Societal Benefits Charge (SBC)
- What is the Societal Benefits Charge?
- What programs are supported by the SBC?
- How much in SBC funding is collected each year?
- How much does the average ratepayer pay in SBC charges annually?
- How are the SBC funds used to support clean energy initiatives?
- How do New Jersey businesses and residents benefit through the Clean Energy Program component of the SBC?
Historically New Jersey utilities included funding for programs in their rates that provide societal benefits such as low income programs, nuclear decommissioning, and funding for energy efficiency and renewable energy programs. New Jersey’s 1999 electric utility restructuring legislation (EDECA) authorized the Board of Public Utilities to permit utilities to continue collecting funds for these types of programs in a restructured utility market through a “societal benefits charge” (SBC).
Six programs, which benefit both residents, businesses and municipalities, are supported by the SBC charges paid by gas and electric users. They are:
- New Jersey's Clean Energy Program
- Social Programs
- Nuclear Decommissioning Trust Fund
- Universal Service Fund
- RAC Expenditures
- Consumer Education
- New Jersey’s Clean Energy Program
The societal benefit charge funds all six programs and is collected as a non-bypassable charge imposed on all customers of New Jersey’s investor-owned electric and gas public utilities. In 2010, the utilities spent $698.2 million in support of SBC funded programs.
The SBC is a per kWh/therm charge that equates to approximately 3.8% of a customer's energy bill. Currently, an average residential electric utility customer using 8,700 kWh annually contributes approximately $56 and an average residential gas utility customer using 1,000 therms annually contributes approximately $51 to fund the SBC components.
In 2010, $229.6 million was expended to support New Jersey's Clean Energy Program. Since the inception of the Clean Energy Program in 2001 and through 2010, $1.2 billion has been expended to support New Jersey's Clean Energy Program.
In 2011 almost 80% of the SBC funds collected for the Clean Energy Program were allocated to electric and natural gas efficiency programs. The remaining funds were allocated as follows: 4.5% to renewable energy initiatives, 13.5 for clean energy manufacturing and roughly 2% for Office of Clean Energy oversight.
By reducing energy use and promoting renewable sources of energy generation, New Jersey’s Clean Energy Program helps reduce the need for traditionally generated electricity and the burning of natural gas, which eliminates the pollution that would have been caused by such electric generation or natural gas usage. The benefits of these programs continue for the life of the measures installed, which on average is about 15 years. Every dollar invested in the energy efficiency program returns $4.00 in savings for the residential customer and $11.00 in savings for the commercial and industrial customer. Funds which are allocated toward energy efficiency projects and renewable energy generation in new construction and retrofits in turn help to stimulate New Jersey’s economy with additional jobs for local trade allies. New Jersey’s leading role in renewable energy initiatives provides opportunities for various businesses in the energy efficiency and renewable energy trades. Thus, through the SBC, communities and businesses receive substantial environmental and public health benefits, lower energy bills, and a stimulated economy.
From 2001 to 2010, activities and measures supported through New Jersey’s Clean Energy Program resulted in lifetime energy savings of over 29.9 million MWh of electricity, 97.3 million dekatherms of natural gas, and 18.7 million MWh of renewable generation and 2.4 MWh of distributed generation from combined heat and power systems. These measures installed are projected to reduce over 34 million metric tons of CO2 emissions – a real step toward reducing greenhouse gases.