXHIBIT B
In th
e M
atte
r of t
he P
etiti
on o
f Sou
th J
erse
y G
as C
ompa
ny
For A
ppro
val T
o C
ontin
ue It
s En
ergy
Effi
cien
cy P
rogr
ams
and
En
ergy
Effi
cien
cy T
rack
er P
ursu
ant t
o N
.J.S
.A. 4
8:3-
98.1
M
INIM
UM
FIL
ING
REQ
UIR
EMEN
TS
FOR
PET
ITIO
NS
UN
DER
N.J
.S.A
. 48:
3-98
.1
LOC
ATIO
N
IN F
ILIN
G
VI.
Eval
uatio
n, M
easu
rem
ent,
and
Ver
ifica
tion
(“EM
&V
”)
a.
The
utili
ty sh
all p
rovi
de a
qua
ntita
tive
anal
ysis
and
pro
ject
ions
of b
oth
the
tota
l and
per
cent
age
redu
ctio
n in
its a
nnua
l kW
h an
d/or
ther
m sa
les
as a
resu
lt of
the
prop
osed
pro
gram
s, as
wel
l as o
f the
pro
ject
ed to
tal i
n pe
ak lo
ad re
duct
ion
expe
cted
from
the
prop
osed
pro
gram
(s),
over
the
lifet
ime
of th
e m
easu
res i
nclu
ded
in th
e pr
ogra
m(s
). T
he u
tility
shal
l al
so p
rovi
de th
is in
form
atio
n ex
pres
sed
as a
per
cent
age
redu
ctio
n re
lativ
e to
its c
urre
nt a
nnua
l pea
k lo
ad.
BSG
-1 -
Prog
ram
Des
crip
tions
b.
For r
enew
able
ene
rgy
prog
ram
s, th
e ut
ility
shal
l pro
vide
the
antic
ipat
ed
cont
ribut
ion
to a
nnua
l kW
h an
d pe
ak lo
ad o
n an
ann
ual b
asis
and
for
the
serv
ice
life
of th
e re
new
able
ene
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EXHIBIT B
EXHIBIT C
BEFORE THE NEW JERSEY BOARD OF PUBLIC UTILITIES
SOUTH JERSEY GAS COMPANY
Direct Testimony
of
Bruce S. Grossman, Program Manager, Energy Efficiency
On Behalf of
South Jersey Gas Company
1
I. INTRODUCTION 1
Q. Please state your name, affiliation and business address. 2
A. My name is Bruce S. Grossman, and my business address is One South Jersey Plaza, Route 3
54, Folsom, New Jersey. I am the Program Manager, Energy Efficiency for the Energy 4
Efficiency Department at South Jersey Gas Company (“South Jersey” or “Company”). In 5
this position, I collaborate in the planning, development, and management of customer 6
directed program activities of South Jersey’s Energy Efficiency Department. I also 7
represent the Company in civic and regulatory forums related to conservation and energy 8
efficiency. 9
10
Q. Please summarize your professional and educational background. 11
A. In total, I have been with the Company for over 39 years, serving in various managerial 12
positions, and have been the Program Manager for energy efficiency initiatives since 2009. 13
I have been responsible for residential, commercial and industrial retail sales for 14
the Company and facilitated negotiations for natural gas contracts with some of the 15
Company’s largest accounts. Since March of 2001, I have represented South Jersey as one 16
of seven utility managers who work with the administrator of the New Jersey Clean Energy 17
Program, within the New Jersey Board of Public Utilities (“Board” or “BPU”) Office of 18
Clean Energy (“OCE”). In that capacity I was the Senior Utility Sponsor for the 19
Commercial / Industrial Construction Program, otherwise known as the SmartStart 20
Buildings Program ®, the Convener of the Combined Heat and Power Program, and the 21
Utility Sponsor for the Home Performance with Energy Star Program. 22
2
I previously represented South Jersey on all of the OCE Energy Efficiency working 1
groups and chaired the Commercial / Industrial Subcommittee of the New Jersey Clean 2
Energy Council. 3
I currently serve as an active member on various committees with the Consortium 4
for Energy Efficiency and serve on the Sustainable Growth Committee of the American 5
Gas Association. In 2017, I joined the Board of the Eastern Heating Cooling Council as 6
Vice Chair. For the past several years, I have served as the Senior Utility Sponsor for the 7
Comfort Partners, Low Income Working Group, which manages the Comfort Partners Low 8
Income Program through the BPU OCE. I earned a Bachelor of Arts degree with Honors 9
in Political Science from Rutgers University Camden College of Arts and Sciences, and a 10
Master’s Degree in Public Policy from the Rutgers School of Public Policy, Camden, NJ. 11
12
II. PURPOSE OF TESTIMONY 13
Q. What is the purpose of your testimony in this proceeding? 14
A. The purpose of my testimony is to provide an overview of the Company’s existing Energy 15
Efficiency Program (“EEP”) offerings, describe the EEPs proposed by the Company in its 16
EEP IV Petition, and to explain why the proposed EEPs, EEP budgets and program 17
duration are appropriate. I will also address certain Minimum Filing Requirements 18
(“MFRs”) required pursuant to the Board’s October 20, 2017 Order in Docket No. 19
QO17091004 (the “October 2017 Order”). 20
21
III. EEP PROGRAM HISTORY 22
Q. Please provide a brief overview of the history of SJG’s previous and existing EEPs. 23
3
A. On July 24, 2009 in Docket No. GO09010059 (the “July 2009 Order”), the Board 1
authorized South Jersey to administer five (5) EEPs: (1) Enhanced Residential Heating, 2
Ventilation and Air Conditioning (“HVAC”) Rebate; (2) Residential Home Performance 3
Finance; (3) Combined Heat and Power; (4) Commercial Customer Direct Install 4
Financing; and (5) Non-Residential Energy Efficiency Investment. The EEPs were 5
designed to complement and supplement the then existing offerings of the New Jersey 6
Clean Energy Program (“NJCEP”) and the Company’s Conservation Incentive Program 7
(“CIP”), in an attempt to encourage higher levels of participation in energy efficiency 8
programs in South Jersey’s service territory. Consistent with the focus of the Regional 9
Greenhouse Gas Initiative (“RGGI”), the then existing New Jersey Energy Master Plan and 10
the Governor’s economic stimulus goals, this suite of EEP’s were designed to encourage 11
customers to reduce their overall energy usage and stimulate the New Jersey economy by 12
creating additional jobs in the energy efficiency market. 13
In May 2012, the Company filed a second Petition seeking to continue its approved 14
EEPs, with certain modifications, and to implement new EEPs. On June 21, 2013 in 15
Docket No. GO12050363 (the “June 2013 Order), the Board authorized South Jersey to 16
continue offering its four (4) EEP’s through June 2015 with an authorized budget of $24 17
million (the “EEP II Extension Program”) which included: (1) the Residential Home 18
Performance and Finance Energy Efficiency Program; (2) the Non-Residential Energy 19
Efficiency Investment Program; (3) the Enhanced Residential HVAC Rebate Program; and 20
(4) the Commercial Customer Direct Install Financing Program. 21
On January 20, 2015, South Jersey filed a third Petition seeking approval to further 22
extend the approved EEPs, with certain modifications, and to implement a new EEP. On 23
4
August 19, 2015 in Docket No. GR15010090 (the “August 2015 Order), the Board 1
authorized South Jersey to continue its Residential Home Performance and Finance Energy 2
Efficiency Program, Non-Residential Energy Efficiency Investment Program, Enhanced 3
Residential HVAC Rebate Program, and Commercial Customer Direct Install Financing 4
Program, through August 2017 with an authorized budget of $36.3 million (the “EEP III 5
Extension Program”). The August 2015 Order also authorized South Jersey to implement 6
the Social Marketing and Education Program (OPOWER). 7
On January 25, 2017 (the “January 2017 Order), the Board approved an extended 8
term of the current EEP III Extension Program to December 31, 2018, with no additional 9
funding. 10
11
IV. PROGRAM OVERVIEW 12
Q. Please describe the proposed EEP IV Program. 13
A. The Company’s proposed EEP IV Program consists of nine (9) EEPs which aim to increase 14
energy efficiency offerings to our residential and commercial customers. This proposal 15
includes the continuation of the Company’s existing EEPs, including: the Residential 16
Home Performance and Finance Program (“Home Performance”), the Enhanced 17
Residential HVAC Rebate Program (“HVAC”), the Non-Residential Energy Efficiency 18
Investment Program (“Non-Residential”), the Commercial Customer Direct Install 19
Financial Program (“Commercial Direct Install”), and the Social Marketing and Education 20
Program. These programs have been combined into three (3) programs and will be referred 21
to as the following going forward: (1) the NJCEP Residential Loans/Rebates Program, (2) 22
the NJCEP Commercial Loans Program; and (3) the Residential Behavior Program. 23
5
SJG also proposes the following new EEPs: (1) the Residential Efficient Products 1
Program; (2) the Residential Home Assessment with Direct Install Program; (3) the 2
Residential Retrofit Weatherization Program; (4) the C&I Engineered Solutions Program; 3
(5) the Education Program; and (6) the Emerging Technologies & Approaches Program. 4
Detailed program descriptions for each of the proposed EEPs are attached hereto as 5
Schedule BSG-1, as required in MFR Section II.a. 6
7
Q. Please briefly describe the current EEPs that will be continued under the EEP IV. 8
A. The Company proposes to continue its current EEPs offered in SJG’s EEP III Extension 9
Program, with limited modifications to the financing terms offered in the NJCEP 10
Residential Loans/Rebates Program and the NJCEP Commercial Loans Program, as 11
discussed in further detail below. 12
13
NJCEP Residential Loans/Rebates Program: This program consists of residential 14
financing and rebate options provided through the Company’s existing Home Performance 15
and HVAC programs. With its Home Performance incentives, SJG offers loans to 16
customers participating in the NJCEP Home Performance program to assist in obtaining 17
whole house energy efficiency, comfort and savings. Consistent with the NJCEP Program, 18
pursuant to the June 2015 Board Order in Docket No. QO15040477, SJG offers Home 19
Performance loans up to $10,000 at zero percent (0%) interest with a repayment term of 20
seven years, or loans up to $15,000 at 4.99% interest with a repayment term of ten years. 21
The Company is not proposing any modifications to these incentives. 22
6
With its HVAC incentive, SJG offers either a financing or rebate option to 1
customers that have HVAC equipment in need of replacement. Customers who opt to 2
receive financing receive up to $6,500 towards the cost of the project with no money down 3
and at zero percent (0%) interest, with a repayment term of five years. Alternatively, 4
qualified customers could opt to receive a $500 rebate for the installation of qualified 5
WARMAdvantage heating and water heating equipment purchases. Customers are only 6
able to choose one option, either to apply for financing or apply for a rebate. With both 7
options, customers are required to have a Home Performance with Energy Star home 8
energy assessment performed by a Building Performance Institute (BPI) certified 9
contractor. This program was designed to incentivize customers to install high efficiency 10
HVAC equipment, energy conservation devices such as attic hatch covers and air sealing, 11
health and safety measures such as carbon monoxide detectors, and to motivate customers 12
to consider a Home Performance option. 13
SJG proposes to modify the HVAC incentive for EEP IV by increasing the 14
financing limit from $6,500 up to $14,000 and increasing the rebate offering from $500 to 15
$600. Over the past couple of years, the Company has identified that the costs of equipment 16
and installation have increased significantly, with the costs ranging from $6,300 to nearly 17
$16,000. Additionally, South Jersey plans to upgrade the required home assessment to a 18
complete “blower door” energy audit for customers entering the loan program. This 19
process will better inform the homeowner regarding where their energy problems are 20
occurring and how to best remedy them, as well as potentially motivate participants to 21
upgrade to a whole house financing approach. The Company also proposes to extend the 22
loan repayment term from five to seven years to align with the terms currently offered by 23
7
the SJG and NJCEP Home Performance Programs discussed above. Overall, the 1
Company’s proposed modifications intend to make the loan payment more affordable to 2
customers and drive increased participation in this EEP through both loan and rebate 3
options. 4
5
NJCEP Commercial Loans Program: This Program consists of commercial financing 6
options through the Company’s existing Non-Residential and Commercial Direct Install 7
programs. With its Non-Residential incentive, SJG offers financing up to $100,000 to 8
eligible non-residential customers with no money down and at zero percent (0%) interest, 9
with a repayment term of five years. This program was designed to generate large energy 10
savings for large commercial and industrial customers. The total amount financed shall 11
not exceed the total project cost, less all NJCEP rebates and incentives. The needs of the 12
customer are assessed by a representative of the NJCEP Market Manager. Through the 13
EEP IV, the Company is proposing to increase the financing limit from $100,000 up to 14
$130,000 and to extend the loan repayment term from five to ten years to provide 15
commercial customers with lower monthly payments and ultimately drive increased 16
participation in this EEP. 17
With its Direct Install incentive, SJG offers qualified customers financing up to 18
30% of the project cost, up to a maximum of $53,571, with no money down and at zero 19
percent (0%) interest, with a repayment term of three years. The program was designed to 20
encourage participation in the NJCEP Direct Install Program by financing the difference 21
between the project’s cost and the incentive provided by the NJCEP Direct Install program, 22
which provides an incentive that covers 70% of a project’s cost, up to a maximum of 23
8
$125,000. Through the EEP IV, the Company is proposing to extend the loan repayment 1
term from three to five years to provide commercial customers with lower monthly 2
payments and drive increased participation in this EEP. 3
4
Residential Behavior Program: With the Company’s Residential Behavior Program, 5
SJG will continue to provide customers with easy-to-understand information regarding 6
energy use, peer usage, and suggested action steps to generate awareness and motivate 7
customers to produce energy savings through behavioral changes and engagement with 8
other EEPs. This is intended to be an expansion of the social marketing and education 9
approach that the Company currently implements through its contract with OPOWER. 10
However, South Jersey intends to issue a Request for Proposal (“RFP”) to several vendors 11
that provide similar services, in order to ensure that enhanced functionality can be captured 12
and that vendor costs are competitive. 13
Direct mail and/or electronic home energy reports (“HERs”) will be the cornerstone 14
of the Program and will provide participants with customized, easy to implement action 15
steps and recommendations to reduce energy consumption and support behavior 16
modification for improved energy efficiency. The Program will also offer an internet-17
based home energy self-audit to all residential customers. This audit will allow customers 18
to better understand their energy usage and opportunities for energy savings. 19
20
Q. Please briefly describe the new EEPs proposed in EEP IV. 21
A. SJG is proposing several new energy efficiency initiatives to attract and engage both 22
residential and commercial customers, as discussed further below. 23
9
1
Residential Efficient Products Program: The Residential Efficient Products Program 2
will promote low and moderately priced energy efficiency products by offering a broad 3
range of energy efficient measures through a variety of channels, including an online 4
marketplace, potential retail in-store rebates, and a network of trade allies. The program 5
will encourage customers to invest in smart thermostats, water saving measures, 6
weatherization items, as well as pre-packaged conservation kits. Installation services will 7
be offered as a component of the program for the smart thermostats. Measures range in 8
type and price but include both natural gas and limited electric energy saving measures that 9
improve energy efficiency in the home. Incentives will be offered on all technologies to 10
reduce initial costs. The program is designed to provide easy and cost-effective access to 11
energy efficient measures through customer preferred channels and provide a means to 12
encourage customers to take the first steps toward energy efficiency. In addition, SJG plans 13
to partner with local foodbanks to distribute no-cost conservation kits to their clients to 14
provide educational information on energy efficiency programs, help provide energy 15
savings assistance to low-to-moderate income customers, and ensure awareness of other 16
available resources, including NJCEP Comfort Partners. This effort will be made in 17
conjunction with the Education Program to enhance outreach opportunities through 18
multiple channels. 19
20
Residential Home Assessment with Direct Install Program: The Residential Home 21
Assessment with Direct Install Program provides customers with an assessment to explore 22
and invest in the improved comfort and energy efficiency of their home. The assessment 23
10
will cost customers $49.00 and will be completed by a trade ally partner(s). During the 1
assessment, customers will benefit from the installation of low-cost measures such as LED 2
lighting, low-flow water devices, and smart electric strips at no additional cost, as well as 3
behavioral suggestions to improve efficiency of the home and a review of thermostat 4
setpoints. Smart thermostats may be made available while the auditors are on the premises 5
through the Residential Efficient Products Program. Following the in-home assessment, 6
the participant will be provided with an energy efficiency action-plan that summarizes the 7
findings of the audit and recommends technology and building performance improvements 8
that will maximize the efficiency of the home. This report will also include details 9
regarding estimated costs, available rebates, and availability of financing programs. 10
11
Residential Retrofit Weatherization Program: SJG proposes to offer free 12
weatherization services and energy education to residential customers who do not qualify 13
for the State’s Comfort Partner Low Income Program, i.e., those whose household income 14
is between 226% and 400% of the annual Federal Poverty Income level. Home audit and 15
cost weatherization work (up to $6,000) will be performed by a team of BPI certified 16
contractors. If South Jersey is made aware of a significant health and safety issue, the 17
Company will evaluate if the system can be repaired (up to $1,000) or replaced on a case-18
by-case basis, if funds permit. For homes that require treatment beyond the scope of the 19
EEP, such services may be coordinated with other local agencies. 20
21
C&I Engineered Solutions Program: The C&I Engineered Solutions Program will 22
provide tailored energy efficiency assistance to public service entities, such as 23
11
municipalities, universities, schools, hospitals, non-profit entities and multi-family 1
facilities. This program is designed to provide specialized services through a contracted 2
engineering firm to assist customers in identifying and undertaking large energy efficiency 3
projects on site, while requiring no up-front funding from the customer. 4
Through this program, customers will be provided with an in-depth audit of their 5
facilities, as well as a detailed assessment and recommendation of energy efficiency 6
measures that could be economically installed. Customer offerings will be determined on 7
a project-by-project basis and may include incentives and/or financing options. If a loan 8
is provided, participants will have the option to pay back the related project costs through 9
interest free financing over a period of five years, or ten years for Home Mortgage Finance 10
Agency (HMFA) qualified multi-family facilities. This program was intended specifically 11
to reach participants in market segments that have typically been underserved or unable to 12
achieve greater energy savings with the current program offerings. 13
14
Education Program: The Education Program is designed to foster energy literacy, 15
provide students with workforce development opportunities, drive energy savings at 16
schools, promote home energy awareness, and distribute home energy efficiency kits to 17
students for their households. SJG intends to partner with Alliance to Save Energy to 18
implement this program. This program is turnkey for SJG as it is rooted in Alliance to 19
Save Energy’s experience working with utilities and providing energy efficiency education 20
free-of-cost to schools, reaching over 250,000 students across the U.S. since 1996. 21
22
12
Emerging Technologies & Approaches Program: The Emerging Technologies and 1
Approaches Program is designed to evaluate, demonstrate, and deploy the next generation 2
of technologies and customer engagement approaches, promote economic development in 3
New Jersey, and coordinate research and development activity and lessons learned with 4
other utilities in New Jersey. By supporting the development and widespread adoption of 5
advanced energy efficiency technologies and customer engagement approaches, this 6
program will support State-wide goals for efficiency and greenhouse gas reductions, 7
including collaborative research facilitated by a third-party implementation contractor, 8
such as a New Jersey research entity. Additional reporting and review processes will be 9
implemented, along with the development of a committee consisting of representatives 10
from utilities, government, trade allies, and other stakeholders. 11
12
Q. Please describe the potential points of entry and customer paths. 13
A. The Company’s EEPs are designed to offer customer entry flexibility at different points in 14
the process and the opportunity to participate in multiple programs. Throughout the 15
process, SJG will continue to educate customers and promote other available EEPs. As 16
such, customers can start or stop their journey at any point based on their individual energy 17
efficiency journey. For example, a customer participating in the Residential Home 18
Assessment with Direct Install Program may decide, after receiving a home assessment, to 19
ultimately purchase a Smart Thermostat through the Residential Efficient Products 20
Program and/or implement whole-house energy measures through the NJCEP Residential 21
Loans/Rebates Program. This potential path for a residential customer is demonstrated 22
further on Schedule BSG-2, attached hereto. 23
13
1
V. PARTICIPATION AND BENEFITS 2
Q. Please describe the participation rates related to SJG’s existing EEPs. 3
A. Customer participation has increased significantly over the past few years with the 4
implementation of SJG’s loan and rebate programs. The following is a summary of 5
participation rates since the inception of the EEPs in 2009 through January 2018: 6
Residential Programs Participants Enhanced HVAC Loans & Rebates 9,144 Home Performance 4,496 Social Marketing and Education Program (OPOWER) 172,113
Subtotal Residential EE Programs 185,753 Commercial & Industrial Programs Participants
Commercial Direct Install 72 Non-Residential 112
Combined Heat and Power - Discontinued 2 Subtotal C&I Programs 186 Total 185,939
7
Q. Please summarize the benefits achieved through SJG’s existing and proposed EEPs. 8
A. The Company’s existing EEPs have been tremendously successful and have also motivated 9
customers to take advantage of the NJCEP programs. As a result, SJG developed the 10
proposed EEP IV to provide expanded availability of energy efficiency initiatives for its 11
customer base. This effort is directed to all customer groups, including those most in need 12
of support and those most challenging to reach, including low and moderate income, 13
businesses, and local government customers. 14
The proposed EEPs will align with State policy and reduce natural gas and electric 15
bills, reduce greenhouse gas emissions in furtherance of New Jersey’s Global Warming 16
14
Response Act, increase employment and associated economic activity, reduce local 1
pollution, and drive economic activity. 2
3
Q. Has the Company performed a program evaluation and if so, what were the results? 4
A. Pursuant to the Board’s Order in Docket No. GR15010090, the Company engaged Applied 5
Public Policy Research Institute for Study and Evaluation (“APPRISE”) to conduct an 6
independent evaluation of its EEPs and report on its findings. The results of the evaluation 7
were provided to BPU Staff and Rate Counsel on September 1, 2016. Overall, APPRISE 8
found that SJG’s EEPs “have increased investments in energy efficiency and resulted in 9
high natural gas savings” and recommended a continuation of the EEPs. 10
11
VI. PROGRAM BUDGET AND DURATION 12
Q. What is the Company’s proposed overall program investment and administrative cost 13
budget? 14
A. SJG is proposing an investment budget of approximately $166.7 million and an 15
administrative budget of approximately $28.7 million, for a total overall program budget 16
of approximately $195.4 million. The administrative costs, also referred to as operating 17
and maintenance expenses (“O&M”), include administration, marketing and sales, 18
training, inspections and quality control, and evaluation costs to support the delivery of the 19
EEPs. A summary of the proposed expenditures for each EEP, including a breakdown by 20
cost category, is shown on Schedule BSG-3. 21
Based on market conditions and the level of market response to each EEP, South 22
Jersey also proposes that it have the ability to transfer funding between EEPs after the 23
15
initial year of the program, in order to maximize energy savings, program resources, and/or 1
to react to changes in the marketplace. 2
3
Q. Please summarize the proposed time period for which these investments will be made. 4
On January 25, 2017, pursuant to Docket No. GO15010090, the Board approved an 5
extended term of the current EEP III Extension Program to December 31, 2018, with no 6
additional funding. As a result, the Company is prepared to and is requesting that the EEP 7
IV Extension Program commence at the date of Board approval and continue for a period 8
of five years through December 31, 2023. 9
10
Q. Why is SJG proposing a five-year continuation of its EEPs? 11
A. Offering the proposed EEPs for a five-year term provides several important benefits that 12
will contribute to the success of the programs. First, and most importantly, a multi-year 13
program enables South Jersey to provide consistent messaging to its customers and 14
facilitates continued customer interest in the EEPs. Programs that are offered on a year-15
to-year basis create customer confusion and uncertainty as to the status and availability of 16
the EEP offerings. This could ultimately lead to lower participation levels, and therefore 17
reduced energy savings. Likewise, for contractors to invest in technical equipment, 18
training, and vehicles, and in some cases building leases, it is important that the programs 19
remain consistent over a longer period of time. 20
In addition, a five-year program will provide greater certainty to the contractors and 21
trade allies providing energy efficiency services in South Jersey’s territory. In turn, 22
16
contractors will be able to develop longer term business and marketing strategies and will 1
be encouraged to hire in the energy efficiency arena. 2
Finally, several of the new proposed programs require a longer lead time to ramp 3
up and successfully sustain the programs. For example, SJG and trade allies will need to 4
engage and retain the appropriate staff, equipment, and administrative resources to promote 5
the EEPs effectively. Securing a five-year program will allow SJG to fully implement and 6
insert these programs into the marketplace efficiently with a qualified workforce. 7
8
VII. DATA & REPORTING 9
Q. What data does SJG intend to collect and evaluate for the proposed programs? 10
A. By partnering with the NJCEP Market Managers and other vendors, South Jersey has 11
collected data regarding annual and lifetime energy savings, environmental air quality 12
improvements (such as CO2 annual and lifetime metric ton emission reductions), and 13
program participant rates. Additionally, the Company has collected financial reporting in 14
terms of investments, operating and administrative costs, the number of program 15
participants who have applied for loans, along with the value of those pending financial 16
commitments. We will continue to collect this data for all proposed programs to monitor 17
the EEPs internally and report to the appropriate parties, as discussed further below. 18
19
Q. Please describe the current and proposed reporting mechanism. 20
A. Pursuant to the EEP III Extension Order in Docket No. GR15010090, the Company 21
currently provides monthly activity reports to the BPU and Rate Counsel, which include 22
investments, administrative costs, and the number of participants for its EEPs on an 23
17
ongoing basis. The Company also provides quarterly activity reports that summarize the 1
related monthly activity reports, with the addition of job creation and loan activity data. 2
The Company proposes to continue providing monthly and quarterly activity 3
reports for the proposed EEPs, commencing upon Board approval of EEP IV through the 4
end of the five-year program. Those reports will be provided no later than sixty (60) days 5
after the end of each calendar month, or quarter end. 6
7
VIII. ADDITIONAL MINIMUM FILING REQUIREMENTS 8
Q. Please provide a detailed explanation of the differences and similarities between each 9
proposed program and programs offered by the New Jersey Clean Energy Program, 10
as well as programs offered by other utilities. 11
A. A comparison of SJG’s proposed EEPs and the programs offered by the NJCEP and other 12
New Jersey utilities is reflected in the program descriptions on Schedule BSG-1, as well as 13
the summary chart attached hereto as Schedule BSG-4. 14
15
Q. Please describe how the proposed programs are similar or different from programs 16
offered in other states. 17
A. A comparison of SJG’s proposed EEPs and those offered in other states is reflected in the 18
summary chart attached hereto as Schedule BSG-4. 19
20
Q. Please provide a detailed description of how the proposed EEPs comport with the 21
New Jersey State policy as reflected in reports, including the New Jersey Energy 22
18
Master Plan and the greenhouse gas emissions reports issued by the Department of 1
Environmental Protection. 2
A. The Company has designed its proposed EEPs to be coordinated with the NJ Clean Energy 3
Program (“NJCEP”), as was done with the previous EEPs that were approved by the Board 4
in 2009, and subsequently extended in 2013 and 2015. Our philosophy has been to partner 5
with the OCE to accelerate activity within South Jersey’s service area, to motivate 6
contractor resources to become energy program advocates, and to be able to provide 7
program services that generate energy and environmental benefits to our customers. 8
Descriptions regarding each of the EEPs are provided in further detail in Schedule BSG-1. 9
While the Company has designed its programs to complement and supplement the 10
existing NJCEP, SJG recognizes that the current program offerings may shift as NJCEP 11
implements changes to align with the anticipated State Strategic Plan. 12
13
Q. Please describe the extent to which the Company intends to utilize employees, 14
contractors or both to deliver the EEP IV Program, as well as the criteria for 15
contractor selection. 16
A. The Company will administer and manage the EEP IV Program utilizing SJG employees, 17
as well as support from third-party implementation contractors. We plan to use third-party 18
implementation contractors for specialized services, such as inspections, loan processing, 19
home energy reports, and the proposed online marketplace platform. Further details 20
regarding the vendor selection process and contractors required for each program are 21
reflected in Schedule BSG-1. 22
23
19
Q. Please describe the process for resolving any customer complaints related to these 1
programs. 2
A. Customer complaints received by the Company regarding any of the proposed programs 3
will be directed to the Program Manager, Energy Efficiency, for prompt investigation and 4
resolution. The Company does not anticipate that any complaints would escalate to a level 5
that would result in the filing of a formal complaint with the BPU. In the event that a 6
complaint is filed, the Company will make every effort towards achieving an amicable 7
resolution of the complaint made against the Company. 8
9
Q. Please describe SJG’s process for customer data protection and security. 10
A. The Company will maintain and protect customer data from unlawful dissemination 11
consistent with applicable law, including all New Jersey statutory and BPU regulatory 12
obligations. SJG will implement privacy and data handling policies and procedures that 13
are consistent with its customer data security protections and any applicable BPU 14
regulations and statutory obligations. The Company will not sell or share any individual 15
customer information or aggregated customer data, except as specified. SJG may share 16
customer information or aggregated customer data with outside third-party implementation 17
contractors, vendors, or trade allies to implement and/or evaluate SJG’s energy efficiency 18
programs, and these companies shall use that information/data for the sole purpose of 19
Program implementation and evaluation. 20
21
Q. Please describe the marketing efforts that SJG will engage in to promote the proposed 22
EEPs to its customers. 23
20
A. Since SJG began offering EEPs, the promotion of energy efficiency has become an integral 1
part of our conversation with existing and prospective customers. Whether speaking with 2
a homeowner, a business owner, or a local/county government official, discussing the 3
importance of energy efficiency is a top priority. Building on the success of previous 4
marketing and educational outreach programs, SJG will continue to use a multi-layered 5
approach to advance the goals of our utility and of the State. These outlets could include, 6
but are not limited to, the following channels: newspaper, television, radio, direct mail, 7
website, billboards, social media, and SJG customer communications. Educational and 8
marketing materials are also disseminated at trade shows, community fairs and public 9
outreach events. Further detail on marketing efforts for each EEP is reflected in Schedule 10
BSG-1. 11
12
Q. What are the potential market barriers to South Jersey’s proposed programs, if any, 13
and how do the proposed programs address these market barriers? 14
A. The primary market barriers that impact the proposed EEPs include the initial cost for 15
energy efficiency (e.g. equipment, products, home retrofits), trade ally awareness and 16
training, and customer awareness and education. 17
Initial Cost: High efficiency HVAC equipment and home retrofits are more expensive and 18
involved, requiring increased investments and commitments from participants. 19
Additionally, efficient products often carry a higher upfront cost. Customers may not have 20
the necessary capital to participate or may not realize the lower lifetime operating cost 21
advantage when initially reviewing these options. 22
21
Trade Ally Awareness and Training: To meet the participation goals for this program, trade 1
allies must be available to perform the work, trained, and interested in promoting and 2
marketing high-efficiency equipment and services to customers. 3
Customer Awareness and Engagement: Residential and commercial customers may not be 4
aware of the best energy efficiency opportunities for their home or business and where to 5
obtain the information and resources they need. 6
SJG will seek to manage barriers to program success through a commitment to 7
applying best practices in program design, delivery, outreach, and marketing/advertising. 8
To the extent possible, SJG will cross-promote programs to spread awareness of the range 9
of efficiency opportunities proposed in this plan. SJG has a strong relationship with trade 10
allies and will continue to regularly train and educate them on the benefits of promoting 11
our EEPs. Further detail on potential market barriers for each EEP is reflected in Schedule 12
BSG-1. 13
14
Q. Will the proposed programs generate incremental activity in the energy 15
efficiency/conservation marketplace? If so, what impact, if any, on competition may 16
be created? 17
A. The proposed EEPs are not only designed to increase energy savings and environmental 18
benefits, but also to stimulate the economy through job creation. With the implementation 19
of the Company’s proposed programs, economic models show that our investment could 20
22
generate approximately 1,208 direct and/or indirect jobs1. Further detail on potential job 1
creation for each EEP is reflected in Schedule BSG-1. 2
With regard to competition, the Company’s approach is to foster customer 3
engagement in the NJCEP and to encourage contractor program participation. South Jersey 4
encourages companies to obtain their proper certifications and accreditations, and thereby 5
offer customers more choices for contractor selection and create competitive pricing for 6
the consumer. Moreover, South Jersey’s model is not designed to compete with offerings 7
or services provided by another utility or the BPU, but rather complement contractor and 8
NJCEP efforts. 9
10
Q. Please describe SJG’s proposed Evaluation, Measurement and Verification 11
(“EM&V”) plan. 12
A. South Jersey Gas intends to secure an independent evaluation contractor to conduct impact 13
and process evaluations for all SJG’s programs over the course of the five-year program. 14
SJG’s independent evaluation contractor will use industry standard methodology and 15
practices to determine baseline and savings values for use in the evaluation studies. The 16
evaluation, measurement, and verification study will provide the methodology for 17
monitoring program progress, including a comparison of actual results to projections, and 18
identify lessons learned in implementing the program. The study will also recommend 19
program enhancements based upon the findings of the evaluation. 20
1 The number of jobs is based on the Rutgers report “Analysis for the 2011 Draft New Jersey Energy Master Plan Update” using the 7.91 per one million investor factor (http://nj.gov/emp/docs/pdf/emp_creeep_report20110412.pdf)
23
Other studies may be commissioned by SJG to be conducted by independent 1
contractors. These may include: review of savings protocols, baseline studies to confirm 2
existing conditions, customer and trade ally feedback, market potential studies to assist 3
with continuous program planning and program development, and known best practices. 4
5
IX. CONCLUSION 6
Q. Please summarize why the BPU should approve EEP IV. 7
A. Consistent with the New Jersey Energy Master Plan, the proposed EEP’s are designed to 8
encourage customers to reduce their overall energy usage, improve the environment, and 9
stimulate the New Jersey economy by creating additional jobs in the energy efficiency 10
market. Implementing the proposed EEP IV will allow SJG to continue the momentum 11
achieved thus far on the existing programs, while also expanding program offerings to 12
reach customers of all demographics and increase participation within SJG’s territory. 13
14
Q. Does this conclude your testimony? 15
A. Yes, it does. 16
South Jersey Gas Energy Efficiency Program Plan 2019-2023
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Table of Contents
Table of Contents i Index of Tables ii
1. INTRODUCTION 1
2. PROGRAM OVERVIEW 2
3. PROGRAM DESCRIPTIONS 3 3.1. SJG Residential Sector Programs 4
3.1.1. Residential Behavior 4 3.1.2. Residential Efficient Products 7 3.1.3. Residential Home Energy Assessment with Direct Install 12 3.1.4. Residential Retrofit Weatherization 16
3.2. SJG Commercial & Industrial Sector Programs 19 3.2.1. C&I Engineered Solutions 19
3.3. SJG Research & Development and Other Sector Programs 24 3.3.1. Emerging Technologies and Approaches 25 3.3.2. Education 32
3.4. NJCEP Loan/Rebate Programs 36 3.4.1. NJCEP Residential Loans/Rebates - HPwES/HVAC 36 3.4.2. NJCEP Commercial Loans 41
4. PROGRAM MANAGEMENT AND MARKET FACTORS 44 4.1. Anticipated Job Creation 44 4.2. Environmental Emissions Savings 45 4.3 Energy Savings 46
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Index of Tables Table 1: Program Overview 2 Table 2: Total Program Expenditures ($millions) 3 Table 3: Residential Behavior Estimated Participation and Savings 5 Table 4: Residential Behavioral Costs 7 Table 5: Residential Efficient Products Estimated Participation and Savings 9 Table 6: Residential Efficient Products Costs 12 Table 7: Residential Home Energy Assessments with Direct Install Estimated Participation and Savings 14 Table 8: Residential Home Energy Assessment with Direct Install Costs 16 Table 9: Residential Retrofit Weatherization Estimated Participation and Savings 17 Table 10: Residential Retrofit Weatherization Costs 19 Table 11: C&I Engineered Solutions Estimated Participation and Savings 21 Table 12: C&I Engineered Solutions Costs 24 Table 13: Key ETA Program Collaborators and Responsibilities 27 Table 14: Efficiency ETA Program Costs 32 Table 15: Educatioin Estimated Participation 34 Table 16: Education Program Costs 36 Table 17: NJCEP Residential Loans/Rebates Estimated Participation and Savings 38 Table 18: NJCEP Residential Rebate/Loans Estimated Costs 41 Table 19: NJCEP Commercial Loans Estimated Participation and Savings 42 Table 20: NJCEP Commercial Loans Estimated Costs 44 Table 21: Direct, Indirect, and Induced Job Creation 45 Table 22: Total Emissions Reduction by Program 46 Table 23: Incremental Annual Gas Savings (therm) and Percent of Gas Sales 47 Table 24: Incremental Annual Electric Savings (kWh) and Electric Demand Savings (kW) 48
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1. INTRODUCTION South Jersey Gas Company (SJG) delivers safe, reliable, and affordable natural gas and promotes energy efficiency to approximately 383,000 residential, commercial and industrial customers in the seven southernmost counties of New Jersey. With a territory of over 2,500 square miles, one third of the geographic area of New Jersey looks to SJG for natural gas and energy efficiency services. This Energy Efficiency (EE) Program Plan was developed by SJG in order to provide expanded availability of energy efficiency initiatives to its customer base, reduce ground-level and atmosphere pollution, and further the energy goals of the State. SJG is proposing to offer new and innovative energy efficiency programs (EEPs) and services within its service territory, as well as continue to support the New Jersey Clean Energy Programs (NJCEP) EEP’s through low and no cost financing for participants in its EEP IV program filing. This EE Program Plan will increase energy efficiency deployment within the SJG service territory, consistent with State and federal policy, including but not limited to the current New Jersey Energy Master Plan and the greenhouse gas emissions reports issued by the New Jersey Department of Environmental Protection.1 This effort is directed to all customer groups, including those most in need of support or most challenging to reach, including low and moderate income, small businesses, and local government customers. This EE Program Plan encompasses nine (9) programs, including R&D initiatives which will incentivize investment in energy efficiency throughout SJG’s service territory, and will result in benefits throughout the entire State. The proposed programs will align with State policy, and reduce customer natural gas and electric bills, reduce greenhouse gases in furtherance of New Jersey’s Global Warming Response Act, increase employment and associated economic activity, reduce local pollution, and drive economic activity. In particular, this EE Program Plan contains the following:
• An overview of the proposed EEP IV program; • Descriptions of all nine programs contained within the proposed EEP IV program; • Quantitative analysis and projections of the costs and savings associated with proposed
programs; and • Details on proposed EEP IV Program and program management, as well as the programs
interaction with the market.
