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8-K - FORM 8-K - NEW JERSEY RESOURCES CORP | c98544e8vk.htm |
EX-99.1 - EXHIBIT 99.1 - NEW JERSEY RESOURCES CORP | c98544exv99w1.htm |
EXHIBIT 99.2
Investor Fact Sheet NYSE: NJR |
NJR Contacts: |
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Dennis R. Puma, Director, Investor Relations
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732-938-1229 | |
Glenn C. Lockwood, Sr. Vice President & Chief Financial Officer
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732-938-1491 |
March 30, 2010
UNDERSTANDING NEW JERSEY NATURAL GAS REGIONAL
GREENHOUSE GAS INITIATIVE FILING
GREENHOUSE GAS INITIATIVE FILING
Background
New Jersey Natural Gas Company (NJNG), the principal subsidiary of New Jersey Resources
Corporation, recently submitted a filing to the New Jersey Board of Public Utilities (NJBPU) for
approval to implement a series of energy-efficiency and renewable energy programs for residential
and commercial customers designed to help customers save money and energy, reduce greenhouse gas
emissions and stimulate market growth. These programs have been developed in line with the Regional
Greenhouse Gas Initiative (RGGI) legislation signed into law on January 13, 2008, which encourages
energy utilities in New Jersey to make investments in energy-efficiency and renewable energy
projects on a regulated basis. Section 13 of the legislation established that electric or natural
gas utilities can offer and invest in regulated energy-efficiency and conservation programs within
their service territory as well as provide and invest in renewable energy programs. The new
programs described below will augment and eventually replace NJNGs Energy-Efficiency program
currently in place through The SAVEGREENTM Project.
Program Descriptions
Residential Energy Efficiency Program
The Residential Energy-Efficiency Program (REEP) will provide enhanced rebates up to $2,000 to
residential customers installing certain high-efficiency heating, cooling or water-heating
equipment and applying for WARM or COOLAdvantage rebates through New Jerseys Clean Energy Program
(NJCEP). Customers will be required to take a Home Performance with Energy Star (HPES) Audit to be
performed by NJNG at no cost to the homeowner. NJNG will also offer discounted financing for
energy-efficiency upgrades installed as a result of the audit. Financing, up to $10,000 per home
with a repayment term up to 10 years at either 2.99 percent or zero percent, based on income and
credit approvals, will be offered through a third-party provider to qualified customers.
Access to Affordable Energy Pilot Program
The Access to Affordable Energy Pilot Program (Access) will offer residential electric heat
customers, who currently receive at least $50 in electric benefits from the Universal Service Fund
(USF), the opportunity to receive up to $7,000 to convert to high-efficiency natural gas equipment.
The USF is a statewide program that offers income-eligible customers financial assistance toward
paying electric and natural gas bills. The Access Program will provide the combined benefit of
assisting eligible customers to save energy and money by converting to a high-efficiency natural
gas heating system as well as helping to ease the statewide burden on USF assistance, which is
funded by all customers.
Commercial Energy-Efficiency Program
The Commercial Energy-Efficiency Program (CEEP) will match current NJCEP rebates available through
the SmartStart Building® program and seek to spur an increase in the number of commercial customers
installing high-efficiency equipment. By effectively doubling the incentives available to
commercial customers for the purchase and installation of high-efficiency natural gas heating,
cooling and water heating equipment such as absorption chillers, engine-driven chillers, desiccant
systems, water heaters, booster heaters, boilers and furnaces, NJNG is helping to make upgrading to
energy-efficient equipment the easy choice for commercial customers.
To help further encourage the installation of Combined Heat and Power (CHP) projects, which draw
heat and electricity from a single source such as natural gas, NJNG will also match current
incentives available from NJCEPs Pay for Performance Program. Commercial customers with a peak
demand over 200 kilowatts (kW) in any one month over the previous 12 months will be eligible to
participate. Currently, NJCEP is providing funding up to $1 million in support of CHP projects that
identify energy-efficiency measures resulting in a reduction of energy consumption by 15 percent or
more. Through CEEP, NJNG will also provide up to $100,000 for those commercial customers who may
have previously implemented energy-efficiency upgrades to participate in an Energy Reduction Plan
and assess additional opportunities to increase efficiency.
