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Smart Energy for a
Sustainable Future
2015/2016
Corporate Sustainability Report
Feedback We welcome your feedback on this report and our programs. To submit your comments by email, send them to CorpCommunications@sjindustries.com. For more information about our company, please visit www.sjindustries.com.
About This Report
South Jersey Industries (SJI) has long held the belief that
business success and corporate social responsibility go
hand in hand. We continue to prioritize environmental
stewardship, community partnerships, customer and
employee safety, diversity, and corporate governance
across our business.
Smart Energy for a Sustainable Future, our eighth-annual
Corporate Sustainability Report, highlights the progress
and achievements made in 2015 and 2016 for our
stakeholders.
This report was produced under the guidance of the
Corporate Responsibility Committee of the SJI Board
of Directors.
Cover photo courtesy of Lisa Batzar, SJI Human Resources Business Partner
Cape May Wetlands State Natural Area, NJ
Table of Contents
About This Report................................................................... 1 Energy at Work...................................................22
Leadership Perspective........................................................... 2 Natural Gas: Environmentally Friendly, Economical Fuel........... 23
About South Jersey Industries.................................................. 4 Environmental Policy and Goals............................................. 24
Corporate Governance............................................................. 5 Land Renewal and Management ........................................... 25
Wildlife and Wetlands Protection Efforts.................................. 25
Fueling the Economy........................................... 6
Air Quality Commitment......................................................... 26
SJI Financial Highlights and Statistics ...................................... 7 Occupational Safety and Health............................................. 28
Investments in the System....................................................... 8
Community Investment ........................................................ 10 Talent and Community........................................30
Revitalization of Atlantic City.................................................. 11 Fueling the Future of Our Employees ..................................... 31
Employee Health and Wellness .............................................. 34
Smart Energy for Life..........................................12
Fairness Training .................................................................. 34
Educating Consumers About Efficiency, Comfort and Savings... 13 Community Partnerships....................................................... 35
Utility Initiatives for Reducing Customers’ Energy Usage.......... 13 Recognition and Awards........................................................ 36
Non-Utility Initiatives to Reduce Customers’
Energy Consumption ............................................................ 18
Partnerships for Collaboration ............................................... 21
Leadership Perspective
Sustainability is more than just making the choice to We are fortunate that our industry allows us to offer a
become sustainable. At South Jersey Industries, we variety of sustainable energy solutions for customers
believe it is living that choice each day, and weighing – solutions that mitigate the customer’s environmental
each area of our business to assess its impact on footprint and resource demand, while still being
stakeholders, and on the long-term economic and economically advantageous. We take our responsibility
environmental viability of the communities where we one step further—encouraging consumers to change
live and work. their mindsets around energy usage, providing training
to students for skilled jobs in the energy industry, and
As we work to become a more sustainable organization, supporting the communities where we live and work,
SJI is committed to being a valued, supportive and both through financial and time commitments. We do
respectful corporate citizen. We are proud to be an all this while also growing the value of an investment
energy provider for more than 375,000 customers in SJI for our shareholders.
in our natural gas utility, as well as for thousands of
customers served through our non-utility businesses. Reaching our corporate objectives, and doing so
But we recognize there is still room to improve on sustainably, requires the commitment of a talented
our performance. and diverse pool of employees, a leadership team
with unparalleled experience, and a Board of Directors
This is our 8th annual Corporate Sustainability Report whose expertise and commitment continues to guide
and within it we continue to highlight both business us to success. I am grateful to each of these groups,
and social responsibility results in driving our strategic as well as to the customers who turn to us each and
priorities. These outcomes, pursued with a consistent every day. It is for them, and for their families and their
focus on safety, diversity, corporate governance, businesses, that we continue down the path toward
environmental stewardship, and social investment, sustainability.
also represent our opportunity to deliver exceptional
service to our customers.
Michael J. Renna
President and CEO
October 2016
2 SJI Corporate Sustainability Report
OUR VISION
To be the Energy Company of First Choice for
Customers, Shareholders and Employees
• Energy Industry Leader
• Growth, Innovation, Service
• One-Stop Energy Shopping
• Entrepreneurial Leadership, Strategic Alliances,
Empowered Employee Base
• Serving the Collective Good of Customers,
Shareholders, and Employees
OUR MISSION
Create Value through Customer-focused Energy
Solutions
• Maximize Long-Term Shareholder Value
• Expanded Menu of Products and Services
• Competitively Priced, Innovative, and High
Quality
• Improved Growth of Stock
• Value Added Provider of Energy Solutions
• Returns Exceeding Traditional Regulation
OUR VALUES
• Live up to Commitments and Conduct
Our Business Guided by the Highest Set
of Principles
• Commitment to Customers, Shareholders,
Employees, and Community
• Integrity
• Highest Standards of Safety
• Innovation
• Performance
• Respect
Photo courtesy of Shelly Parkhurst, SJI Executive Assistant
Lake at Batsto Park, Batsto, NJ
SJI Corporate Sustainability Report 3
Our stakeholders include employees, customers, public officials,
agency regulators, environmental and conservation experts, teachers
and educational institutions, and investors, to name a few. We work to
collaborate with, involve, consult, and inform appropriate stakeholders on
a regular basis. To help accomplish this, our employees serve as members
of utility, energy, and financial associations, board members of nonprofit
and business groups, and advisors to other entities on an ad hoc basis.