Overall, this EE Program Plan represents an expansion of SJG’s efforts in the energy efficiency sector by utilizing SJG’s unique relationship with its customers. The EE Program Plan provides a
1 Pursuant to N.J.S.A. 26:2C- 42(b) and (c); N.J.S.A. 26:2C-43 of the New Jersey Global Warming Response Act, N.J.S.A. 26:2C-37 et seq.; and the policies of the State.
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pathway for New Jersey to achieve the energy goals of the Governor, as well as realize reduced energy costs and benefits for our environment and economy.
2. PROGRAM OVERVIEWThe EEP IV program consists of nine (9) programs that aim to increase energy efficiency throughout the South Jersey Gas service territory. To implement these programs, SJG estimates a total budget of approximately $195 million over a five year period. This Program Plan provides customers with a mix of existing and new energy efficiency programs administered by SJG, as well as additional loans and rebates to increase participation in the NJCEP administered programs. The availability of State-run programs through NJCEP, as well as individual programs meant to target markets and savings not captured by the NJCEP programs, places SJG at the center of the energy efficiency activity within its service territory. The programs are designed to complement one another and the combination of the SJG administered programs with those administered by NJCEP are expected to reduce natural gas consumption every year over the proposed program period.
The Program Plan consists of the following programs:
Table 1: Program Overview SJG
Residential Sector Programs
SJG C&I
Sector Programs
SJG R&D and Other Sector Programs
NJCEP Loan/Rebate
Programs
Res Behavior C&I Engineered Solutions
Emerging Technologies &
Approaches
NJCEP – Res Loan/Rebate
Programs Res Efficient
Products Education NJCEP – C&I Loan Programs
Res Direct Install Res Retrofit
Weatherization
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To accomplish the goals set forth in this Program Plan, SJG anticipates the following program related spending:
Table 2: Total Program Expenditures ($millions)
It should be noted that approximately $89.1 million of these expenditures are in the form of loans to participants, which are paid back to SJG, and ultimately ratepayers. Approximately $77.6 million of the spending is in direct investment, which includes rebates, incentives, and other capitalized expenditures, and approximately $28.7 million is expense spending to support the operation and administration of the programs. While customer enrollment in the various programs may end at the conclusion of SJG’s programs, SJG will continue to incur costs to administer these programs until such time that all services are fulfilled. These costs include loan administration, product fulfillment, internal administrative costs, and program evaluation. It is anticipated that these costs will total $4.1 million and are summarized above.
3. PROGRAM DESCRIPTIONS This section contains detailed design descriptions and budget information for each proposed program. While there are nine discrete programs, it should be recognized that these programs were designed on an integrated basis and many programs provide a stepping stone (through greater education, customer engagement, or installation of easier to implement measures) that can lead to more advanced energy measures, technologies, and opportunities for savings. Each program description is organized to provide the following information:
• Overview; • Market Segment/Efficiency Targeted; • Delivery Method; • Projected Participants and Energy Savings; • Relationship to Existing Programs;
Program 2018 2019 2020 2021 2022 2023 2024+ Total
Res Behavior $0.0 $1.3 $1.3 $1.3 $1.3 $1.3 $0.0 $6.6 Res Efficient Products $0.1 $3.9 $4.6 $4.9 $4.8 $4.7 $0.3 $23.2 Res Direct Install $0.0 $1.2 $1.4 $1.5 $1.6 $1.8 $0.1 $7.6 Res Retrofit Weatherization $0.0 $1.0 $1.8 $2.5 $3.3 $4.0 $0.1 $12.7 C&I Engineered Solutions $0.0 $0.4 $1.3 $3.1 $4.9 $6.7 $0.2 $16.7 NJCEP - Residential Programs $0.2 $13.4 $16.7 $20.4 $22.6 $25.1 $2.0 $100.3 NJCEP - Commercial Programs $0.1 $1.8 $2.0 $2.3 $2.2 $2.2 $0.2 $10.8 Education $0.0 $0.6 $0.8 $1.0 $1.0 $0.9 $0.0 $4.3 ETA $0.0 $0.2 $1.8 $1.8 $1.9 $1.9 $0.1 $7.7 Evaluation $0.0 $0.9 $0.9 $0.9 $0.9 $0.9 $1.0 $5.5 Total $0.4 $24.7 $32.6 $39.6 $44.5 $49.5 $4.1 $195.4
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• Proposed Incentives; • Marketing Approach; • Contractor Role; • Market Barriers; and • Program Costs.
It is expected that SJG will have the flexibility to adjust program delivery, marketing, implementation, incentive levels, and budgets periodically in order to keep pace with the ever-changing energy efficiency marketplace.
3.1. SJG Residential Sector Programs The proposed residential programs will work together to significantly upgrade efficiency in homes throughout SJG’s service territory. This EE Program Plan provides information on the following programs:
• Residential Behavior; • Residential Efficient Products; • Residential Direct Install; and • Residential Retrofit Weatherization.
3.1.1. Residential Behavior
The Residential Behavior program will provide customers with granular and easy-to-understand information about their energy use, the usage of their peers, and suggested steps to generate awareness and motivate customers to produce energy savings through behavioral changes and engagement with other EEPs. This is intended to be an expansion of the general approach that SJG currently implements through its OPOWER program. However, SJG intends to issue a Request For Proposals (RFP) to several vendors that provide similar services in order to ensure that enhanced functionality can be captured and that vendor costs are competitive. Direct mail and/or electronic home energy reports (HERs) will be the cornerstone of this program and will provide participants with customized, easy to implement action steps and recommendations to reduce energy consumption and support behavior modification for improved energy efficiency. The HERs will present participants with a view of their historical energy consumption compared to peer group customers. The program will also offer an internet-based home energy self-audit to all residential customers. This audit will allow customers to better understand energy usage and savings opportunities. Depending on the results of the RFP process, this functionality may be provided by the same vendor issuing the HERs, or a different vendor supporting other programs. An online portal will be used to provide customers with usage information, recommendations, tips, and links to energy efficiency programs provided by SJG, including the online marketplace with access to other Residential Programs - Efficient Products and Home Energy Assessment with Direct Install, Residential Retrofit Weatherization, as well as relevant Office of Clean Energy (OCE) programs financed by SJG. The online customer portal will integrate the information from
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the HERs and online audit to further assist customers as they look to realize deeper energy savings. SJG will utilize the information gathered from the HERs and online audits, to better understand the residential customer base and improve program offerings. Market Segment/Efficiency Targeted This program will provide home energy reports to 170,000 single family residential customers. This quantity will be reviewed periodically and modified as needed to maximize cost-effective energy savings. The online energy audit will be available to all South Jersey Gas residential customers. The HERs and online audit will offer tailored recommendations to reduce their energy consumption. The efficiency savings target for this program is behavior change. The program will also induce additional customer investments in other programs, but these energy savings will not be reported in the evaluated savings for this program. Delivery Method SJG’s HER vendor will identify and distribute HERs to residential customers at no charge to the participant. The online audit will be available at no additional cost for all SJG residential customers. Subsequent to the launch of the program. Projected Participants and Energy Savings The projected participation and savings associated with this program are summarized in the table below. All values are annual incremental totals, and do not incorporate savings achieved in prior years. A participant in the context of the Residential Behavior program is a residential customer, not a home energy report. Savings estimates are based on projected participation during each year of the forecast period. Table 3: Residential Behavior Estimated Participation and Savings
Program 2019 2020 2021 2022 2023
Participants 170,000 170,000 170,000 170,000 170,000 Natural Gas Savings (therms) 1,235,560 1,235,560 1,235,560 1,235,560 1,235,560
Electric Savings (kWh) 5,100,000 5,100,000 5,100,000 5,100,000 5,100,000 Electric Demand Savings (kW) 850 850 850 850 850
Relationship to Existing Programs The Residential Behavior program has similar components to the existing SJG Social Marketing and Education program. Some peer utilities within the state, including Atlantic City Electric, New Jersey Natural Gas, Public Service Electric & Gas, and Elizabethtown Gas are also running home energy reporting programs for residential customers and online audit tools. Jersey Central Power & Light only provides an online audit tool but it is not integrated with specific information about energy efficiency incentives available in New Jersey. This program will complement the peer utility
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programs and include additional direction to next steps for residential customers within SJG territory. The NJCEP does not offer any similar programs at this time. Proposed Incentives All services under this program will be provided at no cost to the customer. Marketing Approach The residential behavior program will not require marketing for participation. However, the program provides SJG an opportunity to market other program offerings and relevant NJCEP programs. Contractor Role SJG will utilize a third-party vendor implementation contractor to provide the services under this program. Market Barriers The primary market barriers that this program addresses include:
• Lack of Information: Most customer have no sense of how their consumption compares with other households. This program addresses this barrier providing energy use information to customers through the HERs. The HERs also include additional information about how customers can reduce bills through tips and marketing to other programs. Customers who do not receive HERs but are interested in learning more can take advantage of the self-service online audit.
• Lack of Customer Effort: While many utilities have offered self-service online audits for years, the traditional participation rate is very low. This program addresses this barrier by sending the HER reports directly to the customer numerous times throughout the year. The customer does not have to initiate the engagement about their energy usage.
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Program Costs The table below illustrates the projected program expenditures for the program. Table 4: Residential Behavioral Costs
Subprogram 2018 2019 2020 2021 2022 2023 2024+ Total
Administration $575 $36,802 $37,793 $38,918 $39,973 $41,060 $10,920 $206,041
Marketing and Sales $2,875 $48,050 $46,637 $45,932 $44,294 $42,522 $16,089 $246,398
Contractor Training $0 $0 $0 $0 $0 $0 $0 $0
Rebates, Grants, and Other Incentives
$0 $1,190,000 $1,190,000 $1,190,000 $1,190,000 $1,190,000 $0 $5,950,000
Rebate Processing, Inspections, and Quality Control
$1,275 $22,405 $19,695 $20,045 $20,354 $20,672 $5,625 $110,070
Evaluation $375 $6,770 $6,860 $7,006 $7,103 $7,204 $2,202 $37,519
Total $5,100 $1,304,026 $1,300,985 $1,301,901 $1,301,724 $1,301,457 $34,835 $6,550,028
3.1.2. Residential Efficient Products The Residential Efficient Products program will promote energy efficiency products by offering a range of energy efficient measures through a variety of channels, including an online marketplace, potential retail in-store rebates, and collaboration with schools and local foodbanks. This program offers incentives on a variety of products for customers through up-front rebates to reduce initial costs. The program will incentivize customers to purchase and install smart thermostats, water saving measures, weatherization items, as well as pre-packaged conservation kits. These measures range in type and price but include both natural gas and limited electric energy saving measures that improve energy efficiency in the home. The program is designed to provide easy and cost-effective access to energy efficient measures through customers' preferred channels, and also provide a means to encourage customers to take the first steps toward energy efficiency. SJG will also consider expansion of the energy efficient products based on success of the program. The program is designed to provide online channels for customers to purchase a variety of products, as well as ensure the participation process is clear and easy for the customer.
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In addition, energy savings kits will be distributed in coordination with the Education program, as well as at foodbanks to reach customers, many of whom are economically disadvantaged, that likely would not be participating in other program offerings. Ensuring equity of program offerings is an important goal for SJG. This program will allow those individuals access to energy efficiency products, through their children (in the Education program) and through food banks where they may attend. SJG will work with food banks in the SJG service territory to ensure food bank recipients have an opportunity to receive a conservation kit onsite. This will require SJG staff to educate food bank staff on the value of the kits to clientele and ensure the delivery and distribution of the kits is as easy as possible. The program will also likely reach low income renters, a segment of customers unlikely to participate in the NJCEP Comfort Partners Program. Market Segment/Efficiency Targeted The Residential Efficient Products program will be available to all natural gas customers in the SJG territory. The efficiency target for this program will be heating and cooling (thermostats, minor building envelope measures), plug load (smart strips), water heating (low flow showerheads and aerators), and efficient lighting. The kits are primarily targeted at limited and low income residential customers in the SJG service territory. The distribution of the kits at food banks also increases the likelihood of reaching the intended target because it eases the burden of participation sometimes faced in other programs. Kits assembled for distribution in the Education program, and at food banks, may include low flow aerators and showerheads, LED bulbs, smart power strips, and educational energy savings tips. Delivery Method SJG will use its brand, customer outreach infrastructure, and marketplace relationships to increase the availability, awareness, and customer uptake of energy efficient products. SJG will utilize our internal marketing communication tools, including monthly customer bill inserts and messages that will appear on the Company’s website, as well as other electronic media. Traditional advertising methods, including email will be used as well as digital and social media channels. Information will be available at community outreach events and through our channel partners. Customer engagement channels may include:
• Online Marketplace: SJG will launch a self-branded online marketplace to optimize the range of functionality and value for our customers. This online marketplace will be an easy to use source for the online purchase of efficient products and services. Participants will be able to purchase self-installed smart thermostats through the marketplace which will offer instant rebates, as well as a variety of other products. SJG will explore options with the vendor to ensure customer eligibility, and also the potential for validation of in-store rebates for the smart thermostats with major retailers.
• Trade Allies: SJG has had many contractors participate in the program to date and has a strong on-going relationship with these trade allies through our training and education. SJG will ensure these contractors recognize the opportunity they have to promote this program and grow their services by offering installation service for smart thermostats.
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• Mail or Hand Delivery: Kits may be mailed, or hand delivered to schools, or to the parents of students, as well as distributed at food bank locations. This will ease access to these measures and assure that they reach the intended customer segments.
Projected Participants and Energy Savings The projected participation and savings associated with this program are summarized in the table below. All values are annual incremental totals, and do not incorporate savings achieved in prior years. Participation estimates are calculated as the sum of smart thermostat customers assuming 1.2 smart thermostats per participant, the number of general kits/measures sold through the online marketplace, and the number of kits distributed at schools through the Education program and at food banks. Savings estimates are based on projected participation during each year of the forecast period. Table 5: Residential Efficient Products Estimated Participation and Savings
Program Cost Category 2019 2020 2021 2022 2023
Participants 22,917 30,000 35,833 37,083 37,333 Natural Gas Savings (therms) 759,000 903,115 947,973 918,174 808,969
Electric Savings (kWh) 5,395,852 6,512,346 7,531,825 7,722,851 7,805,696 Electric Demand Savings (kW) 240 320 400 443 485
Relationship to Existing Programs While NJCEP currently offers an Energy Efficiency Products Program (for clothes washers & dryers and refrigerators), they do not provide incentives for smart thermostats, water savings items, low cost weatherization products, or offered packaged conservation kits. NJCEP currently does not offer an online marketplace. This program will complement the peer utility programs and expand to include additional low-price entry point products and rebate opportunities to make energy efficiency more accessible to a broader range of customers. Additionally, this program adds components to help meet the needs of low to moderate income customers and raise their awareness of other resources to help with their energy needs. Proposed Incentives SJG proposes to offer up to a $150 rebate for smart thermostats to reduce the upfront cost of the investment. As noted above, SJG will be considering options for midstream delivery with retailers. The incentive level for other products will be roughly 50% of the efficient measure cost, as detailed below:
Low flow aerator $2.00 Low flow showerhead $11.00 Smart Power Strip (Tier 1) $16.50 Smart Power Strip (Tier 2) $25.00
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LED Screw-in General Service Lamp $1.50 LED Nightlight $4.59 Outlet covers $0.48 Weather stripping $2.00
The kits distributed through the Education program and at food banks will be provided free of charge to recipients. SJG intends to monitor the success of this online marketplace delivery approach and may consider additional products in the future. SJG also anticipates that as products may graduate from the Emerging Technologies and Approaches (ETA) program over time, they may be included within this Residential Efficient Products program. SJG may also adjust the incentive levels available through this program in order to ensure customers can implement energy efficiency and to meet market needs. Marketing Approach SJG will use digital and social media channels as well as email campaigns to promote this program and analyze results to maximize its effectiveness and marketing dollars. SJG will promote programs through internal marketing tools including bill inserts, customer newsletters, and brochures detailing how South Jersey Gas is making strides to help bring energy efficient products and services to market. Remarketing campaigns will be employed to target customers who have shown interest in our program(s) but have not yet taken action or have not had the opportunity to take further action. Finally, our community outreach specialist will work to promote all residential programs and educate our customers on energy efficiency and the programs available to assist them. SJG will also look to leverage the Residential Behavior program for ‘warm leads’ into this program through both the home energy reports and online audit tool. SJG will also use targeted promotion based on intelligence gathered by other residential programs, primarily SJG’s Residential Behavior, Residential Home Energy Assessment with Direct Install, and NJCEP Residential Loan/Rebate. A combination of strategies will be used to support outreach to customers. Marketing activities will include:
• Bill inserts, bill messages, email messages, Facebook and Twitter; • Brochures that describe the benefits and features of the program including application
forms and processes. The brochures will be available for various public awareness events (presentations, seminars etc.);
• Company website content providing program information resources, contact information, online application forms, online retail store and links to other relevant service and information resources;
• Public relations materials; and • Promotion at conferences and events used to increase general awareness of the program
and distribute program promotional materials.
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Contractor Role SJG will conduct a Request for Proposals (RFP) to secure a vendor for the online marketplace and the potential to include a retail component for some measures, such as the smart thermostat discount. SJG will work closely with the vendor to plan and implement the online marketplace and potential retail components. To select a qualified third-party vendor, SJG will prioritize criteria including but not limited to:
• Experience delivering similar programs or initiatives; • Features and the related potential to engage more customers; and • Cost effectiveness
Market Barriers The primary market barriers that are addressed by this program include:
• Initial Cost of Efficient Products: Relative to the market baseline, efficient equipment often carries a higher upfront cost and a lower lifetime operating cost. Purchasers often may not fully value the lifetime operating cost advantage of efficient equipment and as a result higher upfront cost is a barrier to purchasing efficient equipment. To address this barrier, incentives are provided to the customer to reduce the initial cost.
• Customer Awareness and Engagement: Residential customers may not be aware of the benefits of installing energy-efficient measures or even the existence of some measures, such as smart thermostats. Some customers may lack the time and resources to secure and /or install such measures. To address this barrier, SJG will educate customers on the benefits of the products available in this program through targeted marketing and ensure that incentives are easily accessible. Through outreach efforts, SJG will seek to partner with trade allies to promote program offerings, and also focus marketing, education, and outreach efforts on the trade ally community to ensure that trade allies are aware of available incentives and prepared to serve customers.
SJG will seek to manage barriers to program success through a commitment to applying best practices in program design, delivery, outreach, and marketing/advertising. SJG’s established customer communication channels, data, and trusted brand in the marketplace, will all be leveraged. The Company’s goal is to deliver best-practice programs that identify and confront market barriers on an ongoing basis. To the extent possible, SJG will cross-promote programs to spread awareness of the range of efficiency opportunities proposed in this plan.
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Program Costs The table below illustrates the projected program expenditures for the program. Table 6: Residential Efficient Products Costs
Program 2018 2019 2020 2021 2022 2023 2024+ Total
Administration $5,525 $128,271 $134,265 $139,144 $143,131 $147,237 $39,414 $736,988
Marketing and Sales $40,625 $393,117 $366,128 $343,982 $311,637 $277,056 $51,029 $1,783,576
Contractor Training $0 $120,000 $120,583 $120,601 $120,619 $120,638 $30,164 $632,605
Rebates, Grants, and Other Incentives
$0 $2,598,980 $3,213,260 $3,617,540 $3,637,030 $3,485,520 $0 $16,552,330
Rebate Processing, Inspections, and Quality Control
$5,375 $618,121 $772,729 $614,252 $615,302 $616,384 $155,276 $3,397,440
Evaluation $3,125 $15,456 $16,024 $16,836 $17,153 $17,480 $5,172 $91,245
Total $54,650 $3,873,945 $4,622,990 $4,852,355 $4,844,873 $4,664,316 $281,055 $23,194,183
3.1.3. Residential Home Energy Assessment with Direct Install
The SJG’s Residential Home Energy Assessment with Direct Install (HEAwDI) program is designed to deliver residential customers with a comprehensive, independent assessment of the energy saving potential in their homes. The assessment will cost customers $49 and will be performed by a third-party contractor. The intent of the assessment is to educate and encourage customers who are good candidates for the NJCEP Residential Loan/Rebate programs to move on to tackle more comprehensive energy-efficiency investments. Customers will be educated about the incentives under those programs to support such work, including the availability of interest-free financing options to ensure that customer recognize upfront cost barriers can be addressed through the other programs in our portfolio. The assessment could include the issuance of the Department of Energy’s (DOE) Home Energy Score. Developed by DOE and its national laboratories, the Home Energy Score provides home owners, buyers, and renters directly comparable and credible information about a home's energy use. Like a miles-per-gallon rating for a car, the Home Energy Score is based on a standard assessment of energy-related assets to easily compare energy use across the housing market. Since
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the assessment will show both the Home Energy Score under the existing conditions in the home and after the installation of the measures recommended by the comprehensive assessment, customers can start to understand that the energy efficiency expenditures can provide immediate savings but are also long-term investments. During the course of the assessment, the third-party auditors will install/provide some low-cost energy savings measures (e.g. low flow showerheads, aerators, smart power strips, LED lightbulbs) and will provide some coaching about other low/no-cost energy savings tips (e.g. changing furnace filters, use of ceiling fans). These assessments also provide non-energy benefits. The assessment will follow Building Performance Institute (BPI) health and safety checklist, including combustion safety-testing. Customers will be made aware of the potential health and safety concerns within their home (e.g. high carbon monoxide levels, ventilation situations fostering mold, back-drafting appliances) and immediate action will be taken to rectify significant conditions (e.g. natural gas leaks). At the conclusion of the assessment, all customers will have a recommended list of potential energy efficiency investments tailored to their home that they can share with contractors. SJG will be able to follow-up with both the customers and the contractors to ensure customers receive timely proposals and have the information they need to consider moving ahead with the NJCEP Loan/Rebate programs. SJG’s energy consultants are available to answer questions and assist customers through the process. When a customer schedules an assessment, SJG will encourage customers to consider purchasing a smart thermostat through our Efficient Products program. Customers opting to make that purchase can have their smart thermostat installed during the assessment. Correspondingly, customers contacting SJG for information on our smart thermostat discount will be encouraged to participate in this program. Market Segment/Efficiency Targeted This program will be available to all residential customers in SJG’s service territory. The efficiency target for this program will be heating and cooling (thermostats), plug load (smart strips), and water heating (low flow showerheads and aerators). Delivery Method SJG will use its brand and customer outreach to encourage customers to participate in this program. SJG also anticipates leveraging the networks of other stakeholders interested in advancing energy efficiency (e.g. local green teams, PowerSave school community members) to help raise awareness of this program. SJG will issue a RFP to retain a third-party contractor(s) to perform the home energy assessments. Projected Participants and Energy Savings The projected participation and savings associated with this program are summarized in the table below. All values are annual incremental totals, and do not incorporate savings achieved in prior
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years. Participation estimates are based on assumed number of assessments conducted. Savings estimates are based on projected participation during each year of the forecast period.
Table 7: Residential Home Energy Assessments with Direct Install Estimated Participation and Savings
Program 2019 2020 2021 2022 2023
Participants 1,250 1,450 1,650 1,850 2,050 Natural Gas Savings (therms) 116,280 134,885 153,490 172,095 190,700 Electric Savings (kWh) 1,227,426 1,423,815 1,620,203 1,816,591 2,012,979 Electric Demand Savings (kW) 101 118 134 150 166 Relationship to Existing Programs The Residential Home Energy Assessment with Direct Install Program will be similar to the Home Energy Assessment program currently offered by NJNG today, but also will include direct install measures. Elizabethtown Gas currently offers a Home Energy Assessment program that offers the installation of other measures (e.g. programmable thermostat). Customers within Elizabethtown Gas’s program may be encouraged to participate in the NJCEP Warm Advantage or Home Performance with ENERGYSTAR programs or may be eligible for other seal-up and insulation measures outside of Home Performance with ENERGY STAR. NJCEP has a Home Performance direct install pilot in conjunction with the Home Performance Program. For a limited time, contractor may install up to nine energy and/or water saving items at no cost to customers. The direct install measures will be completed while the customer is having a contractor install energy efficient upgrades to your home through the Home Performance Program. This is not a stand-alone offer.
The eligible items included are LED light bulbs, low-flow faucet aerators, and EPA WaterSense showerheads.
This pilot also provides the customer with the option of having a contractor install air sealing and/or insulation in their home, with potential rebates of $500 each.
Proposed Incentives The $49 assessment fee is intended to generate stronger customer interest in participating in the program and create additional leads for other programs. The measures included during the assessment will be provided at no additional cost to the customer with the exception of when a smart thermostat is paired with an assessment (this measure will receive up to a $150 rebate). Customers pairing the programs will pay the $49 assessment fee and the net per unit cost of the smart thermostat for up to two units.
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Marketing Approach SJG will implement a multi-pronged direct and indirect marketing campaign to promote this program. SJG will use digital and social media channels as well as email campaigns to promote this program to maximize its effectiveness and our marketing dollars. Programs will be promoted through internal marketing tools, including bill inserts and other communication tools that are both traditional and digital. Remarketing campaigns will be employed to target customers who have shown interest in our program(s) but have not yet taken action or customers who have the opportunity to make additional energy saving measures. SJG also anticipates partnering with local stakeholders to promote the program. Finally, our community outreach specialist will work to promote all residential programs and educate our customers on energy efficiency and the programs available to assist them. SJG will engage customers through a variety of messages, including highlighting:
• the low cost of the assessment; • the immediate savings from the energy savings measures; • the ability to pair with the smart thermostat offer; and • the use of the assessment as an objective roadmap to making their homes more energy
efficient. Contractor Role SJG will conduct a RFP to secure a vendor for the Residential Home Energy Assessment with Direct Install program. SJG will work closely with the contractor to plan and implement this program. To select a qualified third-party vendor, SJG will prioritize criteria including but not limited to:
• Experience delivering similar programs or initiatives; • Features and the related potential to engage more customers; and • Cost effectiveness.
Market Barriers The primary market barriers that impact this program include:
• Customer Awareness and Engagement: Residential customers may not be aware of the best energy efficiency opportunities for their home. This program addresses this barrier by providing an independent assessment.
• Up-front Cost of a Home Energy Audit: Many customers would not be interested in an assessment if the costs were more than $50. This program addresses this barrier by offering the assessment at $49, which is significantly lower than market price.
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Program Costs The table below illustrates the projected program expenditures for the program. Table 8: Residential Home Energy Assessment with Direct Install Costs
Program 2018 2019 2020 2021 2022 2023 2024+ Total
Administration $3,657 $81,616 $94,746 $97,920 $100,670 $103,503 $27,230 $509,343
Marketing and Sales $15,625 $157,982 $155,794 $150,683 $140,857 $130,315 $26,986 $778,242
Contractor Training $0 $0 $894 $921 $948 $977 $252 $3,991
Rebates, Grants, and Other Incentives
$0 $887,588 $1,029,602 $1,171,616 $1,313,630 $1,455,644 $0 $5,858,078
Rebate Processing, Inspections, and Quality Control
$7,625 $73,047 $62,677 $63,730 $64,554 $65,403 $17,194 $354,231
Evaluation $3,125 $13,035 $14,415 $14,919 $15,180 $15,447 $4,556 $80,677
Total $30,032 $1,213,268 $1,358,128 $1,499,789 $1,635,839 $1,771,289 $76,218 $7,584,562
3.1.4. Residential Retrofit Weatherization The Residential Retrofit Weatherization Program provides an opportunity for low to moderate income customers to receive no cost energy efficiency measures and upgrades. This program is intended to service customers not served by the OCE Comfort Partners Program. Income eligible customers will undergo an audit, and then receive no cost direct install measures (such as showerheads, faucet aerators, and LED bulbs) and weatherization measures (insulation, air sealing, and duct sealing). Homeowners with nonfunctional heating systems may also be eligible to receive an efficient furnace or boiler at no cost. The program will cap each project at $6,000 with an additional $1,000 cap on health and safety expenses.
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Market Segment/Efficiency Targeted The Residential Retrofit Weatherization Program will be available to all income qualified single-family and single-family attached natural gas customers in the SJG service territory. To qualify for this program, the customer’s household income must range from 226% to 400% of Federal Income Poverty Level. Currently the Office of Clean Energy offers an income qualified program for customers up to 225% of the Federal Income Poverty Level. This program meets customers above this threshold. The efficiency target for this program will be heating and cooling (thermostats), plug load (smart strips), and water heating (low flow showerheads and aerators). This program also includes building envelope, home heating, and water heating measures, when necessary. Delivery Method This program will be implemented by a third party overseen by SJG staff. The program relies on the local trade ally network to identify and deliver efficiency services to customers according to the format described herein:
• In-Home Energy Audit and In-Home Efficiency Improvements: In-home energy audits are conducted by third party contractors retained by SJG. During the audit, customers will receive free installation of low-cost measures such as LED lighting, low-flow devices, and smart strips at no additional cost, in addition to behavioral suggestions to improve efficiency of the home and a review of thermostat setpoints. Smart thermostats will be made available at no cost while the auditors are on premises. Following the in-home audit, the participant will also be given the opportunity for additional building envelope measures to be installed at no cost. These measures include air sealing and building insulation. Also, customers with nonfunctional heating and cooling equipment will receive new equipment at no cost.
Projected Participants and Energy Savings The projected participation and savings associated with this program are summarized in the table below. All values are annual incremental totals, and do not incorporate savings achieved in prior years. Participation estimates are based upon assumed number of audits conducted. Savings estimates are based on projected participation during each year of the forecast period. Table 9: Residential Retrofit Weatherization Estimated Participation and Savings
Program 2019 2020 2021 2022 2023
Participants 100 200 300 400 500 Natural Gas Savings (therms) 34,540 69,080 103,620 138,160 172,700 Electric Savings (kWh) 101,712 203,424 305,137 406,849 508,561 Electric Demand Savings (kW) 17 35 52 69 86
Relationship to Existing Programs This program is designed to complement the OCE Comfort Partners Program by offering a similar program to a slightly higher income segment. Finally, these customers will also receive marketing
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materials for additional energy efficiency and energy assistance programs offered by SJG and OCE. Proposed Incentives This program will be offered at no cost to participants, meaning SJG will provide 100% incentives. This also includes a no cost audit and up to $1,000 in health and safety related costs. The limit for each individual customer is $6,000, unless a heating system replacement is required. Marketing Approach SJG will utilize a targeted marketing approach to educate potential eligible customers about the program. These could include hard-copy materials to promote awareness among trade allies and customers. SJG also intends to pursue additional marketing opportunities through other programs such as Residential Behavior, where information garnered could be used to identify potential participants for the Residential Retrofit program. SJG will also look at customers that did not qualify for the Office of Clean Energy’s Comfort Partners program that might be eligible for the Residential Retrofit program. Finally, our community outreach specialist will work to promote the program and educate customers on energy efficiency and the programs available to assist them. Contractor Role SJG will conduct a Request for Proposals to secure a vendor for the Residential Retrofit program. SJG will work closely with contractor to plan and implement this program. To select a qualified third-party vendor, SJG will prioritize criteria including but not limited to:
• Experience delivering similar programs or initiatives; • Features and the related potential to engage more customers; and • Cost effectiveness.
Market Barriers The primary market barriers that impact this program include:
• Customer Awareness and Engagement: This program requires customers to schedule a visit for an auditor to visit their home. SJG web portal will provide customers with a list of qualified and geographically relevant trade allies that can complete the in-home audit and installation of efficiency measures to make contractor selection as easy as possible.
• Initial Cost of Home Weatherization: Home weatherization may be more expensive and involved than purchasing efficient equipment and therefore require more participant investment and commitment. Customers must be willing and able to invest in more expensive energy efficiency projects. Customers within this income bracket will be less likely to make these investments than most other customers.
SJG will seek to manage all barriers to program success through a commitment to applying best practices in program design, delivery, outreach, and marketing/advertising. SJG’s established customer communication channels, data, and brand in the marketplace will all be leveraged to deliver best-practice programs that identify and confront market barriers on an ongoing basis. To the extent possible, SJG will cross-promote programs to spread awareness of the range of efficiency opportunities proposed in this plan.
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Program Costs The table below illustrates the projected program expenditures for the program.
Table 10: Residential Retrofit Weatherization Costs
Program 2018 2019 2020 2021 2022 2023 2024+ Total
Administration $4,597 $86,656 $91,402 $94,164 $96,802 $99,518 $26,204 $499,342
Marketing and Sales $8,125 $91,815 $90,501 $89,189 $86,014 $82,575 $18,982 $467,200
Contractor Training $0 $0 $583 $601 $619 $638 $164 $2,605
Rebates, Grants, and Other Incentives
$0 $756,944 $1,513,888 $2,270,831 $3,027,775 $3,784,719 $0 $11,354,157
Rebate Processing, Inspections, and Quality Control
$7,175 $67,006 $55,281 $56,046 $56,730 $57,434 $15,165 $314,836
Evaluation $3,125 $12,623 $13,106 $13,416 $13,631 $13,852 $4,145 $73,897
Total $23,022 $1,015,044 $1,764,761 $2,524,247 $3,281,570 $4,038,735 $64,660 $12,712,039
3.2. SJG Commercial & Industrial (C&I) Sector Programs The proposed commercial & industrial programs are designed to address the specific and unique needs of C&I customers throughout SJG’s service territory. This EE Program Plan provides information on the following program:
3.2.1. C&I Engineered Solutions The C&I Engineered Solutions Program will provide tailored energy efficiency assistance to public service entities, such as municipalities, universities, schools, hospitals, non-profit entities and multi-family facilities. The program will provide expert-guided service throughout delivery to assist customers in identifying and undertaking large energy efficiency projects on site, while requiring no up-front funding from the customer. Through this program, customers will be provided with an in-depth audit of their facilities as well as a detailed audit and recommendation of energy efficiency measures that could be economically installed. Customer incentives are determined on a project-by-project basis, and participants may select their preferred installation vendors. In addition to the calculated project-by-project incentive,
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participants will have the option to pay back the non-incentive portion of the project costs with interest free repayments over a period of five years, or ten years for New Jersey Home Mortgage Finance Agency (HMFA) qualified multi-family facilities. Through this program design, participants in market segments that have typically been underserved are able to achieve greater energy savings. Market Segment/Efficiency Targeted C&I public sector municipalities, universities, schools, hospitals, non-profit, multi-family entities, medical and educational facilities located within SJG service territory are eligible to participate in this program. The program will provide energy audits and incentives to entities that directly serve the public but often have difficultly investing in energy efficiency. The measures included in this program may include HVAC, building envelope, motors, lighting, controls, energy storage, and other energy consuming equipment. Delivery Method SJG will retain qualified vendors to undertake the audit and engineering services required to deliver this program. Participants will contract with their preferred installation trade allies to install the measures included in projects. The program delivery will typically occur in four steps:
• Audit: SJG or its selected third-party implementation contractor shall assess the required level of American Society of Heating, Refrigerating, and Air Conditioning Engineers (ASHRAE) audit to perform based on the complexity of the facility and the potential energy efficiency measures. However, an investment grade audit may not be required for all facilities. The selected SJG vendor then will perform the appropriate level energy audit and prepare a customized audit report that includes a list of recommended energy efficiency upgrades. SJG and its representatives will review the recommended energy efficiency upgrades with the customer to determine whether to proceed with a project.
• Engineering Analysis of Project: Based on the audit results, an engineering analysis may be required. SJG will conduct a screening of the payback and project cost effectiveness and select a set of approved energy efficiency measures for the project. The program engineering vendor will prepare bid-ready documents and work with the participant to prepare a project Scope of Work, which will be used by the customer to obtain installation cost estimates for project.
• Scope of Work/Contractor Bids: The participant will issue a Scope of Work to obtain bids to complete the identified and approved project. SJG, the program engineering vendor, and the participant will review and evaluate the bids/costs received and make the final decision on bid selection. Following bid selection, the proposed project is again screened for cost effectiveness and the participant is presented a funding commitment proposal from SJG. Once (i) the participant and SJG have executed the funding commitment and (ii) the installation contractor and the participant have executed applicable agreements and contracts, the first progress payment equal to approximately 30% of the installation cost can be issued to the customer to initiate the project (Stage 1 Progress Payment).
• Measures Installation and Inspections: SJG, its representatives, and the energy engineering vendor, acting as construction administration agent, will monitor project
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progress. Upon verification of satisfactory project progress, a series of Stage 2 progress payments up to 50% of total project commitment can be issued. When the project is 100% complete, a final project true-up, and final inspection will be undertaken. The final payment based on the results of project true-up is determined and issued only if the final inspection is successfully completed and approved. If the final costs are less than the estimated project commitment, the final payment will be adjusted down to reflect the actual costs. If the final costs are greater than the estimated project commitment, the final payment will not be adjusted and will be paid according to the executed agreements and contracts specifying original costs.
