TESTIMONY OF SEEMA M. SINGH, ESQ.
RATEPAYER ADVOCATE
NJ DIVISION OF THE RATEPAYER ADVOCATE

REGARDING
ASSEMBLY BILL, No. 516
Assembly Telecommunications & Utilities Committee
10 a.m. February 26, 2004
Committee Room 15, State House Annex, Trenton

Good morning Chairman Caraballo and members of the committee. Thank you for providing me with the opportunity to comment on Assembly bill A-516 that would establish minimum efficiency standards for select types of new products sold, offered for sale or installed in New Jersey. The Ratepayer Advocate applauds your efforts in sponsoring this proposed bill and the efforts of Assemblywoman Bonnie Watson Coleman, sponsor of the bill.

Energy efficiency programs are a low-cost, high-benefit way to meet society’s ever-increasing energy needs. As we found out from last year’s blackout over the Fourth of July weekend down at the Jersey shore and again on a much larger scale on August 14th in the eastern United States and Canada, not only is electricity vital to maintain a minimally safe and comfortable standard of living, but is also crucial to our hopes for economic prosperity for all. Every avenue should be explored to reduce our energy consumption and increase energy efficiency. This would in turn reduce the strain on our electric transmission system.

Energy Efficiency Standards for Appliances and Equipment

By way of background, energy efficiency standards for appliances and equipment establish a minimum for the efficiency of converting input fuel --electricity, gas, or oil -- into useful energy. Appliances that use more input energy than the minimum set by these standards cannot be sold in a jurisdiction with such standards.

Appliance efficiency standards were first instituted by several states in the 1970s. When the National Appliance Energy Conservation Act was passed in 1987, it established federal efficiency standards. Federal standards replaced most state standards, and were expanded over time to include dozens of types of energy-using appliances and equipment. Under federal law as amended in 1988 and 1992, the U.S. Department of Energy (or “DOE”) has the authority to investigate and promulgate improvements to appliance and equipment efficiency standards.

The benefits of the federal efficiency standards have been documented in studies by the DOE and the American Council for an Energy-Efficient Economy (or “ACEEE”). For example, new refrigerators today use less than one-third of the electricity that they used back in 1976, when California introduced the first refrigerator efficiency standards. On top of this, these appliances cost much less to buy today than they did back then. The history with refrigerators, whose prices have been covered under the federal efficiency program since 1987, shows how beneficial appliance efficiency standards can be.

While the federal appliance efficiency program has accomplished much, it has been at a plateau over the past few years, taking only relatively modest steps compared to what is possible in light of new technology. For this reason, several states are looking at appliance efficiency standards again. They are looking at items of equipment that are not federally regulated at this time. The idea is to gain the benefits of improved energy efficiency while at the same time leading the federal government by example, just as happened originally before the first federal action on appliance efficiency was taken.

In studies such as “Opportunities for New Appliance and Equipment Efficiency Standards: Energy and Economic Savings Beyond Current Standards Programs” (2001), the ACEEE has shown that substantial economic and environmental benefits can be achieved from new efficiency standards for 13 types of equipment not currently regulated. Assembly Bill No. 516 addresses ten of these opportunities. This bill would require the Board of Public Utilities (BPU), in consultation with the Commissioner of Environmental Protection, to establish minimum energy efficiency standards for ten types of new products sold, offered for sale or installed in the State.

The proposed bill begins with products that are not regulated by the federal government, and for this reason is a useful complement to the existing federal efficiency program. The efficiency standards that this bill promulgates for these products have been thoughtfully and carefully designed. They draw on research, testing, and rating of equipment that has already been done by government agencies and research institutions. Moreover, the identical efficiency standards for these products are being promoted in several other state legislatures by the Northeast Energy Efficiency Partnership, a non-governmental organization that is very active on energy efficiency issues throughout the region, and by other groups.

This bill would also authorize the BPU, in consultation with the Commissioner of Environmental Protection, to promulgate additional efficiency standards that would be cost-effective for consumers. The BPU would also be authorized to apply for a waiver of federal pre-emption for equipment that is regulated by the federal government. These provisions would empower the State to build on its experience with the ten products specifically named in the bill, and to evaluate additional opportunities to save on energy bills and consumer costs through prudent regulation of appliance efficiency.

The equipment covered by Assembly Bill No. 516 is currently promoted through the New Jersey Clean Energy Programs funded by utility ratepayers. If this bill is passed, the Clean Energy Program initiatives can focus on the many other technologies they promote. This bill will help the Clean Energy Program to achieve its objectives, without adding any additional costs to it.

In conclusion, energy efficiency reduces the growth in demand for electricity, gas, and oil. It enables us to do more with our finite energy resources. It reduces consumer costs to meet energy needs. It reduces the emissions of harmful air pollutants as well as emissions of carbon dioxide, which contributes to global warming. State appliance and equipment efficiency standards will help to realize these benefits of energy efficiency. For these reasons, we support this bill.

The Ratepayer Advocate is committed to working with the Legislature, the Governor, the Board of Public Utilities and all other interested parties in promoting and increasing energy efficiency standards which will reduce the strain on our electricity grid, and improve our air quality and environment. Again, thank you for the opportunity to speak to you today. I look forward to working with you on this important issue.

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