A new State law allows government agencies to make energy related improvements to their facilities and pay for the costs using the value of energy savings that result from the improvements.  Under the recently enacted Chapter 4 of the Laws of 2009 (the law), the “Energy Savings Improvement Program” (ESIP), provides all government agencies in New Jersey with a flexible tool to improve and reduce energy usage with minimal expenditure of new financial resources.

This Local Finance Notice outlines how local governments can develop and implement an ESIP for their facilities.  A copy of a model RFP is available on the DCA website along with an explanation of how to use it. 

The Board also adopted protocols to measure energy savings.

The ESIP approach may not be appropriate for all energy conservation and energy efficiency improvements.  Local units should carefully consider all alternatives to develop an approach that best meets their needs.  Local units considering an ESIP should carefully review the Local Finance Notice, the law, and consult with qualified professionals to determine how they should approach the task. 

For local governments interested in pursuing an ESIP, the first step is to perform an energy audit. As explained in the Local Finance Notice, this may be done internally if an agency has qualified staff to conduct the audit. If not, the audit must be implemented by an independent contractor and not by the energy savings company producing the Energy Reduction Plan.

Pursuing a Local Government Energy Audit through New Jersey's Clean Energy Program is a valuable first step to the ESIP approach - and it's free. Incentives provide 100% of the cost of the audit.