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On the Road to Energy Independence: Controlling New Jersey’s Runaway Energy Demand Through Energy Efficiency 2/7/2006 On_The_Road.pdf News Release

Executive Summary

As the new home of NJPIRG's environmental work, Environment New Jersey can be contacted regarding this news report.

New Jersey consumes far more electricity and natural gas than it needs to in homes and businesses. High energy use leaves consumers vulnerable to price spikes and supply disruptions. With stronger building codes, expanded appliance efficiency standards and stronger energy efficiency programs, New Jersey could reduce its use of electricity by 16 percent and natural gas by 15 percent by 2020 and reduce the impacts of energy use on New Jersey’s economy and environment.

Demand for both electricity and natural gas has risen dramatically in recent years and is projected to continue to grow.

• Electricity use grew by 28 percent in homes and businesses from 1994 to 2004, and natural gas use increased by 15 percent.

• By 2020, total demand for electricity is projected to increase by 29 percent in the absence of any efficiency measures. Natural gas use could rise by 9 percent.

Spending on electricity and natural gas already is a significant cost, and spikes in natural gas prices strain consumers’ budgets. Rising consumption compounds both the economic and environmental consequences of energy use.

• New Jersey residents and businesses spent $7.7 billion for electricity in 2004, equal to 1.9 percent of the state’s total economic output. Spending for natural gas was $5.1 billion, or 1.2 percent of output.

• Natural gas prices for this winter are projected to be 28 percent higher than they were last year and 70 percent higher than three winters ago, raising the cost of lighting and heating New Jersey homes and businesses.

• In addition, the generation of electricity creates a series of environmental problems including health-damaging air pollution, radioactive waste and global warming.

New Jersey has tremendous potential for reducing its consumption of electricity, natural gas and other fuels, potentially saving money for consumers. Existing efficiency efforts, while a good start, are projected to capture only a portion of this potential.

• Investing in energy efficiency to reduce demand for natural gas or electricity can cost less per unit of energy than purchasing power. According to the New Jersey Board of Public Utilities, recent energy efficiency improvements were accomplished for roughly one-fifth the cost of electricity purchases and about onefourth natural gas prices.

Existing efficiency programs in New Jersey will reduce electricity consumption by 9 percent below projected levels by 2020 and natural gas use by 2.3 percent. Three key energy efficiency measures the state should pursue to boost savings include:

• Stronger building codes for residential and commercial buildings to reduce energy needs for heating, cooling and lighting. New Jersey could improve the energy efficiency of new residential and commercial buildings by up to 25 percent, resulting in a 6 percent reduction in projected electricity use and a 5 percent reduction in natural gas use by 2020.

• Appliance efficiency standards for additional equipment used in homes and businesses. Though recently adopted standards will reduce electricity and natural gas consumption, standards are needed for other common appliances such as home furnaces and boilers and walk-in refrigerators. Adopting available standards for this equipment would reduce electricity use by 1,442 GWh in 2020, equal to 1.4 percent of projected 2020 electricity consumption. Natural gas use could drop by 0.7 percent.

• Greater investment in energy efficiency programs, which are especially important for reducing energy use in existing buildings. Expanded funding can help support the replacement of old, inefficient equipment; retrofit existing buildings with new windows, better insulation and tighter seals; and provide public education about available energy efficiency measures. Increased funding for natural gas efficiency could reduce consumption by 36 billion cubic feet of natural gas, or 7 percent of consumption.

Other programs also could help the state achieve energy efficiency savings. Possibilities include an energy efficiency portfolio standard, which would require electricity suppliers to get a certain amount of their power from efficiency measures.

New Jersey has already adopted a variety of energy efficiency programs and policies, but those measures will not capture the state’s full efficiency potential. To protect the environment and limit consumers’ exposure to spiking fuel costs, New Jersey should adopt stronger energy efficiency policies.