1. NGA Policy Academy on Industrial
EE and CHP
New Jersey’s Clean Energy Program
Opportunities for CHP
Michael Winka NJBPU
Senior Policy Advisor
March 4-6, 2013

2. NJ Clean Energy Program
Background
• Introduced in 2001 as part of the 1999 EDECA
• Funded from “Societal Benefits Charge” on utility bill
• Administered by the New Jersey Board of Public Utilities
• Provides energy efficiency project opportunities for:
– Residential
– Renewables
– Commercial & Industrial

3. NJ Clean Energy Program
Background
New Jersey is a competitive state in terms of energy
Do not look to the tax structures for the most part in energy to
develop incentives –
Either through SBC or riders/trackers rates
– Clean Energy program incentive – NJBPU statewide
– Conservation Improvement Program - Gas decoupling- NJ Natural
and South Jersey Gas utilities
– Utility EE and solar filings – Utility area specific which
complement or enhance the statewide NJBPU Clean Energy
Programs
SBC rate impact and bill costs
Electric 0.3 cents/kWh (1.5%) $1.90/mo
Gas 2 cents/therm (1.8%) $2.00/mo

4. Commercial &
Industrial Portfolio
• NJ SmartStart Buildings
• Local Government Energy Audit
• Direct Install
• Pay for Performance
• Large Energy Users Pilot
• SBC Credit
• Benchmarking
• Combined Heat & Power/Fuel Cells
• Small scale < 1 MW Large scale > 1 MW

5. NJ SmartStart Buildings
• Electric Chillers
• Natural Gas Cooling
• Electric Unitary HVAC Systems
& Controls
• Ground Source Heat Pumps
• Gas Heating
• Water Heating
• Variable Frequency Drives VAV
Systems or ChW Pumps
• NEMA Premium Motors
• Prescriptive & Performance
Lighting
• Lighting Controls
• Refrigeration Doors/Covers and
Controls
Custom measure path for unique electric or
natural gas measures not on this prescriptive list
Prescriptive Incentives – Prequalified Technologies

6. Local Government Energy Audit
The Audit is available for:
• NJ Local Governments
• 501(c)(3) Non-profit Agencies
• NJ State Colleges and Universities
Covering a wide range of building types, including:
• Offices
• Town Halls
• Police and Fire Stations
• Courtrooms
• Community Centers
• School Buildings
100% of cost up to $100,000 per entity

7. Direct Install
• A turn-key, retrofit program designed to address the
replacement of lighting, HVAC and other outdated
operational equipment in small to medium size facilities
with a peak electric demand not exceeding 150 kW in the
preceding 12 months
• Provides incentives of up to 70% of the installed cost
• Incentives are paid directly to the contractor
– customer pays remaining 30%
– $75,000 project cap
– $250,000 per entity cap

8. Pay for Performance
Eligibility
• Existing Building
– Located in New Jersey
– Annual peak demand in excess of 100kW
• New Construction
– Located in New Jersey within Smart Growth area
– 50,000 gross heated square feet of planned space
reduce facility energy consumption by 15% or more, or 4% for eligible
high-energy intensity customers
Incentives up to $2 million per project, assuming both gas and electric
improvements are made; $4 million annual entity cap
Thresholds waived for hospitals, non-profits, local government buildings, affordable multi-
family housing and public universities and colleges

9. Large Energy Users Pilot
• Designed for large C&I facilities who paid a minimum of
$300,000 toward the NJCEP fund in 2011
• Average billed peak demand 400 kW and/or 4,000 DTh
• $0.33 per kWh & $3.75 per Therm annual savings
• Total of $28 million reserved for 2012 pilot
• 45 day new enrollment period began February 13th
• Application package available at:
NJCleanEnergy.com/LEUP

10. SBC Credit program
• Designed for any C&I customer that currently pays a
societal benefits charge (SBC) to a regulated utility
• 50% of the capital costs and service for a customers EE
project
• 50% of the SBC you pay into the fund
• Must be equipment or services approved by BPU in NJCEP
• Can carryover for 10 years (total of 11 years)
Ex: $1.1 M EE project for equipment and services
SBC Credit of $550,000 Customer pays $50 K per year
Carryover for 10 years plus the year they applied.