About South Jersey We started as a utility business in 1910. Back then, SJI
was Atlantic City Gas Company serving customers in
Industries Atlantic City, NJ. Today, SJI is an energy services holding
South Jersey Industries (SJI) is a customer-focused company spanning eight states, comprised primarily
business of energy professionals serving homes, of a natural gas utility, South Jersey Gas (SJG), and
workplaces, schools, hospitals and more. We do this a group of non-utility energy businesses under South
through the operation of a natural gas utility; as a Jersey Energy Solutions (SJES).
provider of wholesale gas and retail gas and electric;
and as a developer of commercial energy production SJG delivers clean, efficient natural gas, and promotes
projects. We help our customers warm their homes or energy efficiency to more than 375,000 residential,
businesses, dry their clothes, heat their water, and cook commercial and industrial customers in the seven
their meals. And as the use of natural gas continues to southernmost counties of New Jersey. In 2015, SJG
grow, we will provide the resources needed to help drive contributed 67 percent of SJI’s Economic Earnings.
cost-effective and efficient electricity generation.
SJES promotes efficiency, clean energy technology and
renewable energy by:
• Developing, owning, and/or operating on-site
JI is an energy services holding company
S energy production facilities, including Combined
with facilities, operations, and interests Heat & Power, Solar, District Heating and Cooling,
spanning eight states.
and Landfill Gas-to-Energy;
• Providing wholesale commodity marketing and fuel
supply management services;
• Acquiring and marketing natural gas and electricity
to retail customers; and
• Offering HVAC and other energy-efficiency related
services.
Also, under the SJI regulated umbrella is SJI
Midstream, formed in 2014 to house our interest
in the PennEast Pipeline project.
SJI is headquartered in Folsom, NJ and employs over
730 people in a variety of roles. The company’s stock
is traded on the New York Stock Exchange under the
trading symbol SJI.
4 SJI Corporate Sustainability Report
74.4M
375K+ dekatherms
Utility Customers in 113
Southern NJ Municipalities
1.7%
Customer Base
of Gas Sold
and Transported
Growth in 2015 in 2015
Corporate Governance The board maintains five standing committees: the
Audit Committee, the Compensation Committee, the
SJI is governed by an 11-member Board of Directors, Corporate Responsibility Committee, the Executive
10 of whom are not SJI employees. Our Board of Committee, and the Governance Committee.
Directors, elected by the shareholders, is the company’s
ultimate decision-making entity, except with respect SJI received the Corporate Board Gender Diversity
to matters reserved for shareholder consideration. Award in 2015 from Executive Women of New Jersey
The board includes Michael J. Renna (SJI President (EWNJ) for leading the way in boardroom gender
and CEO), Walter M. Higgins III (Chairman), Sarah M. diversity. In October 2016, the Forum of Executive
Barpoulis, Thomas A. Bracken, Keith S. Campbell, Women will recognize SJI and other companies
Victor A. Fortkiewicz, Sheila Hartnett-Devlin, Sunita where women directors comprise at least 25 percent
Holzer, Joseph H. Petrowski, Joseph M. Rigby, and of the Board.
Frank L. Sims.
South Jersey Industries
Regulated Non-Utility
South Jersey Gas SJI Midstream South Jersey Energy Solutions
Regulated Natural FERC-Regulated
Gas Distribution Gas Pipeline/Projects SJ Energy Services SJ Energy Group
Company
• Energy production • Wholesale and retail
assets (solar, CHP natural gas and
and landfill gas to electric commodity
electric) marketing
Customer Composition • Meter reading, • Fuel management
HVAC and appliance services
0.1% maintenance
Industrial
6.6%
Commercial
93.3%
Residential
SJI Corporate Sustainability Report 5
Fueling the Economy
$440M
Investment
in South Jersey Gas’ 6,490 Miles
Infrastructure from 2009-2017 of Utility and
Distribution Mains
South Jersey Industries stimulates significant economic
activity in the region, both directly and indirectly.
As one of the largest employers in the region, we paid
base salaries totaling $60.4 million to approximately
730 employees in 2015.
We also fueled significant indirect employment as a
result of the more than $210 million spent by our utility
business alone with vendors and partners in 2015, Additionally, our charitable donations and sponsorships
a number of whom qualify for our Supplier Diversity of nonprofit and business organizations through our
Program. Of note, $186 million of these funds were community investments add to the impact we make on
spent with New Jersey-based businesses. These funds the economy. Details of our Social Investment Program
were paid to pipeline construction subcontractors, are provided on page 37.
environmental consulting and testing firms, small
business owners, traffic control firms, temporary staffing
firms, law firms, municipalities for permitting and traffic SJI Financial Highlights
control, information technology firms, engineering and
design entities, pipe and valve distributors, uniform
and Statistics
companies, facilities management and janitorial The repositioning executed within our business during
companies, among many others. 2015 and 2016 emphasized the tenets of our forward
strategy to deliver meaningful growth for our business.
If we expand our scope across all of South Jersey As we reinforce the foundation for growth and long-term
Industries, the economic impact we have increases success, we’ve set our sights on the year 2020.
exponentially. The dollars exchanged with vendors
in our utility and non-utility businesses, as well as Guided by the corporate strategic objectives of growing
the roughly $66 million paid in dividends to our earnings from high-quality, regulated and contracted
shareholders, fuel significant economic growth and assets, while minimizing risk and maintaining a strong
opportunity both within and well beyond the southern financial position, we are focused on delivering $150
New Jersey region. million of Economic Earnings by 2020. Further,
SJI expects as much as 80 percent of earnings in 2020
to come from utility and other regulated investments.
Through June 30, 2016, income from continuing
operations on an Economic Earnings basis was $65.7
million or $0.89 per diluted share, as compared with
$60.8 million or $0.89 per diluted share in the same
period in 2015.
