New Jersey Resources (NJR) 8-K Regulation FD Disclosure

“New Sources of Earnings –

A Primer on Our Solar

Energy Strategy”

Exhibit 99.1

New Jersey Resources

Corporate Overview

Laurence M. Downes

March 8, 2011

AGENDA

•

Corporate Overview

•

NJR Strategy

•

Solar Information

•

Solar Project -

Development Process

•

Break

•

NJRCEV Project Pipeline

•

The Sunlight Advantage (Residential Program)

•

SRECs

•

Hedging

•

ITC Accounting for Solar Transactions

REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this presentation are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  Forward-

looking

statements

can

also

be

identified

by

the

use

of

forward-looking

terminology

such

as

“may,”

“intend,”

“expect,”

or

“continue”

or

comparable

terminology

and

are

made based upon management’s current expectations and beliefs as of this date concerning future developments and their potential effect upon New Jersey Resources (NJR

or the Company). There can be no assurance that future developments will be in accordance with management’s expectations or that the effect of future developments on

the Company will be those anticipated by management.

The Company cautions persons reading or hearing this presentation that the assumptions that form the basis for forward-looking statements regarding customer growth,

customer

usage,

financial

condition,

results

of

operations,

cash

flows,

capital

requirements,

market

risk

and

other

matters

for

fiscal

2011

and

thereafter

include

many

factors

that

are

beyond

the

Company’s

ability

to

control

or

estimate

precisely,

such

as

estimates

of

future

market

conditions,

the

behavior

of

other

market

participants

and

changes

in

the

debt

and

equity

capital

markets.

The

factors

that

could

cause

actual

results

to

differ

materially

from

NJR’s

expectations

include,

but

are

not

limited

to,

weather and economic conditions; NJR’s dependence on operating subsidiaries; demographic changes in the New Jersey Natural Gas (NJNG) service territory;

the

rate

of

NJNG

customer

growth;

volatility

of

natural

gas

and

other

commodity

prices

and

their

impact

on

customer

usage,

NJR

Energy

Services’

(NJRES)

operations

and

on

the

Company’s

risk

management

efforts;

changes

in

rating

agency

requirements

and/or

credit

ratings

and

their

effect

on

availability

and

cost

of

capital to the Company; the impact of volatility in the credit markets that would result in the increased cost and/or limit the availability of credit at NJR to fund

and support physical gas inventory purchases and other working capital needs at NJRES, and all other non-regulated subsidiaries, as well as negatively affect cost

and

access

to

the

commercial

paper

market

and

other

short-term

financing

markets

by

NJNG

to

allow

it

to

fund

its

commodity

purchases,

capital

expenditures

and meet its short-term obligations as they come due; ability to comply with debt covenants; continued failures in the market for auction rate securities; the

impact to the asset values and resulting higher costs and funding obligations of NJR’s pension and postemployment benefit plans as a result of downturns in the

financial markets, and impacts associated with the Patient Protection and Affordable Care Act; accounting effects and other risks associated with hedging

activities and use of derivatives contracts; commercial and wholesale credit risks, including the availability of creditworthy customers and counterparties and

liquidity

in

the

wholesale

energy

trading

market;

the

ability

to

obtain

governmental

approvals

and/or

financing

for

the

construction,

development

and

operation

of certain non-regulated energy investments; risks associated with the management of the Company’s joint ventures and partnerships; risks associated with the

Company’s investments in solar energy projects, including the availability of regulatory and tax incentives, the development of the market for Solar Renewable

Energy Certificates, the construction and regulatory risks and the availability of viable projects; the level and rate at which costs and expenses are incurred and

the extent to which they are allowed to be recovered from customers through the regulatory process in connection with constructing, operating and maintaining

NJNG’s natural gas transmission and distribution system; dependence on third-party storage and transportation facilities for natural gas supply; operational

risks incidental to handling, storing, transporting and providing customers with natural gas; access to adequate supplies of natural gas; the regulatory and pricing

policies

of

federal

and

state

regulatory

agencies;

the

costs

of

compliance

with

present

and

future

environmental

laws,

including

potential

climate

change-related

legislation; the ultimate outcome of pending regulatory proceedings; the disallowance of recovery of environmental-related expenditures and other regulatory

changes;

and

environmental-related

and

other

litigation

and

other

uncertainties.