The progress payment schedule described above is designed to ensure that building owners can pay their contractors on a timely basis. Project progress and the project cash flow will be monitored and verified by SJG or a designated third-party implementation contractor. Projected Participants and Energy Savings The projected participation and savings associated with this program are summarized in the table below. All values are annual incremental totals, and do not incorporate savings achieved in prior years. Participation estimates are based upon assumed number of facilities participating. Savings estimates are based on projected participation during each year of the forecast period. Table 11: C&I Engineered Solutions Estimated Participation and Savings
Program 2019 2020 2021 2022 2023
Participants 0 1 3 5 7 Natural Gas Savings (therms) 0 43,290 129,870 216,450 303,030 Electric Savings (kWh) 0 568,386 1,705,158 2,841,930 3,978,702 Electric Demand Savings (kW) 0 124 373 621 870
Relationship to Existing Programs The C&I Engineered Solution Program is a broadening of the approach that PSE&G currently uses for its existing Hospital and Healthcare program and Multi-Family program into new sectors including municipalities, universities, non-profits, and schools, while continuing to offer services to the hospital, healthcare, and multi-family segments previously covered. The C&I Engineered Solutions Program is designed to reach segments of the market that have difficulty accomplishing projects through the other pathways (including existing NJCEP programs). NJCEP does not offer a similar program at this time. With respect to public school districts this program is intended to act in a complementary manner with the existing NJ Energy Savings Investment Program (ESIP) financing mechanism, while also providing an optional, alternative financing mechanism. Districts could follow an ESIP path and leverage the incentives provided through this program to allow for a larger project financed through any of the three ESIP approaches (DIY, ESCO, Hybrid). A school district developing an ESIP would utilize incentives available through the C&I Engineered Solutions Program in lieu of other traditional sources. In addition, the district would also have the option of whether to use the ESIP approach to bond or
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access private financing from an Energy Service Company (ESCO) for the additional ESIP costs, or to utilize the interest-free financing provided by the SJG C&I Engineered Solutions Program. Proposed Incentives The program will provide a 100% incentive for an up-front ASHRAE Level I, II, or III audit. The specific audit level will be determined based upon the type, size, and age of the facility. In addition, SJG will buy-down the simple payback of the recommended energy efficiency project cost for approved measures up to six years, with the resulting payback not less than three years. After the project incentive buy-down, the remaining project costs may be funded by the program with participants repaying the balance of the project costs interest-free over time. SJG will retain the option and flexibility to adjust the incentive offered to participants to enable a whole-building approach that will include additional energy efficiency measures in the project. The full cost of the energy efficiency projects, including engineering, transaction costs and cost of construction, will be covered through a combination of program incentive and customer repayments. Marketing Approach SJG will leverage existing relationships with municipalities, universities, schools, and other public agencies to promote the program and will conduct further outreach through school, university, and municipal associations. In addition, SJG will work with hospitals, healthcare facilities, non-profits, and multi-family agencies to increase awareness of the program. The program will leverage SJG’s existing relationships and communication channels with customers. Contractor Role SJG will select qualified program participating vendors to undertake all auditing and engineering work associated with the program. Participants are permitted to select their preferred installation contractors to complete work on site. SJG may also take on a third-party implementation contractor to assist in the outreach, marketing, and trade ally coordination, to support the large number of municipalities and schools within the SJG service territory. Installation contractors, as selected by the participants, must adhere to the project specifications as developed by SJG and the engineering vendor, and as approved by the participant. SJG will leverage trade allies to support the program, including local construction, electrical, plumbing, and other contractors to educate them on program benefits and assist with building a network of trade allies which will reliably install energy efficient equipment for participating customers. The third-party implementation contractor may also monitor participation to assess the effectiveness of outreach efforts, incentive levels, delivery methods, and trade ally availability to provide suggestions to ensure that the program is continually providing SJG customers with their needs. To select a qualified third-party implementation contractor, South Jersey Gas will prioritize criteria including but not limited to:
• Experience delivering similar programs or initiatives; • Resources and marketing strength; and • Cost effectiveness.
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Market Barriers The primary market barriers that impact this program include:
• Business/Operational Constraints: Municipalities, universities, schools and hospital
facilities often have unique operational constraints that act as a barrier to efficiency projects from being implemented. This barrier will be addressed by ensuring that the program operates cooperatively with participants, provides technical assistance, and offers timely incentives and financing support.
• Customer Awareness and Engagement: Eligible participants in the municipalities, universities, schools and hospital facilities market may be unaware of energy efficiency opportunities and programs because the segment has historically not been well served by traditional demand side management (DSM) programs. To address this barrier, this program was designed specifically to support the municipalities, universities, schools and hospital facilities segment. SJG will execute a targeted outreach strategy to ensure that relevant customers are aware of program opportunities and consider energy efficiency in equipment investments and long-term planning. The program will also prepare and distribute successful case studies of prior participants and their experiences and energy savings.
• Cost Effectiveness: Efficiency upgrades require an initial investment that is recovered by lower long-run operating costs and non-energy benefits. Municipalities, universities, schools and hospital facilities projects often carry longer payback periods than traditional DSM projects due to the unique needs of the segment (e.g. hospital & health buildings). To address this barrier, incentives and financing is provided to the customer to reduce the initial cost, and SJG will endeavor to communicate the non-energy benefits offered by many efficiency upgrades that are not well captured in traditional cost/benefit analysis.
SJG will seek to manage all barriers to program success through a commitment to applying best practices in program design, delivery, outreach, and marketing/advertising. SJG’s established customer communication channels, data, and brand in the marketplace will all be leveraged to deliver best-practice programs that identify and confront market barriers on an ongoing basis. To the extent possible, SJG will cross-promote programs to spread awareness of the range of efficiency opportunities proposed in this plan.
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Program Costs The table below illustrates the projected expenditures for the program. Table 12: C&I Engineered Solutions Costs
Program 2018 2019 2020 2021 2022 2023 2024+ Total
Administration $6,866 $179,596 $184,684 $190,132 $195,536 $201,102 $52,709 $1,010,624
Marketing and Sales $10,000 $141,424 $140,062 $140,162 $138,439 $136,496 $30,102 $736,685
Contractor Training $0 $0 $0 $0 $0 $0 $0 $0
Rebates, Grants, and Other Incentives
$0 $0 $899,867 $2,699,602 $4,499,337 $6,299,072 $0 $14,397,878
Rebate Processing, Inspections, and Quality Control
$5,000 $55,112 $56,465 $58,917 $65,166 $75,714 $139,433 $455,807
Evaluation $5,000 $25,037 $25,488 $26,057 $26,539 $27,035 $7,886 $143,043
Total $26,866 $401,169 $1,306,567 $3,114,869 $4,925,016 $6,739,418 $230,131 $16,744,037
3.3. SJG Research & Development and Other Sector Programs The proposed research & development and other programs represent innovative ideas meant to test new technologies and processes of attaining energy savings, and therefore the quantifiable savings of the pilot programs cannot be ascertained. Because of the novelty of these pilot programs, compliance with MFR Part V would not be feasible. The pilot programs are cutting-edge, and lack easily produced documentation supporting estimated costs/benefits. In addition, some of these pilot programs have an educational rather than equipment-based focus. Because of this, the pilot programs described below should be exempt from the requirements set forth in MFR Part V. This EE Program Plan provides information on the following programs:
• Emerging Technologies and Approaches; and • Education
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3.3.1. Emerging Technologies and Approaches The purpose of the Emerging Technologies and Approach (ETA) Program is to evaluate, demonstrate, and deploy the next generation of technologies and customer engagement approaches, promote economic development in New Jersey, and coordinate research and development (R&D) activity and lessons learned with all utilities in New Jersey. The ETA program is proposed as a pilot due to the experimental and supporting role it will play in SJG’s energy efficiency efforts. By supporting the development and widespread adoption of advanced energy efficiency technologies and customer engagement approaches, this pilot will support statewide goals for efficiency and greenhouse gas (GHG) reductions. The pilot accomplishes these tasks through a collaborative research, reporting, and review process with committee of utility, government, trade ally, and other stakeholders. Primary objectives of the ETA program include:
• Provide field-tested insights into new energy efficiency programs and technologies that facilitate energy savings for residential, commercial, and industrial customers;
• Provide support to innovators, researchers, and product developers by evaluating, demonstrating, and promoting their energy efficiency technologies;
• Continually identify, evaluate, and support promising technologies that can then be added to future energy efficiency programs (and the market); and
• Support the successful deployment of new technologies through case studies and marketing materials, contractor training events, contractor and customer recruitment, and other activities.
The ETA program is designed to be an ongoing effort to identify and support emerging technologies that can provide large scale energy savings for New Jersey utility customers in future years. Emerging technologies are those that meet some or all of the following criteria:
• Development phase; • Early commercial availability; • Unproven in commercial setting; • Low market penetration; and • Require business model innovation.
While there is significant energy efficiency potential for New Jersey with current technologies, New Jersey must continue to develop and deploy new technologies, approaches, and offerings to meet New Jersey’s long-term clean energy goals. R&D must be used to determine how new technologies and emerging engagement strategies can be promoted on a large scale. The ETA program will involve numerous activities to identify, evaluate, demonstrate, and deploy new energy efficiency technologies and implementation approaches for SJG’s programs. These activities may include:
• Conducting measure scans to identify technologies under development by other utilities, national laboratories, R&D organizations, manufacturers, and others, and implementing a proof-of-concept pilot with SJG customers
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• Developing business cases for promising technologies that include information such as: unit energy savings, installed cost, incremental cost, lifetime, cost-effectiveness, applicable market sizes, available manufacturers, potential incentive levels, program design strategies, etc.
• Performing laboratory testing or field demonstrations to collect energy savings and other data to validate performance;
• Conducting market research to include surveys, focus groups, interviews, and due diligence reviews of potential new third-party implementation firms to understand the attractiveness and suitability of the new technology or service for customers, trade allies, and other New Jersey stakeholders
• Conducting program pilots where the technologies or service delivery innovations are offered to select groups of customers to measure performance on a wider scale, in preparation for a full program offering
• Educating contractors and other stakeholders by conducting on-line or in-person training events, and preparing marketing materials such as case studies, program brochures, and frequently-asked-question (FAQ) documents
The ETA Program will operate with a rolling process of identifying and pre-qualifying pilot research activities and implementing and evaluating results. SJG will look to partner with peer utilities in New Jersey to achieve operational efficiency and improve the energy efficiency offerings of all programs across the State. The ETA program should be exempt from the requirements set forth in MFR Part V because it is experimental and is testing approaches that are proposed for commercialization, thus the total benefits cannot be estimated at this time. Market Segment/Efficiency Targeted This program will address promising efficiency technologies and delivery strategies that will impact SJG, and ultimately all customers in all sectors across New Jersey. The list of technologies and delivery approaches to be tested in the R&D program will evolve over time and react to changes in the marketplace, advances in new technologies, and customer engagement strategies that are determined to be potentially commercially viable and ready for testing. Delivery Method SJG will administer the ETA program with third-party implementation contractors with support from SJG staff and other stakeholders (e.g., other New Jersey utilities, university researchers, technology developers, trade allies, customers, and others). SJG will also consider New Jersey universities, colleges and other utilities as key implementation partners. The ETA program will involve collaboration between several groups: an ETA program facilitator, participating utilities, and stakeholder advisory committee (SAC). Table 14 describes the anticipated structure and roles for the program.
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Table 13: Key ETA Program Collaborators and Responsibilities ETA Program Group
Member(s) Key Responsibilities
ETA Facilitator
Third party implementation contractors
• Lead technical and market research, engineering analysis, program design, and other activities which lead to identification of the R&D opportunities
• Design the research project and contracting through a competitive process with vendors to finalize and propose an implementation plan that will test different R&D approaches to advancing the program goals.
• Convene focused meetings for more in-depth review of particular programs or new technologies
• Issue meeting agendas and supporting materials at least one week in advance
• Invite participation of subject matter experts (SME) as necessary, including manufacturer representatives, industry associations, and potentially DOE/EPA representatives
• Serve as a central online repository for all ETA Program reports and SAC minutes
• Help recruit additional SAC members if gaps identified • Leverage Clean Energy Learning Center for training for
ETA Program ready for broader market adoption Participating Utilities
SJG staff and other participating New Jersey utilities
• Provide the initial proposals for ETA Program • Fund approved programs • Recruit customers and contractors for ETA programs • Execute broader customer and contractor outreach
strategies for ETA program • Work with ETA Facilitator to develop agendas for all
SAC meetings • Help recruit additional SAC members if gaps identified • Share insights from participation in national/regional
organizations • Prepare Quarterly Progress Reports for programs in
process to be reviewed with SAC • Prepare final ETA program reports for programs and
technologies that have completed testing and review. Disposition options addressed further in this proposal
• Draft annual budgets, program activities and related milestones, in consultation with ETA Facilitator, for SAC review and discussions
• Fund independent evaluation
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Stakeholder Advisory Committee (SAC)
Stakeholders • Members expected to be active participants in meetings and provide feedback if unable to participate
• Member input is expected to ensure ETA programs have properly considered training needs, outreach plans, likely market acceptance, potential market barriers, etc.
• Members encouraged to share additional research about technologies and program approaches as identified
• SAC members may include representatives from utilities, researchers and other parties. from New Jersey colleges and universities, NJCEP Program Administrator, Office of Clean Energy Staff, Rate Counsel, NJEDA and/or Heldrich Center, NJACCA, Eastern Heating & Cooling Council, NJBIA,
• Additional SMEs may be invited to participate for particular meetings, including contractors and customers participating in ETA projects
As noted in the responsibilities chart, activities within this program will establish a regular review of new technologies and approaches and review progress through quarterly and annual reports. The following section outlines the review and reporting process:
• Utilities propose new technologies and approaches for consideration, including a characterization for its current status (e.g., early stage development, late stage testing, deployment support), and potential activities
• Each utility will work closely with the ETA Facilitator to schedule overview sessions for the SAC members to establish a baseline understanding of the initial programs
• Each participating utility shall prepare Quarterly Progress Reports for each program. These reports are intended to serve as Executive Summaries of program status to facilitate discussion with the SAC members. Each Quarterly Progress report will address:
o Recap of program objectives o Overview of relevant activities conducted in that quarter which may include the
following based upon the status of the project, as appropriate: Updates on collaborative research funding; Updates on customer/contractor recruitment; Result from testing; Identification of market barriers; Efforts to address market barriers; Identification of training needs; Training Metrics – participation and feedback; Participation and performance metrics; Unforeseen challenges; Additional research/testing needs identified; and Refinements in program approach
o Funds expended to date o Status of milestones
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Each participating utility shall prepare a Final Report for each technology and approach included in ETA. Final reports are intended to address whether the technology or approach should continue in the program (e.g., move from lab testing to field testing), move directly into existing approved EE Programs, or might not be worth further pursuit at this time (e.g. more promising technologies or programs identified or overwhelming market barriers). Each Final Report will address:
• Recap of program objectives • Overview of relevant activities conducted during the entire project, which may include the
following, as appropriate: o Outcomes of collaborative research funding; o Customer and contractor feedback; o Result from testing; o Identification of market barriers/unforeseen challenges with proposed remedies; o Identification of training needs with proposed workplan; o Training metrics – participation and feedback; o Updates on customer/contractor recruitment; o Participation and performance metrics; o Customer and contractor feedback; o Identification of on-going training needs with proposed workplan; and o Marketing and outreach plan
• Funds expended to date • Rationale for disposition
Projected Participants and Energy Savings Given the uncertainty regarding the measures to be developed and deployed and the need to further study this innovative offering in a pilot setting, no specific participation or savings estimates are available at this time. The collaborative parties will implement a robust Evaluation, Measurement, and Verification (EM&V) process and impact evaluation to assess customer satisfaction, lessons learned, energy savings, and financial efficiencies that are realized. This process may ultimately contribute to the development and design of full-scale program offerings. Relationship to Existing Programs To our knowledge, no other New Jersey utility or state-run program is currently offering an R&D program as proposed in this plan, but these organizations may be planning similar activities for future years. The goal of the ETA program is to continually identify, evaluate, and support promising technologies or innovative implementation approaches to contribute to SJG’s energy efficiency programs in future years. In this way, the final output is an information package that SJG’s energy efficiency programs will use to design and implement new or enhanced programs for customers. Lessons learned and summary reports from the ETA program will be made available to the public, such that all efficiency stakeholders (i.e. vendors, trade allies, other New Jersey utilities, and ultimately customers) can benefit from the experience of SJG. However, SJG anticipates partnering with peer utilities in New Jersey to develop a comprehensive ETA program that will achieve state-wide efficiencies and benefit all residents of New Jersey.
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Proposed Incentives The ETA program will target new technologies that offer natural gas and/or electricity savings for residential, commercial, and industrial customers in New Jersey. The program would not provide direct incentives to customers, with the possible exception for a technology demonstration at a customer site. In these situations, the program may provide financial or in-kind support to the customer and/or demonstration partners, including:
• Energy efficiency rebate based on expected energy savings, similar to custom calculated measures;
• Direct funding to a manufacturer, contractor, or host site to offset technology equipment or installation cost; and
• In-kind support, such as use of monitoring equipment, staff time for data collection and analysis, report preparation and promotion, etc.
Marketing Approach The ETA is not intended as a customer-facing program. Where necessary, the ETA program may conduct demonstrations at customer sites and recruit participants through the following methods:
• Recruit SJG employees to volunteer; • Recruit customers to participate directly via social media, website, etc.; • Notice on SJG website, email marketing, or direct mail; • Coordination with SJG account executives; • Recruitment by pilot applicants; and • Cooperation with trade allies who may already have a project in development at a customer
site. Contractor Role SJG will administer the ETA program with a combination of dedicated staff and a project management third-party implementation contractor, such as the ETA Facilitator. SJG’s role will be to ensure the major milestones are met and to coordinate with various departments (e.g., engineering, programs, marketing, strategy, IT, etc.) to gather input during the process. As the ETA Facilitator, the third-party implementation contractor will provide support through overarching program management. This will include recruiting and developing a vibrant third-party stakeholder advisory committee, described above. Market Barriers The ETA program is designed to identify and support emerging technologies and approaches that SJG could add to energy efficiency programs in future years. Emerging technologies face a large number of market barriers that inhibit wider adoption, including: high upfront cost, long customer paybacks, lack of third party validation, unfamiliarity by trade allies and customers, uncertain installation, operation, and maintenance practices, conflicts with state and local building codes, limited market availability, and other challenges. The ETA program will provide highly targeted support to emerging technologies to overcome these market barriers. The primary market barriers that the ETA program will address include:
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• Identifying New and Improved Products: Efficiency programs need to continually find new and improved efficient products and service delivery approaches to improve program performance. As the market evolves, and technologies that required incentive become commonplace, SJG should focus on advancing efficiency gains in new product areas. The ETA program will provide SJG the focused space and resources to systematically design and deploy a carefully structured process to continually identify, test, validate, and promote the adoption of new efficient products and service delivery approaches.
• Sufficient Stocking and Availability of Efficient Products: Emerging technologies are often unavailable, due to retailer/ distributor failure to stock and service the new products. The ETA Program will raise awareness and engage the New Jersey marketplace with information and case studies about the new technologies that are proven, by deployment test studies, to be high value additions to the efficiency program. The ETA Program will invest resources to familiarize trade ally partners of all types with the advantages of embracing and promoting to customers the new technologies.
• Customer & Trade Ally Awareness and Engagement: Customers and trade allies may not be aware of the benefits of installing new and relatively unknown efficient equipment and/or lack the time and resources to experiment themselves with emerging efficient equipment when replacing existing equipment. To address this barrier, SJG’s ETA Program will implement product testing in New Jersey homes and publish and widely make available case study findings from customer experiences with the new technologies. Through outreach efforts SJG will seek to partner with retail and wholesale entities to promote and deploy for the market these new emerging technologies once proven to be highly reliable and well received in the early trials.
SJG will seek to manage all barriers to program success through a commitment to applying best practices in program design, delivery, outreach, and marketing/advertising. SJG’s established customer communication channels, data, and brand in the marketplace will all be leveraged to deliver best-practice R&D initiatives that identify and confront market barriers on an ongoing basis.
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Program Costs The table below illustrates the projected expenditures for the program. Table 14: Efficiency ETA Program Costs
Program Cost
Category 2018 2019 2020 2021 2022 2023 2024+ Total
Administration $2,450 $111,232 $115,426 $118,836 $122,327 $125,921 $32,656 $628,849
Marketing and Sales $3,440 $80,683 $81,218 $81,300 $81,130 $80,881 $24,450 $433,102
Contractor Training $0 $0 $233 $240 $247 $254 $66 $1,040
Rebates, Grants, and Other Incentives
$0 $0 $1,600,000 $1,600,000 $1,600,000 $1,600,000 $0 $6,400,000
Rebate Processing, Inspections, and Quality Control
$1,250 $31,412 $32,745 $33,664 $34,599 $35,561 $9,388 $178,618
Evaluation $1,250 $12,137 $12,543 $12,856 $13,166 $13,486 $3,704 $69,142
Total $8,390 $235,464 $1,842,164 $1,846,896 $1,851,469 $1,856,105 $70,264 $7,710,750
3.3.2. Education SJG plans to partner with the Alliance to Save Energy (ASE) to facilitate their PowerSave Schools Program. ASE’s PowerSave program empowers students to grow as leaders, apply academic knowledge to solve the real-world challenge of increasing utility bills, and move their schools and communities toward a greener future with energy efficiency practices and measurable energy savings. The program fosters energy literacy, raises student awareness of workforce development opportunities, drives energy savings at schools, and promotes home energy awareness. ASE has experience working with utilities to provide energy efficiency education free-of-cost to schools, reaching over 250,000 students across the nation since 1996. The program will also distribute home energy efficiency kits to students whose families have demonstrated an interest and commitment to pursue energy savings. The measures included in the kits are low flow aerators and shower heads, LED bulbs, smart power strips, and energy education savings tips. The kits allow students to take energy savings knowledge and apply it at home, saving energy and money.
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The core objectives for the program are as follows:
• Foster energy literacy and environmental stewardship within the school community: SJG will partner with ASE to educate schools in SJG’s service territory for each academic year beginning with the 2019-2020 school year to promote energy literacy through lesson plans, activities and competitions. Students will conduct assemblies, classroom audits and presentations, school-wide competitions and behavior-change campaigns reaching their whole school communities—administrators, staff, and students and their families.
• Provide students with experiential learning and professional development opportunities: All participating students will receive leadership opportunities, allowing them to develop critical-thinking skills, public speaking skills and practical experience in the energy field.
• Promote awareness about home energy efficiency in students’ households: Students’ parents and families will gain awareness about energy efficiency, have their homes assessed by students for efficiency opportunities, and—at their request—receive home energy efficiency kits to implement in their households. Data on kit implementation will be gathered through surveys gathered as part of a program-wide, student-led home outreach competition.
• Drive measurable energy savings through student-led behavior change: A primary focus of PowerSave is to train students to identify energy-savings opportunities in their classrooms and schools, and give them the analytical and communications skills to present data-based energy savings recommendations to their teachers and peers. ASE will retain a third-party energy tracker who will gather historical energy data from each site to establish a baseline. During the period of program implementation, schools will receive monthly energy reports comparing current energy use (normalized for weather and adjusted for major changes in energy use, where necessary) against their baseline energy use. These data allow students to monitor the success of their efforts and identify opportunities for further gains. Schools’ savings will be highlighted through a program-wide competition. The historical savings observed through the PowerSave program is 5-15% in other parts of the country.
SJG is seeking an exemption from Part V. of the Minimum Filing Requirements for the costs to administer the PowerSave program since the primary focus of this program is education based and savings are not easily estimated. SJG will, however, include the cost and benefits associated with the conservation kits in the cost benefit analysis for the Residential Efficient Products program. Market Segment/Efficiency Targeted The target market for this program is residential customers in the SJG service territory. The primary focus of this program is energy education for K-12 schools, but it also targets behavioral changes in these schools. Specifically, students test lighting levels, thermal variances in classrooms, and behavioral practices with classroom equipment (e.g. smartboards, chromebook charging carts).
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By connecting the educational efforts with outreach to families of the students, SJG has the opportunity to capture additional energy savings through the distribution of energy saving kits. More importantly, it provides an opportunity to reach more customers to raise awareness of deeper retrofit programs and potential energy efficiency and energy assistance programs that serve low to moderate income customers. Delivery Method SJG will contract directly with ASE to run the PowerSave Program. ASE will hire local project leaders to administer the program and provide the appropriate level of support to the staff at participating schools and to engage directly with the PowerSave student team at each school. ASE will sub-contracted with Utility Management Services (UMS) to gather historical electrical and/or natural gas use data, establish baseline energy performance, implement a routine data sharing mechanism, normalize the data for weather and share the results with schools and SJG so progress can be tracked. SJG will work with ASE to assess the appropriate delivery method of kits to students and their families. Projected Participants The projected participation associated with this program is summarized in the table below. All values are annual incremental totals, and do not incorporate participation in prior years. Participation estimates are calculated as the expected number of schools participating in the program. In addition, SJG expects to distribute approximately 200 kits per school. Savings estimates are not available as this program is educational in nature. Savings for educational kits are not shown here because they are included in the Residential Efficient Products program. Table 15: Education Program Estimated Participation
Program 2019 2020 2021 2022 2023
Participants 50 75 100 100 100 Natural Gas Savings (therms) 0 0 0 0 0 Electric Savings (kWh) 0 0 0 0 0 Electric Demand Savings (kW) 0 0 0 0 0
Relationship to Existing Programs New Jersey Natural Gas currently runs a PowerSave Program for a limited number of schools. That version of the program provides fewer resources to participating schools and does not include the energy monitoring component or the conservation kits for families. SJG expects New Jersey Natural to continue this program. NJCEP has not offered an educational program since the Teaching Energy Awareness with Children’s Help (TEACH) was eliminated in 2010.
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Proposed Incentives Participating schools will receive all tools, curriculum, resources and local project leader support at no cost. They also have the opportunity to earn a modest stipend for completion of certain milestones. Certain students will also receive kits at no cost containing small equipment and literature to further promote energy efficiency at home. Marketing Approach Schools that are participating in the Sustainable Jersey for Schools program have an added motivation of being able to earn points for participating in this program. SJG intends to partner with Sustainable Jersey on initial outreach to schools through an advance registration period. Marketing for this program would primarily be through Sustainable Jersey newsletters, posting on the Sustainable Jersey website, and outreach to the regional Sustainable Jersey hubs within our area. ASE will also plan to conduct direct outreach through New Jersey based school conferences (E.g. NJ School Boards Association Annual Workshop, NJEA Conference, Association of New Jersey Environmental Educators). SJG will allow public schools not participating in Sustainable Jersey and private schools within our territory to participate as well. Marketing for this period would be through press releases and use of SJG social media and traditional utility communication channels. Contractor Role South Jersey Gas intends to contract with the Alliance to Save Energy to implement this program. SJG will also competitively source the conservation kits through an RFP process. While there is no direct role anticipated for local contractors, many schools conduct green fairs that could represent an opportunity for contractors to exhibit. Market Barriers The primary market barriers that are addressed by this program include:
• Lack of time and resources to teach energy education: Many educators are overwhelmed by demands teaching required curriculum and don’t have the time to identify strong supporting resources for energy education. PowerSave addresses this barrier by providing a PowerSave flash drive at the beginning of the school year, which contains a grade-banded Road Map Guide that provides the framework for delivering lesson plans and activities through the year. Each lesson plan is accompanied by a “flipped” lesson plan, with videos that can be used as a teaching tool. On-going support from the Local Project Leader also helps keep teachers engaged and motivated.
• Awareness of Energy Usage with Schools: Classroom occupants may have no idea how their actions influence the school’s energy usage. Traditionally, there is no formal method for sharing feedback with the broader school community. PowerSave addresses this barrier by having the student lead the classroom audits. They frequently identify issues that can generate immediate energy savings (e.g. turning off some lights in overlight classrooms) or some that may require changes in other behavioral practices (e.g. using a timer on Chromebook charging stations). Further, the creation of an energy usage benchmark and on-going feedback on performance will also reinforce the importance of their actions.
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Program Costs The table below illustrates the projected expenditures for the program. Table 16: Education Program Costs
Program 2018 2019 2020 2021 2022 2023 2024+ Total
Administration $1,637 $26,190 $26,901 $28,152 $28,921 $29,714 $7,883 $149,397
Marketing and Sales $16,250 $144,733 $133,047 $124,685 $111,428 $97,267 $10,794 $638,203
Contractor Training $0 $0 $0 $0 $0 $0 $0 $0
Rebates, Grants, and Other Incentives
$0 $400,000 $600,000 $800,000 $800,000 $800,000 $0 $3,400,000
Rebate Processing, Inspections, and Quality Control
$1,250 $10,089 $10,316 $10,810 $11,059 $11,316 $3,145 $57,986
Evaluation $1,250 $4,023 $4,069 $4,376 $4,432 $4,490 $1,387 $24,027
Total $20,387 $585,034 $774,332 $968,022 $955,840 $942,787 $23,209 $4,269,612
3.4. NJCEP Loan/Rebate Programs The proposed NJCEP loan/rebate programs are designed to support the current programs offered by NJCEP with loans, and in some cases, additional rebates. This EE Program Plan provides information on the following programs:
• NJCEP Residential Loans/Rebates o HVAC o Home Performance with Energy Star
• NJCEP Commercial Loans
3.4.1. NJCEP Residential Loans/Rebates - HPwES/HVAC SJG will continue to support the NJCEP Home Performance with ENERGY STAR (HPwES) and COOLAdvantage and WARMAdvantage (HVAC) programs through loans, rebates, and marketing efforts. SJG will leverage existing utility communications channels and conduct marketing and outreach campaigns to help raise awareness for both programs, as well as offer select rebates and loans in lieu of the standard NJCEP financing.
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The HPwES program will promote the “whole house” approach to energy efficiency and the availability of incentives through NJCEP’s HPwES program, while providing the option for interest-free and low-cost financing to participants to reduce the up-front cost of installing energy efficient equipment in their homes. The HVAC Incentives program will encourage customer investment in high-efficiency equipment. SJG will offer incentives to customers installing qualifying high-efficiency gas furnaces/boilers, combination (heat and hot water) units, water heaters, and qualifying air conditioning systems when combined with one of these gas measures. To continue to educate customers about the other energy saving opportunities for their home, SJG will continue to require customers to participate in a no-cost home energy assessment audit conducted by SJG following the installation of equipment. The assessment conducted by SJG will identify additional energy-saving opportunities, and customers will be encouraged to move forward with additional whole-house energy efficiency projects. SJG plans to provide customers their DOE Home Energy Score. Equipment eligibility will continue to align with the requirements of NJCEP’s program (or appropriate successor should NJCEP modify its program). SJG will offer customers the option of an up-front rebate or interest-free financing of program costs. Customers will still be able to participate in the WARM and COOLAdvantage to attain rebates from NJCEP programs. Market Segment/Efficiency Targeted The program will serve residential customers by promoting the installation of high-efficiency equipment and other whole-house energy conservation measures through opportunities identified in the required assessment. The program will be targeted to residential customers seeking comprehensive solutions to equipment upgrades, to customers with comfort issues within their homes, as well as many customers that have completed the Residential with Direct Install Program. Additionally, customers who have recently upgraded their equipment will be targeted for additional energy saving measures including insulation and seal-up. This program targets whole home retrofits and covers a variety of residential measures including building envelope, heating, and cooling. Delivery Method SJG will assist NJCEP in generating leads for this program through its existing relationship with customers and the trade ally community. SJG will contract with third party auditors with BPI certification to perform the required home energy assessment. Customers can use any contractor they choose for project installation, but if they wish to access the interest-free financing they may only use a contractor that is a South Jersey Gas Participating Contractor. Projected Participants and Energy Savings The projected participation and savings associated with this program is summarized in the table below. All values are annual incremental totals, and do not incorporate savings achieved in prior years. Participation estimates are based upon the expected number of participating customers in the HPwES and HVAC programs either taking loans or rebates from SJG. Savings estimates are based on projected participation during each year of the forecast period.
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Table 17: NJCEP Residential Loans/Rebates Estimated Participation and Savings
Program 2019 2020 2021 2022 2023
Participants 1,450 2,050 2,500 2,900 3,200 Natural Gas Savings (therms) 249,570 355,665 432,855 502,950 555,045 Electric Savings (kWh) 761,360 971,745 1,217,765 1,381,550 1,522,035 Electric Demand Savings (kW) 544 796 962 1,124 1,241
Relationship to Existing Programs This program aligns with the NJCEP HPwES and WARM and COOLAdvantage programs and encourages stronger participation by making expensive high efficiency equipment more accessible to all customers through either supplemental rebates or financing. This program is identical to what SJG currently offers in support of NJCEP’s HPwES and WARM and COOLAdvantage programs for any qualified project where the customer meets certain credit criteria. Currently, utility financing is only available for Tier 3 projects. The approach for HVAC is a slight modification to the existing approved programs for NJNG with the connection to a home energy assessment. Elizabethtown Gas offers supplemental HVAC rebates, but it does not include any requirement for a home energy assessment. Proposed Incentives SJG will continue to offer the prevailing NJCEP HPwES financing component as a utility financing option. SJG will offer participants the option of either up to a $10,000 loan at 0% interest with a 7-year maximum term or up to a $15,000 loan at 4.99% interest with a 10-year maximum term.
SJG proposes the following new supplemental rebate incentives for qualifying furnaces (Minimum 95% AFUE) and boilers (Minimum Hydronic 90% AFUE). SJG also proposes increasing the current Boiler with Indirect and/or Combo Unit (90% AFUE), or the simultaneous installation of qualifying furnaces (Minimum 95% AFUE) and water heating systems (.64 or greater UEF), rebate from $500 to $600. This increase is being requested in order to address increased total equipment costs. Incentives are available only after completion of the required home energy assessment:
Furnace (Minimum 95% AFUE) $500 Boiler (Minimum Hydronic 90% AFUE) $500 Boiler with Indirect and/or Combo Unit (90% AFUE) $600
Or Furnace (Minimum 95% AFUE) with the simultaneous installation of a qualifying Water Heating system (.64 or greater UEF) To ensure the up-front cost is not a barrier for customers, SJG will offer customers the option to apply for interest-free financing in lieu of these SJG rebates. SJG proposes to allow customers to finance up to $14,000 for a qualifying HVAC system or boiler. These projects can also include a
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qualifying air-conditioning system if installed with an accompanying qualifying gas measure. All projects will be subject to an overall cap of $14,000. All financing agreements will be net of the value of any NJCEP rebates. All financing agreements through this program will be a 0% Annual Percentage Rate (APR) for a seven year term. SJG recognizes that the equipment covered, minimum efficiency requirements, rebate values, and even the name of the program itself may change as NJCEP implements changes to align with the anticipated Strategic Plan. The intention within this program is to offer incentives and the financing options for any “whole house” program that NJCEP may offer and for any prescriptive existing homes program that NJCEP runs, including both the single measure and bundled approach. Marketing Approach SJG will continue to encourage customers to take a more comprehensive look at energy efficiency throughout their residence, utilizing the “whole-house” method through the HPwES program, as well as select heating and cooling needs through the HVAC program. SJG employs a variety of channels and methods to educate customers on the benefits of energy efficiency, including working through multiple communications channels. The program utilizes our SJG website to promote and educate customers on the availability of incentives for installing energy efficient equipment in their homes. SJG will continue to use digital and social media channels as well as email campaigns to promote this program and analyze results to maximize its effectiveness and our marketing dollars. Traditional marketing venues such as direct mail and advertising will be used as necessary. Relationships with our existing channel partners including realtors and contractors will be fostered while we explore and develop new channel partners who can promote our programs. Remarketing campaigns will be employed to target customers who have shown interest in our program(s) but have not yet taken action or those customers who have additional opportunities. Finally, our community outreach specialists will work to promote all residential programs to educate our customers on energy efficiency and the programs available to assist them. SJG will continue to target homeowners at or close to the time they are making decisions about new heating and cooling equipment, and will continue to engage HVAC contractors in promoting the program. The program will continue to be marketed in a manner that encourages a change to high-efficiency equipment linked with the implementation of whole-house improvements. SJG will work cooperatively with various entities, including community groups, our trade allies (local contractors, supply houses, and the realtor community) to coordinate with other grass roots efforts. Contractor Role SJG will continue to allow all contractors participating in the NJCEP HPwES program to offer the financing feature to their customers. These contractors will be able to access all HPwES leads generated from both the Residential Home Energy Assessment with Direct Install program and from the required audit from the HVAC incentives program. To access those leads, contractors must commit to not charging customers for any additional audit testing work. Customers can use any contractor they choose for the installation of the HVAC equipment but if they wish to access SJG financing they may only use a contractor that has completed the mandatory overview training on program requirements.
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Market Barriers The primary market barriers that impact this program include:
• Initial Cost of Energy-Efficient Equipment: High efficiency equipment is more expensive and involved than purchasing standard equipment and therefore requires more participant investment and commitment. Customers must be willing and able to invest in more expensive energy efficiency projects. Without significant incentives customers are likely to opt for standard equipment to secure the lower up-front cost despite the longer-term benefits to them and to society. In addition to incentives, financing will be available to customers to reduce upfront cost barriers;
• Customer Awareness and Engagement: Residential customers may not be aware of the best energy efficiency opportunities for their home or how to get the information and resources they need. This program addresses this barrier by informing and educating customers through our multiple communication channels including our community outreach program; and
• Trade Ally Awareness and Training: To meet the participation goals set forth for this program, trade allies must be available to undertake the work and be interested in marketing high-efficiency equipment to customers. A lack of viable trade allies could result in customers not installing energy efficiency measures. SJG will continuously work to train and develop our local contractor network to ensure that a high-quality network of contractors is available to serve program participants;
SJG will seek to manage all barriers to program success through a commitment to applying best practices in program design, delivery, outreach, and marketing/advertising. SJG’s established customer communication channels, data, and brand in the marketplace will all be leveraged to deliver best-practice programs that identify and confront market barriers on an ongoing basis. To the extent possible, SJG will cross-promote programs to spread awareness of the range of efficiency opportunities proposed in this plan.
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Program Costs The table below illustrates the projected expenditures for the program. Table 18: NJCEP Residential Rebate/Loans Estimated Costs
Program 2018 2019 2020 2021 2022 2023 2024+ Total
Administration $18,806 $417,382 $464,538 $483,786 $497,924 $512,487 $133,122 $2,528,044
Marketing and Sales $144,159 $1,397,458 $1,314,482 $1,248,270 $1,130,090 $1,003,740 $192,535 $6,430,734
Contractor Training $0 $0 $8,752 $9,015 $9,285 $9,564 $2,463 $39,080
Rebates, Grants, and Other Incentives
$0 $10,587,400 $13,976,800 $17,623,100 $19,869,500 $22,467,400 $0 $84,524,200
Rebate Processing, Inspections, and Quality Control
$33,730 $930,053 $893,139 $944,050 $997,991 $1,058,699 $1,701,016 $6,558,677
Evaluation $6,410 $39,383 $44,566 $48,371 $49,447 $50,556 $14,174 $252,907
Total $203,105 $13,371,675 $16,702,277 $20,356,591 $22,554,238 $25,102,445 $2,043,310 $100,333,642
3.4.2. NJCEP Commercial Loans Commercial customers implementing upgrades through NJCEP’s Direct Install (DI), Pay for Performance (P4P), and Smart Start (SS) programs are eligible to access interest-free financing from SJG. The interest-free financing is available to reduce up-front cost barriers customers may face when installing energy efficient equipment. Consistent with current SJG program terms, customers may take advantage of both the NJCEP DI, P4P and SmartStart incentives and the repayment plan. Only customers who meet SJG’s credit review criteria will be eligible to access financing. SJG reserves the right to limit participation in financing to customers who utilize natural gas within their facility. Market Segment/Efficiency Targeted All commercial customers participating in NJCEP’s Direct Install, P4P and Smart Start Programs within SJG’s service territory. This program covers a wide range of customer types and market segments, therefore the types of efficiency measures are numerous.
