It’s Time for an Energy System Based on Using Less

It’s Time for an Energy System Based on Using Less

For more than 100 years we’ve built an energy system dedicated to keeping the lights on and gas flowing safely and reliably to serve our customers. That’s not going to change. But what if we put at the heart of our energy system the idea of doing more with less?  It’s an idea whose time has come.

Let me explain why.

First and foremost, we need to take bold action to address climate change. And, to safeguard our planet while keeping energy as reliable and affordable as possible, we will need to give the highest priority to energy efficiency – the best tool we have to do more with less.

Indeed, energy efficiency is indispensable if we are to turn an unprecedented challenge into an extraordinary opportunity for economic growth and development – and a safe, secure and prosperous future for our children and grandchildren.

So, I applaud the U.S. Environmental Protection Agency for developing a Clean Power Plan that designates energy efficiency as a primary building block of efforts to reduce greenhouse gases. There’s solid evidence to back this forward-looking step:

  • A study by the consulting firm McKinsey found that by reducing demand, efficiency improvements could move the world 25 percent closer toward what needs to be done to avoid the worst impacts of climate change.
  • Similarly, the American Council for an Energy Efficient Economy reports that energy efficiency could yield a 26% reduction in greenhouse gas emissions.

Of course, we will need a diverse range of clean energy solutions to tackle climate change – including low- and zero-emitting power resources such as renewables and nuclear energy. But energy efficiency has the remarkable advantage of being the lowest-cost solution: The cheapest, cleanest energy is the energy you don’t use.
info_reduce_3Even if you don’t care about the threat from a warming planet, rising sea levels or more extreme storms, you should care about how energy efficiency can lower your utility bill.

Reducing energy consumption by two percent in New Jersey could put $130 million in the pockets of consumers and eliminate 1 million tons of carbon emissions – equal to taking 200,000 cars off the road. (This estimate is based on research about what other states are doing to promote energy efficiency and our familiarity with New Jersey’s efforts).

In short, energy efficiency investments are wins for the customer, for the environment, and for our shareholders—and they create jobs.

However, for too long energy efficiency has been the forgotten option. The United States ranks 13th out of the 16th largest economies in energy efficiency, according to the American Council for an Energy Efficient Economy. Basically, most people and businesses would rather put their money elsewhere.

My utility is eager to step up and be the investor. Indeed, utilities can be instrumental in closing the energy efficiency investment gap, putting to work our low-cost capital, our brand and customer relationships and our focus on serving everyone.

New rules can help make this happen by encouraging utilities to invest in energy efficiency improvements, much as we have traditionally invested in pipes and wires. That’s why we are such fervent advocates for a new regulatory model that doesn’t limit us to one side of the meter but allows us to do much more for our customers, especially to reduce their bills.

I’m proud of the results we’ve achieved with the energy efficiency programs that our regulators have approved in recent years, involving a total investment of about $300 million so far. For example, we have a program that helps hospitals make energy efficiency improvements, saving them more than $11.5 million a year in energy costs. Those savings can make it easier for a hospital to afford new, life-saving medical equipment, benefiting our customers who use those facilities.

We recently received approval to invest an additional $95 million in three popular energy efficiency programs, but want to do much more. Universalizing energy efficiency is doable if we build on the real advantages of being connected together in a strong network, serving all.

What can an energy-efficient future look like? People will use far less electricity than they do today – reaping benefits from lower bills, higher levels of reliability, and a cleaner, healthier environment.

Energy efficiency is empowering: It enables people to enjoy real savings without having to sacrifice or change their lifestyles. And it promotes the type of robust, competitive economy that creates jobs and supports an even brighter future for our children and grandchildren.

But these benefits won’t automatically be realized. The regulatory framework will need to be one that provides the right incentives for companies like PSEG to commit their capital, sowing the seeds of the effort.

Everyone can benefit from improved efficiency – and everyone can win if the benefit is shared. That’s the promise of energy efficiency – and the beauty of doing more with less.

