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January 22, 2009

Governor Signs Energy Savings Improvement Bill



Dear Mayor:

Yesterday, Governor Corzine signed into law, A-1185/S-1537 which authorizes public entities at all levels of government to implement energy savings improvement programs (ESIP).

Under such program, a local government entity may contract with an energy services company to implement energy conservation measures through competitive contracting or public bidding. The energy services company must be a commercial entity that is qualified to provide energy savings services.  An energy savings improvement program may be financed through a lease purchase agreement not to exceed 15 years or 20 years in certain cases.

The money saved through energy efficiencies would allow all public entities to make improvements to aging infrastructure and incorporate green technology by acquiring new, efficient heating, ventilation and air conditioning equipment as well as other energy saving improvements without need for large upfront costs. Without this law, it would be nearly impossible for towns to make these improvements without raising property taxes.

When an energy service company is awarded the contract, it is required to offer the public entity the option to purchase, for an additional cost, an energy savings guarantee. If the governing body votes to accept this option to purchase, the guarantee shall insure that there will be energy savings resulting from the program sufficient to defray all payments pursuant to the lease purchase agreement. If the savings are not sufficient, the energy company is required to reimburse the public entity for any additional amounts.

Upon adoption of an energy savings improvement program by public entities, the plan shall be submitted to the Board of Public Utilities.

The purpose of the ESIP law is to protect the environment by reducing the release of greenhouse gases; reducing public entities’ energy consumption and saving taxpayer dollars.

We urge you to read the many provisions of this law, chapter 4, P.L. 2009.  It becomes effective 60 days after date of enactment.  For a copy, please contact Shirley Cade at or (609) 695-3481 ext. 114.

Very truly yours,


William G. Dressel, Jr.
Executive Director




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