For more information about SJI’s 2016 performance
to date and the non-GAAP measure of Economic
Earnings, please visit www.sjindustries.com to view
SJI’s earnings news releases.
SJI Corporate Sustainability Report 7
500 mi.
Aging Mains
Replaced
Investments in the System SJG currently has two infrastructure improvement
programs underway:
Enhancing the reliability and safety of our distribution
• Accelerated Infrastructure Replacement
system is at the core of South Jersey Gas’ operation.
Program (AIRP) focuses on the replacement of
We use what we’ve learned from our experiences, as
aging cast iron and bare steel infrastructure in our
well as the experiences of other utilities, to continually
distribution system on a fast-tracked timeline. From
improve our system.
2012 to 2016, the program is estimated to create
141 jobs annually and invest $141.2 million in
For this reason, South Jersey Gas has worked
service territory safety and reliability enhancements.
collaboratively with the New Jersey Board of Public
Utilities to aggressively address aging infrastructure. This • Storm Hardening and Reliability Program
infrastructure must be replaced to achieve operational (SHARP) concentrates on the replacement of
efficiencies and continue the employment benefits our low-pressure mains along the barrier islands
created by main replacements programs. The current in SJG service territory in defense of significant
low price of natural gas makes this the right time to weather events. Between 2014 and 2017, system
make these investments, while still keeping customer investments totaling $103.5 million are planned for
rates lower than they were 15 years ago. this program, with a job creation estimate of 138
jobs annually.
Over 500 Miles
and Still Going
From 2012 to 2016, we’ve replaced
over 500 miles of older mains: the
equivalent to the distance from
Niagara Falls to Cape May.
Niagara Falls,
NY
Cape May, NJ
8 SJI Corporate Sustainability Report$103.5M
Investment
in Coastal
Community Storm
Hardening and
Reliability through
June 2017
Both programs involve partnerships—planning and Future Investment Opportunities
coordinating activities—with town officials to minimize
Even though we have made significant progress through
disruption for communities.
the current AIRP program, there was still approximately
700 miles of bare steel and cast iron mains in need of
SJG’s initial system investment efforts began in 2009,
replacement at the end of 2015. It is our hope we can
creating jobs in support of New Jersey’s Economic
partner further with the NJBPU to continue this critically
Stimulus Plan while improving the natural gas delivery
important work. As such, we have requested approval
infrastructure. Since then, the NJBPU has approved
from the NJBPU to invest an additional $500 million
several proposals by SJG to continue its infrastructure
over the next seven years to extend our efforts
improvement programs, totaling $440 million into 2017.
to increase safety and reliability in the years ahead.
With the accelerated infrastructure replacement
programs that have been in place since 2009, and if
the NJBPU approves our proposal to continue making
these improvements to our system, elimination of all
bare steel and cast iron in our system will complete by
2021, as opposed to what would have otherwise been
a 50-year capital improvement schedule.
SJI Corporate Sustainability Report 9$985K
in Grants
Awarded to
Community
Revitalization
Programs
Mural Title: Glasstown Arts District Under Construction. Artist: Maryann Cannon
Community Investment Our grant funded numerous activities throughout the
community, including:
Neighborhood Revitalization • down payment and closing cost assistance to
attract new home buyers;
Tax Credit Program
• 10-week summer camp, back-to-school fair,
In May 2016, SJG provided a grant award totaling
neighborhood cleanups, and fitness and education
$985,000 through the Neighborhood Revitalization Tax
programming;
Credit (NRTC) program to the Holly City Development
Corporation in Millville, NJ. The program, administered • mural arts project featuring a professional muralist
by the New Jersey Department of Community Affairs’ and two local artists (reflected above); and
Division of Housing and Community Resources, • small grants for non-traditional capital projects with
provides community-based nonprofit groups with a community-wide benefit.
funding from corporate contributions for neighborhood
revitalization projects. Since the creation of the
NRTC program, 34 corporations have contributed
$88,081,000 to fund 29 neighborhood revitalization
plans in 15 urban municipalities throughout the state.
Photo courtesy of Maryann Cannon
10 SJI Corporate Sustainability ReportProudly
Proudly Serving
Serving
Customers in
106 Years
Since 1910
of Proudly
Since
Proudly
1910
Serving
Serving Customers
inAtlantic
AtlanticCity
City
Revitalization As of late September 2016, proposals are still in
development for a design of our new office at the
of Atlantic City Gateway Project, adjacent to the proposed Stockton
SJG and Atlantic City have a long history together. Island Campus, which would consolidate multiple
Our roots there were laid in 1910 when one of our leases that host staff across the region. This new
predecessor companies began serving customers as office could accommodate SJG employees while also
Atlantic City Gas Company. Today, we share the vision supporting the economic diversification of the city.
of most elected leaders, economists and the region’s
business community that a greater economic diversity Folsom, NJ has been the corporate office location for
in Atlantic City, NJ, will help it once again become South Jersey Industries for more than 40 years. It will
an economic engine for the region, and the state continue to be our headquarters, housing nearly 200
as a whole. employees. This site will also be upgraded over the
next two years. The proposed location mix will allow
Recently, SJG came to need additional office space us to access talent from the Philly metropolitan area,
as a direct result of a growing and changing workforce. Delaware, shore towns, and everywhere in between.
After considering options, management became
interested in the opportunity in collaboration with the
Atlantic City Development Corporation (AC Devco) to
construct a new office in Atlantic City.
