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In re 20-1.1

Decided: March 26, 1987.

IN THE MATTER OF N.J.A.C. 14A:20-1.1 ET SEQ., IN THE MATTER OF N.J.A.C. 14A:20-1.9


On appeal from the Department of Energy.

Dreier, Shebell and Stern. The opinion of the court was delivered by Stern, J.A.D.

Stern

[216 NJSuper Page 298] Appellants, the New Jersey Utilities Association Inc. (NJUA) and seven major public utilities, appeal from the promulgation by the Department of Energy (DOE) of regulations concerning energy conservation (hereinafter "conservation regulations"). The regulations, codified as subchapter 1 ("Public Utilities

Programs") of Chapter 20 ("Energy Conservation Program Development and Public Utility Planning Evaluations") of the DOE regulations, relate to energy conservation measures to be taken by utilities in the State with the costs either to be absorbed by the utilities or charged to their customers. See N.J.A.C. 14A:20-1.1 et seq.

The first of the two appeals concerns a claim regarding the virtual elimination of the Board of Public Utilities (BPU) from the approval process as evidenced by section 1.9 of the regulations. Appellants contend that the BPU has statutory jurisdiction in this area and that DOE operated beyond its legislative mandate. Appellants emphasize that this is particularly true because the costs might not be included in the rate base of the utilities.

The second appeal is from the readoption of section N.J.A.C. 14A:20-1.9 while the first appeal was pending. The amendment was designed to avoid or moot the arguments advanced on the first appeal.

We affirm the promulgation of the regulations in their present form, subject to the interpretation which we give to them herein.

I.

On December 3, 1984, DOE published its proposed conservation regulations in the New Jersey Register for public comment. 16 N.J.R. 3293. Following a public hearing on November 12, 1985, DOE filed with the Office of Administrative Law (OAL) a notice of adoption of the conservation regulations. The newly adopted regulations were published on February 3, 1986. See 18 N.J.R. 290.

Following publication appellants filed their appeal from the promulgation and obtained a stay of enforcement. Appellants amended their notice of appeal to include the BPU as a respondent. Subsequently, on May 19, 1986 DOE proposed readoption of section 1.9. See 18 N.J.R. 1092. Section 1.9 in its present

form was adopted and published in the New Jersey Register on July 21, 1986. See 18 N.J.R. 1485.

Following the readoption of section 1.9, appellants filed a second notice of appeal challenging the DOE authority to proceed with the readoption process pending disposition of the original appeal. We consolidated the appeals.

II.

The energy conservation regulations require that all electric and natural gas public utilities in the state periodically submit to DOE a proposed plan for energy conservation containing certain specified program elements. These plans are to be reviewed and approved by DOE, which is to conduct an evaluation of the adequacy and feasibility of each plan. N.J.A.C. 14A:20-1.8(c). After DOE approval, the plans are to be submitted to the BPU "for review consistent with the BPU's statutory authority." N.J.A.C. 14A:20-1.9, as amended.

Section 1.1 sets forth the intent of the regulations:

The purpose of the regulations in this subchapter is to promote the rapid and effective installation and use of cost effective energy conservation measures, devices and innovations in the houses and apartments of New Jersey residents. The principal means employed by these regulations is a program of investments and loans by electric and gas utilities, marketing strategies, economic incentives, specified annual targets, and a requirement ...


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