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Delivery Method SJG will utilize in-house staff for the credit screening for larger commercial and industrials customers, along with our financing agent. SJG staff will also assist in outreach and marketing to encourage customers to participate in these NJCEP programs and provide on-going support for customer inquiries throughout the process. Projected Participants and Energy Savings The projected participation and savings associated with this program are summarized in the table below. All values are annual incremental totals, and do not incorporate savings achieved in prior years. Participation estimates are based upon the expected number of loans provided for the DI, P4P and SS programs. Savings estimates are based on projected participation during each year of the forecast period. Table 19: NJCEP Commercial Loans Estimated Participation and Savings
Program 2019 2020 2021 2022 2023
Participants 43 48 52 53 54 Natural Gas Savings (therms) 262,645 420,383 528,065 485,579 443,093 Electric Savings (kWh) 9,893,054 13,702,169 16,361,926 15,573,605 14,785,284 Electric Demand Savings (kW) 2,789 3,997 4,834 4,562 4,290
Relationship to Existing Programs The program is integrated with the NJCEP DI, P4P and SS programs. While external financing options may rely on traditional credit screening, for larger customers, SJG may also review eligibility to participate based on utility payment history and lack of recent bankruptcies for larger applications or other factors. This program approach is consistent with what SJG currently offers for our commercial customers under our current commercial financing programs. New Jersey Natural gas offers similar financing incentives for its customers. PSE&G offers its own version of a Direct Install program that is not integrated with the NJCEP program. Proposed Incentives For DI, financing will be available up to the value of project costs less NJCEP rebates/incentives, subject to prevailing caps. SJG proposes to increase the current repayment term of three (3) years to five (5) years. In the event NJCEP adjusts the incentive ratio or caps during the term of this approved program, the maximum available financing amount should be adjusted accordingly to continue to target the elimination of the up-front cost barrier. For the NJCEP SmartStart Program®, the financed amount is expected to be equal to, or less than the total project costs, net NJCEP rebates/incentives. SJG proposes to increase the repayment term from the current term of five (5) years to a ten (10) year repayment term and proposes to allow customers to finance up to $130,000 . The intention of this program is to offer affordable financing
BSG-1 Page 45 of 51
43
components for any “single and/or multimeasure” commercial programs that NJCEP and South Jersey Gas may offer. The P4P approach is to generate a minimum of 15% energy savings. In the case of the P4P program, there may be customers that could be approached in collaboration with South Jersey’s C&I Engineered Solutions efforts. The South Jersey C&I Engineered Solutions program is also geared to generate maximum cost-effective energy savings from a comprehensive mechanical and building envelop approach. The difference is, South Jersey Gas is proposing the make the financial package more attractive to the customer, thus making the project economically feasible.
SJG recognizes the potential for NJCEP program incentives or measures to change as NJCEP implements changes to align with the anticipated Strategic Plan. Marketing Approach SJG will work with NJCEP program administrators, as well as approved DI contractors, to promote this offering. Because SJG does not have access to the customers’ electric usage information, SJG will also promote this program through local business groups and organizations, email and bill inserts directed to commercial customers, as well as other direct outreach efforts to this customer group. Dedicated commercial program information resides on our website and is also promoted by our marketing team. Additionally, SJG will work with NJCEP’s administration to promote the program through various channels including:
• Local business organizations; • Chambers of Commerce; • Municipal outreach including partnering with Sustainable Jersey communities pursuing
certification point for promoting NJCEP’s Direct Install program; • Town meetings; and • Municipal green teams.
For all commercial programs, informational seminars, direct mail and commercial outreach programs will also be utilized to reach commercial customers. Contractor Role SJG will allow any contractor authorized to participate in these NJCEP programs to offer the SJG financing option to their customers for qualified NJCEP projects Market Barriers The primary market barriers that impact this program include:
• Up-front costs: While the NJCEP DI program provides a significant incentive and turnkey solution for customers, the ability to cover the remaining up-front costs remains a significant hurdle for many customers. SJG addresses this barrier by offering financing options;
BSG-1 Page 46 of 51
44
• Skepticism of contractor offer: Some customers are skeptical that the current NJCEP offer of a 70% incentive seems like a contractor ploy. SJG’s participation in the process lends credibility; and
• Customer awareness: SJG continues to leverage our utility communication channels and provide direct outreach to customers to raise awareness of this program.
Program Costs The table below illustrates the projected expenditures for the program. Table 20: NJCEP Commercial Loans Estimated Costs
Program Cost
Category 2018 2019 2020 2021 2022 2023 2024+ Total
Administration $9,112 $101,765 $106,825 $111,618 $114,479 $117,426 $31,740 $592,966
Marketing and Sales $41,486 $345,357 $321,308 $310,526 $281,717 $250,918 $33,956 $1,585,270
Contractor Training $0 $0 $624 $642 $662 $682 $175 $2,785
Rebates, Grants, and Other Incentives
$0 $1,187,857 $1,467,480 $1,672,379 $1,653,106 $1,633,833 $0 $7,614,655
Rebate Processing, Inspections, and Quality Control
$14,425 $145,375 $128,169 $131,653 $133,322 $134,328 $166,713 $853,986
Evaluation $8,125 $23,443 $23,971 $25,240 $25,510 $25,788 $8,143 $140,220
Total $73,148 $1,803,797 $2,048,377 $2,252,059 $2,208,797 $2,162,975 $240,729 $10,789,882
4. PROGRAM MANAGEMENT AND MARKET FACTORS
4.1. Anticipated Job Creation Consistent with previous filings, direct job creation related to the programs proposed in this EE Program Plan was forecasted with the Rutgers “Analysis for the 2011 Draft New Jersey Energy Master Plan Update.”2 This report specifies 7.91 direct jobs created for every one-million dollars invested in energy efficiency in New Jersey. This investment will also have a ‘multiplier effect’ on New Jersey’s economy in that the direct jobs will spend part of their wages on other goods and
BSG-1 Page 47 of 51
45
services in New Jersey, creating additional economic value. Induced and indirect economic activity was forecasted using the National Renewable Energy Laboratory (NREL) Jobs and Economic Development Impact (JEDI) model. JEDI is an input-output economic impact model that has been accepted by the NJ BPU and uses state and industry specific economic multipliers that estimate the direct, indirect and induced economic impact of energy industry investments. While JEDI does not have a model specifically for energy efficiency investments, the solar PV model has similar economic characteristics (e.g. both have a large up-front investment for the initial installation followed by very low maintenance costs going forward). Further, both utilize a similar level of skilled trade workers. The model assumed that no New Jersey in-state manufacturing activity would result from the investments; to the extent manufacturing activity is induced, it would result in additional job and multiplier benefits to the State. The following table illustrates the direct and indirect and induced jobs to be created as a result of SJG’s energy efficiency program: Table 21: Direct, Indirect, and Induced Job Creation
Program Direct Job Creation
Indirect and Inducted Job
Creation
Total Jobs Created
Res Behavior 5 15 20 Res Efficient Products 183 54 237 Res Direct Install 60 18 77 Res Retrofit Weatherization 101 29 130 C&I Engineered Solutions 132 39 171 NJCEP - Residential Programs 125 232 357 NJCEP - Commercial Programs 25 25 50 Education 20 10 30 Emerging Technologies & Approaches 61 18 79 Evaluation 44 13 57 Total 756 451 1,208 The indirect and induced job estimates above are based upon assumptions on equipment and supplies purchases, installation labor, and project administration expenditures. All purchases were assumed to be made in state while all materials would originate outside the state of New Jersey (i.e. 0% in-state manufacturing).
4.2. Environmental Emissions Savings The impact of energy efficiency on power plant emissions was forecast using dispatch simulation results using the AURORAxmp modeling tool, an industry-leading software and data package that simulates the hourly commitment and dispatch of electric generators to serve load, recognizing utility-level peak demand, transmission constraints, operational characteristics of generators, delivered fuel prices, emissions prices, etc. To determine emissions savings, a base case simulation, which included current utility load forecasts, was compared against an energy
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46
efficiency case, in which total energy and peak demand were reduced to reflect SJG’s energy efficiency program. Because AURORA dispatches generation at the individual unit level, the simulation results provide marginal emissions rates for CO2, SO2, and NOx. The difference between these two cases illustrates the total magnitude of emissions avoided as a result of the energy efficiency programs. Emissions rates associated with residential natural gas use were based upon the US Environmental Protection Agency’s (EPA) emissions factors for residential natural gas use. The following table displays the emissions savings resulting from SJG’s energy efficiency programs in U.S. tons. Table 22: Total Emissions Reduction by Program
Subprogram CO2 Emissions
Reduction (tons)
SO2 Emissions Reduction
(tons)
NOx Emissions Reduction
(tons)
Res Behavior 67,499 31 52 Res Efficient Products 382,421 277 295 Res Home Performance w/ Direct Install 74,115 57 57 Res Retrofit Weatherization 70,225 17 55 C&I Engineered Solutions 169,560 201 132 NJCEP - Residential Programs 292,650 123 229 NJCEP - Commercial Programs 590,592 900 453 Education 0 0 0 Emerging Technologies & Approaches 0 0 0 Total 1,647,063 1,606 1,274
4.3 . Energy Savings The incremental and cumulative energy savings impact from the proposed EEP IV program
are summarized below in Tables 23 and 24, demonstrating significant benefits to participants, customers, and society as a whole. In its entirety, the programs proposed in this Program Plan result in approximately $320 million in participant bill savings and 1.6 million tons of avoided CO2 emissions (Table 22 above).
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47
Table 23 illustrates the projected annual natural gas savings in therms and percentage basis in incremental and cumulative terms over the lifetime of the measures included in the programs.
Table 23: Incremental Annual Gas Savings (therm) and Percent of Gas Sales
Year
Incremental Natural Gas
Savings (therms)
Cumulative Natural Gas
Savings (therm)
Incremental Natural Gas Savings (%
load)
Cumulative Natural Gas Savings (%)
2019 2,657,595 1,718,390 0.18% 0.12% 2020 3,161,978 3,388,530 0.21% 0.23% 2021 3,531,433 5,319,920 0.24% 0.36% 2022 3,668,967 7,485,171 0.25% 0.50% 2023 3,709,096 9,741,511 0.25% 0.66% 2024 1,156,707 10,898,218 0.08% 0.73% 2025 10,783,254 0.00% 0.73% 2026 10,508,948 0.00% 0.71% 2027 10,198,121 0.00% 0.69% 2028 9,883,123 0.00% 0.67% 2029 9,588,556 0.00% 0.65% 2030 8,610,354 0.00% 0.58% 2031 7,603,574 0.00% 0.51% 2032 6,574,770 0.00% 0.44% 2033 5,588,467 0.00% 0.38% 2034 5,063,461 0.00% 0.34% 2035 5,025,820 0.00% 0.34% 2036 4,905,184 0.00% 0.33% 2037 4,631,081 0.00% 0.31% 2038 4,155,002 0.00% 0.28% 2039 3,466,622 0.00% 0.23% 2040 2,714,432 0.00% 0.18% 2041 2,042,655 0.00% 0.14% 2042 1,446,222 0.00% 0.10% 2043 868,131 0.00% 0.06% 2044 510,258 0.00% 0.03% 2045 268,256 0.00% 0.02% 2046 235,725 0.00% 0.02% 2047 235,725 0.00% 0.02% 2048 235,725 0.00% 0.02%
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48
Table 24 illustrates the projected annual electric savings in kWh in incremental and cumulative terms over the lifetime of the measures included in the programs.
Table 24: Incremental Annual Electric Savings (kWh) and Electric Demand Savings (kW)
Year Incremental
Electric Savings (kWh)
Cumulative Electric Savings
(kWh)
Incremental Electric
Demand Savings (kW)
Cumulative Electric
Demand Savings (kW)
2019 22,479,405 13,664,269 4,542 3,645 2020 28,481,885 32,477,173 6,239 6,756 2021 33,842,013 53,642,498 7,604 10,753 2022 34,843,376 77,263,825 7,818 15,196 2023 35,713,258 100,245,612 7,987 19,928 2024 106,663,701 21,135 2025 102,112,576 20,919 2026 96,071,452 20,201 2027 89,175,161 19,422 2028 85,184,602 19,008 2029 84,390,308 19,008 2030 82,677,015 19,008 2031 80,864,894 19,008 2032 78,682,175 19,008 2033 76,578,071 19,008 2034 74,469,466 19,004 2035 70,963,509 18,804 2036 64,878,390 17,778 2037 55,037,355 15,719 2038 42,000,214 12,658 2039 28,752,886 9,119 2040 17,782,953 5,836 2041 12,224,340 3,956 2042 10,133,326 2,678 2043 7,138,692 1,723 2044 3,684,314 1,044 2045 467,459 385 2046 167,250 149 2047 167,250 149 2048 167,250 149
BSG-1 Page 51 of 51
Sout
h Je
rsey
Gas
Com
pany
C
usto
mer
Jou
rney
Opt
ion
1: T
he c
usto
mer
can
ent
er th
e en
ergy
eff
icie
ncy
jour
ney
with
the
Res
iden
tial D
irect
Inst
all P
rogr
am.
The
cust
omer
wou
ld
rece
ive
a ho
me
asse
ssm
ent f
or $
49.0
0, d
urin
g w
hich
ene
rgy
savi
ng m
easu
res,
such
as a
erat
ors a
nd L
ED li
ght b
ulbs
, will
be
inst
alle
d at
no
add
ition
al c
ost.
The
ass
essm
ent w
ill a
lso
prov
ide
cust
omer
s an
actio
n pl
an o
f add
ition
al e
nerg
y sa
ving
opp
ortu
nitie
s and
edu
catio
n on
oth
er S
JG p
rogr
ams a
vaila
ble.
Opt
ion
2: A
fter p
artic
ipat
ing
in th
e R
esid
entia
l Dire
ct In
stal
l Pro
gram
, a c
usto
mer
may
cho
ose
to p
urch
ase
and
inst
all o
ther
eff
icie
nt
prod
ucts
, inc
ludi
ng a
Sm
art T
herm
osta
t, th
roug
h th
e R
esid
entia
l Eff
icie
nt P
rodu
cts P
rogr
am.
Up-
fron
t reb
ates
and
/or d
isco
unts
for
thes
e te
chno
logi
es w
ill b
e pr
ovid
ed th
roug
h th
is P
rogr
am.
If a
cust
omer
is a
lread
y pa
rtici
patin
g in
the
Res
iden
tial D
irect
Inst
all
Prog
ram
, the
se it
ems w
ill b
e in
stal
led
at n
o ad
ditio
nal c
ost.
Opt
ion
3: A
fter p
artic
ipat
ing
in th
e R
esid
entia
l Dire
ct In
stal
l Pro
gram
and
/or t
he R
esid
entia
l Eff
icie
nt P
rodu
cts P
rogr
am, a
cus
tom
er
may
cho
ose
to o
btai
n w
hole
hou
se e
nerg
y ef
ficie
ncy,
com
fort
and
savi
ngs t
hrou
gh th
e N
JCEP
Res
iden
tial L
oans
/Reb
ates
Pro
gram
.
NO
TE
: Cus
tom
ers c
an st
art o
r end
with
any
of t
he p
rogr
ams.
Thi
s rep
rese
nts o
ne e
xam
ple
of p
oten
tial o
ptio
ns fo
r a c
usto
mer
star
ting
with
the
Res
iden
tial D
irect
Inst
all P
rogr
am.
Res
iden
tial
Cus
tom
er
Res
iden
tial D
irect
In
stal
l
Res
iden
tial D
irect
In
stal
lR
esid
entia
l Ef
ficie
nt P
rodu
cts
Res
iden
tial D
irect
In
stal
lR
esid
entia
l Ef
ficie
nt P
rodu
cts
NJC
EP R
esid
entia
l Lo
ans/
Reb
ates
BSG-2
Res
iden
tial
Beh
avio
r
Res
iden
tial
Effic
ient
Pr
oduc
tsR
esid
entia
l D
irect
Inst
all
Res
iden
tial
Ret
rofit
W
eath
eriz
atio
nC
&I E
ngin
eere
d So
lutio
ns
NJC
EP -
Res
iden
tial
Prog
ram
s
NJC
EP -
Com
mer
cial
Pr
ogra
ms
Educ
atio
n
Emer
ging
Te
chno
logi
es &
A
ppro
ache
sEM
&V
Cos
tsTo
tal
Adm
inist
ratio
n20
6,04
1$
73
6,98
8$
50
9,34
3$
49
9,34
2$
1,01
0,62
4$
2,52
8,04
4$
59
2,96
6$
14
9,39
7$
62
8,84
9$
-$
6,
861,
593
$
Mar
ketin
g an
d Sa
les
246,
398
$
1,78
3,57
6$
778,
242
$
467,
200
$
73
6,68
5$
6,
430,
734
$
1,58
5,27
0$
638,
203
$
433,
102
$
-
$
13,0
99,4
10$
Con
tract
or T
rain
ing
-$
63
2,60
5$
3,
991
$
2,
605
$
-$
39
,080
$
2,78
5$
-
$
1,04
0$
-
$
682,
106
$
Ince
ntiv
es (I
nclu
ding
Reb
ates
, Loa
ns, &
Oth
er In
cent
ives
)5,
950,
000
$
16
,552
,330
$
5,
858,
078
$
11
,354
,157
$
14
,397
,878
$
84
,524
,200
$
7,61
4,65
5$
3,40
0,00
0$
6,40
0,00
0$
-
$
156,
051,
298
$
Reb
ate
Proc
essin
g, In
spec
tions
, and
Qua
lity
Con
trol
110,
070
$
3,39
7,44
0$
354,
231
$
314,
836
$
45
5,80
7$
6,
558,
677
$
853,
986
$
57,9
86$
17
8,61
8$
-$
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, 651
$
Eval
uatio
n37
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$
91,2
45$
80,6
77$
73
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$
14
3,04
3$
25
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140,
220
$
24,0
27$
69
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$
5,
570,
550
$
6,
483,
227
$
Tota
l Bud
get
6,55
0,02
8$
23,1
94,1
83$
7,58
4,56
2$
12,7
12,0
39$
16,7
44,0
37$
100,
333,
642
$
10
,789
,882
$
4,
269,
612
$
7,
710,
750
$
5,57
0,55
0$
195,
459,
285
$
Sout
h Je
rsey
Gas
Com
pany
Ener
gy E
ffici
ency
Pro
gram
- 20
18 E
xten
sion
(EET
IV)
Prog
ram
Exp
endi
ture
s
BSG-3
Sout
h Je
rsey
Gas
Pro
gram
NJC
EP
Prog
ram
sN
ew J
erse
y U
tility
Pro
gram
sO
ut o
f Sta
te U
tility
Pro
gram
sN
JCE
P R
esid
entia
l Loa
ns/R
ebat
esN
JCEP
offe
rs th
e fo
llow
ing
resi
dent
ial p
rogr
ams:
• Hom
e Pe
rform
ance
Pro
gram
• War
m A
dvan
tage
• Col
d A
dvan
tage
Sout
h Je
rsey
Gas
alig
ns to
thes
e pr
ogra
ms t
hrou
gh fi
nanc
ing
and
supp
lem
enta
l reb
ate
offe
rs.
New
Jers
ey N
atur
al G
as (N
JNG
) offe
rs si
mila
r Hom
e Pe
rform
ance
and
HV
AC
ince
ntiv
e pr
ogra
ms t
o co
mpl
emen
t th
e N
JCEP
pro
gram
s.
Eliz
abet
htow
n G
as o
ffers
HV
AC
equ
ipm
ent r
ebat
es.
Out
-of-s
tate
pro
gram
s with
sim
ilarit
ies t
o th
e pr
opos
ed
prog
ram
are
offe
red
by th
e fo
llow
ing
adm
inis
trato
rs, a
mon
g ot
hers
:N
atio
nal G
rid (
Mas
sach
uset
ts &
Rho
de Is
land
), En
ergi
zeC
T (C
onne
ctic
ut),
and
Effic
ienc
y V
erm
ont (
Ver
mon
t)
NJC
EP
Com
mer
cial
L
oans
/Reb
ates
NJC
EP o
ffers
the
follo
win
g co
mm
erci
al p
rogr
ams:
• Dire
ct In
stal
l• S
mar
t Sta
rt• P
ay fo
r Per
form
ance
Com
mer
cial
cus
tom
ers i
mpl
emen
ting
upgr
ades
thro
ugh
NJC
EP’s
Dire
ct In
stal
l, Sm
art S
tart
and
Pay
for P
erfo
rman
ce
prog
ram
s are
elig
ible
to a
cces
s int
eres
t-fre
e fin
anci
ng fr
om
SJG
.
NJN
G o
ffers
sim
ilar D
irect
Inst
all a
nd S
mar
t Sta
rt pr
ogra
ms.
Publ
ic S
ervi
ce E
lect
ric a
nd G
as (P
SEG
) offe
rs th
eir o
wn
Dire
ct In
stal
l pro
gram
.
Out
-of-s
tate
pro
gram
s with
sim
ilarit
ies t
o th
e pr
opos
ed
prog
ram
are
offe
red
by th
e fo
llow
ing
adm
inis
trato
rs, a
mon
g ot
hers
:C
onsu
mer
s Ene
rgy
(Mic
higa
n), C
onso
lidat
ed E
diso
n (N
ew
Yor
k) a
nd N
atio
nal G
rid (M
assa
chus
etts
& R
hode
Isla
nd)
Res
iden
tial B
ehav
ior
NJC
EP d
oes n
ot o
ffer a
sim
ilar p
rogr
am.
NJN
G a
nd E
lizab
etht
own
Gas
offe
r sim
ilar R
esid
entia
l Be
havi
or p
rogr
ams.
PSEG
was
app
rove
d to
offe
r a R
esid
entia
l Beh
avio
r pr
ogra
m.
Sim
ilar p
rogr
am h
ave
been
offe
red
thro
ugho
ut th
e U
nite
d St
ates
, Can
ada,
Eng
land
, Fra
nce,
New
Zea
land
and
Japa
n.
With
in th
e U
S, u
titlit
ies s
uch
as :
Am
eric
an E
lect
ric P
ower
(Ohi
o), C
omm
onw
ealth
Edi
son,
(Il
lnoi
s), C
onso
lidat
ed E
diso
n (N
ew Y
ork)
, Duk
en E
nerg
y (N
orth
Car
olin
a), N
atio
nal G
rid (M
assa
chus
etts
& R
hode
Is
land
), Pa
cific
Gas
and
Ele
ctric
(Cal
iforn
ia),
San
Die
go G
as
and
Elec
tric
(Cal
iforn
ia),
Xce
l Ene
rgy
(Min
neso
ta)
Res
iden
tial E
ffic
ient
Pro
duct
sN
JCEP
offe
rs a
n En
ergy
Effi
cien
cy P
rodu
cts p
rogr
am fo
r cl
othe
s was
hers
, dry
ers a
nd re
frige
rato
rs.
They
do
not
prov
ide
ince
ntiv
es fo
r sm
art t
herm
osta
ts, w
ater
savi
ng it
ems,
or lo
w c
ost w
eath
eriz
atio
n pr
oduc
ts.
PSEG
offe
rs S
mar
t The
rmos
tats
with
$15
0 re
bate
.Th
roug
hout
the
coun
try, u
tiliti
es o
ffer S
mar
t The
rmos
tat
reba
tes a
nd/o
r effi
cien
t pro
duct
s thr
ough
an
onlin
e m
arke
tpla
ce su
ch a
s: C
omm
onw
ealth
Edi
son
(Illin
ois)
, Geo
rgia
Pow
er (G
eorg
ia),
Xce
l Ene
rgy
(Min
neso
ta),
Cen
tral H
udso
n (N
ew Y
ork)
, N
atio
nal G
rid (N
ew Y
ork)
, A
vang
rid (N
ew Y
ork)
, C
onsu
mer
s Ene
rgy
(Mic
higa
n), S
MU
D (C
alifo
rnia
), A
EP
Ener
gy (O
hio)
, Ora
nge
& R
ockl
and
(New
Yor
k), a
nd
Vec
tren
Ener
gy (I
ndia
na)
Sout
h Je
rsey
Gas
Com
pany
Ene
rgy
Eff
icie
ncy
Prog
ram
Com
pari
son
BSG-4 Page 1 of 2
Sout
h Je
rsey
Gas
Pro
gram
NJC
EP
Prog
ram
sN
ew J
erse
y U
tility
Pro
gram
sO
ut o
f Sta
te U
tility
Pro
gram
s
Sout
h Je
rsey
Gas
Com
pany
Ene
rgy
Eff
icie
ncy
Prog
ram
Com
pari
son
Res
iden
tial H
ome
Ene
rgy
Ass
essm
ent w
ith D
irec
t Ins
tall
NJC
EP h
as a
Hom
e Pe
rform
ance
dire
ct in
stal
l pilo
t in
conj
unct
ion
with
the
Hom
e Pe
rform
ance
Pro
gram
. For
a
limite
d tim
e, c
ontra
ctor
s may
inst
all u
p to
nin
e en
ergy
and
/or
wat
er sa
ving
item
s at n
o co
st to
cus
tom
ers.
The
dire
ct in
stal
l m
easu
res w
ill b
e co
mpl
eted
whi
le th
e cu
stom
er is
hav
ing
a co
ntra
ctor
inst
all e
nerg
y ef
ficie
nt u
pgra
des t
o th
eir h
ome
thro
ugh
the
Hom
e Pe
rform
ance
Pro
gram
. Thi
s is n
ot a
stan
d-al
one
offe
r.Th
e el
igib
le it
ems i
nclu
ded
are
LED
ligh
t bul
bs, l
ow-fl
ow
fauc
et a
erat
ors a
nd a
n EP
A W
ater
Sens
e sh
ower
head
. Th
is p
ilot a
lso p
rovi
des t
he c
usto
mer
with
the
optio
n of
ha
ving
a c
ontra
ctor
inst
all a
ir se
alin
g an
d/or
insu
latio
n in
th
eir h
ome
and
may
be
elig
ible
for a
$50
0 re
bate
for a
ir se
alin
g, a
nd a
$50
0 re
bate
for i
nsul
atio
n.
NJN
G o
ffers
a h
ome
ener
gy a
sses
smen
t for
$25
0 bu
t doe
s no
t inc
lude
dire
ct in
stal
l mea
sure
s.
Eliz
abet
htow
n G
as o
ffers
a h
ome
ener
gy a
sses
smen
t at n
o co
st to
the
cust
omer
and
offe
rs th
e in
stal
latio
n of
oth
er
mea
sure
s lik
e fa
ucet
aer
ator
s, lo
w-fl
ow sh
ower
head
s, w
ater
he
ater
pip
e w
rap
insu
latio
n, a
nd p
rogr
amm
able
ther
mos
tats
.
Out
-of-s
tate
pro
gram
s with
sim
ilarit
ies t
o th
e pr
opos
ed
prog
ram
are
offe
red
by th
e fo
llow
ing
adm
inis
trato
rs, a
mon
g ot
hers
:N
icor
(New
Yor
k), C
onso
lidat
ed E
diso
n (N
ew Y
ork)
and
N
atio
nal G
rid (M
assa
chus
etts
& R
hode
Isla
nd)
Res
iden
tial R
etro
fit
Wea
ther
izat
ion
The
NJC
EP o
ffers
a p
rogr
am d
irect
ed to
Low
Inco
me
hom
eow
ners
, who
mee
t a m
axim
um o
f 225
% o
f the
cur
rent
Fe
dera
l Pov
erty
hou
seho
ld in
com
e le
vels.
Thi
s pro
gram
is
offe
red
to c
usto
mer
s at n
o co
st.
Eliz
abet
htow
n G
as h
as b
een
appr
oved
, on
a pi
lot b
asis
, to
offe
r ene
rgy
cons
erva
tion
tips a
nd fr
ee h
ome
wea
ther
izat
ion
for i
ncom
e qu
alifi
ed c
usto
mer
s,who
are
not
eco
nom
ical
ly
able
to fa
ll w
ithin
the
guid
elin
es o
f the
NJC
EP L
ow In
com
e C
omfo
rt Pa
rtner
s mod
el.
Out
-of-s
tate
pro
gram
s with
sim
ilarit
ies t
o th
e pr
opos
ed
prog
ram
are
offe
red
by th
e fo
llow
ing
adm
inis
trato
rs, a
mon
g ot
hers
:Ef
ficie
ncy
Ver
mon
t (V
erm
ont),
Eve
rsou
rce(
Con
nect
icut
) an
d Em
Pow
er M
aryl
and
(Mar
ylan
d)
C&
I Eng
inee
red
Solu
tions
NJC
EP o
ffers
a P
ay fo
r Per
form
ance
pro
gram
.PS
EG h
as a
sim
ilar p
rogr
am th
at se
rves
hos
pita
ls an
d m
uli-
fam
ily m
arke
ts.
To o
ur k
now
ledg
e th
ere
are
no o
ut-o
f-sta
te p
rogr
ams t
hat
com
bine
thes
e pr
ogra
m e
lem
ents
into
a si
ngle
eng
inee
red
solu
tions
offe
ring.
Out
-of-s
tate
pro
gram
s with
sim
iliar
ities
to
the
prop
osed
pro
gram
incl
ude,
am
ong
othe
rs:
Cen
terp
oint
Ene
rgy,
Pac
ific
Gas
and
Ele
ctric
(Cal
iforn
ia)
and
PEC
O (P
enns
ylva
nia)
Em
ergi
ng T
echn
olog
ies a
nd
App
roac
hes
NJC
EP d
oes n
ot o
ffer a
sim
ilar p
rogr
am.
To o
ur k
now
ledg
e, n
o ot
her N
ew Je
rsey
util
ity is
cur
rent
ly
offe
ring
a R
&D
pro
gram
. W
e an
ticip
ate
othe
r New
Jers
ey
utili
ties w
ill p
artn
er in
the
prop
osed
pro
gram
.
To o
ur k
now
ledg
e th
ere
are
no o
ut-o
f-sta
te p
rogr
ams
curre
ntly
offe
ring
this
pro
gram
.
Edu
catio
nN
JCEP
doe
s not
offe
r a si
mila
r pro
gram
.N
JNG
offe
rs a
sim
ilar p
rogr
am w
ith A
llian
ce to
Sav
e En
ergy
's Po
wer
Save
pro
gram
.A
llian
ce to
Sav
e En
ergy
's Po
wer
save
pro
gram
has
par
tner
ed
with
ove
r 100
0 sc
hool
s and
has
bee
n fu
nded
by
over
19
utili
ties i
nclu
ding
Sou
ther
n C
alifo
rnia
Edi
son,
Pac
ific
Gas
&
Elec
tric.
Thi
s pro
gram
is a
lso o
ffere
d in
Mar
ylan
d an
d Pe
nnsy
lvan
ia.