SJI Corporate Sustainability Report 11Smart Energy for Life
600K
Consumers Provided with
$58 Credit
on Customer Winter Natural
Pipeline Safety Information Gas Bills Totaling $20MAs an organization, we work as
an advocate for our customers
by focusing on energy efficiency
measures that support reductions
in energy costs and usage.
Educating Consumers Utility Initiatives for
About Efficiency, Reducing Customers’
Comfort and Savings Energy Usage
SJI is committed to providing customers with an
affordable, reliable and safe energy supply. Educating Conservation Incentive Program
consumers about the significant role they play in In 2006, SJG was one of the first utilities in the country
sustainability is an important component of this to implement a Conservation Incentive Program (CIP).
commitment. Consumers are the decision-makers Today, the program continues to encourage customers
driving the market. We give them the tools to evaluate to use natural gas more efficiently through education.
their energy usage. Our work incorporates the goals of
the New Jersey 2011 Energy Master Plan for Energy Residential, government, and business customers
Efficiency and Conservation. continue to reduce their natural gas bills by
implementing energy efficiency measures, such as
SJI’s nonregulated businesses, under South Jersey those on the following page, and lowering their usage.
Energy Solutions, work to encourage customers to The program benefits both SJG and its customers
implement energy efficient equipment and measures. by eliminating the link between utility profits and the
Their activities reduce energy consumption for our quantity of natural gas sold.
customers and simultaneously stimulate the economy
through the creation of jobs. Since inception, customers have reduced their natural
gas usage by a total of 59.9 billion cubic feet, enabling
South Jersey Gas wants customers to take steps them to save $598.7 million in energy costs, while $43
toward lowering their energy consumption. Marketing million of SJG’s net income remained protected as a
and education materials encourage residential result of CIP.
customers to think more broadly about their energy
consumption and quantity. Our social marketing
and education initiative targets 170,000+ residential
customers each year with letters and emails to
motivate them to be more energy conscious and
take advantage of energy efficiency programs.
SJI Corporate Sustainability Report 13170K
Home Energy
Reports
to Homeowners
Energy Efficiency Programs Programs promoting energy efficiency:
SJG offers a series of energy efficiency program • Residential Home Performance and Finance
incentives, in conjunction with the New Jersey Clean Energy Efficiency Program
Energy Program (NJCEP), to help customers reduce • Educates and motivates customers to take
energy usage and save money while strengthening advantage of New Jersey’s Home Performance
the local economy. with ENERGY STAR® program
• Customers receive an assessment and report
In August 2015, SJG received the New Jersey Board on how their home is losing energy
of Public Utilities’ approval for investments totaling
• SJG provides significant financing offers up to
$36.3 million both to continue and enhance its energy
$10,000 as a seven-year loan at zero percent
efficiency programs through August 31, 2017.
interest with no money down, or up to $15,000
as a 10-year loan at 4.99 percent interest
Smart Move, Jersey
• Enhanced Residential HVAC Rebate Program
• Motivates customers with existing Heating,
home to natural gas.
ter time to upgrade your
There’s never been a smar
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• SJG offers grants of $500 or financing up to
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Visit besouthjerseysm
or call 1-855-678-5860
today. $6,500 at zero percent interest for a five-year
term to eligible customers after the installation
of a qualifying heating and water system and
a free home assessment performed by an
accredited home energy auditor
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14 SJI Corporate Sustainability Report• Nonresidential Energy Investment Program Home Energy Reports Using
• Generates significant energy savings for Custom Technology
commercial and industrial customers, so they In early 2016, SJG introduced a new energy efficiency
can achieve efficiency, better environmental program in partnership with cloud-based software
results, and cost savings company, Opower. The program makes more robust
• SJG offers financing of up to $100,000 at zero energy efficiency goals achievable by providing
percent interest for a five-year term to qualified customers with personalized energy use data and
customers who are eligible for financing offers targeted recommendations.
through the NJCEP’s SmartStart, Pay for
Performance, and Custom Measures programs Since the start of the program, SJG has distributed
Home Energy Reports to over 170,000 households
• Commercial Customer Direct Install Financing
in southern New Jersey. Recent survey data from
Program
a third party, who surveyed recipients of these home
• Encourages NJCEP Direct Install participation
energy reports, will assist in determining effectiveness,
for customers whose peak demand did not
and support future improvements to maximize
exceed 150 kilowatts in any of the preceding
efficiency.
12 months
• Financing is available for the difference between Home Energy Report
February 3, 2016
the project cost and the NJCEP Direct Install Account number
We’ve put together this report
to help you
use and what you can do
understand your energy
incentive, which covers 70 percent to save.
Find a list of rebates and
energy-saving products
and services you can buy.
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SJI Corporate Sustainability Report 15100 CNG
Vehicles
in SJG Fleet
16 SJI Corporate Sustainability ReportCNG Fast Facts
Compressed Natural Gas
(CNG) for Vehicles
SJG is committed to building an infrastructure for Natural gas prices are less volatile than
natural gas vehicles in order to benefit businesses,
diesel and gasoline prices.
consumers, and the environment. According to the U.S. Energy Information
Administration, natural gas prices are projected
SJG Conversion Agents work with businesses to to remain relatively stable for the next 20 years or
analyze the anticipated return on investment of a longer. Gasoline and diesel prices are anticipated
fleet before they make the switch to CNG. To help to rise significantly during that same time period.
make conversion possible for more businesses and
government vehicle fleets, we continue to add to
our existing fueling station infrastructure.
CNG is the cleanest-burning commercially
available alternative fuel today.