Solar Energy Program
NJNG will launch a new Solar Energy Program (SEP) similar to the program being offered by NJRs
unregulated subsidiary, NJR Home Services, however this program will be limited to homes within the
utilitys service territory. This program will help customers reduce energy costs as well as
support market growth, create jobs and reduce greenhouse gas emissions in the state. Customers in
Monmouth, Ocean and Morris counties will have the opportunity to have their property evaluated to
determine eligibility to participate in the program. Homes must have a south-facing roof that is
clear of any obstructions and be no more than five years old. NJNG will lease photovoltaic
equipment for approximately $49 a month for a six-kilowatt system over 15 years, effectively
eliminating the upfront costs for customers. NJNG will install, own and operate the equipment which
will generate electricity to offset a portion of the homeowners monthly electric bill. Federal
investment tax credits and Solar Renewable Energy Certificates (SREC) will be used to offset the
overall cost of the program. At the conclusion of the lease, customers will have the option to
purchase the equipment at the fair market value or enter into another lease agreement.
Fostering Environmental and Economic Development
NJNG also plans to implement an additional program entitled Fostering Environmental and Economic
Development (FEED). The FEED program is designed to provide financial assistance for
energy-efficiency upgrades and economic development opportunities for commercial and industrial
customers. FEED will provide access to investment capital, incentives and/or discounted rates to
encourage the installation of energy-efficient equipment as well as business growth, expansion and
retention in the state. Upfront funding will be provided by NJNG with the principal and interest
repaid by the customer over an agreed upon period of time. This program provides no risk to
customers and no associated costs will be recovered through NJNGs rates.
Rate Impact
Assuming full participation, the anticipated impact for the typical residential heat customer using
1,000 therms annually will be approximately 0.6 percent, or an average of $8.14 a year, over a
15-year period. If the RGGI Programs are approved as filed, customers will see no change in their
bill before October 2011. NJNG has requested approval of its filing from the NJBPU by October 1,
2010.
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Program Costs and Recovery
NJNG has proposed that these programs run for three years from the date of NJBPU approval. If fully
subscribed, the cost of the customer incentives will be $102 million to be recovered through NJNGs
current energy-efficiency rider. NJNG will recover the program costs at its weighted average cost
of capital of 7.76 percent. A financial summary for the first three years of the program, assuming
full participation and based on traditional ratemaking assumptions, is below.
2011 | 2012 | 2013 | Total | |||||||||||||
Pro-Forma Income Statement Summary ($000) |
||||||||||||||||
Operating Revenue
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||||||||||||||||
Revenue Requirement |
$ | 9,827 | $ | 13,316 | $ | 17,012 | $ | 40,155 | ||||||||
SREC Revenue |
1,921 | 3,404 | 5,144 | 10,469 | ||||||||||||
Total Revenue |
11,748 | 16,720 | 22,156 | 50,624 | ||||||||||||
Operating Expenses |
11,180 | 15,076 | 19,548 | 45,804 | ||||||||||||
Net Income |
$ | 567 | $ | 1,643 | $ | 2,608 | $ | 4,818 | ||||||||
Pro-Forma Net Income by Program |
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Residential |
$ | 225 | $ | 671 | $ | 1,083 | $ | 1,979 | ||||||||
Commercial |
16 | 59 | 140 | 215 | ||||||||||||
Access |
7 | 20 | 32 | 59 | ||||||||||||
Solar |
319 | 893 | 1,353 | 2,565 | ||||||||||||
Total |
$ | 567 | $ | 1,643 | $ | 2,308 | $ | 4,818 | ||||||||
Property Additions by Program |
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Residential |
$ | 16,097 | $ | 17,507 | $ | 17,507 | $ | 51,111 | ||||||||
Commercial |
1,125 | 2,125 | 4,125 | 7,375 | ||||||||||||
Access |
500 | 500 | 500 | 1,500 | ||||||||||||
Solar |
13,995 | 13,995 | 14,010 | 42,000 | ||||||||||||
Total |
$ | 31,717 | $ | 34,127 | $ | 36,142 | $ | 101,986 | ||||||||
Forward-Looking Statements:
This Investor Fact Sheet contains forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. NJR cautions readers that the assumptions forming the
basis for forward-looking statements include many factors that are beyond NJRs ability to control
or estimate precisely, such as the impact of state and federal regulation (including the regulation
of
rates), estimates of future market conditions and the behavior of other market participants. Other
factors that could cause actual results to differ materially from the companys expectations are
set forth under the heading Risk Factors in NJRs filings with the Securities and Exchange
Commission, including its most recent Form 10-k dated November 30, 2009. NJR does not, by
including this paragraph, assume any obligation to review or revise any particular forward-looking
statement referenced herein in light of future events.
For Further Information Contact:
Dennis R. Puma, Director, Investor Relations, 732-938-1229
dpuma@njresources.com
Glenn C. Lockwood, Senior Vice President and Chief Financial Officer, 732-938-1491
gclockwood@njresources.com
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