BSG-4 Page 2 of 2
EXHIBIT D
BEFORE THE NEW JERSEY BOARD OF PUBLIC UTILITIES
SOUTH JERSEY GAS COMPANY
Direct Testimony
of
Stefany M. Graham, Manager, Rates and Regulatory Initiatives
On Behalf of
South Jersey Gas Company
EXHIBIT D
1
SCHEDULE INDEX
Schedule SMG – 1 Annual Revenue Requirements
Schedule SMG – 2 Weighted Average Cost of Capital
Schedule SMG – 3 Revenue Factor
Schedule SMG – 4 Monthly Recovery and Interest Calculation
Schedule SMG – 5 Comparative Balance Sheet 2015-2017
Schedule SMG – 6 Comparative Income Statement 2015-2017
Schedule SMG – 7 Balance Sheet at December 31, 2017
Schedule SMG – 8 Statement of Revenue at December 31, 2017
Schedule SMG – 9 Utility Payments or Accruals to Affiliates 2015-2017
Schedule SMG – 10 Accounts and Account Numbers
Schedule SMG – 11 Pro Forma Income Statement
Schedule SMG – 12 Annual Rate and Bill Impact Summary
Schedule SMG – 13 Proposed Tariff Sheet
EXHIBIT D
2
I. INTRODUCTION 1
Q. Please state your name, affiliation and business address. 2
A. My name is Stefany M. Graham and I am Manager, Rates and Regulatory 3
Initiatives for South Jersey Gas Company (“South Jersey” or “SJG” or the 4
“Company”). My business address is South Jersey Gas, One South Jersey Plaza, 5
Route 54, Folsom, NJ 08037. 6
7
Q. Please summarize your professional and educational background. 8
A. I graduated in 2011 with a Bachelor of Science Degree in Accounting from 9
Pennsylvania State University and I obtained a Masters in Business 10
Administration Degree with a concentration in Finance from Drexel University in 11
2015. In October 2014, I joined the Internal Audit Department at South Jersey 12
Industries, Inc. (“SJI”), and subsequently accepted the role of Senior Rate Analyst 13
in the Rates and Revenue Requirement Department in May 2015. Most recently, 14
in December 2017, I was promoted to my current position, Manager, Rates and 15
Regulatory Initiatives for South Jersey. In my current role, I manage the 16
Company’s Rate Department activities relative to South Jersey’s regulatory 17
initiatives and strategic planning. I also prepare and support rate and revenue 18
related filings before the Board of Public Utilities (“BPU” or the “Board”). Prior 19
to my employment at South Jersey, I worked for the Big Four public accounting 20
firm of Deloitte, LLP as an auditor for a diverse client base, as well as the Internal 21
Audit Department at Virtua Health. I am a member of the American Gas 22
EXHIBIT D
3
Association (AGA) and the New Jersey Utilities Association (NJUA), where I 1
serve on the Finance and Regulations Committee. 2
3
II. PURPOSE OF TESTIMONY 4
Q. What is the purpose of your testimony in this proceeding? 5
A. The purpose of my testimony is to address the revenue requirements and cost 6
recovery mechanism associated with the Company’s proposed continuation of its 7
Energy Efficiency Programs (“EEPs”). My testimony also provides information 8
responsive to certain Minimum Filing Requirements (“MFRs”) required pursuant 9
to the Board’s October 20, 2017 Order in Docket No. QO17091004 (the “October 10
2017 Order”), which established the procedures by which electric and natural gas 11
utilities may seek approval of energy efficiency and conservation programs on a 12
regulated basis. The proposed EEPs and the related investments and O&M 13
budgets are described in detail in the Direct Testimony of Bruce S. Grossman, 14
Program Manager, Residential Energy Efficiency. 15
16
III. REVENUE REQUIREMENTS17
Q. Please provide a brief description of the revenue requirements for the 18
proposed EEPs. 19
A. The revenue requirements for the proposed EEPs are detailed on the attached 20
Schedule SMG-1. The revenue requirement components vary with the type of 21
incentive provided to customers. The proposed EEPs can be divided into two 22
general types of incentives: Loan Program Investments and Direct Program 23
EXHIBIT D
4
Investments. The Loan Program Investment category is comprised of the loan 1
incentives that will be provided by the Company through the NJCEP Residential 2
Loans/Rebates Program, the NJCEP Commercial Loans Program, and the C&I 3
Engineered Solutions Program. The Direct Program Investments category is 4
comprised of grants and energy audits, as well as other capitalizable expenditures 5
required to implement the proposed programs. 6
The total program revenue requirements are calculated by adding the 7
revenue requirements for the Direct Program Investments and the Loan Program 8
Investments. The revenue requirement components also include accumulated 9
amortization of the direct investments, accumulated deferred income tax 10
(“ADIT”), pre-tax weighted average cost of capital (“WACC”), incremental pre-11
tax operating and maintenance (“O&M”) expense, and a revenue factor, as 12
discussed in further detail below. The determination of revenue requirements is 13
consistent with previous BPU approvals of SJG’s EEPs. 14
15
Q. Please provide the revenue requirement calculation for the Direct Program 16
Investments. 17
A. The Direct Program Investment revenue requirement calculation is as follows: 18
Revenue Requirement = ((Direct Program Net Investment * 19
Pre-Tax WACC) + Incremental Pre-Tax O&M Expense + Pre-20
Tax Amortization) * Revenue Factor 21
22
EXHIBIT D
5
Q. Likewise, please provide the revenue requirement calculation for the Loan 1
Program Investments. 2
A. The Loan Program Investment revenue requirement calculation is as follows: 3
Revenue Requirement = ((Loan Program Net Investment * Pre-4
Tax WACC) + Incremental Pre-Tax O&M Expense) * Revenue 5
Factor 6
7
Q. Please explain how the net investment is calculated for the Direct Program 8
Investments and Loans. 9
A. Direct Program net investments are comprised of the cumulative program 10
investments, less the accumulated amortization, less the accumulated deferred 11
income tax. Loan Program net investments are calculated as the cumulative 12
program investments, less loan repayments. 13
14
Q. Please explain which investments are amortized and the amortization period. 15
A. Only the Direct Program Investments will be amortized. The Company proposes 16
an amortization period of sixteen (16) years to better align with the useful life of 17
the measures being installed, calculated based on the weighted average measure 18
life for each of the programs. The proposed amortization timeframe would also 19
have the benefit of reducing the annual rate impact of the program to ratepayers. 20
21
Q. How is the ADIT calculated and applied? 22
EXHIBIT D
6
A. The ADIT is only applicable to the Direct Program Investments revenue 1
requirement. The ADIT is calculated as the accumulated Direct Program 2
Investments, less accumulated amortization, multiplied by a 28.11% tax rate. The 3
28.11% tax rate is a combination of the Federal income tax rate of 21% and the 4
State corporate business tax of 9%. 5
6
Q. What is the basis for the rate of return used to calculate the revenue 7
requirements? 8
A. The Company is using a rate of return (“ROR”) of 6.80%, or 8.77% on a pre-tax 9
basis. This is the WACC utilized to set rates in the Company’s most recent base 10
rate case in Docket No. GR17010071, updated to reflect the recent Federal 11
corporate tax rate change to 21%, effective January 1, 2018. Any change in the 12
WACC authorized by the Board in a subsequent base rate case will be reflected in 13
the subsequent monthly revenue requirement calculations. Any change in the 14
revenue requirement resulting from the change in the WACC will not be included 15
in the monthly interest calculation for over and under recoveries until the date of 16
the next scheduled annual true-up but in any event, no later than October 1 of the 17
subsequent year. In addition, any changes to current tax rates would be reflected 18
in an adjustment to the Pre-Tax WACC. The WACC calculation is attached 19
hereto as Schedule SMG-2. 20
21
Q. What assumptions and types of expenses are included in the incremental 22
O&M used to calculate the revenue requirement? 23
EXHIBIT D
7
A. Consistent with the prior approval of the Company’s EET III Extension Program, 1
South Jersey is seeking to recover O&M expenses, which include administration, 2
marketing and sales, training, inspections and quality control, and evaluation costs 3
incurred to run the EEPs. 4
5
Q. Please explain the basis for the revenue factor used to calculate the revenue 6
requirements. 7
A. The revenue factor reflects tax adjustments for Sales and Use Tax (“SUT”), 8
Public Utility Assessment Tax (“PUA”), and bad debt allowance. The Company 9
is using a revenue factor of 1.09034, which is the revenue factor utilized to set 10
rates in the Company’s most recent base rate case in Docket No. GR17010071 11
and further removing the Federal and State corporate business tax. The 12
calculation of this revenue factor is attached hereto as Schedule SMG-3. 13
14
IV. COST RECOVERY MECHANISM15
Q. Please describe the cost recovery mechanism proposed by the Company for 16
the recovery of costs associated with the EEPs. 17
A. The proposed cost recovery mechanism is consistent with the cost recovery 18
mechanism approved by the Board for the Company’s current EEPs. The 19
Company recovers its costs associated with the EEPs through the Energy 20
Efficiency Tracker (“EET”), which is set forth in Rider “N” to the Company’s 21
Tariff. Total EEP revenue requirements for an annual period are calculated and 22
recovered though a volumetric charge applicable to all firm throughput. Rider 23
EXHIBIT D
8
“N” also includes provisions for the treatment of any over or under recoveries. 1
Recovery of the revenue requirements associated with the Company’s proposed 2
EEP IV program will be accomplished by deriving a rate associated with the EEP 3
revenue requirements and adding it to the Company’s currently approved EET 4
rate. The forecasted recovery of the EEP IV year one revenue requirement is 5
attached hereto as Schedule SMG-4. 6
7
Q. Please explain how the rate associated with the Company’s proposed EEPs is 8
derived. 9
A. The total revenue requirement equals the sum of the Direct Program Investment 10
revenue requirement and the Loan Program Investment revenue requirement. The 11
total revenue requirement is divided by the applicable firm throughput to derive 12
the rate per therm, excluding taxes. 13
14
Q. What is the basis for the therms used to calculate the rate? 15
A. The initial recovery rate for the proposed EEPs is based on forecasted revenue 16
requirements for the period October 1, 2018 to September 30, 2019. The initial 17
period was proposed to align future cost recovery periods with the EET year 18
ending September 30th, as set forth in Rider “N” of the Company’s Tariff, and to 19
achieve conformity with the Company’s existing EET recovery rate. Annual 20
true-up filings covering the recovery period of October 1st to September 30th will 21
be submitted commencing in June 2019. The forecasted volumes for the initial 22
recovery period are 482,486,715 therms. These volumes reflect firm consumption 23
EXHIBIT D
9
for all rate classes that are charged the EET. In forecasting its customer 1
consumption, the Company utilizes ten years of historical usage and 20 years of 2
normalized weather data. 3
4
Q. How will the Company account for any over/under recoveries? 5
A. Consistent with the cost recovery mechanism approved by the Board for the 6
Company’s current EEPs, the Company would defer any over/under recovery of 7
the actual revenue requirements compared to revenues. In calculating the 8
monthly interest on net over and under recoveries, the interest rate shall be based 9
on the Company’s monthly average Short-Term Debt rate. The calculation of 10
monthly interest expense is attached hereto as Schedule SMG-4. 11
12
Q. Please provide the initial EET rate associated with the Company’s proposed 13
EEPs, as well as the associated customer bill impacts. 14
A. The EET rate and annual customer bill impact associated with the rate for each 15
year of the EEP IV program are included in Schedule SMG-1. The proposed 16
Year 1 EET rate will be $0.011459 per therm, including taxes, and $0.010720 per 17
therm, excluding taxes. This represents an increase of $0.011459 per therm to the 18
current EET rate of $0.009144 per therm, for a total combined EET rate of 19
$0.020603 per therm, to be effective upon issuance of a Board Order. The bill 20
impact for a residential heating customer using 100 therms during a winter month 21
will be an increase of $1.15, or 0.8%. The cumulative annual bill impacts for all 22
EXHIBIT D
10
approved and proposed programs, for all rate classes, are provided in Schedule 1
SMG-12. 2
3
V. ADDITIONAL MINIMUM FILING REQUIREMENTS 4
Q. Please provide a comparative balance sheet for the most recent three-year 5
period. 6
A. Please see the attached Schedule SMG-5, which reflects the Company’s balance 7
sheets as of December 31st for 2017, 2016, and 2015, as stated in the Company’s 8
annual SEC 10K filings. 9
10
Q. Please provide a comparative income statement for the most recent three-11
year period. 12
A. Please see the attached Schedule SMG-6, which reflects the Company’s income 13
statement for the year ending December 31st for 2017, 2016, and 2015. 14
15
Q. Please provide a balance sheet with the most recent date available. 16
A. Please see the attached Schedule SMG-7, which reflects the Company’s balance17
sheet as of December 31, 2017. 18
19
Q. Please provide a statement of the amount of revenue derived in the calendar 20
year last preceding the institution of this proceeding from the intrastate sales 21
of natural gas. 22
EXHIBIT D
11
A. Please see the attached Schedule SMG-8 which lists the Company’s intrastate 1
revenue for the year ending December 31, 2017 by customer class. 2
3
Q. Please provide a schedule of payments and accruals made to affiliated 4
companies. 5
A. Please see the attached Schedule SMG-9 listing payments and accruals made to 6
affiliated companies for the year ending December 31st for 2017, 2016, and 2015. 7
8
Q. Please provide the accounts and account numbers that will be utilized in 9
booking revenue, costs, expenses and assets pertaining to each proposed 10
program and indicate which accounts will be debited or credited monthly. 11
A. Please see the attached Schedule SMG-10 which provides the account numbers 12
for all accounting entries related to each EEP as well as which accounts will be 13
debited or credited monthly. 14
15
Q. Please provide pro forma income statements and balance sheets for the 16
program for each of the first three years of operations and actual or 17
estimated balance sheets at the beginning and end of each year of said three-18
year period. 19
A. Please see the attached Schedule SMG-11. The pro forma income statement and 20
balance sheet reflect the first three years of the program. 21
22
EXHIBIT D
12
Q. Please provide an annual cumulative rate impact summary for all approved 1
and proposed programs as well as a cumulative bill impact summary by year 2
for all approved and proposed programs. 3
A. Please see the attached Schedule SMG-12 for the annual rate impact and bill 4
impact by year for all approved and proposed EEPs. 5
6
Q. Please provide proposed tariff sheets associated with the proposed EEPs. 7
A. Please see the attached Schedule SMG-13 for the proposed tariff sheets and Rider 8
“N”, in redlined form. 9
10
Q. Does this conclude your testimony? 11
A. Yes, it does. 12
South Jersey Gas CompanyEnergy Efficiency Tracker - 2018 Extension (EET IV)
Annual Revenue Requirements
Year 1 Year 2 Year 3 Year 4
DIRECT PROGRAM INVESTMENTS
Annual Investment 6,315,276$ 11,549,539$ 14,177,168$ 16,587,118$
Cumulative Investment 6,315,276$ 17,864,816$ 32,041,984$ 48,629,102$
Less Accumulated Amortization (148,075)$ (880,399)$ (2,421,815)$ (4,923,405)$
Less Accumulated Deferred Tax (1,733,600)$ (4,774,320)$ (8,326,230)$ (12,285,671)$
Net Investment 4,433,601$ 12,210,097$ 21,293,940$ 31,420,025$
Rate of Return (Pre Tax) 8.77% 8.77% 8.77% 8.77%
Required Net Operating Income (Based on Avg. Annual Investment) 179,739$ 768,986$ 1,525,875$ 2,377,770$
Incremental O&M Pre Tax 2,392,045$ 2,985,125$ 2,981,160$ 2,952,010$
Pre Tax Amortization 148,075$ 732,323$ 1,541,416$ 2,501,590$
Operating Income 2,719,860$ 4,486,435$ 6,048,451$ 7,831,370$
Revenue Factor 1.09034 1.09034 1.09034 1.09034
Revenue Requirement 2,965,569$ 4,891,734$ 6,594,861$ 8,538,848$
Revenue Requirement Excluding SUT 2,781,307$ 4,587,793$ 6,185,099$ 8,008,298$
LOAN PROGRAM INVESTMENTS
Annual Investment 7,622,076$ 13,005,055$ 16,774,624$ 19,839,890$ Less Loan Repayments (442,370)$ (2,006,561)$ (4,065,667)$ (6,605,291)$
Net Investment 7,179,706$ 10,998,494$ 12,708,957$ 13,234,600$
Cumulative Investment 7,179,706$ 18,178,199$ 30,887,156$ 44,121,756$
Rate of Return (Pre Tax) 8.77% 8.77% 8.77% 8.77%
Required Net Operating Income (Based on Avg. Annual Investment) 271,647$ 2,214,174$ 2,214,174$ 3,375,940$
Incremental O&M Pre Tax 2,066,675$ 2,417,659$ 2,382,448$ 2,278,383$
Operating Income 2,338,323$ 3,579,788$ 4,596,622$ 5,654,324$
Revenue Factor 1.09034 1.09034 1.09034 1.09034
Revenue Requirement 2,549,564$ 3,903,182$ 5,011,876$ 6,165,129$
Revenue Requirement Excluding SUT 2,391,150$ 3,660,663$ 4,700,469$ 5,782,067$
RATE CALCULATIONRevenue Requirement For Direct Investments Excluding Taxes 2,781,307$ 4,587,793$ 6,185,099$ 8,008,298$ Revenue Requirement For Loans Programs Excluding Taxes 2,391,150$ 3,660,663$ 4,700,469$ 5,782,067$ Prior Year (Over)/Under Recovered Deferred Balance Including Carrying Costs -$ (25,961)$ (31,370)$ (40,234)$ Total Revenue Requirements 5,172,458$ 8,222,495$ 10,854,198$ 13,750,132$
Therms 482,486,715 482,775,535 482,775,535 482,775,535
Rate Per Therm, Excluding SUT and PUA 0.010720$ 0.017032$ 0.022483$ 0.028481$
Rate Per Therm, Including PUA 0.010747$ 0.017075$ 0.022539$ 0.028552$
Rate Per Therm, Including SUT and PUA 0.011459$ 0.018206$ 0.024033$ 0.030444$
Annual Bill ImpactResidential Non Heat (210 Therms) 2.40$ 1.42$ 1.22$ 1.35$ Residential Heat (727 Therms) 8.33$ 4.90$ 4.24$ 4.65$ General Service (3,595 Therms) 41.19$ 24.25$ 20.95$ 23.05$ General Service - Large Volume (178,885 Therms) 2,049.85$ 1,206.94$ 1,042.36$ 1,146.84$
SMG-1 Page 1 of 3
South Jersey Gas CompanyEnergy Efficiency Tracker - 2018 Extension (EET IV)
Annual Revenue Requirements
DIRECT PROGRAM INVESTMENTS
Annual Investment
Cumulative Investment
Less Accumulated Amortization
Less Accumulated Deferred Tax
Net Investment
Rate of Return (Pre Tax)
Required Net Operating Income (Based on Avg. Annual Investment)
Incremental O&M Pre Tax
Pre Tax Amortization
Operating Income
Revenue Factor
Revenue Requirement
Revenue Requirement Excluding SUT
LOAN PROGRAM INVESTMENTS
Annual InvestmentLess Loan Repayments
Net Investment
Cumulative Investment
Rate of Return (Pre Tax)
Required Net Operating Income (Based on Avg. Annual Investment)
Incremental O&M Pre Tax
Operating Income
Revenue Factor
Revenue Requirement
Revenue Requirement Excluding SUT
RATE CALCULATIONRevenue Requirement For Direct Investments Excluding TaxesRevenue Requirement For Loans Programs Excluding TaxesPrior Year (Over)/Under Recovered Deferred Balance Including Carrying CostsTotal Revenue Requirements
Therms
Rate Per Therm, Excluding SUT and PUA
Rate Per Therm, Including PUA
Rate Per Therm, Including SUT and PUA
Annual Bill ImpactResidential Non Heat (210 Therms)Residential Heat (727 Therms)General Service (3,595 Therms)General Service - Large Volume (178,885 Therms)
Year 5 Year 6 Year 7 Year 8
18,754,377$ 8,144,774$ 984,262$ 325,071$
67,383,479$ 75,528,253$ 76,512,516$ 76,837,587$
(8,528,331)$ (13,072,688)$ (17,827,877)$ (22,619,460)$
(16,544,182)$ (17,556,259)$ (16,496,252)$ (15,240,715)$
42,310,966$ 44,899,306$ 42,188,387$ 38,977,411$
8.77% 8.77% 8.77% 8.77%
3,307,293$ 3,935,740$ 3,815,041$ 3,547,010$
2,912,770$ 1,732,974$ 428,048$ 38,201$
3,604,926$ 4,544,357$ 4,755,189$ 4,791,583$
9,824,988$ 10,213,071$ 8,998,277$ 8,376,794$
1.09034 1.09034 1.09034 1.09034
10,712,567$ 11,135,709$ 9,811,172$ 9,133,544$
10,046,956$ 10,443,807$ 9,201,568$ 8,566,044$
22,812,431$ 8,690,134$ 389,030$ -$ (9,558,744)$ (11,950,056)$ (12,374,370)$ (12,139,705)$
13,253,687$ (3,259,922)$ (11,985,340)$ (12,139,705)$
57,375,443$ 54,115,521$ 42,130,181$ 29,990,476$
8.77% 8.77% 8.77% 8.77%
4,542,255$ 5,085,728$ 4,181,565$ 3,112,495$
2,146,081$ 805,261$ 123,601$ 25,466$
6,688,336$ 5,890,989$ 4,305,167$ 3,137,960$
1.09034 1.0903 1.0903 1.0903
7,292,553$ 6,423,175$ 4,694,091$ 3,421,440$
6,839,440$ 6,024,079$ 4,402,430$ 3,208,854$
10,046,956$ 10,443,807$ 9,201,568$ 8,566,044$ 6,839,440$ 6,024,079$ 4,402,430$ 3,208,854$
(49,770)$ (60,663)$ (48,561)$ (40,237)$ 16,836,626$ 16,407,223$ 13,555,437$ 11,734,660$
482,775,535 482,775,535 482,775,535 482,775,535
0.034875$ 0.033985$ 0.028078$ 0.024307$
0.034962$ 0.034070$ 0.028148$ 0.024368$
0.037279$ 0.036327$ 0.030013$ 0.025982$
1.43$ (0.20)$ (1.32)$ (0.85)$ 4.97$ (0.69)$ (4.59)$ (2.93)$
24.57$ (3.43)$ (22.69)$ (14.49)$ 1,222.68$ (170.30)$ (1,129.48)$ (721.09)$
SMG-1 Page 2 of 3
South Jersey Gas CompanyEnergy Efficiency Tracker - 2018 Extension (EET IV)
Annual Revenue Requirements
DIRECT PROGRAM INVESTMENTS
Annual Investment
Cumulative Investment
Less Accumulated Amortization
Less Accumulated Deferred Tax
Net Investment
Rate of Return (Pre Tax)
Required Net Operating Income (Based on Avg. Annual Investment)
Incremental O&M Pre Tax
Pre Tax Amortization
Operating Income
Revenue Factor
Revenue Requirement
Revenue Requirement Excluding SUT
LOAN PROGRAM INVESTMENTS
Annual InvestmentLess Loan Repayments
Net Investment
Cumulative Investment
Rate of Return (Pre Tax)
Required Net Operating Income (Based on Avg. Annual Investment)
Incremental O&M Pre Tax
Operating Income
Revenue Factor
Revenue Requirement
Revenue Requirement Excluding SUT
RATE CALCULATIONRevenue Requirement For Direct Investments Excluding TaxesRevenue Requirement For Loans Programs Excluding TaxesPrior Year (Over)/Under Recovered Deferred Balance Including Carrying CostsTotal Revenue Requirements
Therms
Rate Per Therm, Excluding SUT and PUA
Rate Per Therm, Including PUA
Rate Per Therm, Including SUT and PUA
Annual Bill ImpactResidential Non Heat (210 Therms)Residential Heat (727 Therms)General Service (3,595 Therms)General Service - Large Volume (178,885 Therms)
Year 9 Year 10 Year 11 Year 12 Year 13
293,636$ 211,581$ 150,120$ 99,908$ 21,806$
77,131,222$ 77,342,803$ 77,492,923$ 77,592,831$ 77,614,637$
(27,430,386)$ (32,257,734)$ (37,096,245)$ (41,942,712)$ (46,793,399)$
(13,970,905)$ (12,673,413)$ (11,355,506)$ (10,021,249)$ (8,663,850)$
35,729,931$ 32,411,656$ 29,041,172$ 25,628,871$ 22,157,388$
8.77% 8.77% 8.77% 8.77% 8.77%
3,263,647$ 2,975,934$ 2,682,179$ 2,384,657$ 2,082,838$
6,200$ 3,472$ 2,232$ 1,984$ 496$
4,810,927$ 4,827,348$ 4,838,510$ 4,846,467$ 4,850,688$
8,080,773$ 7,806,754$ 7,522,921$ 7,233,108$ 6,934,022$
1.09034 1.09034 1.09034 1.09034 1.09034
8,810,781$ 8,512,008$ 8,202,533$ 7,886,540$ 7,560,434$
8,263,335$ 7,983,126$ 7,692,880$ 7,396,520$ 7,090,677$
-$ -$ -$ -$ -$ (11,043,347)$ (9,023,308)$ (6,532,363)$ (3,633,573)$ (1,231,590)$
(11,043,347)$ (9,023,308)$ (6,532,363)$ (3,633,573)$ (1,231,590)$
18,947,129$ 9,923,820$ 3,391,457$ (242,115)$ (1,473,705)$
8.77% 8.77% 8.77% 8.77% 8.77%
2,092,472$ 1,215,945$ 540,004$ 102,599$ (91,786)$
12,550$ 7,028$ 4,518$ 4,016$ 1,004$
2,105,022$ 1,222,973$ 544,522$ 106,615$ (90,782)$
1.0903 1.0903 1.0903 1.0903 1.0903
2,295,188$ 1,333,456$ 593,714$ 116,246$ (98,983)$
2,152,579$ 1,250,603$ 556,824$ 109,023$ (92,833)$
8,263,335$ 7,983,126$ 7,692,880$ 7,396,520$ 7,090,677$ 2,152,579$ 1,250,603$ 556,824$ 109,023$ (92,833)$
(36,873)$ (32,741)$ (29,243)$ (26,372)$ (23,967)$ 10,379,042$ 9,200,988$ 8,220,461$ 7,479,171$ 6,973,877$
482,775,535 482,775,535 482,775,535 482,775,535 482,775,535
0.021499$ 0.019059$ 0.017028$ 0.015492$ 0.014445$
0.021553$ 0.019107$ 0.017071$ 0.015531$ 0.014481$
0.022981$ 0.020373$ 0.018202$ 0.016560$ 0.015441$
(0.63)$ (0.54)$ (0.46)$ (0.35)$ (0.23)$ (2.18)$ (1.89)$ (1.58)$ (1.20)$ (0.81)$
(10.79)$ (9.38)$ (7.80)$ (5.90)$ (4.02)$ (536.83)$ (466.54)$ (388.36)$ (293.73)$ (200.17)$
SMG-1 Page 3 of 3
RevenueConversion Pre-Tax
Type of Capital Ratios Cost Rate Weighted Cost Rate Factor* Weighted Cost Rate
Long-Term Debt 47.50% 3.70% 1.76% 1.76%
Common Equity 52.50% 9.60% 5.04% 139.10% 7.01%
100.00% 6.80% 8.77%
*Tax Reflects FIT Rate of 21%, effective January 1, 2018
SOUTH JERSEY GAS COMPANYENERGY EFFICIENCY TRACKER - 2018 EXTENSION (EET IV)
WEIGHTED AVERAGE COST OF CAPITALDOCKET NO. GR17010071
SMG-2
LineNo.12 Components:34 Sales and Use Tax (SUT) 6.625%56 Public Utility Assessment Tax (PUA) 0.2505%78 Bad Debt Provision (Bad Debt) 2.0037%910 Operating Revenue 1.00001112 Revenue Factor Calculation:13 1.020037*1.002505*1.06625= 1.09034
SOUTH JERSEY GAS COMPANYENERGY EFFICIENCY TRACKER - 2018 EXTENSION (EET IV)
DERIVATION OF REVENUE FACTOR
SMG-3
Proj
ecte
dPr
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ted
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Nov
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Dec
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Mar
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Apr
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May
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Vol
umes
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48,5
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$
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$
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5$
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$
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$
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285,
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$
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$
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$
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$
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$
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9,67
5$
275,
965
$
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262,
040
$
5,
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10 11M
onth
ly (O
ver)/
Und
er R
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Bal
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(148
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)$
(2
28,6
02)
$
(396
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)$
(1
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$
(149
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)$
(1
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$
(1
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81
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$
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(3
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Bal
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(148
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(3
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(774
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(9
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$
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Inte
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(To
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Com
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SMG-4
SOUTH JERSEY GAS COMPANYBALANCE SHEETS - ASSETS
AT END OF PERIODS INDICATED(In Thousands)
December 31,Line 2017 2016 2015No. Assets
1 Property, Plant and Equipment:2 Utility Plant, at original cost 2,652,244$ 2,424,134$ 2,211,239$ 3 Accumulated Depreciation (498,161) (471,222) (440,473) 45 Property, Plant and Equipment - Net 2,154,083 1,952,912 1,770,766 67 Investments:8 Available-for-Sale Securities - 9,270 8,788 9 Restricted Investments 2,912 32 6,769 1011 Total Investments 2,912 9,302 15,557 1213 Current Assets:14 Cash and Cash Equivalents 1,707 1,359 77515 Notes Receivable 9,916 16 Accounts Receivable 78,571 69,651 64,445 17 Accounts Receivable - Related Parties 988 1,355 1,972 18 Unbilled Revenues 54,980 41,754 25,613 19 Provision for Uncollectibles (13,799) (12,570) (9,778) 20 Natural Gas in Storage, average cost 14,932 11,621 14,294 21 Materials and Supplies, average cost 825 914 93722 Deferred Income Taxes - Net - - - 23 Prepaid Taxes 38,326 16,428 21,483 24 Derivatives - Energy Related Assets 7,327 5,434 1,077 25 Other Prepayments and Current Assets 12,670 13,853 13,405 2627 Total Current Assets 196,527 149,799 144,139 2829 Regulatory and Other Noncurrent Assets:30 Regulatory Assets 469,224 410,746 323,434 31 Unamortized Debt Issuance Costs - - - 32 Long-Term Receivables 25,851 25,758 24,950 33 Derivatives - Energy Related Assets 5 373 6434 Other 17,372 3,033 2,666 3536 Total Regulatory and Other Noncurrent Assets 512,452 439,910 351,114 3738 Total Assets 2,865,974$ 2,551,923$ 2,281,576$
SMG-5 Page 1 of 2
SOUTH JERSEY GAS COMPANYBALANCE SHEETS - LIABILITIES & CAPITALIZATION
AT END OF PERIODS INDICATED(In Thousands)
December 31,2017 2016 2015
LineNo. Capitalization and Liabilities
1 Common Equity: 2 Common Stock, Par Value $2.50 per share:3 Authorized - 4,000,000 shares4 Outstanding - 2,339,139 shares 5,848$ 5,848$ 5,848$ 5 Other Paid-In Capital and Premium on Common Stock 355,744 315,827 250,827 6 Accumulated Other Comprehensive Loss (25,997) (14,934) (12,862) 7 Retained Earnings 585,838 533,159 464,114 8 9 Total Common Equity 921,433 839,900 707,927
1011 Long-Term Debt 758,052 423,177 577,454 1213 Total Capitalization 1,679,485 1,263,077 1,285,381 1415 Current Liabilities:16 Notes Payable 52,000 104,300 134,400 17 Current Portion of Long-Term Debt 63,809 215,909 27,909 18 Accounts Payable - Commodity 43,341 23,815 8,936 19 Accounts Payable - Other 41,365 45,370 40,579 20 Accounts Payable - Related Parties 17,029 11,216 7,552 21 Derivatives - Energy Related Liabilities 9,270 1,372 5,489 22 Derivatives-Other Current 389 386 - 23 Deferred Income Taxes - Net - - - 24 Customer Deposits and Credit Balances 41,656 45,816 19,531 25 Environmental Remediation Costs 66,040 45,018 48,323 26 Taxes Accrued 1,760 855 1,930 27 Pension Benefits 2,353 2,428 2,227 28 Interest Accrued 7,615 5,369 5,989 29 Other Current Liabilities 7,026 8,011 5,686 3031 Total Current Liabilities 353,653 509,865 308,551 3233 Regulatory and Other Noncurrent Liabilities:34 Regulatory Liabilities 287,105 49,121 42,841 35 Deferred Income Taxes - Net 280,747 469,408 432,674 36 Environmental Remediation Costs 105,656 108,029 74,871 37 Asset Retirement Obligations 58,714 58,674 57,219 38 Pension and Other Postretirement Benefits 88,870 81,800 65,491 39 Investment Tax Credits - - 351 40 Derivatives - Energy Related Liabilities 170 - - 41 Derivatives - Other 6,639 6,979 7,631 42 Other 4,935 4,970 6,566 4344 Total Regulatory and Other Noncurrent Liabilities 832,836 778,981 687,644 4546 Total Capitalization and Liabilities 2,865,974$ 2,551,923$ 2,281,576$
SMG-5 Page 2 of 2
Line 2017 2016 2015No.
1 Operating Revenues 517,254$ 461,055$ 534,290$ 23 Operating Expenses:4 Cost of Sales (Excluding depreciation) 204,432 174,390 245,290 5 Operations 98,992 95,609 107,836 6 Maintenance 19,727 17,549 16,183 7 Depreciation 53,887 47,432 41,365 8 Energy and Other Taxes 3,729 3,620 4,031 910 Total Operating Expenses 380,767 338,600 414,705 1112 Operating Income 136,487 122,455 119,585 1314 Other Income and Expense:15 Other Income and Expense 6,475 3,831 3,844 1617 Total Other Income & Expense Net 6,475 3,831 3,844 1819 Interest Charges (24,705) (17,875) (19,906) 2021 Income Taxes (45,700) (39,366) (36,945) 2223 Net Income 72,557$ 69,045$ 66,578$
December 31,
SOUTH JERSEY GAS COMPANY STATEMENTS OF INCOME
FOR THE PERIODS INDICATED(In Thousands)
Twelve Months Ended
SMG-6
December 31,Line 2017No. Assets
1 Property, Plant and Equipment:2 Utility Plant, at original cost 2,652,244$ 3 Accumulated Depreciation (498,161) 45 Property, Plant and Equipment - Net 2,154,083 67 Investments:8 Available-for-Sale Securities -9 Restricted Investments 2,912
1011 Total Investments 2,912 1213 Current Assets:14 Cash and Cash Equivalents 1,707 15 Accounts Receivable 78,571 16 Accounts Receivable - Related Parties 988 17 Unbilled Revenues 54,980 18 Provision for Uncollectibles (13,799)19 Natural Gas in Storage, average cost 14,932 20 Materials and Supplies, average cost 825 21 Deferred Income Taxes - Net -22 Prepaid Taxes 38,326 23 Derivatives - Energy Related Assets 7,327 24 Other Prepayments and Current Assets 12,670 2526 Total Current Assets 196,527 2728 Regulatory and Other Noncurrent Assets:29 Regulatory Assets 469,224 30 Unamortized Debt Issuance Costs -31 Long-Term Receivables 25,851 32 Derivatives - Energy Related Assets 5 33 Other 17,372 3435 Total Regulatory and Other Noncurrent Assets 512,452 3637 Total Assets 2,865,974$
SOUTH JERSEY GAS COMPANYBALANCE SHEET - ASSETS
AT MOST RECENT PERIOD CERTIFIED(In Thousands)
SMG-7 Page 1 of 2
December 31,Line 2017No. Capitalization and Liabilities
1 Common Equity: 2 Common Stock, Par Value $2.50 per share:3 Authorized - 4,000,000 shares4 Outstanding - 2,339,139 shares 5,848$ 5 Other Paid-In Capital and Premium on Common Stock 355,744 6 Accumulated Other Comprehensive Loss (25,997) 7 Retained Earnings 585,838 8 9 Total Common Equity 921,433 1011 Long-Term Debt 758,052 1213 Total Capitalization 1,679,485 1415 Current Liabilities:16 Notes Payable 52,000 17 Current Portion of Long-Term Debt 63,809 18 Accounts Payable - Commodity 43,341 19 Accounts Payable - Other 41,365 20 Accounts Payable - Related Parties 17,029 21 Derivatives - Energy Related Liabilities 9,270 22 Derivatives - Other Current 389 23 Deferred Income Taxes - Net - 24 Customer Deposits and Credit Balances 41,656 25 Environmental Remediation Costs 66,040 26 Taxes Accrued 1,760 27 Pension Benefits 2,353 28 Interest Accrued 7,615 29 Dividends Declared - 30 Other Current Liabilities 7,026 3132 Total Current Liabilities 353,653 3334 Regulatory and Other Noncurrent Liabilities:35 Regulatory Liabilities 287,105 36 Deferred Income Taxes - Net 280,747 37 Environmental Remediation Costs 105,656 38 Asset Retirement Obligations 58,714 39 Pension and Other Postretirement Benefits 88,870 40 Investment Tax Credits - 41 Derivatives - Energy Related Liabilities 170 42 Derivatives - Other 6,639 43 Other 4,935 4445 Total Deferred Credits and Other Noncurrent Liabilities 832,836 4647 Commitments and Contingencies4849 Total Capitalization and Liabilities 2,865,974$
BALANCE SHEET - LIABILITIES & CAPITALIZATIONAT MOST RECENT PERIOD CERTIFIED
(In Thousands)
SOUTH JERSEY GAS COMPANY
SMG-7 Page 2 of 2
Customer Class Total Revenue
Residential 283,882$
Commercial 97,079$
Industrial 25,043$
Street & Yard Lighting 81$
Total 406,085$
South Jersey Gas CompanyIntrastate Gas Revenue By Customer Class
As of December 31, 2017($000's)
SMG-8
2017 2016 2015
MILLENNIUM ACCOUNT SERVICES, LLC (meter reading services) 2,974,066$ 2,897,290$ 2,763,014$
SOUTH JERSEY INDUSTRIES, INC. (corporate support) a 90,443,586 53,058,046 85,963,307
SOUTH JERSEY ENERGY SERVICE PLUS (heater conversion installations) 46,474 136,723 273,911
SOUTH JERSEY ENERGY COMPANY (billing services remittances) 18,851,109 18,685,527 26,215,786
SOUTH JERSEY ENERGY SOLUTIONS, LLC (accounting support) 229,621 63,023 54,591
SOUTH JERSEY RESOURCES GROUP, LLC (commodity purchases) 22,578,608 21,126,043 26,171,816
(a) SOUTH JERSEY INDUSTRIES, INC. includes the following major pass-through items:
COMMON DIVIDENDS 20,000,000 0 40,764,038
FEDERAL INCOME TAXES 0 0 0
401K PLAN CONTRIBUTIONS 5,191,812 4,956,488 5,116,523
PENSION PLAN CONTRIBUTIONS 7,996,500 0 12,020,143
BENEFITS 4,329,674 3,924,142 2,822,000
Subtotal of Major Pass-Through Items 37,517,986 8,880,631 60,722,704
SOUTH JERSEY GAS COMPANYPAYMENTS AND ACCRUALS TO AFFILIATED COMPANIES
FOR THE PERIODS INDICATED
Twelve Months EndedDecember 31,
SMG-9
Debit CreditTo Record Regulatory Asset
182 Program Investment Regulatory Asset XXX131 Cash XXX
To Record Incremental O&M907 Program O&M Expense XXX131 Cash XXX
To Amortize Regulatory Asset907 Program Investment Amortization Account XXX182 Program Investment Regulatory Asset XXX
To Record Recovery of Regulatory Asset131 Cash XXX484 Clause Revenue XXX484 Clause Revenue XXX182 Regulatory Asset XXX
To Record Over/Under Recovery182 Regulatory Asset XXX484 Regulatory Debit XXX484 Regulatory Credit XXX253 Regulatory Liability XXX
To Record Carrying Costs on Under/(Over) Recovered Balance182 Regulatory Asset XXX419 Other Income XXX253 Regulatory Liability XXX419 Other Income XXX
To Record Loan Repayment (Reduction to the Regulatory Asset)131 Cash XXX907 Customer Loan Expense XXX907 Customer Loan Expense XXX182 Regulatory Asset XXX
South Jersey Gas CompanyEnergy Efficiency Program Accounting Entries
SMG-10
Year 1 Year 2 Year 3
Operating Revenues 5,172,458$ 8,248,456$ 10,885,568$
Incremental O&M Expense (4,458,721)$ (5,402,784)$ (5,363,608)$
Margin 713,737$ 2,845,672$ 5,521,960$
Amortization of Program Investment (148,075)$ (732,323)$ (1,541,416)$
Operating Income 565,662$ 2,113,349$ 3,980,544$
Interest Expense (135,651)$ (618,501)$ (1,221,466)$
Income Before Income Taxes 430,011$ 1,494,848$ 2,759,078$
Income Tax Expense (28.11%) (120,876)$ (420,202)$ (775,577)$
Net Income 309,135$ 1,074,646$ 1,983,501$
South Jersey Gas CompanyEnergy Efficiency Program - 2018 Extension (EET IV)
Pro Forma Income Statement (Program Year)
SMG-11 Page 1 of 2
Year 1 Year 2 Year 3
AssetsCumulative Investment 13,937,352$ 38,491,946$ 69,443,738$
Less Accumulated Amortization (148,075)$ (880,399)$ (2,421,815)$
Net Investment 13,789,277$ 37,611,547$ 67,021,923$
Deferred Tax (1,733,600)$ (4,774,320)$ (8,326,230)$ .