11. Free Benchmarking Report
Benchmarking assessments are designed to help:
• Understand energy cost trends and consumption at each
building
• With sufficient comparative data, see how building(s) compare
to similar buildings using ENERGY STAR®
Portfolio Manager
• Identify opportunities for improving operations, reducing
costs, and getting an energy efficiency project started

12. Combined Heat & Power/ Fuel
Cells- Small Scale program
All system size limited to one MW or less
100% or less of facility’s historic usage
New equipment or incremental for existing system
Non-RE Fuel < 500 kW $1000/kw > 500 kW $500/kW
$250/kw bonus w PfP capped at 30% or 40% with cooling
RE Fuel < 500 kW $3000/kw > 500 kW $2000/kW
Capped at 40%
Fuel cells HR $2000/kW
Fuel cells w/o HR $1500/kW
$250/kW bonus w PfP capped at 60%

13. Combined Heat & Power / Fuel
Cells – Large scale program
All system sizes, incentives limited to first 3 MW
• 1-3 MW $550/ kW
• > 3 MW $350 / KW
• Capped at $3 M or 30%
Fuel cells
• $2000 per kW w HR
• $1,500 per kW w/o HR
• Capped at $3 M or 45%
• HHV or 45% or LHV of 65%
Must be “new” and no export -100% on site use

14. NJ CHP Background
NJ current has 3,000 MW of CHP at 209 facilities
Governor Christie’s EMP set a goal of 1,500 of
CHP by 2020 or approx 200 MW per year. Market
potential study performed by MA CEAC
Goal was for duel economic and environmental
benefits – facilities have to demonstrate net
benefits.
Sandy amended that goal

15. NJ CHP Background
Small scale – Non- RE fuel 26.3 MW 2006- 2012 $ 17.6 M
RE fuel 3.2 MW $ 6.8 M
Fuel Cells 1.5 MW $ 4.7 M
Budget for 2012 $17M now it is $12M
7 projects approved 2.3 MW 5 under review 2.8 MW
Large scale – 24 MW $11M – 2012 6 projects ($67.5M)
Budget for 2012 was $55M now it is $35 M
ARRA - 34 MW $15 MW 2010-2011

16. NJ CHP Policy – storm
Response
– Power was out at in Princeton for over a week but
Princeton University was able to switch off grid and
power a large part of the campus with an 11 MW CHP
unit
– The College of NJ was able to island their facilities
because of their CHP units and continue to stay open
while the 26kV line that feeds power to the campus
was down and was being repaired

17. NJ CHP Policy – Storm
Response for Critical Facilities
CHP more than just an emergency BUG operates 24/7
Can generate a portion/all of the facilities energy needs
including electric and thermal
What is needed for CHP for Critical Facilities
Operate isolated from the grid – Islanding
Undergrounding of wires
Blackstart - (Code issues)
Testing
Training

18. NJ CHP Policy – Storm
Response for Critical Facilities
• To highlighted the importance of training and testing
• Rutgers attempted to isolate and black start their CHP
facility but it was determined that the control logic
prevented the black start system to function.
• Rutgers needed to upgrade that logic as needed to
perform in island mode with installation of a new and
upgraded 69 KV substation that was recently installed.
• This requires both software and electrical equipment
upgrade. The estimated cost is $350,000.

19. NJ CHP Policy – Storm
Response for Critical Facilities
If we were to fund the installation of 1500 MW of CHP in
the same manner as in the current Large Scale CHP and
Fuel Cell program
This would cost the ratepayers approximately $700M over
8 years and over $1B if that includes the small scale CHP-
Fuel cell program
Approximately $100 M per year (0.3% rate impact)
Rebates and grants are not the more effective and efficient
way to incentivize actions
Uncertainty in the start and stop of a rebate budget –
CHP needs a larger degree of certainty because of size
And timeframe needed to develop CHP

20. NJ CHP Policy – Storm
Response for Critical Facilities
Options for Financing
CHP Portfolio Standard
Long history with RECs and Portfolio Standards
Some degree of uncertainty w/o long term contracts
Third party supplier need to manage another REC
Public Private Partnerships (P3)
Long term contracts
Competitive Bidding ?
Increase transparency separating audits from work
Bond Financing – QECB
More complex
Brings in Private capital 3:1 +

21. NJ CHP Policy – Storm
Response for Critical Facilities
• BPU has engaged Rutgers Center for Economic, Energy
and Environmental Policy (CEEEP) to work with the
CHP-Fuel Cell Work Group to complete a cost benefits
analysis of these options.
• The outcome of that analysis will be built into the SC
CHP-FC Program and the LS CHP –FC program in 2014
which actually starts July 1, 2013 on the same year as the
State’s fiscal year.

22. NJ CHP Policy – Questions
1. NG decoupling does not address chp
2. PJM provides capacity for EE and RE and some other ancillary
services like frequency regulation (capacity payments small)
3. NJBPU can direct utilities to file EE and RE on their side or
customer side of the meter – Rate Counsel issues sale of gas
4. NJ has a CHP general permit for CHP < 5 MW
5. MACT issues minimal no industrial coal and few #6 oil
6. We do not mange the financing models except on public
7. Biggest issue is certainty in financing/incentives
8. Sales Tax exemption for sale of energy from CHP
9. Extends onsite generation to any customer connected with a pipe
10. Public Private Partnerships (P3) Performance contracting on
steroids
11. CHP- PS as an option is easier than other EE because of generation
so it looks more like a RE PS and RECs
12. Best use of funds is our job

23. For More Information
Visit NJCleanEnergy.com/SSB
Call (866) NJSMART