Brattle Consultants Evaluate Expected New Jersey Ratepayer Energy Costs in 2030 in New Report

New Jersey is committed to achieving a 100% clean energy economy by 2050, and set forth policies and strategies to reduce greenhouse gases in the 2019 Energy Master Plan (EMP). To evaluate the impact of the EMP on customers’ energy costs, the New Jersey Board of Public Utilities enlisted The Brattle Group to evaluate the net cost of the EMP’s incremental programs to customers. Based on their study, Brattle consultants prepared a recent report for the NJBPU incorporating findings from the 2019 EMP study into a comprehensive model of customer rate and energy cost impacts across New Jersey.

The report evaluates expected ratepayer energy costs in 2030 under three scenarios for different residential and non-residential customer types and compares them to costs in 2020. Overall, the study found that:

• Encouraging customers to reduce consumption of electricity and natural gas and implement energy efficiency strategies lowers customer costs and is vital to achieving clean energy goals. If customers reduce their energy consumption and invest in electrification of buildings and transportation, average bills in 2030 will fall below energy costs in 2020 by between 10–20% for most customers. It is important to note that the Brattle report only looks at the impact on energy costs and does not include customer costs associated with clean energy investments, nor any new federal incentives available through the Inflation Reduction Act.
• While the results are directionally similar for the low-income customers, the Brattle report found that low-income customers are currently experiencing a high energy burden in 2020 (7.3% excluding vehicle operating costs and 10.8% including vehicle operating costs). However, energy burden may fall or at least stay the same through 2030 despite increases in electricity and gas rates, if low-income customers adopt electric vehicles and heat pumps. This implies that energy assistance programs targeting low-income customers may be key to reduce the upfront costs of electrification and energy efficiency improvements. These programs may range from providing rebate assistance for the purchase of efficient appliances and electric vehicles to on-bill financing for income-qualifying customers to be able to undertake projects with high initial capital cost requirements.
• The report also found that the annual benefit of reduced greenhouse gas emissions from implementing the State’s clean energy programs is about $1.75 billion a year in 2030. Annual greenhouse gas emissions decrease by 30% from 2020 levels by 2030 under the EMP Achievement Pathway, which is equivalent to avoided emissions from 3.4 million homes’ energy use for one year, or 5.8 million gasoline vehicles driven for one year.

The full report, “New Jersey Energy Master Plan: Ratepayer Impact Study” – coauthored by Principals Dr. Sanem Sergici and Dr. Kathleen Spees, Associate Dr. Goksin Kavlak, and Senior Research Analyst Rohan Janakiraman – can be found below.