Total Asset 12,055,676$ 32,837,227$ 58,695,694$
Liabilities & CapitalizationDeferred Income Tax (1,733,600)$ (4,774,320)$ (8,326,230)$ Total Capitalization 13,789,277$ 37,611,547$ 67,021,923$ Total Liabilities & Capitalization 12,055,676$ 32,837,227$ 58,695,694$
South Jersey Gas CompanyEnergy Efficiency Program - 2018 Extension (EET IV)
Pro Forma Balance Sheet (Program Year)
SMG-11 Page 2 of 2
Program Year Rate Annual Bill Change ($) Change (%)Cumulative Change (%) Annual Bill Change ($) Change (%)
Cumulative Change (%)
Current Bill $0.009144 $380.68 $1,070.27
Year 1 $0.020603 $383.08 $2.40 0.6% 0.6% $1,078.60 $8.33 0.8% 0.8%
Year 2 $0.027350 $384.50 $1.42 0.4% 1.0% $1,083.50 $4.90 0.5% 1.2%
Year 3 $0.033177 $385.72 $1.22 0.3% 1.3% $1,087.74 $4.24 0.4% 1.6%
Year 4 $0.039588 $387.07 $1.35 0.3% 1.7% $1,092.39 $4.65 0.4% 2.1%
Year 5 $0.046423 $388.50 $1.43 0.4% 2.1% $1,097.36 $4.97 0.5% 2.5%
Year 6 $0.045471 $388.30 ($0.20) -0.1% 2.0% $1,096.67 ($0.69) -0.1% 2.5%
Year 7 $0.039157 $386.98 ($1.32) -0.3% 1.7% $1,092.08 ($4.59) -0.4% 2.0%
Year 8 $0.035126 $386.13 ($0.85) -0.2% 1.4% $1,089.15 ($2.93) -0.3% 1.8%
Year 9 $0.032125 $385.50 ($0.63) -0.2% 1.3% $1,086.97 ($2.18) -0.2% 1.6%
Year 10 $0.029517 $384.96 ($0.54) -0.1% 1.1% $1,085.08 ($1.89) -0.2% 1.4%
Year 11 $0.027346 $384.50 ($0.46) -0.1% 1.0% $1,083.50 ($1.58) -0.1% 1.2%
Year 12 $0.025704 $384.15 ($0.35) -0.1% 0.9% $1,082.30 ($1.20) -0.1% 1.1%
Year 13 $0.024585 $383.92 ($0.23) -0.1% 0.9% $1,081.49 ($0.81) -0.1% 1.0%
Effective Date Rate Annual Bill Change ($) Change (%)Cumulative Change (%) Annual Bill Change ($) Change (%)
Cumulative Change (%)
Current Bill $0.009144 $4,549.61 $94,332.87
Year 1 $0.020603 $4,590.80 $41.19 0.9% 0.9% $96,382.72 $2,049.85 2.2% 2.2%
Year 2 $0.027350 $4,615.05 $24.25 0.5% 1.4% $97,589.66 $1,206.94 1.3% 3.5%
Year 3 $0.033177 $4,636.00 $20.95 0.5% 1.9% $98,632.02 $1,042.36 1.1% 4.6%
Year 4 $0.039588 $4,659.05 $23.05 0.5% 2.4% $99,778.86 $1,146.84 1.2% 5.8%
Year 5 $0.046423 $4,683.62 $24.57 0.5% 2.9% $101,001.54 $1,222.68 1.2% 7.1%
Year 6 $0.045471 $4,680.19 ($3.43) -0.1% 2.9% $100,831.24 ($170.30) -0.2% 6.9%
Year 7 $0.039157 $4,657.50 ($22.69) -0.5% 2.4% $99,701.76 ($1,129.48) -1.1% 5.7%
Year 8 $0.035126 $4,643.01 ($14.49) -0.3% 2.1% $98,980.67 ($721.09) -0.7% 4.9%
Year 9 $0.032125 $4,632.22 ($10.79) -0.2% 1.8% $98,443.84 ($536.83) -0.5% 4.4%
Year 10 $0.029517 $4,622.84 ($9.38) -0.2% 1.6% $97,977.30 ($466.54) -0.5% 3.9%
Year 11 $0.027346 $4,615.04 ($7.80) -0.2% 1.4% $97,588.94 ($388.36) -0.4% 3.5%
Year 12 $0.025704 $4,609.14 ($5.90) -0.1% 1.3% $97,295.21 ($293.73) -0.3% 3.1%
Year 13 $0.024585 $4,605.12 ($4.02) -0.1% 1.2% $97,095.04 ($200.17) -0.2% 2.9%
Proposed General Service Sales (3,595 Therms) Proposed General Service Large Volume Sales (178,885 Therms)
South Jersey Gas CompanyEnergy Efficiency Program - 2018 Extension (EET IV)
Annual Bill Summary
Proposed Residential Non Heat Sales (210 Therms) Proposed Residential Heat Sales (727 Therms)
SMG-12 Page 1 of 2
South Jersey Gas CompanyEnergy Efficiency Program - 2018 Extension (EET IV)
Annual Bill Summary
Effective Date Rate Annual Bill Change ($) Change (%)Cumulative Change (%) Annual Bill Change ($) Change (%)
Cumulative Change (%)
Current Bill $0.009144 $91,101.73 $343,066.63
Year 1 $0.020603 $94,348.42 $3,246.69 3.6% 3.6% $349,127.13 $6,060.50 1.8% 1.8%
Year 2 $0.027350 $96,260.06 $1,911.64 2.0% 5.7% $352,695.51 $3,568.38 1.0% 2.8%
Year 3 $0.033177 $97,911.03 $1,650.97 1.7% 7.5% $355,777.33 $3,081.82 0.9% 3.7%
Year 4 $0.039588 $99,727.46 $1,816.43 1.9% 9.5% $359,168.01 $3,390.68 1.0% 4.7%
Year 5 $0.046423 $101,664.03 $1,936.57 1.9% 11.6% $362,782.94 $3,614.93 1.0% 5.7%
Year 6 $0.045471 $101,394.30 ($269.73) -0.3% 11.3% $362,279.44 ($503.50) -0.1% 5.6%
Year 7 $0.039157 $99,605.35 ($1,788.95) -1.8% 9.3% $358,940.06 ($3,339.38) -0.9% 4.6%
Year 8 $0.035126 $98,463.24 ($1,142.11) -1.1% 8.1% $356,808.12 ($2,131.94) -0.6% 4.0%
Year 9 $0.032125 $97,612.96 ($850.28) -0.9% 7.1% $355,220.94 ($1,587.18) -0.4% 3.5%
Year 10 $0.029517 $96,874.04 ($738.92) -0.8% 6.3% $353,841.61 ($1,379.33) -0.4% 3.1%
Year 11 $0.027346 $96,258.92 ($615.12) -0.6% 5.7% $352,693.40 ($1,148.21) -0.3% 2.8%
Year 12 $0.025704 $95,793.69 ($465.23) -0.5% 5.2% $351,824.97 ($868.43) -0.2% 2.6%
Year 13 $0.024585 $95,476.65 ($317.04) -0.3% 4.8% $351,233.15 ($591.82) -0.2% 2.4%
Effective Date Rate Annual Bill Change ($) Change (%)Cumulative Change (%) Annual Bill Change ($) Change (%)
Cumulative Change (%)
Current Bill $0.009144 $199,423.74 $847,322.05
Year 1 $0.020603 $202,670.43 $3,246.69 1.6% 1.6% $863,555.51 $16,233.46 1.9% 1.9%
Year 2 $0.027350 $204,582.06 $1,911.63 0.9% 2.6% $873,113.69 $9,558.18 1.1% 3.0%
Year 3 $0.033177 $206,233.03 $1,650.97 0.8% 3.4% $881,368.55 $8,254.86 0.9% 4.0%
Year 4 $0.039588 $208,049.47 $1,816.44 0.9% 4.3% $890,450.73 $9,082.18 1.0% 5.1%
Year 5 $0.046423 $209,986.03 $1,936.56 0.9% 5.3% $900,133.58 $9,682.85 1.1% 6.2%
Year 6 $0.045471 $209,716.30 ($269.73) -0.1% 5.2% $898,784.92 ($1,348.66) -0.1% 6.1%
Year 7 $0.039157 $207,927.35 ($1,788.95) -0.9% 4.3% $889,840.15 ($8,944.77) -1.0% 5.0%
Year 8 $0.035126 $206,785.24 ($1,142.11) -0.5% 3.7% $884,129.61 ($5,710.54) -0.6% 4.3%
Year 9 $0.032125 $205,934.97 ($850.27) -0.4% 3.3% $879,878.23 ($4,251.38) -0.5% 3.8%
Year 10 $0.029517 $205,196.04 ($738.93) -0.4% 2.9% $876,183.59 ($3,694.64) -0.4% 3.4%
Year 11 $0.027346 $204,580.93 ($615.11) -0.3% 2.6% $873,108.02 ($3,075.57) -0.4% 3.0%
Year 12 $0.025704 $204,115.70 ($465.23) -0.2% 2.4% $870,781.88 ($2,326.14) -0.3% 2.8%
Year 13 $0.024585 $203,798.65 ($317.05) -0.2% 2.2% $869,196.64 ($1,585.24) -0.2% 2.6%
Proposed Comprehensive Firm Trans Service Proposed Large Volume Service
Proposed Electric Generation Service Proposed Electric Generation Service Large Volume
SMG-12 Page 2 of 2
SOUTH JERSEY GAS COMPANY Fourth Revised Sheet No. 6
B.P.U.N.J. No. 12 - GAS Superseding Third Revised Sheet No. 6
Issued _______________ Effective with service rendered by South Jersey Gas Company, on and after _______________ D. Robbins, Jr., President
Filed pursuant to Order in Docket No. _______________ of the Board of Public Utilities, State of New Jersey, dated ________________
RESIDENTIAL SERVICE (RSG)
APPLICABLE TO USE OF SERVICE FOR:
All residential purposes. Customer may elect Firm Sales Service or Firm Transportation Service. To be eligible for Firm Transportation Service RSG, a customer must hold clear and marketable title to gas that is made available for delivery to the customer’s residence on the Company’s system.
CHARACTER OF SERVICE Firm Sales Service and Firm Transportation Service.
MONTHLY RATE: (1)
Customer Charge: $10.662500 per month
Delivery Charge:
(a) Residential Non-Heating CustomersFirm Sales Service and Firm Transportation Service $.875491864032 per therm
(b) Residential Heating CustomersFirm Sales Service and Firm Transportation Service $.967976956517 per therm
Basic Gas Supply Service (“BGSS”) Charge:
All consumption for customers who elect See Rider “A” of this Tariff. Firm Sales Service.
APPLICABLE RIDERS:
Basic Gas Supply Service Clause: BGSS charges are depicted in Rider “A” of this Tariff.
Transportation Initiation Clause: The rates set forth above have been adjusted, as is appropriate, pursuant to Rider “C” of this Tariff.
Societal Benefits Clause: The rates set forth above have been adjusted, as is appropriate, pursuant to Rider “E” of this Tariff.
Temperature Adjustment Clause: The rates set forth above have been adjusted, as is appropriate, pursuant to Rider “F” of this Tariff.
(1) Please refer to Appendix A for components of Monthly Rates and Price to Compare
SMG-13 Page 1 of 28
SOUTH JERSEY GAS COMPANY Fourth Revised Sheet No. 10
B.P.U.N.J. No. 12 - GAS Superseding Third Revised Sheet No. 10
Issued __________________ Effective with service rendered by South Jersey Gas Company, on and after ________________ D. Robbins, Jr., President
Filed pursuant to Order in Docket No. ____________ of the Board of Public Utilities, State of New Jersey, dated _____________
GENERAL SERVICE (GSG)
APPLICABLE TO USE OF SERVICE FOR: All Commercial and Industrial Customers who would not qualify for any other Rate Schedule. A customer qualifying for service under Rate Schedule GSG may elect either Firm Sales Service or Firm Transportation Service. To be eligible for Firm Transportation Service under this Rate Schedule GSG, a customer must hold clear and marketable title to gas that is made available for delivery to customer’s facility on the Company’s system.
CHARACTER OF SERVICE:
Firm Sales Service or Firm Transportation Service.
MONTHLY RATE: (1)
Customer Charge:
$33.853438 per month
Delivery Charges: Firm Sales Service and Firm Transportation Service $.824079812620 per therm
Basic Gas Supply Service (“BGSS”) Charge:
All consumption for customers who elect Firm Sales Service See Rider “A” of this Tariff. LINE LOSS: Line Loss shall be 1.43% as provided in Special Provision (o). APPLICABLE RIDERS:
Basic Gas Supply Service Clause: BGSS charges are depicted in Rider “A” of this Tariff. Transportation Initiation Clause: The rates set forth above have been adjusted, as is appropriate,
pursuant to Rider “C” of this Tariff.
Societal Benefits Clause: The rates set forth above have been adjusted, as is appropriate, pursuant to Rider “E” of this Tariff.
Temperature Adjustment Clause: The rates set forth above have been adjusted, as is appropriate,
pursuant to Rider “F” of this Tariff.
(1) Please refer to Appendix A for components of Monthly Rates and Price to Compare.
SMG-13 Page 2 of 28
SOUTH JERSEY GAS COMPANY
Fourth Revised Sheet No. 14 B.P.U.N.J. No. 12 - GAS Superseding Third Revised Sheet No. 14
Issued ___________________ Effective with service rendered by South Jersey Gas Company, on and after ________________ D. Robbins, Jr., President
Filed pursuant to Order in Docket No. ______________ of the Board of Public Utilities, State of New Jersey, dated ______________
GENERAL SERVICE – LARGE VOLUME (GSG-LV)
APPLICABLE TO USE OF SERVICE FOR: All Commercial and Industrial Customers who would not qualify for any other Rate Schedule (other than Rate Schedule GSG), and who has an annualized usage of 100,000 therms or more,. A customer qualifying for service under Rate Schedule GSG-LV may elect either Firm Sales Service or Firm Transportation Service. To be eligible for Firm Transportation Service under this Rate Schedule GSG-LV, a customer must hold clear and marketable title to gas that is made available for delivery to customer’s facility on the Company’s system.
CHARACTER OF SERVICE:
Firm Sales Service or Firm Transportation Service.
MONTHLY RATE: (1)
Customer Charge:
$159.937500 per month
Delivery Charges: Firm Sales Service and Firm Transportation Service(2) Demand Charge: D-1FT: $11.195625 per Mcf of Contract Demand Volumetric Charge: $.440948429489 per therm
Basic Gas Supply Service (“BGSS”) Charge: All consumption for customers who elect
Firm Sales Service See Rider “A” of this Tariff. LINE LOSS: Line Loss shall be 1.43% as provided in Special Provision (o).
(1) Please refer to Appendix A for components of Monthly Rates and Price to Compare. (2) See Special Provision (p) of this Rate Schedule GSG-LV, regarding appropriate balancing charges.
SMG-13 Page 3 of 28
SOUTH JERSEY GAS COMPANY Fourth Revised Sheet No. 18
B.P.U.N.J. No. 12 - GAS Superseding Third Revised Sheet No. 18
Issued _________________ Effective with service rendered by South Jersey Gas Company, on and after ________________ D. Robbins, Jr., President
Filed pursuant to Order in Docket No. _______________ of the Board of Public Utilities, State of New Jersey, dated _____________
COMPREHENSIVE TRANSPORTATION SERVICE (CTS)
APPLICABLE TO USE OF SERVICE FOR: All customers having a Firm Contract Demand, and an average annual daily Firm usage of 100 Mcf per day or more. To be eligible for service under this Rate Schedule CTS, a customer must hold clear and marketable title to gas that is made available for delivery to customer’s facility on the Company’s system. Provided, however, that any customer receiving service under this Rate Schedule CTS prior to August 29, 2003 shall continue to be eligible to receive service under this Rate Schedule CTS, notwithstanding the foregoing, if said customers continues to have a Firm Contract Demand of 100 Mcf per day or more. Further provided, however, that if a customer ceases to receive service under this Rate Schedule CTS, and seeks to return to service under this Rate Schedule CTS, said customer must meet all requirements for eligibility as though applying for service in the first instance. CHARACTER OF SERVICE: Firm Transportation Service and Limited Firm Transportation Service MONTHLY RATE: (1)
Firm: Customer Charge: $639.750000 per month
Delivery Charges: Demand Charge: D-1FT: $33.053750 per Mcf of Contract Demand
Volumetric Charges: All consumption for customers who elected to transfer from Sales Service to Firm Transportation Service $.163208151749
per therm
Limited Firm:
Customer Charge: $106.625000 per month Delivery Charges: Volumetric Charges:
All consumption for customers who elected to
transfer from Sales Service to Firm Transportation Service $.156392144933 per therm
(1) Please refer to Appendix A for components of Monthly Rates.
SMG-13 Page 4 of 28
SOUTH JERSEY GAS COMPANY
Fourth Revised Sheet No. 25 B.P.U.N.J. No. 12 - GAS Superseding Third Revised Sheet No. 25
Issued ________________ Effective with service rendered by South Jersey Gas Company, on and after ____________ D. Robbins, Jr., President
Filed pursuant to Order in Docket No. _____________ of the Board of Public Utilities, State of New Jersey, dated ___________
LARGE VOLUME SERVICE (LVS) APPLICABLE TO USE OF SERVICE FOR:
Firm Sales Service and Firm Transportation Service pursuant to this Rate Schedule LVS, shall be available to all Industrial Customers with a Contract Demand and a minimum annualized average use of 200 Mcf per day. To be eligible for Firm Transportation Service under this Rate Schedule LVS, a customer must hold clear and marketable title to gas that is made available for delivery to customer’s facility on the Company’s system.
CHARACTER OF SERVICE:
Firm Sales Service, Limited Firm Sales Service, Firm Transportation Service, and Limited Firm Transportation Service.
MONTHLY RATE: (1)
Firm:
Customer Charge:
$959.625000 per month Delivery Charge:
Firm Sales Service and Firm Trasnportation Service Demand Charge: D-1FT: $19.192500 per Mcf of Contract Demand Volumetric Charge: $.143401131942 per therm
Basic Gas Supply Service (“BGSS”) Charge: Demand Charge: D-2: $15.759966 per Mcf of Contract Demand. Volumetric Charge:
See Rider “A” of this Tariff.
(1) Please refer to Appendix A for components of Monthly Rates.
SMG-13 Page 5 of 28
SOUTH JERSEY GAS COMPANY Fourth Revised Sheet No. 26
B.P.U.N.J. No. 12 - GAS Superseding Third Revised Sheet No. 26
Issued ____________________ Effective with service rendered by South Jersey Gas Company, on and after _______________ D. Robbins, Jr., President
Filed pursuant to Order in Docket No. _____________ of the Board of Public Utilities, State of New Jersey, dated _______________
LARGE VOLUME SERVICE (LVS) (Continued)
Limited Firm:
Customer Charge:
$106.625000 per month Delivery Charge:
Firm Sales Service and Firm Transportation
Volumetric Charge:
$.224360212901 per therm
Basic Gas Supply Service (“BGSS”) Charge:
Applicable to customers who elect Firm Sales Service Volumetric Charge:
See Rider “A” of this Tariff. PRICE TO COMPARE: The Company will provide the Price to Compare for an LVS customer, at said customer’s request. LINE LOSS: Line Loss shall be 1.43% as provided in Special Provision (h). MINIMUM BILL:
Sum of monthly Customer Charge and monthly Demand Charges, irrespective of use.
SMG-13 Page 6 of 28
SOUTH JERSEY GAS COMPANY Fourth Revised Sheet No. 31
B.P.U.N.J. No. 12 - GAS Superseding Third Revised Sheet No. 31
Issued ___________________ Effective with service rendered by South Jersey Gas Company, on and after ________________ D. Robbins, Jr., President
Filed pursuant to Order in Docket No. _______________ of the Board of Public Utilities, State of New Jersey, dated _________________
FIRM ELECTRIC SERVICE (FES)
APPLICABLE TO USE OF SERVICE FOR: All gas that is purchased or transported to generate electricity. Provided, however, that in order to qualify for this Rate Schedule FES, a customer must have a Winter Daily Contract Demand of 1,000 Mcf per day or more, or a Summer Daily Contract Demand of 2,000 Mcf per day or more, or both. To be eligible for Firm Transportation Service under this Rate Schedule FES, a customer must hold clear and marketable title to gas that is made available for delivery to customer’s facility on the Company’s system.
CHARACTER OF SERVICE:
Firm Sales Service and Firm Transportation Service.
MONTHLY RATE (1) (2)
WINTER (November – March):
Demand Charge: D-1 $3.089100 per Mcf of Winter Daily Contract Demand D-2 $7.879983 per Mcf of Daily Billing Determinant or $0 for Firm Transportation customers
Volumetric Charge:
C-1: $.094092082633 per therm of consumption C-2: FES Monthly Commodity Rate, pursuant to Rider “A” and Special Provision (x), OR
Customer Owned Gas Clause, Rider “D” C-3: $.173700 per therm of consumption C-4: Escalator Rate – Charge may change monthly pursuant to Standard Gas Service Addendum.
Minimum Bill: The monthly D-1 and D-2 charges, irrespective of use. SUMMER (April – October):
Demand Charge: D-1 $3.089100 per Mcf of Summer Daily Contract Demand
D-2 $7.879983per Mcf of Daily Billing Determinant or $0 for Firm Transportation customers
Volumetric Charge: C-1: $.094092082633 per therm of consumption
C-2: FES Monthly Commodity Rate, pursuant to Rider “A” and Special Provision (x), OR Customer Owned Gas Clause, Rider “D”
C-3: $.173700 per therm of consumption C-4: Escalator Rate – Charge may change monthly pursuant to Standard Gas Service Addendum.
(1) Please refer to Appendix A for components of Monthly Rates. (2) Please refer to Special Provision (p)
SMG-13 Page 7 of 28
SOUTH JERSEY GAS COMPANY Fourth Revised Sheet No. 38
B.P.U.N.J. No. 12 - GAS Superseding Third Revised Sheet No. 38
Issued ______________________ Effective with service rendered by South Jersey Gas Company, on and after ______________ D. Robbins, Jr., President
Filed pursuant to Order in Docket No. _______________ of the Board of Public Utilities, State of New Jersey, dated ______________
ELECTRIC GENERATION SERVICE (EGS)
APPLICABLE TO USE OF SERVICE FOR:
Residential, commercial and industrial uses for electric generation facilities (excluding back-up generator equipment); all Prime Movers; and all engine driven equipment (whether or not used for electric generation). Provided, however, that in order to be eligible for this Rate Schedule EGS, a customer must have a Firm Daily Contract Demand of less than 200 Mcf per day; provided, however, that a residential EGS customer will have no Firm Daily Contract Demand. To be eligible for Firm Transportation Service under this Rate Schedule EGS, a customer must hold clear and marketable title to gas that is made available for delivery to customer’s facility on the Company’s system.
CHARACTER OF SERVICE:
Firm Sales Service and Firm Transportation Service MONTHLY RATE: (1)(2)
Residential Customer Charge: $10.662500 per month Residential Delivery Charge Residential Volumetric Charge: $.287359275900 per therm Commercial and Industrial Customer Charge:
$79.968750 per month
Commercial and Industrial Delivery Charge:
Commercial and Industrial Demand Charge: D-1 Charge: $8.796563 per Mcf of contract
Volumetric Charges: Winter Season (effective during billing months of November through March):
All Consumption for Firm Sales Service and Firm Transportation Service $.290930279471 per therm
(1) Please refer to Appendix A for components of Monthly Rates. (2) See Special Provision (k) of this Rate Schedule EGS, regarding appropriate balancing charges.
SMG-13 Page 8 of 28
SOUTH JERSEY GAS COMPANY Fourth Revised Sheet No. 39
B.P.U.N.J. No. 12 - GAS Superseding Third Revised Sheet No. 39
Issued _____________________ Effective with service rendered by South Jersey Gas Company, on and after ________________ D. Robbins, Jr., President
Filed pursuant to Order in Docket No. ______________ of the Board of Public Utilities, State of New Jersey, dated __________________
ELECTRIC GENERATION SERVICE (EGS) (Continued)
Summer Season (effective during billing months of April through October):
All Consumption for Firm Sales Service and Firm Transportation Service $.258942247483 per therm
Basic Gas Supply Service (“BGSS”) Charge: Applicable to customers who elect Firm Sales Service See Rider “A” of this Tariff. LINE LOSS: Line Loss shall be 1.43% as provided in Special Provision (p).
APPLICABLE RIDERS:
Basic Gas Supply Service Clause: BGSS charges are depicted in Rider “A” of this Tariff. Societal Benefits Clause: The rates set forth above have been adjusted, as is
appropriate, pursuant to Rider “E” of this Tariff. Balancing Service Clause The rates set forth above have been adjusted, as is
appropriate, pursuant to Rider “J” of this Tariff. However, also see Special Provision (k) regarding Rider “I”.
Energy Efficiency Tracker: The rates set forth above have been adjusted, as is
appropriate, pursuant to Rider “N” of this Tariff.
TERMS OF PAYMENT:
Payment of all bills must be received in full at the Company's designated office within fifteen (15) days of the billing date; provided however, the Company shall take into account any postal service delays of which the Company is advised. If the fifteenth (15th) day falls on a non-business day, the due date shall be extended to the next business day. Should the customer fail to make payment as specified, the Company may, beginning on the twenty-sixth (26th) day, assess simple interest at a rate equal to the prime rate as published in the Money Rates column in The Wall Street Journal. A late payment charge shall not be assessed on a residential customer, or on State, county or municipal government entities.
SMG-13 Page 9 of 28
SOUTH JERSEY GAS COMPANY Fourth Revised Sheet No. 43
B.P.U.N.J. No. 12 - GAS Superseding Third Revised Sheet No. 43
Issued ___________________ Effective with service rendered by South Jersey Gas Company, on and after _______________ D. Robbins, Jr., President
Filed pursuant to Order in Docket No. ______________ of the Board of Public Utilities, State of New Jersey, dated ________________
ELECTRIC GENERATION SERVICE – LARGE VOLUME (EGS-LV)
APPLICABLE TO USE OF SERVICE FOR: All commercial and industrial electric generation facilities; all Prime Movers and all engine driven equipment (whether or not used for electric generation). Provided, however, that in order to be eligible for this Rate Schedule EGS-LV, a customer must have a Firm Daily Contract Demand of 200 Mcf per day or more. To be eligible for Firm Transportation Service under this Rate Schedule EGS-LVS, a customer must hold clear and marketable title to gas that is made available for delivery to customer’s facility on the Company’s system.
CHARACTER OF SERVICE:
Firm Sales Service, Firm Transportation Service, Limited Firm Sales Service and Limited Firm Transportation Service.
MONTHLY RATE: (1)
Customer Charge: $959.625000 per month FIRM:
Demand Charges: (2)
D-1 $24.694442 per Mcf of Firm Daily Contract Demand. D-2 $15.455576 per Mcf of Firm Daily Contract Demand or $0 for Firm Transportation
customers.
Volumetric Charge: C-1: $.094092082633 per therm of consumption
C-2: As depicted in the Monthly BGSS Subrider of Rider “A” of this Tariff, OR Customer Owned Gas Clause, Rider “D”
Minimum Bill: Monthly D-1 and D-2 charges, irrespective of use.
LIMITED FIRM:
Demand Charge: D-2 $7.879983 per Mcf of Limited Firm Daily Contract Demand or $0 for Limited Firm
Transportation customers
Volumetric Charge: (2) C-1: $.094092082633 per therm of consumption
C-2: As depicted in the Monthly BGSS Subrider of Rider “A” of this Tariff, OR Customer Owned Gas Clause, Rider “D”
C-3 $.173700 per therm for all consumption within Limited Firm Contract Demand level.1
(1) Please refer to Appendix A for components of Monthly Rates. (2) Please refer to Special Provision (j).
SMG-13 Page 10 of 28
SOUTH JERSEY GAS COMPANY Fourth Revised Sheet No. 60
B.P.U.N.J. No. 12 - GAS Superseding Third Revised Sheet No. 60
Issued ____________________ Effective with service rendered by South Jersey Gas Company, on and after ________________ D. Robbins, Jr., President
Filed pursuant to Order in Docket No. ________________ of the Board of Public Utilities, State of New Jersey, dated ______________
NATURAL GAS VEHICLE (NGV) APPLICABLE TO:
This service will be available to Commercial and Industrial customers who will utilize natural gas, for the purpose of providing vehicle fuel at Company-operated fueling stations or at separately metered customer-operated fueling stations.
CHARACTER OF SERVICE:
Firm Sales Service or Firm Transportation Service COMPRESSED NATURAL GAS VEHICLE SERVICE AT COMPANY OPERATED FUELING STATIONS
This part of the service is available for refueling vehicles with compressed natural gas to customers who refuel at Company operated fueling stations. All service at Company operated fueling stations shall be Firm Sales Service. Provided, however, that in the Company’s sole discretion, it may allow for Firm Transportation service for a Customer-specific dedicated dispenser or time fill system (separately metered) at a Company operated fueling station.
Rate for Monthly Consumption
Volumetric Charge
C-1: $0.094092082633 per therm ($0.117615103291 GGE*)
Distribution Charge: $0.227061 per therm ($0.283826 GGE*)
Compression Charge: $0.598596 per therm ($0.748245 GGE*)
Commodity Charges
All consumption for customers who elected Firm Sales Service
Basic Gas Supply Service (“BGSS”) Charge:
See Rider “A” of this Tariff. BGSS rate * GGE Factor 1.25 = GGE
GGE indicates Gasoline Gallon Equivalent. The gasoline gallon equivalent shall be determined in accordance with local standards. The point of sale price to the Customer shall be displayed in gasoline gallon equivalents at public access dispensers at Company operated fueling stations, and shall be calculated as C-1 + Distribution Charge + Compression Charge + New Jersey Motor Vehicle Fuel Tax + Federal Excise Tax + BGSS.
Commodity charges do not include State of New Jersey Motor vehicle fuel tax and Federal Excise
Tax. As of July 1, 2011 these taxes were $0.0525 and $0.183 per gallon, respectively and shall be charged at the prevailing rate when applicable. The Company is under no obligation to determine if a customer is exempt from taxation.
SMG-13 Page 11 of 28
SOUTH JERSEY GAS COMPANY Fourth Revised Sheet No. 61
B.P.U.N.J. No. 12 - GAS Superseding Third Revised Sheet No. 61
Issued _____________________ Effective with service rendered by South Jersey Gas Company, on and after ________________ D. Robbins, Jr., President
Filed pursuant to Order in Docket No. ______________ of the Board of Public Utilities, State of New Jersey, dated _________________
NATURAL GAS VEHICLE (NGV) (Continued)
NATURAL GAS VEHICLE SERVICE AT CUSTOMER OPERATED FUELING STATIONS
This part of the service is available for the sale of separately metered uncompressed gas for the use of the customer solely as a vehicle fuel as follows:
The customer agrees to obtain and maintain, at its expense, all necessary certificates, licenses and regulatory approvals and pay all taxes levied on the gas compressed for refueling the customer’s vehicles;
If the customer provides natural gas for resale as a motor fuel, the customer will be responsible for collecting and paying all applicable taxes on the gas compressed for resale and on the sale thereof and for the metering of such sale in accordance with local standards and regulations; and
The customer must execute a Standard Gas Service Agreement (NGV) for not less than 12 months and must produce evidence of Land Rights.
Rate for Monthly Consumption
Monthly Customer Charge
The monthly customer charge shall be determined in accordance with the maximum delivery capability requested by the customer.
0-999 Cf/hour $39.984400
1,000-4,999 Cf/hour $79.968800 5,000-24,999 Cf/hour $213.250000 25,000 and greater Cf/hour $959.625000 Volumetric Charges
C-1: $0.094092082633 per therm ($0.117615103291 GGE)
Distribution Charge: $0.227061 per therm ($0.283826 GGE)
Basic Gas Supply Service (“BGSS”) Charge:
All consumption for customers who elect Firm Sales Service See Rider “A” of this Tariff. Facilities Charge
All consumption for Customers that elect to have the Company construct Compressed Natural Gas (“CNG”) fueling facilities located on Customer’s property:
C-2: $0.345653 ($0.432066 GGE)
The customer shall pay all related motor vehicle taxes directly to the taxing entity. Such taxes shall be incremental to charges paid to the Company for the cost of receiving service under this rate schedule.
SMG-13 Page 12 of 28
SOUTH JERSEY GAS COMPANY Fourth Revised Sheet No. 62
B.P.U.N.J. No. 12 – GAS Superseding Third Revised Sheet No. 62
Issued ________________ Effective with service rendered by South Jersey Gas Company, on and after _________________ D. Robbins, Jr., President
Filed pursuant to Order in Docket No. ______________ of the Board of Public Utilities, State of New Jersey, dated ______________
NATURAL GAS VEHICLE (NGV) (Continued)
DELIVERY SERVICE FOR NATURAL GAS VEHICLES
This part of service is available for delivery of customer owned natural gas for use in compression and dispensing equipment at the Customer’s premises, as follows:
The customer must purchase under a contract with an initial term of not less than one year an adequate supply of natural gas of a quality acceptable to the Company, and must make arrangements by which such volumes of natural gas can be delivered into the Company’s distribution system at the Customer’s expense.
By taking service under this part, the Customer warrants that it has good and legal title to all gas supplied to the Company, and agrees to indemnify, defend and hold the Company harmless from any loss, claims or damages in regard to such title.
Rate for Delivery Service
Monthly Customer Charge The monthly customer charge shall be determined in accordance with the maximum delivery capability requested by the customer.
0-999 Cf/hour $39.984400
1,000-4,999 Cf/hour $79.968800 5,000-24,999 Cf/hour $213.250000 25,000 and greater Cf/hour $959.625000
Volumetric Charge
C-1: $0.094092082633 per therm ($0.117615103291 GGE)
Distribution Charge: $0.227061 per therm ($0.283826 GGE) Facilities Charge All consumption for Customers that elect to have the Company construct CNG fueling facilities located on
Customer’s property: C-2: $0.345653 per therm ($0.432066 GGE)
Sales taxes are not included in the above basic charges. The Company is under no obligation to determine if a customer is exempt from taxation. Customers seeking tax exemption must file verification with the Company.
SMG-13 Page 13 of 28
SOUTH JERSEY GAS COMPANY Third Revised Sheet No. 105
B.P.U.N.J. No. 12 - GAS Superseding Second Revised Sheet No. 105
Issued ___________________ Effective with service rendered by South Jersey Gas Company, on and after ________________ D. Robbins, Jr., President
Filed pursuant to Order in Docket No_____________ of the Board of Public Utilities, State of New Jersey, dated _______________
RIDER “N” ENERGY EFFICIENCY TRACKER (“EET”)
APPLICABLE TO: Rate Schedule RSG - Residential Rate Schedule GSG - General Service Rate Schedule GSG-LV - General Service- Large Volume Rate Schedule CTS - Comprehensive Transportation Service Rate Schedule LVS - Large Volume Service Rate Schedule FES - Firm Electric Service Rate Schedule EGS - Electric Generation Service Rate Schedule EGS-LV - Electric Generation Service- Large Volume Rate Schedule IGS - Interruptible Gas Service Rate Schedule ITS - Interruptible Transportation Service Rate Schedule NGV - Natural Gas Vehicle This Rider “N” shall be known as the Energy Efficiency Tracker (“EET”). For financial accounting purposes the Company shall record a return on and a return of investments in energy efficiency programs, as approved by the Board at Docket No. GO09010059, in an Order dated July 24, 2009, Docket No. GO12050363, in an Order dated June 21, 2003 and Docket No. GR15010090, in an Order dated August 19, 2015 and recover all incremental operating and maintenance expenses of the programs, subject to the EET. The calculation will use the weighted average cost of capital as identified in the respective Orders referenced above. The EET rate will be calculated annually using projected data and subject to a true-up at the end of the EET year (September 30th) with simple interest on net over/under recoveries. Interest associated with over recoveries will be credited against the EET, while interest associated with under recoveries will be charged to the EET. The interest on monthly EET under and over recoveries shall be the interest rate based on the Company’s weighted interest rate for the corresponding month obtained on its commercial paper and bank credit lines but shall not exceed the Company’s weighted average cost of capital utilized to set rates in its most recent base rate case. This EET will be effectuated through a volumetric rate applied to customers’ bills. The Company shall make an annual EET rate filing in June of each year with a proposed implementation of the revised EET rate in October. Included in the filing will be a list of efficiency programs offered and eligible for recovery under the EET. The Company shall have the discretion to implement a bill credit or a refund at any time during the EET Year with five (5) days notice to the BPU Staff and the Division of Rate Counsel. The Company shall have the discretion to file a self-implementing EET rate reduction at any time with two (2) weeks notice to the BPU Staff and the Division of Rate Counsel. Rate Schedules subject to this Rider will be charged the following volumetric rate: EET EET IV Total Rate per therm $0.008557 $0.010720 $0.019277 Applicable Revenue Tax $0.000019 $0.000027 $0.000046 Total EET Rate per therm $0.008576 $0.010747 $0.019323 Applicable NJ Sales Tax $0.000568 $0.000712 $0.001280 EET Rate per therm with NJ Sales Tax $0.009144 $0.011459 $0.020603
SMG-13 Page 14 of 28
SOU
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SMG-13 Page 15 of 28
SOU
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SMG-13 Page 16 of 28
SOU
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SMG-13 Page 17 of 28
SOU
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SMG-13 Page 18 of 28
SOU
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Sche
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0.06
9116
S
BC
:
RA
C
E, G
0.03
2415
0.00
0071
0.00
2152
0.03
4639
C
LEP
E
, K0.
0282
150.
0000
620.
0018
730.
0301
50
US
FE
0.00
8200
0.00
0000
0.00
0500
0.00
8700
Tota
l SB
C0.
0688
300.
0001
330.
0045
250.
0734
89
E
ET
N0.
0192
770.
0000
460.
0012
800.
0206
03
Tota
l Del
iver
y C
harg
e0.
1529
290.
0001
790.
0100
990.
1632
08
B
alan
cing
Ser
vice
Cha
rge
BS
-1I
0.01
1800
0.00
0000
0.00
0800
0.01
2600
B
alan
cing
Ser
vice
Cha
rge
BS
-1 (O
pt O
ut P
rovi
sion
)I
0.00
2500
0.00
0000
0.00
0200
0.00
2700
B
UY
-OU
T P
RIC
ER
ATE
SE
T M
ON
THLY
LIM
ITED
FIR
MC
UST
OM
ER C
HA
RG
E10
0.00
0000
6.62
5000
106.
6250
00
DEL
IVER
Y C
HA
RG
E (p
er th
erm
):
Bas
e R
ate
0.05
8400
0.00
3900
0.06
2300
S
BC
:
RA
C
E, G
0.03
2415
0.00
0071
0.00
2152
0.03
4639
C
LEP
E
, K0.
0282
150.
0000
620.
0018
730.
0301
50
US
FE
0.00
8200
0.00
0000
0.00
0500
0.00
8700
Tota
l SB
C0.
0688
300.
0001
330.
0045
250.
0734
89
E
ET
N0.
0192
770.
0000
460.
0012
800.
0206
03
Tota
l Del
iver
y C
harg
e0.
1465
070.
0001
790.
0097
050.
1563
92
B
alan
cing
Ser
vice
Cha
rge
BS
-1I
0.01
1800
0.00
0000
0.00
0800
0.01
2600
B
alan
cing
Ser
vice
Cha
rge
BS
-1 (O
pt O
ut P
rovi
sion
)I
0.00
2500
0.00
0000
0.00
0200
0.00
2700
B
UY
-OU
T P
RIC
ER
ATE
SE
T M
ON
THLY
SMG-13 Page 19 of 28
SOU
TH J
ERSE
Y G
AS
CO
MPA
NY
Sche
dule
of R
ate
Com
pone
nts
App
endi
x A
- Ef
fect
ive
____
____
____
_Pa
ge 6
LAR
GE
VOLU
ME
SER
VIC
E (L
VS)
RID
ERR
ATE
PUA
NJ
SALE
S TA
XTA
RIF
F R
ATE
FIR
MC
UST
OM
ER C
HA
RG
E90
0.00
0000
59.6
2500
095
9.62
5000
D-1
Dem
and
Cha
rge
(Mcf
)18
.000
000
1.19
2500
19.1
9250
0
D-2
DEM
AN
D B
GSS
(App
licab
le to
Sal
es C
usto
mer
s O
nly )
A14
.748
296
0.03
2446
0.97
9224
15.7
5996
6
DEL
IVER
Y C
HA
RG
E (p
er th
erm
):
Bas
e R
ate
0.04
6245
0.00
3064
0.04
9309
S
BC
:
RA
C
E, G
0.03
2415
0.00
0071
0.00
2152
0.03
4639
C
LEP
E
, K0.
0282
150.
0000
620.
0018
730.
0301
50
US
FE
0.00
8200
0.00
0000
0.00
0500
0.00
8700
Tota
l SB
C0.
0688
300.
0001
330.
0045
250.
0734
89
E
ET
N0.
0192
770.
0000
460.
0012
800.
0206
03
Tota
l Del
iver
y C
harg
e0.
1343
520.
0001
790.
0088
690.
1434
01
B
alan
cing
Ser
vice
Cha
rge
BS
-1I
0.01
1800
0.00
0000
0.00
0800
0.01
2600
B
alan
cing
Ser
vice
Cha
rge
BS
-1 (O
pt O
ut P
rovi
sion
) (A
pplic
able
to T
rans
porta
tion
Cus
tom
ers
Onl
y)I
0.00
2500
0.00
0000
0.00
0200
0.00
2700
B
alan
cing
Ser
vice
Cha
rge
CA
SH
OU
T C
HA
RG
E (C
RE
DIT
) (A
pplic
able
Tra
nspo
rtato
n C
usto
mer
s O
nly)
IR
ATE
SE
T M
ON
THLY
BG
SS: (
App
licab
le S
ales
Cus
tom
ers
Onl
y )A
RA
TE S
ET M
ON
THLY
LIM
ITED
FIR
MC
UST
OM
ER C
HA
RG
E10
0.00
0000
6.62
5000
106.