We recently partnered with Wawa to open a CNG
station at their location in Paulsboro, NJ. This When used for vehicles, it improves air quality
partnership is the first of its kind in the region following through significant reductions in greenhouse gas
models used by other natural gas utilities across emissions compared to gasoline and diesel. By
the country. There are now eight CNG fueling converting 100 vehicles in our fleet, we’ve already
stations in South Jersey serving the general public eliminated the use of approximately 265,700
as shown below. gallons of gasoline per year and reduced our
greenhouse gas emissions by 662 tons per year.
SJG introduced its 100th CNG vehicle to its fleet in May
2016 and is committed to converting its entire fleet by
2020. Once fully converted, SJG will have eliminated the
Natural gas as a transportation fuel helps
use of approximately 457,000 gallons of gasoline per
reduce our dependence on foreign oil.
year. We will also lower our greenhouse gas emissions
by 1,139 tons per year. That’s the equivalent of taking Domestic gas production accounts for nearly
219 passenger cars off the road. 93 percent of all natural gas consumed in the
United States and shale gas production now
accounts for about 50 percent of gas produced.
CNG Station
Locations
SJI Corporate Sustainability Report 17500
TRUCKLOAD
SHIPMENTS
SAVED
Partnerships for Improved Service, Construction of the unit is complete and it is planned to
be in service in November 2016. Once operational, the
Smaller Environmental Impact
liquefier will offset more than 500 truckload shipments
Millennium Account Services, our joint venture of LNG per year. The project generated significant
investment with Conectiv Solutions, has provided purchasing and contractor support. In addition to
meter-reading services to SJG and Atlantic City Electric adding personnel to operate and maintain the plant,
for the past 17 years. Since the two service territories the project’s capital expenditures were approximately
overlap in many areas, the joint venture was the most $35 million with nearly 25,000 hours worked during
cost-effective and environmentally friendly way for the construction.
companies to have customer meters read.
This joint venture has allowed each utility to: Non-Utility Initiatives
• conserve 19,341,278 miles;
to Reduce Customers’
• avoid the consumption of 1,265,944 gallons of fuel;
• prevent the discharge of 25,297,080 pounds of
Energy Consumption
carbon dioxide into the atmosphere. Our non-utility businesses remain uniquely positioned
to advance New Jersey’s clean energy objectives.
Creating LNG Locally
In order to ensure that demand for natural gas can be
The Power of Aggregation
met during peak periods of high customer use, SJG In 2015, South Jersey Energy won the Alliance for
began construction in mid-2015 of a liquefier at our Competitive Energy Service (ACES) contract with the
McKee City, NJ Liquefied Natural Gas (LNG) facility. New Jersey School Boards Association. Then, in early
2016, SJE won three community ‘resident energy
The McKee City facility will now have the capability aggregation’ or municipal contracts. These acquisitions
to draw natural gas from the utility’s existing pipeline helped SJE meet and exceed its sales goals, while
system, turn it into LNG at extremely low temperatures lowering energy costs for residents and helping school
through the newly constructed liquifier, store it in the districts direct more of their available funds to the
existing double-walled, insulated storage tank, and children they educate.
then warm it back into a vaporous natural gas and
infuse it into the piping infrastructure. Natural gas Under the ACES contract, SJE serves roughly 2,600
usage changes throughout the year with peak needs accounts across approximately 185 school boards.
typically occurring in the winter months. The liquifier To date, the program has saved $8.4 million for
is anticipated to run up to 200 days per year depending participants. The contract continues until May 2017.
on winter temperatures.
18 SJI Corporate Sustainability Report$8.4M Updating, Upgrading, and
SAVED
in energy costs
Maintaining Energy Efficiency
SJESP is a leading authority in high-efficiency Heating,
for 185 New Jersey Ventilation, and Air Conditioning and plumbing services
School Boards and solutions. In conjunction with New Jersey’s Clean
Energy programs, we promote high-efficiency, ENERGY
STAR® - rated, residential heating and cooling equipment
and commercial equipment upgrades through the Direct
Install Program.
Governmental Energy
Aggregations SJESP partners with HomeServe USA®, a leading
Community Energy Aggregations recently awarded supplier of home repair programs, and has the exclusive
multi-year contracts to SJE: right to provide service to maintain customers’ equipment
for function at peak performance. This agreement allows
SJESP to continue growing its business while freeing
up resources for installation, service and maintenance
Old Bridge (OBCEA)
of HVAC systems in southern New Jersey.
• Electric supply at 15% cost savings
• Typical resident will save approximately $240
Cleaner Air through Gas
• Aggregate savings estimated at nearly
Supply to Electric Markets
$4.3 million
South Jersey Resources Group identified a niche market
as electric generation plants were required to phase out
South Hunterdon Regional Energy use of coal power. The business was able to broaden its
Cooperative (SHREC CEA) Round II scope to include contracts with these plants, especially
as natural gas became more abundant and affordable
• Electric supply at 14% cost savings
with the discovery of shale gas.
• Typical resident will save approximately $240
• Aggregate savings estimated at nearly Over the past five years, the number of fuel supply
$650,000 management agreements have increased. As a
result, SJRG has already met its goal of 10 contracts
to support the projected contribution by this area to
Eatontown (ECEA) Economic Earnings in 2020.
