New Jersey’s Clean Energy Program Opportunities for Commercial, Industrial and Institutional Buildings Gary E Finger Bus

1. New Jersey’s Clean Energy ProgramOpportunities for Commercial, Industrial and Institutional BuildingsGary E FingerBusiness OmbudsmanSeptember 2013 javascript:;

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. Program Goals • Save energy and lower operating costs • Protect environment and lower emissions • Change the business mindset: • Think high efficiency first • Encourage early retirement of equipment • Increase effective operations and maintenance • Promote renewable energy alternatives

4. Commercial & Industrial Portfolio • NJ SmartStart Buildings • Local Government Energy Audit • Direct Install • Pay for Performance • Combined Heat & Power/Fuel Cells • Large Energy Users Pilot • Benchmarking

5. NJ SmartStart Buildings Includes New Construction, Rehab, and Retrofit Projects Most Popular - Equipment Replacement Projects Prescriptive Custom Electric and Gas

6. NJ SmartStart Buildings Prescriptive Incentives – Prequalified Technologies • Electric Chillers • Natural Gas Cooling • Electric Unitary HVAC Systems & Controls • Ground Source Heat Pumps • Gas Heating • Water Heating • Lighting Controls • Variable Frequency Drives VAV Systems or ChW Pumps • NEMA Premium Motors* • Prescriptive & Performance Lighting* • Refrigeration Doors/Covers and Controls • Food Service Equipment Custom measure path for unique electric or natural gas measures not on this prescriptive list *Incentives for premium motors and T12 lighting are discontinued as of March 1, 2013, except in Hurricane Sandy areas where the date has been extended to June 30, 2013.

7. NJ SmartStart Buildings • Changes Effective March 1, 2013: • Prescriptive lighting incentives for T12 fixtures* eliminated. • The retrofit savings baseline will shift from T12s to T8s. • Incentives for premium efficiency motors* eliminated. • Motors with greater than 200 HP will continue under custom measures. • Application for fractional HP electronically commutated motors (ECMs) for refrigerated/freezer cases will become part of a new prescriptive Refrigeration Controls/Motors application. • Motor and T12 lighting incentive applications were accepted through close of business, February 28, 2013. • Approved projects must be completely installed within • one year of the program commitment date. *June 30, 2013 in Hurricane Sandy areas

8. NJ SmartStart Buildings • Custom Measures is designed for unique technologies • Incentives paid for approved projects at the lesser of three values: • 50% of project cost, or • Buy down to one year payback, or • $0.16/kWh, $1.60/therm saved in first year • Projects must have a minimum first year energy savings of 75,000 kWh or 1,500 therms to be eligible.

9. NJ SmartStart Buildings • Hurricane Sandy Enhanced Incentives • Additional incentives are available for businesses and local government buildings located within storm-damaged areas. • Equipment purchased on or after October 29, 2012 will qualify, while funding is available. • A map of eligible zip codes is available at NJCleanEnergy.com/SANDY • Buildings outside eligible zip code areas may qualify for enhanced incentives if it can be demonstrated • that damage was caused by Hurricane Sandy.

10. Enhanced Incentives • Prescriptive Equipment Incentives available through • NJ SmartStart Buildings • have been increased by 50% in areas affected by Hurricane Sandy.

11. NJ SmartStart Buildings A new line of NJ SmartStart Buildings incentives has been added for high efficiency food service equipment, including: • Dishwashers • Fryers • Griddles • Hot Food Holding Cabinets • Ice Machines • Ovens • Refrigerators & Freezers • Steam Cookers The 50% enhancement for areas impacted by Sandy does not apply to the new food service equipment incentives.

12. Streamlined Requirements Additional enhancements for buildings located in Hurricane Sandy areas include modifications to standard program requirements: • Pre-inspections and pre-approvals will be waived where appropriate, as will equipment inventory requirements for those with proof of existing conditions (i.e. maintenance records, recent photographs and energy audit reports); • Restrictions on performance lighting measures in major rehabilitation projects have been eliminated; • Planned discontinuation of incentives for premium • motors and T12 lighting has been extended from • March 1, 2013 to June 30, 2014.

