New Jersey released its energy master plan two weeks ago to fanfare, but challenges remain in fleshing out its goals with programs that would make business sense to utilities that could find themselves with less revenue if the plan succeeds in cutting energy use.

Lance Miller, chief of policy and planning at the state Board of Public Utilities, which is steering the energy plan's implementation, agrees that the scope and scale of some of its objectives are unprecedented. Principally, these are the massive scale of energy audits planned for buildings, finding ways to finance the improvements needed in those buildings to cut energy use and getting utilities to buy into a plan where there is less demand for their power.

"New Jersey is the first to do [energy audits] on such a big scale," Miller said of the inspection plan, which will cover 3.7 million buildings, of which 3.2 million are residential. At an average annual clip of 300,000 building inspections, Miller estimates the task would run through 2020.

The building audits would create some of the 20,000 green jobs Corzine wants on the payroll by 2020, but Miller says it's too early to forecast a number, and how those jobs will be funded - and by whom - also needs to be determined. The state Department of Labor and Workforce Development is working on training programs for these jobs; calls to that office seeking comment were not returned.

In a typical energy audit, inspectors would perform a "blower test" - sucking air out of the house to find leaks - and check appliances, insulation, vents, ducts, windows and the like, Miller says. They would then suggest upgrades or replacements to cut energy use.

The next step is to conduct a cost-benefit analysis to show how the investment in upgrades would pay for itself in energy savings, Miller says. One option is to provide the consumer with an interest-free loan to finance the initial capital cost of improvements, which could be paid through a share of the energy savings, he says.

Hypothetically, a utility prov-ider could finance a capital improvement costing $1,800, Miller says, which might cut a $400 monthly energy bill by one-fifth, or $80. The financing would be paid in 30 months if the utility provider and the consumer split the savings 3-to-1, he says, but the picture gets more complex if that financing has an interest rate, or if the savings are shared in some other ratio.

Miller says he plans to call a meeting with the seven utility distributors in the state to discuss those financing scenarios for the energy audits and investments in building upgrades. Informally, he says, representatives of the utilities said "this is something they want to get involved with."

Robert Marshall, vice president of Atlantic City Electric, in the Mays Landing section of Hamilton, says Miller's thoughts on involving utility distributors in a financing role "is a new concept, and we are still looking at it and trying to understand how it will work." He says that while his company supports many of the goals of the plan, he is studying it to see how it intersects with an energy blueprint the provider submitted late last year.

Ralph LaRossa, president and chief operating officer of PSEG, parent of provider PSE&G, says his company "has long advocated increased investment in energy efficiency and renewable energy." Specifically, he mentions a $105 million solar loan financing program, plans to invest $50 million in energy efficiency improvements and environmental studies on a possible wind farm off the coast of Atlantic City.

Even if some of those challenges find solutions, one potential sticking point is the potential revenue loss for utility companies as energy usage decreases, Miller says. He says "there are ways to offset that loss in revenue," but declines to elaborate.

Marshall says Atlantic City Electric's blueprint contains a rate stabilization plan that separates fixed costs and energy consumption, which would call for utilities to recover their fixed costs at a pre-agreed rate, while the other part of the energy bill could fluctuate depending on usage. Maryland recently adopted a similar plan, though it is too early to say if it is working well, he adds.

A week before he unveiled the energy plan, Corzine called upon utility companies to contribute half of a projected $1 billion investment in energy efficiency and renewable energy next year. He also called upon them to make full use of a $462 million investment in the state's clean energy program.

"We are going to be looking at all of the programs, but it's premature to say exactly how we will respond to them," says Ron Morano, spokesman for Jersey Central Power & Light.

Miller says each of the problems facing the plan's implementation have potential solutions, adding that it is premature to reveal his cards and that answers need to be determined after discussions with the various stakeholders involved.

Marshall expects to see rules and proposals getting firmed up by early next year. "There is a sense of urgency" from the policy planners pushing the energy agenda, he says.