• Electric supply at 19% cost savings
New multi-year agreements were announced in 2016 for:
• Typical resident will save approximately $325
• Invenergy LLC, Lackawanna Energy Center power
• Aggregate savings estimated at nearly plant in Lackawanna County, PA
$1.6 million
• Caithness Moxie Freedom Power Genein Luzerne
County, PA
North Plainfield Community • Lordstown Energy Center, near Cleveland, OH
Energy Aggregation
These long-term, low-risk arrangements have helped
• Participant potential of 6% cost savings
redirect the focus of our wholesale business on securing
• Typical resident will save approximately $70 net income from contracted assets while improving air
• Aggregate savings estimated at nearly quality and potentially lowering costs for customers.
$500,000
SJI Corporate Sustainability Report 19Distribution of Assets Solar Photovoltaic
In early 2016, Energenic,® a joint venture partnership Electric Generation
between Marina Energy and DCO Energy on multiple Marina has constructed more than 194 megawatts of
energy projects, distributed their assets to better align solar projects throughout the mid-Atlantic and northeast
with the strategic objectives of each partner. Selected region. The business also operates solar arrays that
assets became wholly owned by either Marina Energy deliver power directly to the electric grid in New Jersey,
or DCO Energy. Maryland and Massachusetts. These projects include
open-field and roof-top arrays that sell power directly
Marina became the sole owner of the following energy to commercial and industrial customers through Power
facilities: Purchase Agreements.
• Marina Thermal Plant Cogeneration Facility
These solar projects have positively impacted the
• Atlantic County Landfill Gas to Electricity Facility
environment. The energy produced by our fleet in 2015:
• Salem County Landfill Gas to Electricity Facility
• Offset 100,830 tons of CO2—the equivalent of more
• Sussex County Landfill Gas to Electricity Facility
than 7,801,908,710 trees
• New Brunswick Solar
• Could power nearly 801,551 sixty-watt light bulbs
• Seabrook Brothers Solar for one year
Through Marina Energy, SJI currently owns and • Avoided the use of more than 5.6 million gallons
operates: of water by a coal-fired plant
• Cogeneration facilities
• Solar photovoltaic arrays
• Landfill to Gas to Electricity facilities
The Marina Cogeneration Facility provides power to the
Marina Thermal Facility, which ultimately powers the
Borgata Hotel Casino & Spa in Atlantic City, NJ. This
project includes a combustion turbine that generates
electricity to replace power normally drawn. Our landfill
sites generate renewable electricity to support Borgata’s
green energy objectives through a long-term power
purchase agreement.
20 SJI Corporate Sustainability Report$500K
in Contributions
Given to
Sustainable
Jersey
Partnerships for Regional Energy Action Team
Collaboration SJI executives have joined with more than 80 business,
public sector, labor and academic leaders as part of the
Greater Philadelphia Energy Action Team to capitalize
Sustainable Jersey on the benefits offered by the Marcellus and Utica
SJG is a partner and major contributor to Sustainable natural gas reserves, leveraging the region’s energy and
Jersey, a nonprofit group working with communities manufacturing assets to accelerate economic growth.
and their school districts to reduce waste, cut
greenhouse gas emissions and improve environmental The team works in partnership with the Greater
quality. Since 2012, SJG has provided Sustainable Philadelphia Chamber of Commerce to advocate
Jersey with over half a million dollars to support the for increasing the supply of low-cost natural gas
group’s southern New Jersey efforts. that is available to support heating, manufacturing,
petrochemical processing and other energy-intensive
industries. One proposed solution, additional pipeline
development from Pennsylvania shale gas wells to the
Greater Philadelphia region, would significantly enhance
efforts to attract manufacturing companies and, more
importantly, well-paying jobs, back to southeastern
Pennsylvania, southern New Jersey and northern
Delaware.
SJI Corporate Sustainability Report 21Energy at Work
25%
Reduction
of CO2 -Equivalent
Emissions by SJG
2,500sq.mi.
of Southern NJ
from 2011 - 2015
Served by SJGNatural Gas: SJI focuses on delivering energy solutions to customers
after natural gas is extracted. While SJI does not drill
Environmentally Friendly, for natural gas, we support environmentally responsible
Economical Fuel drilling by producers who comply with strict local, state
and federal regulations and regularly monitor and test to
Natural gas is a highly efficient form of energy and the
confirm that their work is proceeding safely.
cleanest burning fossil fuel. Using it to replace less
environmentally friendly fuels, such as oil and coal,
can help reduce smog, acid rain, and greenhouse gas Penn East Pipeline Project
emissions. According to the American Gas Association
In support of our commitment to provide reliable,
(AGA), it now supplies nearly one-fourth of all of the
low-cost natural gas, SJI is a partner in the proposed
energy used in the United States.
PennEast Pipeline. It is intended to deliver lower-cost
natural gas produced in the Marcellus Shale region to
Supply and Extraction homes and businesses in Pennsylvania and New Jersey
through a 118-mile underground system. It is designed
As a member of the AGA, South Jersey Industries
to service the equivalent of 4.7 million homes and offer
endorses its Responsible Natural Gas Resource
consumers additional savings through reduced gas
Development principle. We believe the domestic
transportation costs. The pipeline’s route begins in
resource of natural gas can be developed in a
Luzerne County in northeastern Pennsylvania and
responsible manner using improved technologies
ends at Transco’s Trenton-Woodbury interconnection
to provide clean, abundant, and cost-effective supply
in New Jersey.
to our customers.
The anticipated benefits of this project are best
Safe and reliable extraction, transport, and delivery of
illustrated using the experience from winter 2014. At
natural gas to consumers remain the first priority for all
that time, natural gas prices in New Jersey traded as
AGA natural gas industry members. For the role our
high as $100 per dekatherm. In the area that PennEast
utility subsidiary plays in delivering natural gas supply
will access, natural gas traded in the range of $3 to $4
and services, South Jersey Gas meets all applicable
per dekatherm. Had the pipeline been in service then,
federal, state and local regulations. In addition, we
energy costs to consumers in our state could have
interact with a wide variety of stakeholders to engage
been reduced by as much as $890 million.
in open and transparent communications.