ALL_BLOG_IzzoRalph Izzo,
Chairman, President & CEO

Ralph LaRossa, Chairman, President & CEO - PSEG


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  • I agree 100%. Conservation is the easiest thing we can do in response to reduce fossil fuel emissions from energy generation. At the present, alternative generation technologies are too costly and too much unknown. Many like solar or wind are fine in certain geographical areas, but not a overall solution. Major changes in the design and construction of future homes are called for and could accomplish huge energy savings. We need inexpensive energy to fuel our economy, not more expensive energy to put us at a competitive disadvantage.

  • You’ve got to be kidding with the “climate change” nonsense… More extreme storms? Really? There hasn’t been a severe hurricane since Sandy, and that was one storm out of potentially 100. Rising sea levels? According to Gore we should be living in water world by now, but last I checked the polar caps actually EXPANDED. Get off the global warming band wagon

  • Not a big fan of science are we Davey? I’m sure you’re just a troll, but I’ll bite. You do know that storms and hurricanes happen in places other than the U.S. right? Like the two Super Typhoons (that’s a hurricane if you weren’t sure) heading for China and Japan right now. To your point about the polar ice caps expanding, which I’m sure you read about in a recent article that was quickly rebuked by the entire scientific community: 1) total (or global) polar sea ice is in fact declining, according to both NASA and the University of Illinois at Urbana-Champaign’s Cryosphere Today; 2) if you analyze the Arctic and Antarctic separately — which makes more sense to do, as very different things are happening to sea ice in the two places — you realize that the Arctic sea ice decline in particular is very stark; 3) there is also bad news about the melting of ice atop land, based on data that are completely outside of this discussion, that are perhaps the most worrying of all.

    So it is hard to find anything here that should make you not worry about climate change. But last you checked that’s not true, and what does NASA know right?.

  • Hurricanes, global warming, and unusual weather patterns aside, doesn’t it just make sense to conserve energy at all levels for personal cost savings, health, and quality of life reasons? We (human beings) are consuming fossil fuels in all forms and polluting the planet at an unsustainable rate, I am in complete agreement with utilities like PSEG and businesses that are forward looking and wise enough to see that we simply can’t continue on this way. As a nation the USA is well behind in efforts to promote non-polluting sources of energy, i.e. nuclear energy and pushing our lawmakers to open Yucca Mountain to safely store the waste produced by it, going a step further, we should be doing research for ways to refine and use that waste to produce additional energy. Utilities also need to champion renewable wind, solar, and hydro-electric projects regardless of the expense as the payoff is less carbon pollutants in the air we breath, less acid rain poisoning the water we drink and cook with and a brighter future we can leave to our children and grandchildren, that should be the legacy of this generation.

  • As for everything else today, I think information will play a key role. For PSE&G, we may need to know the details of what, how, and when the customers (residential to large industrial) use the energy then we can formulate energy efficiency solutions effectively. Even now, I think all the utility companies in the country do not know much of the details of their customer loads. There are baselines and good estimates but since we are looking at smart incremental changes of our energy usage, not drastic changes, knowing the details are important. A good reference point is how the utility companies approach the transformer life extension decision – by getting more information. Who would have thought of using fiber optics sensors inside transformers to measure winding and oil temperatures at specific areas.
    In our industry we implement solutions in our system based on system models that are based on some assumptions and general system data. Maybe, just an example, it will help if we know more whether the customer load is inductive, capacitive, or resistive.

    Maybe there is a billion dollar solution for cleaner environment such as installing smart service panel to every residence and large customers so we can say ” Hey you are running your pool pump 24 hours for two weeks maybe you need a smart controller” or “There is something wrong with your refrigerator, it cycles too much” or ” By the way, there is so much spike of capacitive loads last week in your facility”. Show them a chart of their (wasteful) usage, the cost to environment and what they can do to help – that is generated by PSE&G or their home computer. Little things matter when we are dealing with millions of customers. Information like this may shave off tens of MW usage daily and utilities can also operate their system smartly.

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