6250
00
DEL
IVER
Y C
HA
RG
E (p
er th
erm
):
Bas
e R
ate
0.12
2174
0.00
8094
0.13
0268
S
BC
:
RA
C
E, G
0.03
2415
0.00
0071
0.00
2152
0.03
4639
C
LEP
E
, K0.
0282
150.
0000
620.
0018
730.
0301
50
US
FE
0.00
8200
0.00
0000
0.00
0500
0.00
8700
Tota
l SB
C0.
0688
300.
0001
330.
0045
250.
0734
89
E
ET
N0.
0192
770.
0000
460.
0012
800.
0206
03
Tota
l Del
iver
y C
harg
e0.
2102
810.
0001
790.
0138
990.
2243
60
B
alan
cing
Ser
vice
Cha
rge
BS
-1I
0.01
1800
0.00
0000
0.00
0800
0.01
2600
B
alan
cing
Ser
vice
Cha
rge
BS
-1 (O
pt O
ut P
rovi
sion
) (A
pplic
able
to T
rans
porta
tion
Cus
tom
ers
Onl
y)I
0.00
2500
0.00
0000
0.00
0200
0.00
2700
B
UY
-OU
T P
RIC
EI
RA
TE S
ET
MO
NTH
LY
SMG-13 Page 20 of 28
SOU
TH J
ERSE
Y G
AS
CO
MPA
NY
Sche
dule
of R
ate
Com
pone
nts
App
endi
x A
- Ef
fect
ive
____
____
____
_Pa
ge 7
FIR
M E
LEC
TRIC
SA
LES
(FES
)R
IDER
RA
TEPU
AN
J SA
LES
TAX
TAR
IFF
RA
TEW
INTE
RD
-1 D
EMA
ND
(MC
F) (R
ate
is n
egot
iate
d. S
how
n he
re is
the
benc
hmar
k ra
te.)
2.89
7200
0.19
1900
3.08
9100
D-2
DEM
AN
D B
GSS
(MC
F) (A
pplic
able
to S
ales
Cus
tom
ers
Onl
y )A
7.37
4148
0.01
6223
0.48
9612
7.87
9983
DEL
IVER
Y C
HA
RG
E (p
er th
erm
):
SB
C:
R
AC
E
, G0.
0324
150.
0000
710.
0021
520.
0346
39
CLE
P
E, K
0.02
8215
0.00
0062
0.00
1873
0.03
0150
U
SF
E0.
0082
000.
0000
000.
0005
000.
0087
00To
tal S
BC
0.06
8830
0.00
0133
0.00
4525
0.07
3489
E
ET
N0.
0192
770.
0000
460.
0012
800.
0206
03
Tota
l Del
iver
y C
harg
e0.
0881
070.
0001
790.
0058
050.
0940
92
C-3
All
Ther
ms
(Rat
e is
neg
otia
ted.
Sho
wn
here
is th
e be
nchm
ark
rate
. )0.
1629
000.
0108
000.
1737
00
C-4
Esc
alat
or R
ate
(To
be d
eter
min
ed a
s pr
escr
ibed
in th
e C
ompa
ny's
Tar
iff)
RA
TE S
ET M
ON
THLY
Bal
anci
ng S
ervi
ce C
harg
e C
AS
H O
UT
CH
AR
GE
(CR
ED
IT) (
App
licab
le to
Firm
Tra
nspo
rtatin
Cus
tom
ers
Onl
y)I
RA
TE S
ET
MO
NTH
LY
BG
SS: (
App
licab
le T
o Sa
les
Cus
tom
ers
Onl
y)A
RA
TE S
ET M
ON
THLY
SUM
MER
D-1
DEM
AN
D (M
CF)
(Rat
e is
neg
otia
ted.
Sho
wn
here
is th
e be
nchm
ark
rate
.)2.
8972
000.
1919
003.
0891
00
D-2
DEM
AN
D B
GSS
(MC
F) (A
pplic
able
to S
ales
Cus
tom
ers
Onl
y )A
7.37
4148
0.01
6223
0.48
9612
7.87
9983
S
BC
:
RA
C
E, G
0.03
2415
0.00
0071
0.00
2152
0.03
4639
C
LEP
E
, K0.
0282
150.
0000
620.
0018
730.
0301
50
US
FE
0.00
8200
0.00
0000
0.00
0500
0.00
8700
E
ET
N0.
0192
770.
0000
460.
0012
800.
0206
03
Tota
l Del
iver
y C
harg
e0.
0881
070.
0001
790.
0058
050.
0940
92
C-3
All
Ther
ms
(Rat
e is
neg
otia
ted.
Sho
wn
here
is th
e be
nchm
ark
rate
. )0.
1629
000.
0108
000.
1737
00
C-4
Esc
alat
or R
ate
(To
be d
eter
min
ed a
s pr
escr
ibed
in th
e C
ompa
ny's
Tar
iff)
RA
TE S
ET M
ON
THLY
Bal
anci
ng S
ervi
ce C
harg
e C
AS
H O
UT
CH
AR
GE
(CR
ED
IT) (
App
licab
le to
Firm
Tra
nspo
rtatin
Cus
tom
ers
Onl
y)I
RA
TE S
ET
MO
NTH
LY
BG
SS: (
App
licab
le T
o Sa
les
Cus
tom
ers
Onl
y)A
RA
TE S
ET M
ON
THLY
SMG-13 Page 21 of 28
SOU
TH J
ERSE
Y G
AS
CO
MPA
NY
Sche
dule
of R
ate
Com
pone
nts
App
endi
x A
- Ef
fect
ive
____
____
____
_Pa
ge 8
ELEC
TRIC
GEN
ERA
TIO
N S
ERVI
CE
(EG
S) -
RES
IDEN
TIA
LR
IDER
RA
TEPU
AN
J SA
LES
TAX
TAR
IFF
RA
TE
CU
STO
MER
CH
AR
GE
10.0
0000
00.
6625
0010
.662
500
DEL
IVER
Y C
HA
RG
E (p
er th
erm
):
Bas
e R
ate
0.13
4084
0.00
8883
0.14
2967
S
BC
:
RA
C
E, G
0.03
2415
0.00
0071
0.00
2152
0.03
4639
C
LEP
E
, K0.
0282
150.
0000
620.
0018
730.
0301
50
US
FE
0.00
8200
0.00
0000
0.00
0500
0.00
8700
Tota
l SB
C0.
0688
300.
0001
330.
0045
250.
0734
89
E
ET
N0.
0192
770.
0000
460.
0012
800.
0206
03
B
alan
cing
Ser
vice
Cha
rge
BS
-1J
0.04
7100
0.00
0100
0.00
3100
0.05
0300
Tota
l Del
iver
y C
harg
e0.
2692
910.
0002
790.
0177
880.
2873
59
BG
SS: (
App
licab
le T
o Sa
les
Cus
tom
ers
Onl
y )A
0.31
8187
0.00
0700
0.02
1126
0.34
0013
SMG-13 Page 22 of 28
SOU
TH J
ERSE
Y G
AS
CO
MPA
NY
Sche
dule
of R
ate
Com
pone
nts
App
endi
x A
- Ef
fect
ive
____
____
____
_Pa
ge 9
ELEC
TRIC
GEN
ERA
TIO
N S
ERVI
CE
(EG
S) -
CO
MM
ERC
IAL/
IND
UST
RIA
LR
IDER
RA
TEPU
AN
J SA
LES
TAX
TAR
IFF
RA
TE
CU
STO
MER
CH
AR
GE
75.0
0000
04.
9687
5079
.968
750
D-1
DEM
AN
D (M
CF)
8.25
0000
0.54
6563
8.79
6563
DEL
IVER
Y C
HA
RG
E (p
er th
erm
):
Bas
e R
ate
- Win
ter S
easo
n (N
ov -
Mar
)0.
1374
330.
0091
050.
1465
38
Bas
e R
ate
- Sum
mer
Sea
son
(Apr
- O
ct)
0.10
7433
0.00
7117
0.11
4550
S
BC
:
RA
C
E, G
0.03
2415
0.00
0071
0.00
2152
0.03
4639
C
LEP
E
, K0.
0282
150.
0000
620.
0018
730.
0301
50
US
FE
0.00
8200
0.00
0000
0.00
0500
0.00
8700
Tota
l SB
C0.
0688
300.
0001
330.
0045
250.
0734
89
E
ET
N0.
0192
770.
0000
460.
0012
800.
0206
03
B
alan
cing
Ser
vice
Cha
rge
BS
-1J
0.04
7100
0.00
0100
0.00
3100
0.05
0300
Tota
l Del
iver
y C
harg
e - W
inte
r Sea
son
0.27
2640
0.00
0279
0.01
8010
0.29
0930
Tota
l Del
iver
y C
harg
e - S
umm
er S
easo
n0.
2426
400.
0002
790.
0160
220.
2589
42.
BG
SS: (
App
licab
le T
o Sa
les
Cus
tom
ers
Onl
y )A
RA
TE S
ET M
ON
THLY
SMG-13 Page 23 of 28
SOU
TH J
ERSE
Y G
AS
CO
MPA
NY
Sche
dule
of R
ate
Com
pone
nts
App
endi
x A
- Ef
fect
ive
____
____
____
_
Page
10
ELEC
TRIC
GEN
ERA
TIO
N S
ERVI
CE-
LV (E
GS-
LV)
RID
ERR
ATE
PUA
NJ
SALE
S TA
XTA
RIF
F R
ATE
FIR
MC
UST
OM
ER C
HA
RG
E90
0.00
0000
59.6
2500
095
9.62
5000
D-1
DEM
AN
D (M
CF)
(Rat
e is
neg
otia
ted.
Sho
wn
here
is th
e be
nchm
ark
rate
.)23
.160
086
1.53
4356
24.6
9444
2
D-2
DEM
AN
D B
GSS
(MC
F) (A
pplic
able
to S
ales
Cus
tom
ers
Onl
y )A
14.4
6344
50.
0318
200.
9603
1115
.455
576
DEL
IVER
Y C
HA
RG
E (p
er th
erm
):
SB
C:
R
AC
E
, G0.
0324
150.
0000
710.
0021
520.
0346
39
CLE
P
E, K
0.02
8215
0.00
0062
0.00
1873
0.03
0150
U
SF
E0.
0082
000.
0000
000.
0005
000.
0087
000.
0688
300.
0001
330.
0045
250.
0734
89
E
ET
N0.
0192
770.
0000
460.
0012
800.
0206
03
Tota
l Del
iver
y C
harg
e0.
0881
070.
0001
790.
0058
050.
0940
92
B
alan
cing
Ser
vice
Cha
rge
BS
-1I
0.01
1800
0.00
0000
0.00
0800
0.01
2600
B
alan
cing
Ser
vice
Cha
rge
BS
-1 (O
pt O
ut P
rovi
sion
)I
0.00
2500
0.00
0000
0.00
0200
0.00
2700
B
alan
cing
Ser
vice
Cha
rge
CA
SH
OU
T C
HA
RG
E (C
RE
DIT
) (A
pplic
able
to F
irm T
rans
porta
tin C
usto
mer
s O
nly )
IR
ATE
SE
T M
ON
THLY
BG
SS: (
App
licab
le T
o Sa
les
Cus
tom
ers
Onl
y)A
RA
TE S
ET M
ON
THLY
LIM
ITED
FIR
MD
-2 D
EMA
ND
BG
SS(M
CF)
(App
licab
le to
Sal
es C
usto
mer
s O
nly)
A7.
3741
480.
0162
230.
4896
127.
8799
83
DEL
IVER
Y C
HA
RG
E (p
er th
erm
):
SB
C:
R
AC
E
, K0.
0324
150.
0000
710.
0021
520.
0346
39
CLE
P
E, G
0.02
8215
0.00
0062
0.00
1873
0.03
0150
U
SF
E0.
0082
000.
0000
000.
0005
000.
0087
000.
0688
300.
0001
330.
0045
250.
0734
89
E
ET
N0.
0192
770.
0000
460.
0012
800.
0206
03
Tota
l Del
iver
y C
harg
e0.
0881
070.
0001
790.
0058
050.
0940
92
C-3
(Rat
e is
neg
otia
ted.
Sho
wn
here
is th
e be
nchm
ark
rate
.)0.
1629
000.
0108
000.
1737
00
B
alan
cing
Ser
vice
Cha
rge
BS
-1I
0.01
1800
0.00
0000
0.00
0800
0.01
2600
B
alan
cing
Ser
vice
Cha
rge
BS
-1 (O
pt O
ut P
rovi
sion
)I
0.00
2500
0.00
0000
0.00
0200
0.00
2700
B
alan
cing
Ser
vice
Cha
rge
CA
SH
OU
T C
HA
RG
E (C
RE
DIT
) (A
pplic
able
to F
irm T
rans
porta
tin C
usto
mer
s O
nly )
IR
ATE
SE
T M
ON
THLY
BG
SS: (
App
licab
le T
o Sa
les
Cus
tom
ers
Onl
y)A
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SMG-13 Page 24 of 28
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SMG-13 Page 25 of 28
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SMG-13 Page 26 of 28
SOU
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SMG-13 Page 27 of 28
SOUTH JERSEY GAS COMPANYSchedule of Rate Components
Appendix A - Effective _____________Page 14
Heat Residential Rate Schedule:
RSG FSS RSG-FTS Difference
BGSS 0.340013 0.000000 0.340013Base Rate 0.743838 0.743838 0.000000CLEP 0.030150 0.030150 0.000000RAC 0.034639 0.034639 0.000000CIP 0.078172 0.078172 0.000000USF 0.008700 0.008700 0.000000TIC 0.001574 0.001574 0.000000EET 0.020603 0.020603 0.000000BSC "J" BS-1 0.050300 0.050300 0.000000
Price to Compare 1.307989 0.967976 0.340013
NonHeat Residential Rate Schedule:
RSG FSS RSG-FTS Difference
BGSS 0.340013 0.000000 0.340013CIP (0.014313) (0.014313) 0.000000Base Rate 0.743838 0.743838 0.000000CLEP 0.030150 0.030150 0.000000RAC 0.034639 0.034639 0.000000USF 0.008700 0.008700 0.000000TIC 0.001574 0.001574 0.000000EET 0.020603 0.020603 0.000000BSC "J" BS-1 0.050300 0.050300 0.000000
Price to Compare 1.215504 0.875491 0.340013
GSG(Under 5,000 therms annually)
GSG FSS GSG-FTS Difference
BGSS 0.340013 0.000000 0.340013CIP 0.056877 0.056877 0.000000Base Rates 0.621236 0.621236 0.000000CLEP 0.030150 0.030150 0.000000RAC 0.034639 0.034639 0.000000USF 0.008700 0.008700 0.000000TIC 0.001574 0.001574 0.000000EET 0.020603 0.020603 0.000000BSC "J" BS-1 0.050300 0.050300 0.000000
Price to Compare 1.164092 0.824079 0.340013
GSG(5,000 therms annually or greater)
GSG FSS GSG-FTS Difference
BGSS 0.383740 0.000000 0.383740CIP 0.056877 0.056877 0.000000Base Rates 0.621236 0.621236 0.000000CLEP 0.030150 0.030150 0.000000RAC 0.034639 0.034639 0.000000USF 0.008700 0.008700 0.000000TIC 0.001574 0.001574 0.000000EET 0.020603 0.020603 0.000000BSC "J" BS-1 0.050300 0.050300 0.000000
Price to Compare 1.207819 0.824079 0.383740
GSG-LVPrior to 7/15/97
GSG-LV FSS GSG-LV-FTS Difference
BGSS 0.383740 0.000000 0.383740CIP (0.013783) (0.013783) 0.000000Base Rates 0.308765 0.308765 0.000000CLEP 0.030150 0.030150 0.000000RAC 0.034639 0.034639 0.000000USF 0.008700 0.008700 0.000000TIC 0.001574 0.001574 0.000000EET 0.020603 0.020603 0.000000BSC "J" BS-1 0.050300 0.050300 0.000000
Price to Compare 0.824688 0.440948 0.383740
SMG-13 Page 28 of 28
EXHIBIT E
STATE OF NEW JERSEY BOARD OF PUBLIC UTILITIES
IN THE MATTER OF THE PETITION OF SOUTH JERSEY GAS COMPANY
TO CONTINUE ITS ENERGY EFFICIENCY PROGRAMS (“EEP IV”) AND ENERGY EFFICIENCY TRACKER
PURSUANT TO N.J.S.A. 48:3-98.1
(“SJG EEP IV Program”) DOCKET: _________ _____
DIRECT TESTIMONY
OF
ISAAC GABEL-FRANK
ON BEHALF OF
SOUTH JERSEY GAS COMPANY
March 2018
EXHIBIT E
TABLE OF CONTENTS
I. INTRODUCTION.............................................................................................................. 1
II. PURPOSE OF THIS TESTIMONY ................................................................................ 3
III. SUMMARY OF CONCLUSIONS ................................................................................... 8
IV. COST-BENEFIT ANALYSIS ASSUMPTIONS ............................................................. 9
V. COST-BENEFIT ANALYSIS RESULTS ..................................................................... 20
VI. CONCLUSIONS .............................................................................................................. 22
EXHIBIT E
- 1 -
I. INTRODUCTION 1
2
Q. Please state your name and business address. 3
A. My name is Isaac Gabel-Frank and my business address is 417 Denison Street, Highland 4
Park, New Jersey, 08904. I am presently employed as a Vice President at Gabel Associates, 5
Inc., an energy, environmental, and public utility consulting firm. 6
7
Q. Please summarize your professional experience and educational background. 8
A. As a Vice President at Gabel Associates, Inc., I perform specialized economic, financial, 9
tariff, regulatory, and marketplace analysis for various energy projects including energy 10
efficiency, renewable energy, cogeneration, and traditional generation sources. This 11
comprehensive analysis takes into account all critical cost/benefit factors and is designed 12
to quantify the economic outcome of customized projects to support investment decisions. 13
Through this work, I also monitor the electricity, natural gas, and renewable markets and 14
offer tailored insights in that regard. Since beginning work at Gabel Associates, Inc. in 15
2009, I have evaluated a myriad of projects for both public and private clients and assisted 16
in the analysis, development, and implementation for all types of technologies and 17
contractual arrangements. This includes the development of proprietary models that 18
evaluate the viability of projects, as well as long-term forecasts based on market signals 19
and industry knowledge. 20
21
I use my knowledge of wholesale electricity and natural gas markets, paired with my 22
experience working with retail tariffs to deliver in-depth market forecasts which are used 23
to assess and undertake project investment decisions. I am also versed on regional 24
transmission organizations (RTOs) including the offering of energy efficiency, demand 25
response, renewable, and traditional generation resources into the PJM market, and was a 26
lead contributor in the development of a proprietary statistical model that computes the risk 27
exposure of capacity resources within the PJM and ISO-New England footprints. 28
29
I received a BA in Economics, Political Science, and English Writing from the University 30
of Pittsburgh. 31
EXHIBIT E
- 2 -
1
Further work experience is detailed in my resume provided in the attached Schedule IGF-2
1. 3
4
Q. What experience do you have in conducting cost benefit analyses (CBAs) for energy 5
efficiency programs? 6
A. In 2017, I prepared the Public Service Electric & Gas Company (PSE&G) CBA using the 7
five tests referenced in the New Jersey Board of Public Utilities (“BPU” or “Board”) 8
Minimum Filing Requirements (MFRs), in support of PSE&G’s 2017 Energy Efficiency 9
Program filing, and provided expert testimony presenting the CBAs. I have also completed 10
numerous CBAs for Federal agencies across the United States, as a well as a multitude of 11
counties, municipalities, and school districts within the State of New Jersey. I am also 12
currently preparing CBAs for other utilities in New Jersey to support upcoming energy 13
efficiency filings. 14
15
The projects I have analyzed range in type and size and represent an array of different 16
technologies and configurations. Having performed this analysis for projects with varying 17
degrees of complexity, I am extremely familiar with the process and methodology to 18
formulate an objective and balanced cost-benefit study. 19
20
Q. Did you prepare the CBA supporting the petition of South Jersey Gas Company (SJG 21
or the Company) for continuation of the Company’s programs? 22
A. Yes. I prepared the CBA detailing the results of the five tests prescribed in the BPU MFRs. 23
This analysis included developing a model that analyzed measure-specific details and 24
computing the estimated costs and savings of each program for use in the Total Resource 25
Cost (TRC) test, the Participant Cost test (PCT), the Program Administrator Cost (PAC) 26
test, the Ratepayer Impact Measure (RIM) test, and the Societal Cost test (SCT). 27
28
29
30
31
EXHIBIT E
- 3 -
II. PURPOSE OF TESTIMONY 1
2
Q. Please describe the purpose of your testimony. 3
A. The purpose of my testimony is to present the methodology and results of the five CBA 4
tests including the TRC, PCT, PAC, RIM and SCT tests, to satisfy SJG’s EEP IV MFRs. 5
6
Q. Please describe the five CBA tests required by the Board’s MFRs. 7
A. On October 20, 2018 the Board approved in Docket No. QO17091004 a new set of MFRs 8
to supersede those put in place in May of 2008. As set forth in the updated MFRs, Section 9
V.b. states that: 10
11
“The utility shall calculate a cost/benefit analysis using the Participant Cost Test, Program 12
Administrator Cost Test, Ratepayer Impact Measure Test, Total Resource Cost Test, and 13
Societal Cost Test that assesses all program costs and benefits from a societal perspective 14
i.e., that includes the combined financial costs and benefits realized by the utility and the 15
customer. The utility may also provide any cost benefit analysis that it believes appropriate 16
with supporting rationales and documentation.” 17
18
Each test listed above is designed to provide a different perspective on the cost-19
effectiveness of the proposed programs. According to the California Standard Practice 20
Manual1, the five tests can be understood to illustrate the following: 21
22
Societal Cost Test – The SCT measures the net costs of a program as a resource option 23
based on the total costs of the program, including both the participants' and the utility's 24
costs. The SCT differs from the TRC test in that it includes the effects of societal impacts 25
such as environmental impacts to the economy, excludes tax credit benefits, and uses a 26
different (societal) discount rate. 27
28
1 cpuc.ca.gov/uploadedFiles/CPUC_Public_Website/Content/Utilities_and_Industries/Energy_-_Electricity_and_Natural_Gas/CPUC_STANDARD_PRACTICE_MANUAL.pdf
EXHIBIT E
- 4 -
Total Resource Cost Test – The TRC test measures the net costs of a program as a resource 1
option based on the total costs, including both the participant and the utility costs of the 2
program. 3
4
Participant Cost Test – The PCT is the measure of the quantifiable benefits and costs from 5
the perspective of program participants. Since many customers do not base their decision 6
to participate in a program entirely on quantifiable variables, this test is not a complete 7
measure of the benefits and costs of a program to a customer. 8
9
Program Administrator Cost Test – The PAC test measures the net costs of a program as a 10
resource option based on the costs incurred by the program administrator or utility 11
(including incentive costs) and excluding any net costs incurred by the participant. The 12
benefits are similar to the TRC benefits. Costs are defined more narrowly. This test 13
measures the net economic impact of investing in energy efficiency programs from the 14
perspective of the utility. 15
16
Ratepayer Impact Measure Test – The RIM test measures what happens to customer rates 17
due to changes in utility revenues and operating costs caused by the program. Rates will 18
go down if the change in revenues from the program is greater than the change in utility 19
costs. Conversely, rates or bills will go up if revenues collected after program 20
implementation are less than the total costs incurred by the utility in implementing the 21
program. The RIM test indicates the direction and magnitude of the expected change in 22
customer bills or rate levels. In essence, the RIM test reviews the benefits of energy 23
efficiency programs against the cost to all ratepayers, not just participants. 24
25
In aggregate, these tests provide the Board with multiple viewpoints of the benefits and 26
costs associated with the programs. 27
28
29
30
EXHIBIT E
- 5 -
Q. Of these five tests, which in your opinion best measures the cost-effectiveness of an 1
energy efficiency program? 2
A. The SCT is the best test to evaluate energy efficiency programs because it provides the 3
most complete picture of the costs and benefits of the energy efficiency programs. The 4
other tests, while useful for other information, are incomplete in comparison with the SCT. 5
For example, the SCT is the only test that recognizes carbon reduction and other 6
environmental benefits, and therefore is the only means to consider the potential cost of 7
climate change and the positive impact on the environment of proposed programs, and their 8
alignment with the State’s environmental and energy policy goals. The full range of 9
benefits used in the SCT are also statutorily required for evaluating offshore wind projects 10
under New Jersey’s Offshore Wind Economic Development Act (OWEDA). Offshore 11
wind projects also require the Board to consider CBAs. It is equitably unfair and 12
discriminatory to consider societal benefits for offshore wind and not consider the same 13
for energy efficiency programs. 14
15
A thorough accounting of all benefits related to the energy efficiency programs, inclusive 16
of environmental benefits and other important society-wide impacts such as emission 17
reductions, economic and employment benefits, enhanced ability for low income bill 18
payment and reduced health costs, among other benefits, can only be accomplished through 19
use of the SCT, a critical test evaluating cost-effectiveness. 20
21
Q. Did you evaluate all the EEP IV programs proposed using the five CBA tests 22
identified in the MFRs? 23
A. No. Pursuant to MFR Section I.e., the utility is permitted to exempt certain programs from 24
the CBA “if compliance with Part V of these requirements would not be feasible.” Based 25
on this, the Emerging Technologies and Approaches (ETA) and Education programs are 26
exempt from CBA analysis. 27
28
For those programs that are not exempt and are subject to the CBA requirement, I provided 29
results for all five tests. 30
31
EXHIBIT E
- 6 -
Q. Why are the Emerging Technologies and Approaches and Education programs 1
exempt from the CBA requirements? 2
A. The ETA and Education programs are exempt because both programs meet the express 3
exemption detailed in MFR Section I.e. 4
5
Specifically, the ETA program is geared towards evaluating novel and innovative 6
technologies and approaches to energy savings that have yet to achieve commercial or 7
mainstream operation. The ETA program includes research, field test technologies, and 8
approaches to develop reliable measurable savings estimates to support future deployment. 9
SJG will work with fellow utilities to share insights and information to achieve best 10
practices and improve testing methods and reduce costs. It is anticipated that the ETA 11
program will help to shape the future of energy efficiency in the State, and that some of the 12
initiatives and technologies evaluated in this program may result in full scale program 13
offerings in the future that would be subject to CBA analysis based upon the findings of 14
this program. Because this program introduces novel ideas where documentation 15
supporting estimated costs/benefits may not be easily produced, it should be exempt from 16
the requirements of the CBA. 17
18
Similarly, the Education program is designed to promote energy efficiency at schools and 19
homes through targeted curriculum and educational sessions. While it is anticipated that 20
this program will generate savings, there is a lack of verifiable evidence in New Jersey to 21
support a CBA. The implementation of the Education program will include information 22
gathering, baseline calculations, and tracking of savings to support future energy savings 23
calculations. Because this program has an educational rather than equipment-based focus, 24
it too should be exempt from the requirements of the CBA. 25
26
Q. Did you evaluate the SJG programs that provide loans supporting NJCEP 27
administered programs using the five CBA tests provided in the MFRs? 28
Yes, for programs that provide complementary service to the already existing NJCEP 29
administered programs, i.e., those where SJG will provide loans (and for select programs, 30
rebates) to NJCEP program participants, I completed the five CBA tests. These specific 31
EXHIBIT E
- 7 -
programs were evaluated jointly with other programs administered by SJG in order to 1
prevent an unbalanced view of the cost-effectiveness of the SJG programs. However, I 2
utilized a different approach in evaluating the NJCEP programs than the other SJG 3
programs. Since these programs are providing loans (and for select programs, rebates) and 4
are complementary to a program offered by another funding entity (the NJ Office of Clean 5
Energy), the measurement of costs and benefits is unlike that of usual programs and does 6
not fit squarely into the five CBA test methods. Accordingly, this presents a novel issue 7
and there are a range of approaches that could be used. 8
9
Q. Please explain how you evaluated the NJCEP programs differently than the other 10
SJG programs? 11
A. For the NJCEP Loan programs, I estimated the cost-effectiveness of these programs using 12
the cost of the financing, total number of participants expected to take financing, and the 13
incremental costs and benefits for each program. I did not include the additional costs 14
borne by NJCEP to deliver the program or the NJCEP rebate cost. SJG has survey results 15
that I utilized to determine the benefits from their loan offer. 16
17
For benefits, I assumed only the benefits associated with the incremental participation 18
assumed to result from the financing, rebates, marketing, and support provided by SJG for 19
these programs. The incremental participation was sourced from participant feedback 20
survey data provided in the Applied Public Policy Research Institute for Study and 21
Evaluation (APPRISE) South Jersey Gas 2016 Energy Efficiency Program Evaluation, 22
which stated that 82% of participants would not have “moved forward with all energy 23
efficiency improvements if the SJG 0% loan was not available.” Therefore, for these 24
programs, only 82% of benefits were included in the CBA. 25
26
For costs, I included the internal SJG financing costs, assumed to be SJG’s Weighted 27
Average Cost of Capital (WACC) on the outstanding loan amounts, as well as the 28
incremental cost of the programs associated with the incremental value provided by SJG. 29
The financing costs, or the lost opportunity cost of the dollars loaned to SJG customers, 30
represents the value SJG incurs to provide loans to customers. The incremental costs, i.e., 31
EXHIBIT E
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the difference between the base and efficient measure costs, were sourced from NJCEP 1
FY2018 program filing data discounted by 82% to represent only those costs incurred by 2
incremental participation. 3
4
While not a traditional approach to evaluating the cost effectiveness of these programs, this 5
approach is warranted because these are not traditional programs. By providing no or low-6
cost financing, SJG increases participation in the NJCEP programs. However, as NJCEP 7
has already evaluated the cost effectiveness of these programs, all other associated costs 8
are not considered incremental to this program and were not included. 9
10
11
III. SUMMARY OF CONCLUSIONS 12
13
Q. Please summarize your conclusions. 14
A. Based on a calculation of costs and benefits (as detailed in this testimony), I derived the 15
benefit-cost ratio of each of the five tests for each of the sectors proposed in SJG’s EEP IV 16
program filing. Accordingly, the SJG’s EEP IV portfolio level SCT ratio is 3.2. Over the 17
life of the energy efficiency measures, the SJG EEP IV programs will yield total societal 18
benefits (NPV) of $435 million as compared to total societal costs of $134 million, 19
resulting in net benefits of $301 million. The detailed results of the CBA are provided 20
below as well as in Schedule IGF-2. 21
22
The results from the other tests, in summary, indicate that: 23
• Nearly all programs are cost effective from a TRC perspective; 24
• All programs are cost effective from a PCT perspective; 25
• Nearly all programs are cost effective from a PAC perspective; and 26
• The programs show appropriate impact from a RIM perspective. 27
28
Q. What do you conclude from these results? 29
A. I conclude that each of the proposed programs, as well as the total portfolio, are cost 30
effective under the SCT, the most comprehensive measure of cost-effectiveness. In 31
EXHIBIT E
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addition, the results of the remaining tests also show the programs are cost-effective and 1
provide significant benefits to ratepayers and the State. 2
3
4
IV. COST-BENEFIT ANALYSIS ASSUMPTIONS 5
6
Q. What types of CBAs did you prepare? 7
A. As previously stated, my analysis included the following five CBA tests: 8
9
1) Societal Cost Test (SCT); 10
2) Total Resource Cost (TRC) Test; 11
3) Participant Cost Test (PCT); 12
4) Program Administrator Cost (PAC) Test; and 13
5) Ratepayer Impact Measure (RIM) Test. 14
15
Q. What methodology did you use to undertake these calculations? 16
A. Consistent with previously approved energy efficiency filings at the Board, I utilized the 17
methods in the California Standard Practice Manual, which has been used throughout the 18
country for over 30 years as a basis for the calculation of cost-effectiveness through the 19
five prescribed CBA tests discussed above. I also utilized the National Standard Practice 20
Manual developed by the National Efficiency Screening Project2 to support the 21
measurement of cost-effectiveness. 22
23
Within the CBA tests, there are a wide range of costs and benefits used to characterize 24
program integrity, some of which are applicable in conducting certain tests but not others. 25
Table 1 shows a list of specific costs and benefits and the tests they apply to: 26
27
28
29
30
2nationalefficiencyscreening.org/wp-content/uploads/2017/05/NSPM_May-2017_final.pdf.
EXHIBIT E
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1
Table 1: Costs and Benefits Utilized in CBA Tests 2
SCT TRC PCT PAC RIM
Program Benefits
Lifetime Avoided Wholesale Electric Energy Costs x x x x
Lifetime Avoided Wholesale Electric Capacity Costs x x x x
Lifetime Avoided Wholesale Natural Gas Costs x x x x
Lifetime DRIPE Benefits (E&G) x x x x
Lifetime Avoided RPS REC Purchase Costs x x x x
Lifetime Avoided Wholesale Volatility Costs (E&G) x x x x
Lifetime Avoided T&D Costs (E&G) x x x x
Lifetime Avoided Retail Electric Costs x
Lifetime Avoided Retail Natural Gas Costs x Lifetime Program Investment Costs x
Lifetime Avoided Distribution Costs (utility lost revenue) x
Lifetime Avoided Emissions Costs x
Lifetime Job and Savings Multiplier Benefits x
Program Costs Lifetime Incremental Costs x x
Lifetime Participant Costs x
Lifetime Administration Costs x x x x
Lifetime Program Investment Costs x x
Lifetime Reallocated Distribution Costs (utility lost revenue) x 3
Q. Please briefly describe the Program Benefits listed in Table 1. 4
A. To conduct the CBA, I reviewed and analyzed thirteen (13) types of benefits which were 5
incorporated across the five prescribed cost benefit tests. These benefits include: 6
7
Lifetime Avoided Wholesale Natural Gas Costs 8
The Lifetime Avoided Wholesale Natural Gas Costs benefit captures wholesale natural gas 9
market purchases that would be avoided as a result of reduction in energy usage associated 10
with SJG’s EEP IV programs. 11
12
The value of avoided costs is computed based on the market cost of natural gas delivered 13
to Transcontinental Pipeline (Transco) Z6Non-NY North delivery point. Underlying 14
supply prices were escalated based upon EIA Annual Energy Outlook Henry Hub reference 15
case. The underlying Henry Hub supply forecast was combined with the Transco Z6Non-16
EXHIBIT E
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NY North basis to determine the avoided cost projection. All values were adjusted to 1
account for average losses and sales and use tax. 2
3
Lifetime Avoided Wholesale Electric Energy Costs 4
The Lifetime Avoided Wholesale Electric Energy Costs benefit captures wholesale electric 5
market purchases that would be avoided as a result of reductions in energy usage associated 6
with SJG’s Programs. 7
8
The value of avoided costs is estimated using PJM Western Hub forward prices, adjusted 9
for congestion to reconcile for topographical Locational Marginal Pricing (LMP) 10
differences between Western Hub and the Atlantic City Electric (ACE) zone (the electric 11
delivery territory in which a majority of SJG customers receive electric service). Prices 12
were forecasted based upon Energy Information Administration (EIA) Annual Energy 13
Outlook reference case for the Reliability First Corporation – East region electricity 14
generation escalations. All values were adjusted to account for marginal line losses on the 15
ACE and PJM systems, and sales and use tax. 16
17
Lifetime Avoided Wholesale Electric Capacity Costs 18
The Lifetime Avoided Wholesale Electric Capacity Costs benefits captures the wholesale 19
reduction in PJM capacity as a result of the reductions in electric demand associated with 20
SJG’s Programs. 21
22
I used actual cleared PJM Eastern Mid-Atlantic Area Council (EMAAC) Locational 23
Deliverability Area (LDA) prices where available. Clearing prices were escalated by three 24
(3) percent thereafter. All values were adjusted to account for marginal line losses on the 25
ACE and PJM systems, PJM’s Forecast Pool Requirement (FPR) to account for avoided 26
reserve requirements, and sales and use tax. 27
28
Lifetime Demand Reduction Induced Price Effect Benefits (Electric & Gas) 29
The Lifetime Demand Reduction Induced Price Effects (DRIPE) price suppression (also 30
known as merit order benefits) benefit captures the reduction in wholesale electric and 31
EXHIBIT E
- 12 -
natural gas market prices for all customers, not just participants, as a result of energy 1
efficiency. Wholesale electric and natural gas markets are fundamentally supply and 2
demand based. Therefore, downward movement in the electric or natural gas demand 3
curve as a result of reduced consumption should result in less expensive generation 4
resources being dispatched for electricity, and less expensive natural gas delivered. Both 5
markets “clear” at a lower price, and the associated reductions in market prices flow 6
through to all customers. 7
8
The value of electric DRIPE price suppression was computed by undertaking a North 9
American power market simulation using AURORAxmp (AURORA), focusing on the 10
Eastern Interconnect and in particular, the PJM interconnect. To determine the incremental 11
change in electricity prices using AURORA, the model conduced two separate market 12
simulations: 1) a Base Case, using current fuel prices, and business-as-usual market 13
assumptions; and 2) a SJG Energy Efficiency Case, in which total energy and peak demand 14
were reduced to reflect SJG’s proposed Energy Efficiency Program. Each of these 15
simulations produced long-term price forecast for the ACE zone. The comparison of the 16
two different price forecasts results in the market price impact (merit order effect or 17
DRIPE). 18
19
Natural gas DRIPE price suppression occurs as a result of reduced demand in the natural 20
gas markets servicing New Jersey. Highly congested natural gas markets, those in New 21
Jersey that trade around the Transco Z6 Non-NY North delivery point are candidates for 22
DRIPE price suppression effects as a result of energy efficiency. In these highly liquid and 23
traded markets, even a small reduction in the bid-ask price spread can have significant 24
effects on the cost of natural gas. 25
26
While a value for natural gas DRIPE price suppression was not included in this analysis, it 27
merits further research and could be included at a later date as it represents a tangible 28
benefit to all ratepayers. 29
30
31
EXHIBIT E
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Lifetime Avoided RPS REC Purchase Costs 1
The Lifetime Avoided Renewable Portfolio Standard (RPS) Renewable Energy Certificate 2
(REC) Purchase Costs benefit estimates the reduced volume of RECs that must be 3
purchased by New Jersey’s electric retail suppliers as a result of SJG’s EEP IV programs. 4
The New Jersey RPS sets the total volume requirement of RECs that must be purchased as 5
a percent of retail load. A reduction in retail load due to energy efficiency will reduce the 6
total number of RECs required to be purchased. 7
8
Market prices for New Jersey Class I RECs, Class II RECs and SRECs were used based 9
on an internal supply-demand analysis and compliance costs for the three New Jersey REC 10
markets. 11
12
Lifetime Avoided Wholesale Volatility Costs (Electric & Gas) 13
The Lifetime Avoided Wholesale Volatility Costs benefit estimates the value of avoiding 14
risk of wholesale purchases. Wholesale electric and natural gas prices are inherently risky 15
as they are market-based and not fixed in price or volume. Large fluctuations in prices 16
expose customers and retail suppliers to risks that ultimately are priced into retail rates. 17
Energy efficient measures and practices amount to a purchase of energy service which does 18
not contain the price volatility implicit in the price of electricity and natural gas. By 19
reducing the overall energy purchases of customers, customers are exposed to less fuel 20
volatility. In this regard, energy efficiency can be viewed as an energy resource that does 21
not contain the price volatility embedded in purchases from the electric and gas supply 22
systems. 23
24
The risk avoidance benefit of energy efficiency was applied as a price adder to the cost of 25
electricity and natural gas. The price adder was determined based upon a review of studies 26
and regulatory decisions. While there is some variation among the studies, a conservative 27
premium based on these precedents of 10% of electric and natural gas costs was assumed. 28
29
30
31
EXHIBIT E
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1
Lifetime Avoided Transmission and Distribution (T&D) Costs (Electric & Gas) 2
The Lifetime Avoided T&D Costs benefit estimates the value of reducing the cost of 3
building new and maintaining existing transmission and distribution infrastructure as a 4
result of reduced or flattened load. 5
6
Avoided electric T&D costs were calculated based upon the precedent set in previous 7
filings, sourced from the “Draft Energy Efficiency Cost-Benefit Analysis Avoided Cost 8
Assumptions” produced by the Center for Energy, Economic and Environmental Policy 9
(CEEP) of the Edward J. Bloustein School of Planning and Public Policy at Rutgers 10
University, which has been used previously in a BPU proceeding and was not contested by 11
any party. This estimate is conservative based on other recent data presented by the 12
American Council for an Energy-Efficient Economy, which presented a range of $0 to 13
$200 per kW with most values exceeding $50/kW.3 14
15
Avoided natural gas T&D value results from a reduction in natural gas throughput, which 16
has the potential to avoid incremental investment in transportation and delivery 17
infrastructure, as well as potentially reduce maintenance and other related costs on a system 18
experiencing less throughput. While avoided natural gas T&D value was not included in 19
this analysis, it merits further research and could be included at a later time as it represents 20
a real benefit to all ratepayers. 21
22
Lifetime Avoided Retail Electric and Natural Gas Costs 23
The Lifetime Avoided Retail Electric and Natural Gas Costs benefit captures the actual bill 24
savings to participants of the programs. A key benefit of energy efficiency is reduced 25
consumption by participants, which in turn, results in reduced utility costs. 26
27
Avoided retail electric costs were calculated based on the electric charges and applicable 28
rate classes in ACE’s Tariff for Electric Service. This method results in a “price to 29
3 See Everyone Benefits: Practices and Recommendations for Utility System Benefits of Energy Efficiency at aceee.org/sites/default/files/publications/researchreports/u1505.pdf.