We strongly believe that by responsibly utilizing this
resource, New Jersey can benefit from its proximity and
abundance of supply to help drive down gas pricing
in our market area through the safe and responsible
extraction and transportation of natural gas.
SJI Corporate Sustainability Report 23Environmental
Policy and Goals
We are committed to reducing our environmental
impact and continually improving our environmental
performance as an integral and fundamental part
of our business strategy and operating methods.
SJI’s Environmental Committee is comprised of
Cape Atlantic Reliability several senior executives who meet to monitor the
status of matters related to safety, the environment,
Pipeline Project
remediation, health, regulatory or legislative matters,
SJG is committed to the construction of a pipeline to and performance. The committee provides the
deliver cleaner burning, efficient natural gas to the B.L. Board regular updates of the program status.
England Generating Station, supporting its conversion
from coal to natural gas. Importantly, the new pipeline As an organization, we recognize the importance
will also help reinforce SJG’s transmission pipeline of the following environmental principles:
system with much needed redundancy, improving
• Products and operations comply with or exceed
system reliability for the 142,000 customers we serve
all applicable regulations and requirements.
in Cape May and Atlantic counties, NJ. Currently, a
disruption to the one transmission line feeding Cape • Management systems and procedures are
May County could affect service for thousands of specifically designed to minimize the use of
customers for multiple months. hazardous materials, energy and other natural
resources, minimize waste generated, and
Construction of the Cape Atlantic Reliability Pipeline is enable recycling and reuse of materials.
projected to create 75 full-time jobs, cost approximately • Minimize energy and water usage in our
$100 million, and run 22-miles long, primarily within buildings, vehicles, and processes to conserve
existing public rights-of-way. supplies and minimize our consumption of
nonrenewable natural resources.
Since this project’s inception, SJG has worked
• Continuous improvement of air, water, noise,
collaboratively and cooperatively with all of the
and light pollution from our premises and
governing agencies involved in this project, including
reduction of any impacts from our operations
the U.S. Army Corps of Engineers, NJ Department of
on the environment and local community.
Environmental Protection, NJ Board of Public Utilities,
and Pinelands Commission. We remain optimistic that • Purchase products and services that do
the project will move forward with construction in 2017. the least damage to the environment and
encourage others to do the same.
• Offer our customers the most environmentally
friendly energy supplies and encourage them
to purchase energy-efficient equipment and
implement efficiency measures.
• Communicate and promote our commitment
to responsible environmental management,
inform suppliers of our environmental policy
and encourage them to adopt effective
environmental management practices.
24 SJI Corporate Sustainability ReportLand Renewal
and Management
During the 1800s, in many towns and cities across the
United States, manufactured gas was produced from
materials such as coal and oil. The fuel produced at a
Manufactured Gas Plant (MGP) site was used to light
homes, businesses, and street lamps. Prior to World
Remediation at Discontinued
War II, more than 5,000 plants existed throughout the
country, particularly in cities and towns in the Midwest Non-Utility Subsidiary Sites
and East. When the interstate pipeline introduced In addition to the remediation liabilities associated
natural gas to the area in the 1950s, MGPs rapidly with the MGP sites, SJI also maintains environmental
disappeared. The operations of these plants left by- responsibility at several properties owned by two
products at these sites that are being cleaned up under discontinued non-utility subsidiaries. Due to historic
today’s environmental standards. activities at the sites, such as fuel storage, maintenance
and fueling, five sites previously owned by South
SJG, via our corporate lineage and historic operations, Jersey Fuel and nine sites previously owned by The
is responsible for the remediation of a number of MGP Morie Company are in various stages of environmental
sites, including two where significant remediation activity investigation or remediation. Six of the sites have been
occurred during 2016. completely investigated and remediated.
Hammonton, New Jersey Wildlife and Wetlands
In March 2016, work began at the former Hammonton Protection Efforts
MGP site located in the Town of Hammonton, NJ.
Protecting the wildlife and wetlands of our region
The remediation will address environmental impacts
is central to SJI’s environmental protection focus.
caused by inadvertent releases that occurred during
Through board memberships, sponsorships, donations,
the operation of the facility in the early 1900s. The soil
and volunteer hours dedicated to preserving and
and groundwater impacts are being addressed via a
rehabilitating natural resources, SJI has supported:
combination of excavation and offsite disposal, In Situ
Stabilization, and Monitored Natural Attenuation. In • Energy efficiency upgrades to Woodford Cedar
total, work at the site is scheduled to last approximately Run Wildlife Refuge’s rehabilitation hospital, which
12 months. treats more than 4,000 wild animals each year
• Coastal America Foundations’ initiatives in New
Swedesboro, New Jersey Jersey that protect, preserve, and restore local
aquatic habitats
Cleanup work at the former Swedesboro MGP site
began in 2015 and concluded during 2016 after a
period of approximately 12 months. During this time
approximately 40,000 tons of contaminated soil was
removed and sent for treatment at a recycling facility.
The site was backfilled with clean material and the
streets, curbs, grass, and trees were restored.
