| State of New Jersey
Department Of The Public Advocate
240 West State St.
P.O. Box 851
Trenton, NJ 08625-0851
Phone: (609) 826-5090 Fax: (609) 984-4747
|JON S. CORZINE
For Immediate Release:
March 18, 2008
|RONALD K. CHEN
STEFANIE A. BRAND
For Further Information
Rate Counsel Negotiates Agreement on PSE&G Solar Energy Plan
Consumer protections included in settlement
Newark, N.J.— Public Advocate Ronald K. Chen today announced the department’s Division of Rate Counsel has reached a settlement agreement with Public Service Electric and Gas Co. ( PSE&G), the staff of the Board of Public Utilities (BPU), and other interested parties that paves the way for the company to invest $100 million in a solar energy pilot program. Under the settlement, PSE&G will create a subsidiary that will provide loans to residential and commercial customers for the installation of solar energy systems. The loans will be paid back through the sale of the solar energy credits generated by the systems.
“This agreement establishes a promising pilot program that we hope will encourage the development of solar energy,” said Stefanie A. Brand, director of the Division of Rate Counsel. “We were successful in getting the company to agree to improve the program to provide greater consumer protections and increased ratepayer benefits,” she added.
The proposal calls for PSE&G, which filed its petition with the Board in 2007, to establish a registered subsidiary to administer the loans. PSE&G will make loans equal to about 40 to 50 percent of a project’s cost. Borrowers or developers will own the systems and repay the loans with solar energy credits earned by generating solar power. The credits will be auctioned to ensure they capture the highest market price. Participation in the program would be open to all customer groups.
Among the key elements of the agreement negotiated by Rate Counsel were:
- PSE&G agreed to revise its proposal to administer the loans through a subsidiary regulated by the Department of Banking and Insurance (DOBI). As a result, all of the consumer protections required by DOBI’s regulations would apply.
- PSE&G agreed to lower the interest rate charged to residential consumers and to auction the solar credits generated, rather than give the credits away. These provisions make the loans more attractive and affordable for borrowers.
- Although PSE&G will earn a fair return on their investment, the company agreed to absorb half of its administrative costs and not to seek recovery for “lost revenues” that may result if the program is successful and energy use declines.
“We are hopeful that the project we have negotiated with PSE&G demonstrates that investment in renewable energy can be productive for the utilities and affordable for consumers,” said Chen. “The final result should be a win-win for the ratepayers and for the company.”
The agreement is expected to be considered by the Board of Public Utilities at its April 8 meeting.
The Division of Rate Counsel is a division within the Department of the Public Advocate and represents the interests of consumers of electric, natural gas, water/sewer and telecommunications and cable TV service. Additional information on this and other utility matters can be found at the Division’s website at www.state.nj.us/publicadvocate/utility. The Department of the Public Advocate website is http://www.njpublicadvocate.gov.