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NEW JERSEY NATURAL GAS: DEMAND-SIDE MANAGEMENT PLAN SHOULD SERVE AS SPRINGBOARD TO INTEGRATED RESOURCE PLANNING WITH ELECTRIC UTILITIES

NEW JERSEY NATURAL GAS: DEMAND-SIDE MANAGEMENT PLAN SHOULD SERVE AS SPRINGBOARD TO INTEGRATED RESOURCE PLANNING WITH ELECTRIC UTILITIES
 FREEHOLD TOWNSHIP, N.J., April 14 /PRNewswire/ -- New Jersey Natural Gas Company (NJNG) today proposed a new energy conservation program, which goes far beyond traditional energy-saving measures to include innovative steps to help lower customer bills, clean the environment and meet the state's Energy Master Plan goals.
 The proposal calls upon regulators to embrace the concept of integrated resource planning among gas and electric utilities to promote energy efficiency, company officials said today.
 Demand-side management, or DSM, refers to management of the commodity's end use, which is largely accomplished through conservation programs. Integrated resource planning, or IRP, refers to the coordinated efforts among gas and electric utilities to meet consumer's energy demands efficiently.
 "Natural gas and related services have important roles to play in New Jersey's energy future," said Thomas J. Kononowitz, NJNG senior vice president for marketing and consumer services, at a public hearing on the plan held here. "The efficiency, security and environmental benefits of gas all indicate that its contributions to our service area should grow.
 "Moreover, given the complementary patterns of gas and electric demand and price, NJNG is ready to take the steps necessary to realize the synergies possible from joint, integrated planning. We are confident that the benefits from such programs can adequately compensate utility customers and shareholders and create mutually beneficial situations for all concerned.
 "Our plan has not responded to the BRC's initiative by simply seeking to comply with new requirements, but to continue the formation of a corporate focus on providing high-value, environmentally beneficial energy service," he added. "It is designed to reach outside the specific requirements of the BRC to incorporate the broader, long-term energy objectives specified in the New Jersey Energy Master Plan -- true integrated resource planning among utilities."
 The DSM plan, a 100-page document filed with the state Board of Regulatory Commissioners (BRC) earlier this year, includes proposals for continuing many current natural gas conservation programs.
 NJNG also recommends a number of options to balance its annual fuel demand and promote a cleaner environment through the increased use of gas for cogeneration, air-conditioning and vehicular transportation.
 The BRC must approve the plan before it can be implemented.
 The plan consists of three major sets of programs:
 -- Standard pricing offer pilot programs, which provide financial incentives for third-party energy service companies to conduct conservation measures for residential, commercial and industrial markets.
 -- State-mandated core programs, which provide for residential and commercial energy audits, low-income weatherization assistance, informational and educational efforts to foster conservation awareness and enhance the understanding of energy efficiency, and builder rebates and joint marketing efforts with developers on super-efficient homes.
 -- Optional core programs, which include rebates for the purchase of energy-efficient gas furnaces and water heaters, subsidized low-interest and no-interest loans for the low-income market, research and development (R&D) and program support.
 The R&D program would be designed to investigate the feasibility of new and advanced technologies to conserve gas and improve the efficiency of NJNG's distribution system. NJNG has also proposed the formation of a collaborative working group with relevant customers to develop mutually beneficial demand-side programs. The intent of both of these efforts would be to develop data for a future DSM plan.
 Kononowitz noted that NJNG's goals are "in close synchronization" with the BRC's demand-side management goals and the state's energy policy goals. They are to provide secure energy supplies and services to energy users; to encourage economic growth by providing energy services at the least cost; to protect the environment through wise and efficient energy use; and to balance energy needs and impacts through coordinated and integrated planning with other utilities.
 NJNG believes that there is only limited potential for increased efficiency and environmental improvements through natural gas conservation beyond what has already been accomplished.
 "But we know there is tremendous potential for efficiency and environmental improvements involving the strategic use of natural gas in New Jersey," Kononowitz said.
 He said that there is a serious need for better information regarding DSM conservation potential and implementation costs. A 1991 Massachusetts Institute of Technology study that focused on electric DSM found that the cost of conservation "is substantially higher than previously suggested by standard sources" and "routinely cited by policymakers." Another recent study funded by the National Association of Regulatory Utility Commissioners reported that "because of the uncertainty surrounding estimates of energy savings, regulators need to exercise caution in sanctioning DSM bidding."
 NJNG's DSM plan has been influenced by the utility's experience with its Lakewood Residential Energy Efficiency Program a decade ago. While the program yielded promising results on customer acceptance of conservation measures, it also found that dollars spent exceeded dollars saved by conservation and the actual gas cost savings proved lower than original engineering estimates.
 "Utilities and our regulators need to put forth an aggressive, yet systematic, approach that takes demand-side management one step forward to integrated resource planning," Kononowitz said. "By doing this we can craft measures that will truly make a difference."
 NJNG, the principal subsidiary of New Jersey Resources Corporation (NYSE: NJR), serves more than 315,000 customers in virtually all of Monmouth and Ocean counties and parts of Morris and Middlesex counties.
 -0- 4/14/92
 /CONTACT: Glenn J. Phillips, 908-938-1112, or David M. Klucsik, 908-938-1114, both for New Jersey Natural Gas/
 (NJR) CO: New Jersey Natural Gas Company ST: New Jersey IN: UTI SU:


CK -- NY041 -- 8180 04/14/92 10:50 EDT
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Date:Apr 14, 1992
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