(June 23, 2008 – Newark, N.J.) - In the first proposal of its kind to be filed under New Jersey’s new legislation that addresses regional greenhouse gases, Public Service Electric and Gas Company (PSE&G) today unveiled a new program designed to curb customers’ energy consumption, resulting in lower customer bills and a meaningful reduction in carbon dioxide emissions.

The innovative filing with the New Jersey Board of Public Utilities (BPU) was made today under the recently enacted Regional Greenhouse Gas Initiative (RGGI) legislation, which encourages utilities to invest in conservation and energy efficiency programs as part of its regulated business. The legislation, signed into law on January 13, 2008, requires the BPU to review and act on the filing within 180 days.

“The RGGI legislation rightly recognizes the important role utilities like PSE&G can play in helping customers use energy more efficiently,” said Ralph LaRossa, PSE&G president and COO. “It’s clear that meeting our state’s goals to reduce harmful carbon emissions will take more than just talking about conservation. We need to give customers – especially those in our urban centers -- greater direct access to energy-saving tools and information that will lead to concrete, meaningful reductions.”  

Through a number of small-scale sub-programs, the company will provide energy-saving measures such as home energy audits, programmable thermostats, attic insulation and high-efficiency lighting upgrades to about 30,000 residential and business customers. The proposal, if approved by the BPU, would enable the utility and regulators to determine the best way to implement broader initiatives to reach the state’s aggressive carbon reduction goals.

Several of the sub-programs are targeted to those customers who find it the most difficult to make the up-front investments in energy-saving measures, LaRossa said.

”Achieving our state’s ambitious goals will require that everyone has access to the same energy-saving tools, whether you live in a city like Trenton or Newark or the suburbs. We want to provide the same universal access to conservation and efficiency programs as we do for safe, reliable electric and gas service.” 

PSE&G will invest up to $45.9 million in this energy efficiency and conservation program over four years. Two of the sub-programs will be available to eligible customers in Trenton and Newark during the initial year. In the following years, they will be expanded to customers in additional municipalities that contain Urban Enterprise Zones (UEZs) within PSE&G’s service territory. There are also two program segments that focus on improving efficiency in hospitals.

The filing seeks to recover the investment, not otherwise repaid by customers participating in the programs, through an energy-based charge. Under PSE&G’s proposal, a typical residential electric customer would pay about 12 cents per year and the typical gas customer would pay 42 cents per year in the first year of the program.

PSE&G’s carbon abatement proposal has garnered support from various state and local officials, environmental advocates and community leaders.

“With this program, PSE&G will begin the hard work that must be done to save energy and fight climate change,” said U.S. Rep. Donald Payne, D-10, who represents Newark. “By targeting urban homes and hospitals, they are ensuring that everyone -- not just those who can afford to make the investments themselves -- will have a chance to lower their energy bills. I urge the state to approve this plan so that work can begin as soon as possible. We have no time to lose.”

Newark Mayor Cory Booker also expressed support. “As America searches for ways to save energy, we cannot ignore those who lack the money to make the needed investment in efficiency,” he said. ”It has to be a universal effort, in rich and poor neighborhoods, in suburbs and in cities. PSE&G designed this program with that principle in mind. Their program will leave us a greener state, and one where everyone has a chance to cut their energy costs through conservation. I hope the plan wins approval quickly so that work can begin.”

Raymond Ocasio, executive director of the non-profit community group La Casa de Don Pedro in Newark, said the program could offer meaningful help to local families at a time when they are facing higher energy costs.

“We’re seeing an ever-increasing demand for help with energy costs,” Ocasio said. “We can offer some help with utility bills. But the best answer is to make homes more efficient so their bills aren’t as high in the first place. La Casa helps low-income families with conservation measures now, but the need goes far beyond our reach. That’s why this help from PSE&G, a leader in energy conservation for New Jersey, is so welcome.”

“The best way to reduce greenhouse gases, pollution and energy bills is through energy efficiency,” said Jeff Tittel, director of the New Jersey Sierra Club. ”We applaud PSE&G for stepping up and doing what is right with its new efficiency program and investing in the future of our environment.”

Today’s filing follows BPU approval earlier this month of the company’s proposal to test advanced metering infrastructure (AMI) technologies in three Passaic County towns. If deployed in the future, AMI would enable customers to monitor and reduce their energy use, eliminating carbon emissions and lowering their costs during periods of peak electric demand. PSE&G will install advanced meters in17,500 homes and businesses in Wayne, Totowa and Paterson beginning this fall. 

Residential and small business programs in Trenton, Newark and other urban centers

Under the company’s proposal, two of the six sub-programs initially will be offered to customers in Trenton and Newark. Customers who qualify for the Residential Home Energy Tune-up Sub-program, for example, will receive an energy audit, including a blower door test, that will identify steps they can take to make their home more energy efficient. PSE&G will also install caulking, weather-stripping, compact fluorescent light bulbs (CFLs) and a programmable thermostat, at no charge to the customer. If attic insulation, duct insulation or duct sealing is recommended, customers may be required to repay a portion of the cost over a two-year period. After the first year, these services will be expanded to customers in additional municipalities that contain UEZs within PSE&G’s service territory.

Through the Residential Programmable Thermostat Installation Sub-program, PSE&G technicians will install new thermostats during routine utility-related gas service calls to customers in all municipalities that contain UEZs in the utility’s service territory. Customers will also receive free CFL bulbs and educational materials on how to save energy and reduce their energy bills. 

In addition to the sub-programs for residential customers, a sub-program will be available to small business owners in Trenton and Newark in the initial year, expanding to additional UEZ municipalities later in the program. Eligible customers will receive an energy assessment, and direct installation of basic efficiency measures, such as lighting upgrades, insulation, and more energy efficient refrigeration and heating and cooling systems. These customers would be required to repay a portion of the installation costs over two years.

PSE&G will work with municipal, local community and non-profit groups to identify the specific areas in which these sub-programs will be offered. This “neighborhood” approach will build upon relationships that PSE&G has established over the years with these groups and their customers.

Large business and hospital technology demonstration programs

PSE&G’s proposal also includes conservation and carbon reduction initiatives for large warehouses that could benefit from more efficient lighting systems. PSE&G is collaborating with Orion Energy Services to provide high-bay lighting equipped with lamp and ballast products from GE Consumer & Industrial, solar light pipes and a lighting control system that automatically dims the fixtures when there is sufficient natural light. The integrated lighting system will provide measurable and verifiable base and peak load demand and energy savings, and associated financial benefits to PSE&G customers. PSE&G will provide financial incentives that will enable customers to recover their investment in two years through energy and operating savings.

If approved by the BPU and implemented, the carbon abatement program is estimated to save about 723,000 metric tons of carbon dioxide over the life of the energy saving measures implemented under this program. 

The company’s proposal replaces a program it had filed with the BPU last December, before the RGGI legislation was enacted. While the expanded proposal provides similar energy efficiency and conservation services, it increases the amount of PSE&G’s investment to $45.9 million from $5 million, expands the program to additional customers in PSE&G’s service territory, and will be available to customers over a four-year period.

Public Service Electric and Gas Company (PSE&G) is New Jersey’s oldest and largest regulated gas and electric delivery utility, serving nearly three-quarters of the state’s population. PSE&G is the winner of the ReliabilityOne Award for superior electric system reliability. PSE&G is a subsidiary of Public Service Enterprise Group Incorporated (PSEG) (NYSE:PEG), a diversified energy company (www.pseg.com).