13. Application Procedures Hurricane Sandy Application Procedures • Check the list of zip codes in Sandy affected areas to ensure your eligibility at NJCleanEnergy.com/SANDY. • Complete the Hurricane Sandy Certification Form. • Complete an application(s) for the appropriate NJ SmartStart Buildings energy efficiency measure. • Attach the application(s) to the Certification • Form and send it to the program manager at • the address provided on the form.

14. Local Government Energy Audit • The Audit is available for: • NJ Local Governments • 501(c)(3) Non-profit Agencies • NJ State Colleges and Universities • K-12 Schools • Covering a wide range of building types, including: • Offices • Town Halls • Police and Fire Stations • Courtrooms • Community Centers • School Buildings

15. Participants select from a list of pre-qualified auditing firms who follow strict parameters to analyze the buildings and prepare the audit report The program subsidizes 100% of the audit cost, subject to an annual $100,000 incentive cap per entity Audit generates a list of recommended, cost-effective energy efficiency measures and facility upgrades to reduce operating expenses Many of the recommended measures are eligible for additional incentives offered by New Jersey’s Clean Energy Program Local Government Energy Audit

16. Local Government Energy Audit • Audit must be performed by one of five preselected • engineering firms: • Camp Dresser and McKee, Inc. • Clough Harbour and Associates, LLP • Concord Engineering Group Inc. • Dome-Tech Group • Steven Winter Associates, Inc. • Firms selected by Department of Treasury • Rates for services posted on DOT site

17. 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 200 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% $125,000 project cap $250,000 per entity cap

18. Direct Install Features • Minimal customer investment • Generous incentives and fast paybacks • Participating contractors provide support • Average length of time for job completion, 4-6 months • Measures include lighting, occupancy sensors, pipe insulation, variable speed drives, refrigeration, HVAC and low flow water devices

19. Direct Install Contractors • Assigned by region • Assist with applications/agreements • Guide participants through program steps • Perform free energy assessments • Install cost-effective measures • Process all necessary paperwork • The list of authorized contractors is posted on NJCleanEnergy.com/DI

20. Direct Install Examples

21. Temple Beth-El • House of Worship & Offices • HVAC & Controls • 5 Packaged HVAC Units, Economizers • Programmable T-stats & Occupancy Sensors • Total Project Cost $114,052 • Direct Install Incentive $75,000 (capped) • Customer Share of Cost $39,052 • Annual Savings • 83,308 kWh, 6,478 Therms • $19,622 • Payback Period - 2 Years

22. Bob Danzeisen, Inc. • 15,000 sq.ft. Retail Building • Lighting & HVAC • Incandescents to Screw-in CFLs • T-12 Fluorescents to T-8 • 5 Packaged HVAC Units • Total Project Cost $112,964 • Direct Install Incentive $75,000 (Capped) • Customer Share of Cost $37,964 • Annual Savings • 141,311 kWh • $28,283 • Payback Period – 1.34 Years

23. Prudential Stainless & Alloys • 50,000 sq.ft. Warehouse • Lighting & HVAC • HID to T-5 • Fluorescents to T-8 • 4 Packaged HVAC Units, Economizers • Total Project Cost $110,580 • Direct Install Incentive $75,000 (Capped) • Customer Share of Cost $33,580 • Annual Savings • 140,203 kWh, 5,200 Therms • $33,073 • Payback Period – 1.02 Years

24. Galloway Township Municipal Building • 17,000 sq.ft. Office Space • Lighting & HVAC Retrofit • Screw-in CFLs, Exit Signs, T-8s • 13 HVAC Units • Economizers, Programmable T-stats • Faucet Aerators • Total Project Cost $152,148 • Direct Install Incentive $75,000 (Capped) • Customer Share of Cost $77,148 • Annual Savings • 90,620 kWh, 2,588 Therms • $16,614 • Payback Period – 4.64 Years

