New Jersey’s Clean Energy Program: 2010 Renewable Energy Plan

1. New Jersey’s Clean Energy Program: 2010 Renewable Energy Plan Market Manager Budget Recommendations DRAFT July 21, 2010

2. Timeline for Honeywell 2010 NJCEP Filing 2010 program overview to Committee: July 21 Committee feedback to MM: July 24 Present to Clean Energy Council: July 31 Complete Plan Draft to OCE staff: Aug 14 Final Plan filed with BPU: Sept 14

3. Purpose of Presentation • Review proposed renewable program changes • Review proposed Renewable Energy Incentive Program (REIP) and Clean Power Choice (CPC) budgets • Review next steps

4. Key Points to Keep in Mind • Budgets & savings built from “bottom up” • By measure for incentives and savings • By contract line item for non-rebate costs • Market Activity for Rebate Systems Remain Strong • New Contractor Participation • On track to meet Participation projections for 2009

5. Context • Solar Rebate Markets Remain Strong • Complimentary Utility efforts – securitization and financing • Increased public interest • Extension of the ITC • Industry cost declines • Many communities interested in what they can do in RE • Potential Pitfalls • Extended or worsening economic slow-down • Assessment of recent legislation on prevailing wage impacts

6. Renewable Energy Incentive Program Overview • REIP Design • Maintain funding cycle model –remove buffer mechanism • Maintain residential incentive capacity block step-down (implement step-down for non-residential incentives) • Maintain EE requirements for residential / implement EE requirements for C/I • Potential increase for wind system size up to 1 million kWh per year estimated annual production • Extend completion deadline for wind and public projects • Program requirement for metering all projects (pending Board Order/Rule-making) • Entity cap modifications

7. Budget Setting for REIP • Review 2009 Activity to Date • Solar on Track to fully expend 2009 funds – funding cycles appear approximately correct in size and duration • Non-solar new market activity continues to lag from 2009 budget

8. Budget Setting for REIP • 2010 Expected Capacity Block incentive reductions: • Standard Residential: $1.75/Watt  $1.55/Watt • Average rebate from ~$13,000  $11,500 • Standard Non Residential: $1.00/Watt  $.90/Watt • Average rebate from ~$25,000  $22,500

9. Budget Setting for REIP • Initial Projections 2010 Volumes: • Residential: • ~1700 new solar projects • Non Residential: • ~500 new solar projects • New Solar Incentive Budgets: • ~$20 million Residential • ~$11 million Non-residential • Wind and Biopower: • $5 million each • REIP Total: • ~$46 million ($41 million new rebates) funding for 2010

10. 2010 Clean Power Choice • Stimulate the development of a voluntary market for renewable energy that complements the RPS compliance market • Supports the Energy Master Plan and other policy initiatives • Verify REC purchases by CPMs on the product claims made by them to ratepayers • Engage local New Jersey communities through Clean Power Partners in support of renewable energy • Examine links to Community Renewable facilitated by potential RPS rule changes • Lower CleanPower Marketers (CPMs) barriers to market and encourage their active involvement in a statewide program • Utilization of the Customer Account Lookup (CAL) to grow enrollment • Continue back to back bill inserts in Spring 2010

11. Next Steps • Confirm non-REIP Renewable Budgets • Complete 7&5 Reports for Total 2010 Program Volumes and Carry-forward • Finalize Program Design and Incentive Changes

12. Preliminary 2010 RE Budgets

13. Questions and Discussion