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.
Even 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.