25. Eden Autism Services • Office Facility • Lighting & HVAC Retrofit • Screw-in CFLs, Occupancy Sensors, T-8s • 4 HVAC Units • Economizers, Programmable T-stats • Faucet Aerators, Pipe Wrap Insulation • Total Project Cost $96,741 • Direct Install Incentive $67,719 (70%) • Customer Share of Cost $29,022 (30%) • Annual Savings • 83,681 kWh, 3,079 Therms • $14,124 • Payback Period – 2.05 Years

26. Avon Foods (Roebling Town Market) • 10,000 sq.ft. Grocery • Lighting, Motors, Refrigeration • T-12 to LED Sticks • Motor Retrofit • Compressor/Freezer Door Control • Aluminum Night Covers, Novelty Cooler Shutoff • Total Project Cost $38,969 • Direct Install Incentive $27,278 (70%) • Customer Share of Cost $11,691 (30%) • Annual Savings • 66,879 kWh • $8,776 • Payback Period – 1.33 Years

27. Pay for Performance • Comprehensive, whole-building approach to saving energy in existing or new facilities • Goal is to reduce facility energy consumption by 15% or more, or 4% for eligible high-energy intensity customers • Relies on a network of program partners who provide technical services under direct contract to customer

28. 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 feetof planned space Thresholds waived for hospitals, non-profits, local government buildings, affordable multi-family housing and public universities and colleges

29. Pay for Performance Incentives Incentives up to $2 million per project, assuming both gas and electric improvements are made; $4 million annual entity cap Incentives paid out in three installments at program milestones: Completion of comprehensive energy study (“Energy Reduction Plan”) Installation completion of recommended measures End of 12-month energy savings verification period

30. Pay for Performance Partners For a complete list of approved partners, as well as information on becoming a partner, visit… NJCleanEnergy.com/P4P

31. Pay for Performance Examples

32. Rockaway ShopRite Associates Perth Amboy • 60,000 sq.ft. Existing Building • Energy Efficiency Measures • Induction and LED retail display lighting • Defrost cycling • ECM motors • New compressors and condensers • Project Cost $578,541 • Incentives $260,747 • Annual Savings 1,332,296 kWh, 226 kW, $172,151 • Payback Period: 1.85 years

33. FDR Services Corp • 27,000 sq.ft. Healthcare Laundry • Energy Efficiency (EE) Measures: • Boiler Economizer • HID/T-12s to T-8s • New High Efficiency HVAC Unit • Variable Frequency Drives on Compressors • 200 kW Combined Heat & Power (CHP) System • Project Cost $211,314 plus $980,766 CHP • Incentives $110,657 (EE) plus $200,000 (CHP) • Annual Savings and Heat Recovery • 116,002 kWh, 94,390 Therms, $130,594 (EE) • 1,244,486 kWh, 93,270Therms (CHP) • Payback Periods – EE 10 Months, CHP 5 Years

34. Wyckoff Public Schools • Eisenhower Middle School, Lincoln, Coolidge, Washington Elementary Schools • Energy Efficiency Measures: • T-12s to T-8s • Lighting Occupancy Sensors • Stream Trap Replacements • Building Automation Systems • Project Cost $1,189,879 • Incentives $201,448 (integrated with ESIP) • Annual Savings • 474,274 kWh, 34,840 Therms, $138,417 • Payback Period – 7 Years

35. ATT Corp - Bedminster • 866,020 sq.ft. Office and Datacenter • Energy Efficiency Measures: • Optimization of VAV, Fan Powered Terminal, AHU Control, Chiller & Cooling Tower Sequencing, Water Temperature & Datacenter Control Set-Points • Kitchen Hood VFD w/ Temp and VOC Sensors • VFDs: Primary, Secondary, Condenser, Hot Water Pumps and Datacenter Unit Fans • Convert Cooling Coils from 3 Way to 2 Way Valves • Re-piping Water-Side Economizer • Project Cost $1,532,205 • Incentives $731,323 • Annual Savings • 3,289,880 kWh, 49,530 Therms, $634,060 • Payback Period – Less Than 2 Years