SJI Corporate Sustainability Report 2511%
Reduction
of CO2-Equivalent
Emissions in 2015
• Shore protection, beach replenishment, and
advocacy for coastal resources through Jersey
Air Quality Commitment
Shore Partnership Climate change represents a serious challenge for
virtually all industry sectors—particularly those dealing
• Marine Mammal Stranding Center’s rescue,
with energy generation and distribution. Recently, the
rehabilitation, and release of stranded or otherwise
EPA issued the Mandatory Report of Greenhouse
distressed marine mammals and sea turtles along
Gases Rule to collect greenhouse gas data and other
the 1,800-mile New Jersey coastal waterway
relevant information from large sources and supplies
• An upcoming blue carbon feasibility study so that accurate and timely greenhouse gas data is
coordinated by The Nature Conservancy to available when formulating future policy decisions.
determine the ability of New Jersey coastal
wetlands to provide carbon sequestration benefits A Mandatory Greenhouse Gas Reporting Rule required
with the ultimate goal of generating salable carbon local distribution companies, like SJG, to report yearly
credits to offset carbon emissions greenhouse gas emissions. SJG has monitoring and
• The New Jersey Audubon Society’s World Series record-keeping systems in place to estimate its annual
of Birding, a 24-hour competition to identify the emissions.
greatest number of bird species throughout the
state, with all proceeds raised dedicated to bird
conservation
Emissions Tracking
SJG tracks the greenhouse gas emissions of its
• Raising broods of Quail, a grassland bird population
natural gas delivery system annually. In 2015, SJG
requiring rehabilitation in southern New Jersey,
infrastructure emitted 85,360.43 metric tons of CO2-
through South Jersey Quail Project’s work with
equivalent emissions from its system, a decrease of
the local Boy Scouts of America
11 percent from prior year emissions. As we continue
• Horseshoe Crab rescue walks through The our progress with infrastructure replacement programs,
Wetlands Institute, where volunteers collect which remove aging infrastructure by replacing it with
information on horseshoe crab strandings and secure plastic piping, these numbers are anticipated
rescues, work to remove debris from sponsored to continue their steady decline year-over-year.
beaches, organize data, and report results to project
partners and the NJ Division of Fish and Wildlife Overall, SJG reduced CO2-equivalent emissions from
its system by 25 percent from 2011 to 2015.
26 SJI Corporate Sustainability ReportEPA STAR
Challenge Partner
to Reduce Emissions
Marina Energy tracks the greenhouse gas emissions STAR Methane Challenge
from its Marina Thermal Facility in Atlantic City, NJ on an
SJG joined the U.S. Environmental Protection Agency’s
annual basis. The energy produced at this natural gas
(EPA) Natural Gas STAR Methane Challenge Program
powered facility emitted 43,224 metric tons of carbon
in 2016 as a founding partner. The program is designed
dioxide (CO2) emissions in 2015. This is a reduction of
to provide a transparent platform for utilities to make,
approximately 111,787 metric tons when compared to
track, and communicate commitments to reduce
a traditional or conventional powered facility, such as a
methane emissions.
coal-fired plant.
We are excited to join with industry peers to make
Marina Energy has four landfill gas-to-electric projects
ambitious and transparent commitments to reducing
(LFGTE) in Atlantic, Burlington, Salem, and Sussex
our methane emission as part of our consistent focus
counties in New Jersey. The electric capacity of
on sustainability. The STAR Methane Challenge aligns
these combined projects is over 15.7 megawatts.
with our commitment to help protect our region’s
Importantly, they convert more than 31 thousand tons
environment and natural resources.
of environmentally harmful methane gas per year into
electricity capable of powering approximately 9,400
In participating, SJG will follow the Challenge’s Cast
residences.
Iron and Unprotected Steel Best Management Practice
commitment. SJG will reduce emissions by replacing
In addition, Marina Energy is committed to reducing
a significant portion of its aging bare
the amount of emissions released into the atmosphere
steel and cast iron distribution mains
by treating the landfill gas as necessary prior to its
and services over the next five
combustion in stationary engines. Both facilities in
years with modern medium-density
Burlington and Sussex counties have existing landfill gas
plastic mains and services.
treatment systems. An additional landfill gas treatment
system is anticipated to go online at the Atlantic County
facility by the end of 2017.
SJI Corporate Sustainability Report 2723 Interns
from 14 Colleges
and Universities
in 2016
Occupational Safety • Evaluate the effectiveness of company safety and
health programs, and modify programs as required
and Health to improve performance
SJI has based its safety philosophy on six principles: • Evaluate the impact of legislation or regulatory
• All injuries can be prevented actions in the areas of safety and health, and
ensure responses to the changing environment are
• Management is dedicated to
timely and appropriate
preventing injuries and illnesses
• Ensure lessons learned from safety incidents are
• All hazards can be controlled
communicated and implemented across SJG
• Safety is a condition of employment
SJG continues its commitment to reducing the number
• Employees must be trained to work safely
of Occupational, Safety, and Health Administration
• Preventing injuries is good business for everyone (OSHA) recordable incidents and preventable motor
vehicle accidents. Our goal in 2015, which continues in
Steering Committee 2016, is to aggressively pursue improvement in safety
SJG’s Safety and Health Strategic Steering Committee performance with the ultimate goal of zero injuries and
leads the development of programs by providing zero preventable motor vehicle accidents, while tracking
guidance, making decisions and establishing policies our injuries and determining the root cause of injuries.
that reduce accidents and injuries, and maintain or We are attempting to achieve top quartile performance
improve the health of our employees, contractors, among our peers by 2017.
and the general public.
Incident/
Incident/
Accident
Actual
The committee’s responsibilities are to: Targets
• Ensure safety remains a core value for the company 2015 2015
by providing oversight of safety performance and OSHA RecordableYou can also read
