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New Jersey Government Energy Aggregation

New Jersey Government Energy Aggregation. P.L. 2003 c. 24 “GEA Act”. October 1, 2013. Gary E Finger Ombudsman New Jersey Board of Public Utilities. New Jersey Energy Master Plan Goals. Maximize energy conservation and energy efficiency Reduce electric consumption by 20,000GWh

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New Jersey Government Energy Aggregation

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  1. New Jersey Government Energy Aggregation P.L. 2003 c. 24 “GEA Act” October 1, 2013 Gary E Finger Ombudsman New Jersey Board of Public Utilities New Jersey Board of Public Utilities (c) 2013

  2. New Jersey Energy Master Plan Goals • Maximize energy conservation and energy efficiency • Reduce electric consumption by 20,000GWh • Reduce heating energy by 110 trillion BTU’s • Reduce Peak Electricity demand by 5700 MW by 2020 • Obtain 22.5% of the State’s electricity needs from renewable sources by 2021. • Develop a stronger sustainable and more independent infrastructure. • Promote innovative clean energy technologies and businesses. New Jersey Board of Public Utilities (c) 2013

  3. Government Energy Aggregation • New Jersey is one of five states to introduce Government Energy Aggregation since the 1999 Electric Discount & Energy Competition Act (EDECA) • Other states have successfully implemented similar programs; sometimes called “Community Choice Aggregation” • California, eg., Marin County • Ohio, eg., NOPEC • Massachusetts, eg., Cape Light Compact • New Jersey’s 2003 Government Energy Aggregation Act allows municipalities and counties to aggregate the purchasing of power for their constituents to secure alternative sources of energy at lower costs. New Jersey Board of Public Utilities (c) 2013

  4. Government Energy Aggregation (P.L. 2003 c. 24) Allows a government aggregator (GA) that is a municipality or county to establish a government energy aggregation program by ordinance or resolution. Allows residents and businesses to save money on the supply portion of their gas or electric utility bills GEA programs can be designed so that the municipality will not incur any out-of-pocket expenses for consulting fees or professional fees. Expenses reimbursed by the Third Party Supplier (TPS) for expenses actually incurred by the government aggregator. New Jersey Board of Public Utilities (c) 2013

  5. Steps in Implementing a GEA Program • GEA program must be authorized by municipal ordinance (or county resolution) and provided to the electric and/or gas distribution company • A government aggregator can act on its own or hire a contractor or consultant to perform on its behalf. • The energy consultant can be hired directly or through an RFP process. • The government aggregator MUST advertise for and solicit bids from Third Party Suppliers (TPS) interested in providing electricity or gas under the GEA program. • After awarding the bid the town can enter into a contract with the Third Party Supplier. • The TPS will reimburse the town for actual costs incurred New Jersey Board of Public Utilities (c) 2013

  6. Steps in Implementation… • The law does not permit payment of concession fees, finders fees or other direct monetary benefits to the government aggregator (municipality) • Each participating municipality must enter into an agreement with the Electric and/or Gas distribution company. (All customer lists need to come from the current supplier.) • It is strongly suggested that the town initiate an extensive public awareness program. • Key documents must be presented to BPU staff and the Division of Rate Counsel for review and comment during the process. New Jersey Board of Public Utilities (c) 2013

  7. Key Points Write this down • Residential Customers: • This is an “Opt-Out” program • All residential customers (taxpayers) are automatically sign-up. • Residential customers can withdraw anytime, but need to provide a 30 day notice. • Residential customers that already have a 3rd party energy supplier (TPS) are excluded but may choose to opt-in. New Jersey Board of Public Utilities (c) 2013

  8. Key Points cont…. • Non-Residential Customers: • Business Customers and government entities must • Opt-In • Approx. 21% of the businesses in the State already are under contract with a Third Party Supplier • Extensive outreach to businesses would still be suggested to improve a more competitive response to the bids. New Jersey Board of Public Utilities (c) 2013

  9. Bid Pricing • Although it should be obvious, pricing to residential customers should NOT be set at a rate that exceeds the benchmark price as described at N.J.A.C. 14:4-6.9 • Exceptions: • The residential customers are notified that the town is considering a higher rate, (Additional services requested by the TPS might require higher pricing.) • The town has decided, through significant community awareness and input, to incorporate “Clean Choice” or a renewable element in their rates. • Renewable rates are almost always higher than standard utility rates New Jersey Board of Public Utilities (c) 2013

  10. Two Primary Types of GEA Programs Differ in the timing of notice of eligibility to participate • Option 1 • Customers are notified by their current energy supplier of your eligibility to participate and Opt-In / Opt-Out BEFORE the town advertises for bids and makes the Third Party Supplier (TPS) selection. • The town selects the TPS & will seek BPU staff & Rate Counsel comments regarding TPS contract, prior to entering into the TPS contract and commencement of the program. New Jersey Board of Public Utilities (c) 2013

  11. Option 2 • Business customers are notified by the town of eligibility to participate through public notice and Opt-In BEFORE the government aggregator solicits bids and selects the TPS. • Residential customers are notified by the town of their eligibility to participate and option to Opt-Out after the government aggregator selects the TPS. New Jersey Board of Public Utilities (c) 2013

  12. Plumsted Township… the first to act January 2013 • Township approved an ordinance to form a Community Energy Aggregation. • Hired Gable Associates as their Energy Consultant. • Residents and Business were notified of their options. • Residents may Opt-Out • Businesses may Opt-In • JCP&L provided data on all service accounts • Opt-Out and Opt-In responses received • Energy consultant prepared a bid package, reviewed bids and makes a recommendation for a Third Party Supplier • Power continues to be delivered through JCP&L as before, except at a lower price. • JCP&L remains the responsible party for service needs, including power outages. New Jersey Board of Public Utilities (c) 2013

  13. Local government has the ability to promote community-wide, energy cost reductions through leadership actions which start with their own facilities. New Jersey Board of Public Utilities (c) 2013

  14. Additional information and sample notices can be found at the Board of Public Utilities web site, under “About BPU” / “Divisions” / “Energy” or http://www.bpu.state.nj.us/bpu/about/divisions/energy/ Jacqueline Galka Issues Manager 609-984-4657 Jacqueline.Galka@bpu.state.nj.us New Jersey Board of Public Utilities (c) 2013

  15. Thank you for your time and interest Q & A Gary Finger Ombudsman New Jersey Board of Public Utilities gary.finger@bpu.state.nj.us New Jersey Board of Public Utilities (c) 2013

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