EXHIBIT E
- 15 -
compare” analysis, as only portions of the tariff which would be offset as a result of the 1
programs are included in the analysis. By way of example, customers will not offset any 2
of the monthly fixed Service Charge. Therefore, the avoidance of that charge was not 3
included in the retail electric savings analysis. Each charge was escalated, by component, 4
to account for separate escalation rates for distribution and supply charges. Charges related 5
to electric delivery and transmission were escalated at 2.0% per year and electric energy 6
and capacity supply charges were escalated in a manner consistent with the wholesale 7
market escalations explained above. 8
9
Avoided retail natural gas costs were calculated based on the natural gas charges and 10
applicable rate classes available in SJG’s Tariff for Gas Service. This method results in a 11
“price to compare” type analysis, as only portions of the tariff which would be offset as a 12
result of the programs are included in the analysis. By way of example, customers will not 13
offset any of the monthly fixed Service Charge. Therefore, the avoidance of that charge 14
was not included in the retail natural gas savings analysis. Each charge was escalated, by 15
component, to account for separate escalation rates for distribution and supply charges. 16
Charges related to natural gas delivery were escalated at 2.0% per year while natural gas 17
supply charges were escalated in a manner consistent with the wholesale market escalations 18
explained above. 19
20
Lifetime Program Investment Costs 21
The Lifetime Program Investment Costs benefit captures the direct rebate incentives 22
provided to participants of the programs. Depending on perspective, lifetime program 23
investment costs can either be a benefit to a program (to participants) or a cost to programs 24
(to the utility and ultimately, ratepayers). This benefit is only realized in the PCT, as that 25
test singles out the experience of a participant in the programs. For the NJCEP Loan 26
programs, the lifetime program investment cost represents the present value of any rebates 27
provided in support of NJCEP Loans. 28
29
30
31
EXHIBIT E
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Lifetime Avoided Distribution Costs (Utility Lost Gained) 1
The Lifetime Avoided Distribution Costs benefit captures additional revenues collected by 2
the utility which can be used to reduce distribution costs for all customers. The avoided 3
distribution costs primarily occur when revenues from new or increased customer usage 4
exceed the cost to service the new load. This cost is sometimes known as gained utility 5
revenues. 6
7
SJG’s EEP IV filing does not include any programs resulting in avoided distribution costs. 8
9
Lifetime Avoided Emissions Costs 10
The Lifetime Avoided Emissions Costs benefit captures the value of reductions in CO2, 11
NOx, and SO2. Neither mercury nor any other greenhouse gases were included in my 12
analysis. 13
14
The reduction in power plant emissions was forecasted using dispatch simulation results 15
using AURORAxmp. Because AURORAxmp dispatches generation at the individual unit 16
level, the simulation results provide marginal emissions rates for CO2, SO2, and NOx. 17
Emissions rates associated with natural gas usage savings were based on the US 18
Environmental Protection Agency (EPA) emissions factors for residential natural gas use. 19
20
The emissions benefits were calculated using methods accepted by the State and EPA and 21
other recognized national sources, including the “Social Cost of Carbon for Regulatory 22
Impact Analysis - Under Executive Order 12866” produced by the Interagency Working 23
Group on Social Cost of Greenhouse Gases, United States Government, as well as the 24
Cross-State Air Pollution Rule (CSAPR) EPA CBA. 25
26
Lifetime Job and Savings Multiplier Benefits 27
The Lifetime Job and Savings Multiplier Benefits were calculated using the Jobs and 28
Economic Development Impact (JEDI) model, developed by the National Renewable 29
Energy Laboratory (NREL). This model has been accepted by the BPU and captures direct, 30
indirect, and induced job multiplier benefits. I also included a multiplier benefit to capture 31
EXHIBIT E
- 17 -
the value of participant savings in the economy, as a portion of that savings would be spent 1
and have a multiplied impact that would benefit the State overall. This value netted out any 2
additional fixed costs reallocated to ratepayers. 3
4
Q. Please describe the Program Costs listed in Table 1 above. 5
A. I reviewed and analyzed five (5) categories of costs which were incorporated into the five 6
prescribed cost benefit tests. These costs include: 7
8
Lifetime Incremental Costs 9
The Lifetime Incremental Costs capture the incremental costs of participating in the 10
programs. These costs are calculated based on the difference between the efficient measure 11
costs assumed to install energy efficiency technologies and processes and the base measure 12
costs assumed that a participant would otherwise pay without access to the proposed 13
program. 14
15
Lifetime Participant Costs 16
The Lifetime Participant Costs capture the incremental costs of participating in the 17
programs paid by participants. These costs include both incremental costs paid by 18
participants for the non-subsidized portion of energy efficiency costs as well as loan 19
repayments for programs offering financing. 20
21
Lifetime Administration Costs 22
The Lifetime Administration Costs capture the costs of administering the proposed EEP 23
IV program by SJG. These costs were developed by SJG, with my support, based on a Full 24
Time Employee (FTE) equivalent and program year basis. While these costs are not direct 25
customer incentives, the programs could not function without adequate administration and 26
oversight. These costs also include marketing, contractor training, inspections and quality 27
control, and evaluation. 28
29
30
31
EXHIBIT E
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Lifetime Program Investment Costs 1
The Lifetime Program Investment Costs capture the direct rebate incentives provided to 2
participants of the programs. Rebate values were determined to maximize customer 3
participation and minimize ratepayer impact. Loan incentives are captured in the lifetime 4
participant cost as they are ultimately repaid by participants. For the NJCEP Loan 5
programs, the Lifetime Program Investment Costs represent the present value of SJG’s 6
Cost of Capital on the outstanding loan amount for each program. This cost mirrors that 7
provided as a benefit to participants in the PCT. 8
9
Lifetime Reallocated Distribution Costs (Utility Revenue Lost) 10
An associated cost is the Lifetime Reallocated Distribution Costs capture the value of any 11
distribution costs avoided by participants that must be collected from the balance of 12
ratepayers. SJG has an existing mechanism, the Conservation Incentive Program (CIP) that 13
collects foregone distribution contributions from customers. These are not direct program 14
costs and represent the transfer between existing ratepayer subsectors. This cost is 15
sometimes known as lost utility costs or lost revenues. 16
17
Reallocated distribution costs were calculated based on the individual rate charges which 18
currently contribute to supporting distribution costs. In addition, the reallocated 19
distribution costs also include tariff surcharges and riders that do not contribute to 20
distribution costs but would likely be reallocated to ratepayers at large. Moreover, 21
reallocated distribution costs do not include any supply related costs, as New Jersey’s 22
electric and natural gas utilities are deregulated, and avoided supply costs resulting from 23
energy efficiency are not borne by ratepayers. 24
25
Q. What assumptions did you use in estimating measure and program costs and energy 26
savings? 27
A. I relied on several different sources to estimate energy and demand savings from specific 28
measures. My primary source was the most recently approved BPU Protocols. However, 29
the BPU Protocols are limited to the programs offered by NJCEP. When the measure-30
related calculations were unavailable in the protocols, I relied on several other sources 31
EXHIBIT E
- 19 -
including the Mid-Atlantic TRM, the Massachusetts TRM, the New York TRM, historic 1
SJG data, and NJCEP data to develop energy savings. When using out-of-state data 2
sources, I adjusted weather and other variables to represent conditions in SJG’s service 3
territory. 4
5
For costs, I relied on a variety of sources, including reports from the Northeast Energy 6
Efficiency Partnerships, Department of Energy, previous evaluation studies, regionally 7
specific technical resource manuals, web vendors for applicable measures, internal SJG 8
cost estimates, and incremental cost data from the NJCEP. Incremental measure costs are 9
difficult to estimate as they change on a near daily basis and vary regionally. 10
11
With respect to free rider and free driver (spillover) effects, I assumed a net-to gross ratio 12
of 1.0. This is consistent with the approach taken by TRC in NJCEP planning. In fact, the 13
NJCEP Protocols “report gross savings and generation only. Free riders and free drivers 14
are not addressed in these Protocols. Further research in this area is planned.” While some 15
participants may have made similar investments absent the program (free riders), the 16
programs also drive non-participants to invest in energy efficient products and change 17
behavior (free drivers). I believe 1.0 is a reasonable estimate based on these factors. In 18
addition, the lack of a formal net-to-gross evaluation in New Jersey makes it extremely 19
difficult to ascertain this impact. 20
21
Q. Were the costs and benefits evaluated on a nominal or present value basis? 22
A. For the purposes of each of the CBA tests, all costs and benefits were evaluated on a present 23
value basis. The TRC, PCT, PAC, and RIM tests used a discount rate to determine the 24
present value of costs and benefits of 6.3%. This value was determined based on SJG’s net 25
of tax WACC approved in the Company’s most recent base rate case in Docket No. 26
GR17010071. The SCT was evaluated using a discount rate of 2.77%, equal to the yield of 27
a 30-year U.S. Treasury bond. 28
29
30
31
EXHIBIT E
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V. COST-BENEFIT ANALYSIS RESULTS 1
2
Q. What were the results of the CBA for the proposed SJG EEP IV programs? 3
A. Based on my analysis, every proposed program comfortably exceeded an SCT ratio of 1.0, 4
with a minimum of 1.1 and a portfolio wide ratio of 3.2. Table 2 summarizes the SCT ratios 5
of each program offered to customers in SJG’s EEP IV program. 6
7
Table 2: SJG EEP IV SCT Ratios 8
Program SCT
Total Portfolio 3.2
Residential Behavior 1.9
Residential Efficient Products 4.5 Residential Home Assessment with Direct Install 2.7
Residential Retrofit Weatherization 1.6
C&I Engineered Solutions 3.2
NJCEP Residential Loan/Rebate
NJCEP - HPwES 1.1
NJCEP - HVAC 2.6
NJCEP Commercial Loans
NJCEP - Direct Install 5.4
NJCEP - Smart Start 13.0
NJCEP - P4P 15.7 9
10
Q. How did the proposed SJG EEP IV programs fare in TRC, PCT, PAC, and RIM 11
tests? 12
A. The SJG EEP IV programs proved cost-effective using the balance of the CBA tests 13
prescribed in the MFRs, in addition to the SCT test, as described above. Table 3 illustrates 14
the CBA ratios for each of the programs for the TRC, PCT, PAC, and RIM tests. 15
EXHIBIT E
- 21 -
1
Table 3: SJG EEP IV TRC, PCT, PAC, & RIM Ratios 2
Program TRC PCT PAC RIM
Total Portfolio 1.1 14.3 1.4 0.6
Residential Behavior 1.1 n/a 1.1 0.5
Residential Efficient Products 1.7 61.4 1.6 0.5 Residential Home Assessment with Direct Install 1.0 47.7 1.0 0.4
Residential Retrofit Weatherization 0.5 n/a 0.4 0.3
C&I Engineered Solutions 1.0 5.3 1.6 0.8
NJCEP Residential Loan/Rebate
NJCEP - HPwES 0.2 2.1 0.5 0.4
NJCEP - HVAC 0.6 19.3 0.5 0.4
NJCEP Commercial Loans
NJCEP - Direct Install 2.0 57.9 4.9 0.7
NJCEP - Smart Start 4.9 40.2 8.9 0.8
NJCEP - P4P 6.4 32.1 4.0 0.7 3
Q. Why did some programs score so highly in the PCT? 4
A. As detailed above, the PCT is designed to ascertain cost-effectiveness for customers 5
participating in programs. Many of the programs were designed to offer participants a 6
number of low and no-cost measures and energy savings, and target markets that often have 7
difficulty participating in energy efficiency programs. This includes programs such as the 8
Residential Retrofit Weatherization program which targets residents earning between 9
225% to 400% of Federal Poverty Level, just above eligibility to participate in the Comfort 10
Partners program, but still in an economic demographic with difficulty focusing on and 11
investing in energy efficiency. Another program encompassed in the Residential Programs 12
is the Residential Behavior program which provides Home Energy Reports (HERs) to 13
participants. The HERs provide customers with insights and behavioral recommendations 14
to improve the efficiency of their homes, all at no cost to the participants. Because 15
EXHIBIT E
- 22 -
participants pay nothing for the HERs, the PCT for this particular program is infinite (any 1
level of savings divided by zero costs is an incalculable infinite number). Combining this 2
program with other programs which require participant payments results in aggregated 3
results with high cost-effectiveness. 4
5
6
VI. CONCLUSIONS 7
8
Q. Can you briefly summarize the results of your analysis? 9
A. The SJG EEP IV program portfolio is cost effective and will provide quantified net benefits 10
to the customers of SJG. Total direct benefits to ratepayers (participants and non-11
participants) is estimated at $435 million while the associated costs are estimated at $134 12
million yielding net benefits of $301 million. In addition, participants’ direct retail bill 13
savings are estimated at $320 million. 14
15
Q. Based on these results, do you recommend approval of SJG’s EEP IV program filing? 16
A. Yes. The Board should approve SJG’s application based on the substantial benefits to the 17
State and to ratepayers, and the quantified positive results demonstrated by the cost benefit 18
test. 19
20
Q. Does this conclude your testimony? 21
A. Yes. I further reserve the right to update my testimony should additional information 22
become available. Thank you. 23
Isaac Gabel-FrankVice President
Overview of ExperienceProfessional Qualifications
BA., Economics, Political Science,
English Writing
University of Pittsburgh, 2009
Isaac Gabel-Frank, Vice President at Gabel Associates, has over 8 years of
experience supporting complex energy issues related to cost-benefit analysis, energy
efficiency and renewables, energy project development, economic and tariff
analysis, electric vehicles, regional transmission organizations (RTOs), and energy
procurement.
Mr. Gabel-Frank is an expert on cost-benefit analytics and has supported a
multitude of clients in quantifying cost and benefit dynamics related to the
economic impact of energy projects. This includes past and present work for Federal
agencies, state and local governments, school districts, and private sector clients on
energy efficiency, renewable energy, cogeneration, and traditional generation
projects. Mr. Gabel-Frank also performs sensitivity analysis to help identify risk
boundaries and market deviations. This analysis is critical to investment decisions
as it allows clients to understand the full value proposition associated with energy
initiatives.
Mr. Gabel-Frank has submitted expert testimony to the New Jersey Board of Public
Utilities (NJBPU) in matters regarding the cost effectiveness of energy efficiency.
He is also currently supporting analytical and filing preparation activities for energy
efficiency and renewable matters for a range of clients.
Mr. Gabel-Frank has also performed in-depth project valuation and levelized cost of
energy studies to support a proposed asset transaction.
Mr. Gabel-Frank assists in the development of numerous renewable and energy
efficiency projects including in-depth economic, technical, and utility tariff
analysis, which incorporates long-term utility and energy forecasts. He has
developed various tariff models from the ground up, which are customized to reflect
the specific parameters of each project. He is also skilled at calculating energy
savings associated with various project structures. As a result of his strong
analytical skill set, Mr. Gabel-Frank has served an integral role on various
progressive projects throughout the region.
He supports solar projects through the request for proposal (RFP) process as well as
reviews utility tariffs and performs cost/benefit analysis. He is also knowledgeable
on the solar renewable energy certificate (SREC) market.
He has specialized knowledge on demand response programs and can effectively
support clients in evaluating this revenue opportunity. Mr. Gabel-Frank also
developed a model that calculates energy savings and potential rebates associated
with energy efficiency projects.
In addition, he is extremely knowledgeable on RTO issues and actively monitors
activities related to energy and capacity markets, energy efficiency, demand
response, ancillary services, interconnection, and general grid issues. Mr. Gabel-
Frank helps clients formulate and strategize positions on current PJM rules as well
as provides analysis on potential market changes. This includes development of
offer and bid strategies for energy efficiency, demand response, renewable, and
traditional generation resources into the PJM market.
He was a key contributor in the development of the Analytical Likelihood of
Availability and Non-Performance Risk (ALAN) model, a proprietary stochastic
modeling tool that computes the exposure of capacity resources within the PJM and
ISO-NE footprints. ALAN uses resource outage data as well expected performance
assessment event information to determine the probabilistic coincidence of outages
and performance assessment events.
Gabel Associates, Inc.
www.gabelassociates.com
IGF-1
Total Resource Cost Test (TRC) Total Portfolio Res BehaviorRes Efficient
ProductsRes Direct Install
Res Retrofit Weatherization
BENEFITS1 Lifetime Avoided Wholesale Electric Energy Costs 44,278,713$ 1,316,729$ 9,783,545$ 2,023,606$ 524,224$ 2 Lifetime Avoided Wholesale Electric Capacity Costs 13,412,915$ 261,302$ 429,987$ 169,141$ 88,668$ 3 Lifetime Avoided Wholesale Natural Gas Costs 46,563,205$ 3,606,300$ 14,671,155$ 2,720,028$ 3,140,423$ 4 Lifetime DRIPE Benefits (E&G) 7,001,576$ 274,535$ 1,624,774$ 345,476$ 152,913$ 5 Lifetime Avoided RPS REC Purchase Costs 7,659,407$ 268,999$ 1,891,654$ 392,083$ 92,972$ 6 Lifetime Avoided Wholesale Volatility Costs (E&G) 10,425,483$ 518,433$ 2,488,469$ 491,278$ 375,331$ 7 Lifetime Avoided T&D Costs (E&G) 4,071,474$ 123,346$ 163,948$ 65,986$ 18,710$
Total Benefits 1+2+3+4+5+6+7 133,412,772$ 6,369,644$ 31,053,532$ 6,207,598$ 4,393,241$ COSTS
8 Lifetime Incremental Costs 93,525,759$ 5,203,967$ 12,288,433$ 5,045,700$ 8,397,735$ 9 Lifetime Administration Costs 26,449,245$ 505,854$ 5,636,425$ 1,462,869$ 1,149,194$
Total Costs 8+9 119,975,004$ 5,709,821$ 17,924,858$ 6,508,570$ 9,546,928$ Benefit Cost Ratio (1+2+3+4+5+6+7)/(8+9) 1.1 1.1 1.7 1.0 0.5
Participant Cost Test (PCT) Total Portfolio Res BehaviorRes Efficient
ProductsRes Direct Install
Res Retrofit Weatherization
BENEFITS10 Lifetime Avoided Retail Electric Costs 198,478,077$ 5,842,572$ 40,951,611$ 8,504,882$ 2,168,350$ 11 Lifetime Avoided Retail Natural Gas Costs 121,580,618$ 9,307,999$ 39,481,374$ 7,202,943$ 7,851,303$ 12 Lifetime Program Incentive Costs 65,100,042$ 5,203,967$ 13,930,276$ 4,903,808$ 9,254,560$
Total Benefits 10+11+12 385,158,737$ 20,354,538$ 94,363,261$ 20,611,634$ 19,274,214$ COSTS
13 Lifetime Participant Costs 26,977,452$ -$ 1,535,789$ 431,879$ -$ Total Costs 13 26,977,452$ -$ 1,535,789$ 431,879$ -$
Benefit Cost Ratio (10+11+12)/13 14.3 n/a 61.4 47.7 n/a
Program Administrator Cost Test (PAC) Total Portfolio Res BehaviorRes Efficient
ProductsRes Direct Install
Res Retrofit Weatherization
BENEFITS14 Lifetime Avoided Wholesale Electric Energy Costs 44,278,713$ 1,316,729$ 9,783,545$ 2,023,606$ 524,224$ 15 Lifetime Avoided Wholesale Electric Capacity Costs 13,412,915$ 261,302$ 429,987$ 169,141$ 88,668$ 16 Lifetime Avoided Wholesale Natural Gas Costs 46,563,205$ 3,606,300$ 14,671,155$ 2,720,028$ 3,140,423$ 17 Lifetime DRIPE Benefits (E&G) 7,001,576$ 274,535$ 1,624,774$ 345,476$ 152,913$ 18 Lifetime Avoided RPS REC Purchase Costs 7,659,407$ 268,999$ 1,891,654$ 392,083$ 92,972$ 19 Lifetime Avoided Wholesale Volatility Costs 10,425,483$ 518,433$ 2,488,469$ 491,278$ 375,331$ 20 Lifetime Avoided T&D Costs 4,071,474$ 123,346$ 163,948$ 65,986$ 18,710$
Total Benefits 14+15+16+17+18+19+20 133,412,772$ 6,369,644$ 31,053,532$ 6,207,598$ 4,393,241$ COSTS
21 Lifetime Administration Costs 26,449,245$ 505,854$ 5,636,425$ 1,462,869$ 1,149,194$ 22 Lifetime Program Investment Costs 68,923,111$ 5,203,967$ 13,930,276$ 4,903,808$ 9,254,560$
Total Costs 21+22 95,372,356$ 5,709,821$ 19,566,701$ 6,366,677$ 10,403,754$ Benefit Cost Ratio (14+15+16+17+18+19+20)/(21+22) 1.4 1.1 1.6 1.0 0.4
Ratepayer Impact Measure Test (RIM) Total Portfolio Res BehaviorRes Efficient
ProductsRes Direct Install
Res Retrofit Weatherization
BENEFITS23 Lifetime Avoided Wholesale Electric Energy Costs 44,278,713$ 1,316,729$ 9,783,545$ 2,023,606$ 524,224$ 24 Lifetime Avoided Wholesale Electric Capacity Costs 13,412,915$ 261,302$ 429,987$ 169,141$ 88,668$ 25 Lifetime Avoided Wholesale Natural Gas Costs 46,563,205$ 3,606,300$ 14,671,155$ 2,720,028$ 3,140,423$ 26 Lifetime DRIPE Benefits (E&G) 7,001,576$ 274,535$ 1,624,774$ 345,476$ 152,913$ 27 Lifetime Avoided RPS REC Purchase Costs 7,659,407$ 268,999$ 1,891,654$ 392,083$ 92,972$ 28 Lifetime Avoided Wholesale Volatility Costs 9,430,526$ 518,433$ 2,488,469$ 491,278$ 375,331$ 29 Lifetime Avoided T&D Costs 4,071,474$ 123,346$ 163,948$ 65,986$ 18,710$ 30 Lifetime Avoided Distribution Costs -$
Total Benefits 23+24+25+26+27+28+29+30 132,417,814$ 6,369,644$ 31,053,532$ 6,207,598$ 4,393,241$ COSTS
31 Lifetime Administration Costs 26,449,245$ 505,854$ 5,636,425$ 1,462,869$ 1,149,194$ 32 Lifetime Program Investment Costs 68,923,111$ 5,203,967$ 13,930,276$ 4,903,808$ 9,254,560$ 33 Lifetime Re-allocated Distribution Costs 142,506,884$ 8,051,519$ 40,149,311$ 7,761,769$ 5,373,403$
Total Costs 31+32+33 237,879,240$ 13,761,340$ 59,716,011$ 14,128,446$ 15,777,156$ Benefit Cost Ratio (23+24+25+26+27+28+29+30)/(31+32+33) 0.6 0.5 0.5 0.4 0.3
Societal Cost Test (SC) Total Portfolio Res BehaviorRes Efficient
ProductsRes Direct Install
Res Retrofit Weatherization
BENEFITS34 Lifetime Avoided Wholesale Electric Energy Costs 63,146,479$ 1,499,281$ 12,850,064$ 2,636,967$ 752,362$ 35 Lifetime Avoided Wholesale Electric Capacity Costs 20,509,632$ 317,143$ 532,440$ 217,235$ 145,030$ 36 Lifetime Avoided Wholesale Natural Gas Costs 65,189,472$ 4,069,932$ 18,926,382$ 3,586,956$ 4,988,394$ 37 Lifetime DRIPE Benefits (E&G) 9,764,975$ 312,077$ 2,047,080$ 435,307$ 297,312$ 38 Lifetime Avoided RPS REC Purchase Costs 10,404,539$ 307,148$ 2,442,448$ 502,078$ 126,073$ 39 Lifetime Avoided Wholesale Volatility Costs 14,884,558$ 588,636$ 3,230,889$ 644,116$ 588,579$ 40 Lifetime Avoided T&D Costs 5,746,726$ 139,407$ 193,375$ 80,575$ 27,313$ 41 Lifetime Avoided Emissions Costs 111,779,219$ 2,567,303$ 22,163,515$ 4,543,741$ 1,348,752$ 42 Job and Savings Multiplier Benefits 133,224,727$ 2,038,035$ 25,326,046$ 7,002,499$ 8,782,906$
Total Benefits 34+35+36+37+38+39+40+41+42 434,650,327$ 11,838,962$ 87,712,238$ 19,649,473$ 17,056,720$ COSTS
43 Lifetime Incremental Costs 105,200,396$ 5,598,953$ 13,468,266$ 5,561,767$ 9,395,709$ 44 Lifetime Administration Costs 29,163,320$ 555,252$ 6,165,072$ 1,601,377$ 1,258,810$
Total Costs 43+44 134,363,716$ 6,154,205$ 19,633,337$ 7,163,143$ 10,654,520$ Benefit Cost Ratio (34+35+36+37+38+39+40+41+42)/(43+44) 3.2 1.9 4.5 2.7 1.6
IGF-2 Page 1 of 2
Total Resource Cost Test (TRC)
BENEFITS1 Lifetime Avoided Wholesale Electric Energy Costs2 Lifetime Avoided Wholesale Electric Capacity Costs3 Lifetime Avoided Wholesale Natural Gas Costs4 Lifetime DRIPE Benefits (E&G)5 Lifetime Avoided RPS REC Purchase Costs6 Lifetime Avoided Wholesale Volatility Costs (E&G)7 Lifetime Avoided T&D Costs (E&G)
Total Benefits 1+2+3+4+5+6+7COSTS
8 Lifetime Incremental Costs9 Lifetime Administration Costs
Total Costs 8+9Benefit Cost Ratio (1+2+3+4+5+6+7)/(8+9)
Participant Cost Test (PCT)
BENEFITS10 Lifetime Avoided Retail Electric Costs11 Lifetime Avoided Retail Natural Gas Costs12 Lifetime Program Incentive Costs
Total Benefits 10+11+12COSTS
13 Lifetime Participant CostsTotal Costs 13
Benefit Cost Ratio (10+11+12)/13
Program Administrator Cost Test (PAC)BENEFITS
14 Lifetime Avoided Wholesale Electric Energy Costs15 Lifetime Avoided Wholesale Electric Capacity Costs16 Lifetime Avoided Wholesale Natural Gas Costs17 Lifetime DRIPE Benefits (E&G)18 Lifetime Avoided RPS REC Purchase Costs19 Lifetime Avoided Wholesale Volatility Costs20 Lifetime Avoided T&D Costs
Total Benefits 14+15+16+17+18+19+20COSTS
21 Lifetime Administration Costs22 Lifetime Program Investment Costs
Total Costs 21+22Benefit Cost Ratio (14+15+16+17+18+19+20)/(21+22)
Ratepayer Impact Measure Test (RIM)BENEFITS
23 Lifetime Avoided Wholesale Electric Energy Costs24 Lifetime Avoided Wholesale Electric Capacity Costs25 Lifetime Avoided Wholesale Natural Gas Costs26 Lifetime DRIPE Benefits (E&G)27 Lifetime Avoided RPS REC Purchase Costs28 Lifetime Avoided Wholesale Volatility Costs29 Lifetime Avoided T&D Costs30 Lifetime Avoided Distribution Costs
Total Benefits 23+24+25+26+27+28+29+30COSTS
31 Lifetime Administration Costs32 Lifetime Program Investment Costs33 Lifetime Re-allocated Distribution Costs
Total Costs 31+32+33Benefit Cost Ratio (23+24+25+26+27+28+29+30)/(31+32+33)
Societal Cost Test (SC)BENEFITS
34 Lifetime Avoided Wholesale Electric Energy Costs35 Lifetime Avoided Wholesale Electric Capacity Costs36 Lifetime Avoided Wholesale Natural Gas Costs37 Lifetime DRIPE Benefits (E&G)38 Lifetime Avoided RPS REC Purchase Costs39 Lifetime Avoided Wholesale Volatility Costs40 Lifetime Avoided T&D Costs41 Lifetime Avoided Emissions Costs42 Job and Savings Multiplier Benefits
Total Benefits 34+35+36+37+38+39+40+41+42COSTS
43 Lifetime Incremental Costs44 Lifetime Administration Costs
Total Costs 43+44Benefit Cost Ratio (34+35+36+37+38+39+40+41+42)/(43+44)
C&I Engineered Solutions
NJCEP - HPwES NJCEP - HVACNJCEP - Direct
InstallNJCEP - Smart
StartNJCEP - P4P
4,947,233$ 1,961,953$ 830,701$ 3,753,478$ 6,148,343$ 12,988,901$ 1,808,431$ 728,919$ 895,489$ 1,416,722$ 2,183,097$ 5,431,159$ 3,488,633$ 3,509,277$ 6,940,405$ 1,262,588$ 1,221,426$ 6,002,971$
800,833$ 294,592$ 107,479$ 599,476$ 899,898$ 1,901,599$ 724,523$ 306,297$ 135,472$ 671,245$ 1,025,094$ 2,151,068$
1,024,430$ 620,015$ 866,659$ 643,279$ 955,287$ 2,442,303$ 486,609$ 238,673$ 171,850$ 435,589$ 683,069$ 1,683,693$
13,280,692$ 7,659,725$ 9,948,055$ 8,782,377$ 13,116,215$ 32,601,694$
11,371,610$ 32,454,832$ 9,236,259$ 2,959,961$ 1,956,813$ 4,610,447$ 1,952,141$ 6,496,095$ 6,573,441$ 1,478,387$ 740,205$ 454,635$
13,323,751$ 38,950,928$ 15,809,700$ 4,438,348$ 2,697,018$ 5,065,082$ 1.0 0.2 0.6 2.0 4.9 6.4
C&I Engineered Solutions
NJCEP - HPwES NJCEP - HVACNJCEP - Direct
InstallNJCEP - Smart
StartNJCEP - P4P
10,908,496$ 10,173,415$ 7,418,762$ 19,003,991$ 30,076,081$ 63,429,915$ 8,953,546$ 8,111,608$ 15,876,685$ 3,776,353$ 3,553,824$ 17,464,982$ 6,398,151$ 12,573,254$ 8,378,276$ 2,249,430$ 397,616$ 1,810,704$
26,260,193$ 30,858,277$ 31,673,723$ 25,029,775$ 34,027,521$ 82,705,602$
4,973,459$ 14,534,718$ 1,644,258$ 432,404$ 847,427$ 2,577,517$ 4,973,459$ 14,534,718$ 1,644,258$ 432,404$ 847,427$ 2,577,517$
5.3 2.1 19.3 57.9 40.2 32.1
C&I Engineered Solutions
NJCEP - HPwES NJCEP - HVACNJCEP - Direct
InstallNJCEP - Smart
StartNJCEP - P4P
4,947,233$ 1,961,953$ 830,701$ 3,753,478$ 6,148,343$ 12,988,901$ 1,808,431$ 728,919$ 895,489$ 1,416,722$ 2,183,097$ 5,431,159$ 3,488,633$ 3,509,277$ 6,940,405$ 1,262,588$ 1,221,426$ 6,002,971$
800,833$ 294,592$ 107,479$ 599,476$ 899,898$ 1,901,599$ 724,523$ 306,297$ 135,472$ 671,245$ 1,025,094$ 2,151,068$
1,024,430$ 620,015$ 866,659$ 643,279$ 955,287$ 2,442,303$ 486,609$ 238,673$ 171,850$ 435,589$ 683,069$ 1,683,693$
13,280,692$ 7,659,725$ 9,948,055$ 8,782,377$ 13,116,215$ 32,601,694$
1,952,141$ 6,496,095$ 6,573,441$ 1,478,387$ 740,205$ 454,635$ 6,398,151$ 8,706,724$ 11,833,111$ 319,235$ 738,602$ 7,634,677$ 8,350,292$ 15,202,819$ 18,406,552$ 1,797,622$ 1,478,807$ 8,089,312$
1.6 0.5 0.5 4.9 8.9 4.0
C&I Engineered Solutions
NJCEP - HPwES NJCEP - HVACNJCEP - Direct
InstallNJCEP - Smart
StartNJCEP - P4P
4,947,233$ 1,961,953$ 830,701$ 3,753,478$ 6,148,343$ 12,988,901$ 1,808,431$ 728,919$ 895,489$ 1,416,722$ 2,183,097$ 5,431,159$ 3,488,633$ 3,509,277$ 6,940,405$ 1,262,588$ 1,221,426$ 6,002,971$
800,833$ 294,592$ 107,479$ 599,476$ 899,898$ 1,901,599$ 724,523$ 306,297$ 135,472$ 671,245$ 1,025,094$ 2,151,068$
1,024,430$ 508,412$ 710,661$ 527,489$ 783,335$ 2,002,689$ 486,609$ 238,673$ 171,850$ 435,589$ 683,069$ 1,683,693$
13,280,692$ 7,548,123$ 9,792,056$ 8,666,587$ 12,944,263$ 32,162,079$
1,952,141$ 6,496,095$ 6,573,441$ 1,478,387$ 740,205$ 454,635$ 6,398,151$ 8,706,724$ 11,833,111$ 319,235$ 738,602$ 7,634,677$ 8,673,995$ 4,985,354$ 6,795,547$ 10,148,625$ 14,448,150$ 36,119,212$
17,024,287$ 20,188,174$ 25,202,099$ 11,946,247$ 15,926,957$ 44,208,523$ 0.8 0.4 0.4 0.7 0.8 0.7
C&I Engineered Solutions
NJCEP - HPwES NJCEP - HVACNJCEP - Direct
InstallNJCEP - Smart
StartNJCEP - P4P
8,103,597$ 2,993,224$ 1,252,622$ 5,164,788$ 8,928,731$ 18,964,843$ 3,112,594$ 1,166,308$ 1,411,669$ 2,039,322$ 3,305,281$ 8,262,611$ 5,718,841$ 5,314,503$ 10,389,322$ 1,746,326$ 1,757,846$ 8,690,970$ 1,346,153$ 438,724$ 157,466$ 797,944$ 1,255,226$ 2,677,686$ 1,091,557$ 435,517$ 191,782$ 890,799$ 1,421,299$ 2,995,839$ 1,693,503$ 947,404$ 1,305,361$ 895,044$ 1,399,186$ 3,591,842$
774,529$ 351,418$ 250,567$ 578,691$ 962,693$ 2,388,156$ 15,363,619$ 5,409,992$ 2,306,692$ 9,119,069$ 15,662,000$ 33,294,537$ 12,644,159$ 30,052,273$ 30,075,101$ 4,883,332$ 5,062,965$ 7,357,410$ 49,848,552$ 47,109,363$ 47,340,582$ 26,115,315$ 39,755,228$ 88,223,894$
13,274,673$ 36,592,900$ 10,706,290$ 3,261,875$ 2,234,284$ 5,105,680$ 2,157,620$ 7,226,348$ 7,263,625$ 1,610,718$ 824,956$ 499,542$
15,432,293$ 43,819,247$ 17,969,915$ 4,872,593$ 3,059,240$ 5,605,222$ 3.2 1.1 2.6 5.4 13.0 15.7
IGF-2 Page 2 of 2