36. Saker ShopRite • 91,707 sq.ft. Supermarket • Energy Efficiency Measures: • T-12s to T-8s, LED Retail Display • Compressor Upgrade, New Condensers • Radiant Floor Heat Recovery • Additional Wall & Roof Insulation • Reach-in Refrigerators/Freezers with LED Lights and ECM Motors, Controls • High Efficiency RTUs • Project Cost $1,201,830 • Incentives $329,205 • Annual Savings • 1,354,812 kWh, 8,790 Therms, $186,886 • Payback Period – Less Than 5 Years

37. Camelot Condominium Association • 248,358 sq.ft. Multifamily • Energy Efficiency Measures: • T-12s to T-8s, Incandescents to CFLs • Lighting Occupancy Sensors • Additional Wall Insulation • Solar Thermal Water Heater • Pool Insulation and New Heater • Project Cost $566,600 • Incentives $96,500 • Annual Savings • 341,259 kWh, $53,578 • Payback Period – Less Than 9 Years

38. Genesis Healthcare Voorhees Center • 67,079 sq.ft. Nursing Home • Energy Efficiency Measures: • T-12s to T-8s • VFD Kitchen Hood Controls • High Efficiency Space Heating • High Efficiency Water Heating Boilers • Project Cost $314,074 • Incentives $72,140 • Annual Savings • 157,612 kWh, Therms 20,590, $47,601 • Payback Period – 5 Years

39. NJ CHP Background NJ currently has 3,000 MW of CHP at 209 facilities Governor Christie’s EMP set a goal of adding 1,500 MW of CHP by 2021 or approx 150 MW per year. Market potential study performed by MA CEAC Goal was for duel economic and environmental benefits – facilities must demonstrate net benefits.

40. NJ CHP Policy – for Critical Facilities CHP more than just an emergency measure - 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

41. 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%

42. Combined Heat & Power / Fuel Cells – Large scale program All system sizes greater > 1 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% Must be “new” and no export -100% on site use

43. 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 7 projects approved 2.3 MW 5 under review 2.8 MW Large scale – 24 MW $11M – 2012 6 projects ($67.5M) ARRA - 34 MW $15 M 2010-2011

44. NJ CHP Policy – storm Response Power was out 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

45. NJ CHP Policy – Storm Response for Critical Facilities To highlight 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 from functioning. Rutgers needed to upgrade that logic as required 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.

46. NJ CHP Policy 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

47. NJ CHP Policy Pike Research estimates that the global CHP market will enjoy a period of strong growth over the next decade, and forecasts that more than 8.5 million CHP systems, mostly small residential units, will be shipped between 2011 and 2021. With reduced natural gas prices, CHP has become more popular in the U.S. The DOE goal is to reduce these costs to $1000 per kW , which is expected to support increased demand for micro CHP products. http://www.navigantresearch.com/newsroom/combined-heat-and-power-unit-shipments-to-total-8-5-million-by-2020.

48. Combined Heat & Power Examples

49. Viking Yacht • 500,000 sq.ft. manufacturing facility • Combined Heat & Power (CHP) • 390 kW installation consisting of six 65 kW inverter-based, grid connect microturbines with integral heat recovery modules • Three 30-ton absorption chillers • Project Cost $2,367,006 - Incentives $877,500 • Annual Savings 979,928 kWh generation, 7,360 MMBtu recovered waste heat to offset 85% of the facility’s electrical load and 100% of the heating and cooling loads • Annual Cost Savings $111,902 • Payback Period 10.5 Years • 200 new jobs added; additional 175 jobs by end of current year as a result of energy and cost savings

50. Rider University • 280 acre college campus • Combined Heat and Power (CHP) • 1,100 kW internal combustion engine with heat recovery • 80-ton absorption chiller • Project Cost $4,594,188 (estimated) • Incentives $1,000,000 • Annual Savings 8,545,053 kWh generation, 21,029 MMBtu recovered waste heat to provide 47% of campus electric load, 76% heating and hot water load, and 23% cooling load • Annual Cost Savings $527,973 • Payback Period 6.8 Years • Manufacturing and construction anticipated to generate 25 • temporary full-time jobs