While

the

Company

periodically

reassesses

material

trends

and

uncertainties

affecting

the Company’s results of operations and financial condition in connection with its preparation of management’s discussion and analysis of results of operations and

financial

condition

contained

in

its

Quarterly

and

Annual

Reports

filed

with

the

Securities

and

Exchange

Commission,

the

Company

does

not,

by

including

this

statement,

assume any obligation to review or revise any particular forward-looking statement referenced herein in light of future events.

3

DISCLAIMER REGARDING

NON-GAAP FINANCIAL MEASURES

4

This presentation includes the non-GAAP measures net financial earnings (losses) and utility gross margin. As an indicator of the

company’s operating performance, these measures should not be considered an alternative to, or more meaningful than, GAAP

measures such as cash flow, net income, operating income or earnings per share. Net financial earnings (losses) exclude

unrealized gains or losses on derivative instruments related to the company’s unregulated subsidiaries and certain realized gains

and losses on derivative instruments related to natural gas that has been placed into storage at NJRES. Volatility associated with

the change in value of these financial and physical commodity contracts is reported in the income statement in the current period.

In order to manage its business, NJR views its results without the impacts of the unrealized gains and losses, and certain realized

gains and losses, caused by changes in value of these financial instruments and physical commodity contracts prior to the

completion of the planned transaction because it shows changes in value currently as opposed to when the planned transaction

ultimately is settled. NJNG’s utility gross margin represents the results of revenues less natural gas costs, sales and other taxes

and regulatory rider expenses, which are key components of the company’s operations that move in relation to each other. 

Management uses net financial earnings and utility gross margin as supplemental measures to other GAAP results to provide a

more complete understanding of the company’s performance. Management believes these non-GAAP measures are more

reflective of the company’s business model, provide transparency to investors and enable period-to-period comparability of

financial performance. For a full discussion of our non-GAAP financial measures, please see Item 7 of our Annual Report on

Form 10-K for the fiscal year ended September 30, 2010, filed on November 24, 2010.

KEY INDUSTRY ISSUES

5

•

Net Financial Earnings for the quarter

–

$.71 vs. $.66 last year, a 7.6 percent increase

•

NFE

guidance

announced

–

range

of

$2.50

to

$2.65

per

share

–

60 to 70 percent from NJNG

•

Implemented

a

5.9

percent

dividend

increase

effective

January

3,

2011

•

Strong results from NJNG

–

Steady customer growth

–

AIP investments

–

Higher BGSS incentive margins

•

Positive earnings contribution from NJRES and midstream assets

•

Announced The Sunlight Advantage™

1    QUARTER FISCAL 2011 HIGHLIGHTS

6

ST

FIRST QUARTER NFE

($mm)

Company

Q1 2011

Q1 2010

Change

New Jersey Natural Gas

$24.4

$23.5

$0.9

NJR Energy Services

3.2

2.5

0.7

Midstream Assets

1.7

1.9

         (0.2)

Clean Energy/Retail/Other

(0.2)

(0.5)

           0.3

Total

$29.1

$27.4

$1.7

Per basic share

$0.71

$0.66

$0.05

7

KEY FINANCIAL DRIVERS

•

New Jersey Natural Gas

–

Margin Growth from New Customers

–

Regulatory Programs

•

Accelerated Infrastructure Programs

•

Incentive Programs

•

Clean Energy Ventures

•

Midstream Assets

–

Steckman Ridge

–

Iroquois

•

Disciplined Wholesale Energy Services

•

Home Services

8

OUR BUSINESS MODEL

Safety and reliability

Competitive pricing

Steady customer growth

Rate base

investment opportunities

Regulatory initiatives

Natural Gas Distribution

Clean Energy and Retail Services

Residential solar  programs

Commercial solar projects

and ground mount solar farms

Residential and commercial

service contracts, installations

and repair services

Wholesale Energy Services

Physical natural

gas marketer

Producer services

Manage storage and

transportation assets

Synergistic midstream

investment opportunities

The Fundamentals:

•

Stakeholder Relationships

•

Strong Financial Profile

•

Disciplined Capital Allocation

•

Infrastructure, Asset Mgmt. & Service

•

Consistent Earnings and Dividend Growth

9

CONSISTENT FINANCIAL PERFORMANCE

$1.88

$2.11

$2.24

$2.40

$2.46

$2.50 - $2.65

$1.30

$1.55

$1.80

$2.05

$2.30

$2.55

2006

2007

2008

2009

2010

2011 Current

Range

September 30

NJR estimates net financial earnings of

$2.50 to $2.65 per basic share in fiscal 2011

10

2011 EARNINGS GUIDANCE

Infrastructure-based businesses expected to contribute

up to 90 percent of fiscal 2011 NFE

Clean Energy

Ventures

10-20%

Midstream

5-10%

NJR Energy

Services

5-10%

New Jersey

Natural Gas

60-70%

Home Services

& Other

2-5%

11

$0.96

$1.01

$1.12

$1.24

$1.36

$1.44*

$0.50

$0.60

$0.70

$0.80

$0.90

$1.00

$1.10

$1.20

$1.30

$1.40

$1.50

2006

2007

2008

2009

2010

2011

DIVIDEND GROWTH

* Effective January 3, 2011

12

PAYOUT RATIO

Based on Net Financial Earnings

Payout ratio provides continued dividend growth opportunities

13

OUR BUSINESS MODEL

Safety and reliability

Competitive pricing

Steady customer growth

Rate base

investment opportunities

Regulatory initiatives

Natural Gas Distribution

The Fundamentals:

•

Stakeholder Relationships

•

Strong Financial Profile

•

Disciplined Capital Allocation

•

Infrastructure, Asset Mgmt. & Service

•

Consistent Earnings and Dividend Growth

14

THE  NJNG ADVANTAGE

The NJNG Advantage is:

•Core customer growth

–

New construction

–

Conversions

•The SAVEGREEN Project™

•Regulatory incentives

15

The NJNG Advantage is the price and value benefits provided

to customers

•

Over 490,000 customers

•

$943 million of rate base

•

100 percent residential &

commercial customers

•

Favorable demographics

to support customer

growth

THE  NJNG ADVANTAGE -

OUR SERVICE AREA

NYC

Phila.

Atlantic

City

16

THE  NJNG ADVANTAGE -

SERVICE AREA

DEMOGRAPHICS

3.5%

3.9%

4.7%

12.3%

0.0%

5.0%

10.0%

15.0%

NJ

Morris

Monmouth

Ocean

Population Change 2000-2009

Source: US Census Bureau

County by County Customer Breakdown

Morris

12%

Ocean

44%

Monmouth

44%

17

$1.28

$2.68

$4.63

$4.98

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

NJNG

Fuel Oil

Propane

Electricity

THE NJNG ADVANTAGE -

FUEL PRICE

COMPARISON

Data as of January 2011. Based on

100,000 comparable BTUs

18

NJNG enjoys a distinct price advantage in its service area

89,838

7,600

2014-Build Out

Potential

New Customers = 97,438

2011-2013

THE NJNG ADVANTAGE -

NEW

CONSTRUCTION

•

Estimates based on:

•

Local construction trends

•

Economic forecasts

•

New construction market

improving

19

•

Identifying and targeting communities for conversion

–

Close proximity to natural gas lines

–

Type of fuel and equipment

•

Age and size of house

•

To encourage conversions:

–

Provide custom fuel cost comparisons

–

SAVEGREEN rebates and incentives

–

Partner with contractors

THE  NJNG ADVANTAGE

–

CONVERSION

MARKETS

20

•

1,640 new customers in Q1 fiscal 2011: 

a 14 percent increase over 1Q 2010

•

92 additional existing customer heat

conversions

•

Q1 new customers and existing customer

conversions will contribute approximately

$.9 million of new NJNG utility gross

margin annually

•

Estimate 12,000 to 14,000 new

customers over the next two years -

a growth rate of 1.2 percent

THE

NJNG

ADVANTAGE

RESULT

-

STEADY

CUSTOMER GROWTH

21

New

49%

Conversions

51%

Q1 Fiscal 2011 New Customer Breakdown

Residental

60%

Commerical

38%

Existing

2%

NJNG Gross Margin Contribution

THE SAVEGREEN PROJECT

•

Programs to encourage energy efficiency

•

Extended by BPU in September through 2011

•

Contractor partners grew from 144 to 693 in 2010

•

$10 million in incentives has created an estimated $40 million in economic

activity

•

On-bill repayment plan

–

Allows customers to fund up to $10,000 of HPwES energy-efficiency upgrades

and repay it on their bills over a 10 year period with no interest.

22

•

Off-system sales and capacity release

–

In place since 1992

–

Optimization of capacity contracts

–

Sharing formula of 85 percent customer; 15

percent NJNG

•

Storage Incentive (SI)

–

In place since 2004

–

Promotes long-term price stability

–

Promotes cost efficiencies

–

Sharing formula of 80 percent customer; 20

percent NJNG

•

Financial Risk Management (FRM)

–

In place since 1997

–

Promote application of risk management

techniques

–

Sharing formula of 85 percent customer; 15

percent NJNG

BGSS INCENTIVES

Total customer savings since

inception: $504 million

23

REGULATORY INITIATIVES

Accelerated Infrastructure Programs (AIP)

•

Investment of $70.8 million on infrastructure projects

–

Since inception in 2009, NJNG has expended $56 million (December

2010)

–

$36.4 million of AIP expenditures now included in base rates

–

Rate recovery of program spending annually at WACC of 7.76 percent

–

Has created an estimated 700 direct and indirect jobs

•

Filed with the NJ BPU for an additional $52.2 million in October

–

Amended filing increases total to $60.2 million in January

–

Decision expected by end of March

Conservation Incentive Program

•

In place through September 30, 2013; encourages customer conservation

•

Customers have saved over $174 million since inception

•

Protects NJNG utility gross margin from declining usage and weather

24

J.D. Power and Associates 2010 Gas Utility

Residential Customer Satisfaction Study

CUSTOMER SATISFACTION

•

“Highest in Customer Satisfaction With

Residential Natural Gas Service in the Eastern

U.S. among Large Utilities”

•

Our Best Performance By Far

–

NJNG Score:  649

–

East Region Large Utility Average:  612

•

Our 4

J.D. Power Award

–

2002 Residential Customer Satisfaction

–

2007 Founder’s Award

–

2009 Residential Customer Satisfaction

–

2010 Residential Customer Satisfaction

New Jersey Natural Gas received the highest numerical score among large utilities in the

Eastern U.S. in the proprietary J.D. Power and Associates 2010 Gas Utility Residential

Customer

Satisfaction

Study

.

Study

based

on

61,026

online

interviews

ranking

10

providers

in the

Eastern

U.S.

(CT,

DC,

MD,

MA,

NH,

NJ,

NY,

PA,

RI,

VA).

Proprietary

study

results

are

based on experiences and  perceptions of consumers surveyed September 2009-

July

2010.

Your

experiences

may

vary.

Visit

jdpower.com.

25

SM

th

OUR BUSINESS MODEL

Wholesale Energy Services

Physical natural

gas marketer

Producer services

Manage storage and

transportation assets

Synergistic midstream

investment opportunities

The Fundamentals:

•

Stakeholder Relationships

•

Strong Financial Profile

•

Disciplined Capital Allocation

•

Infrastructure, Asset Mgmt. & Service

•

Consistent Earnings and Dividend Growth

26

•

Overall, midstream assets contributed $1.7 million to Q1 2011 NFE

•

Expected to contribute 5 to 10 percent to fiscal 2011 NFE

•

Approximately

30

percent

of

Steckman

Ridge

capacity

is

now

under

long-term contracts 

MIDSTREAM ASSETS

27

•

411-mile pipeline system running from the

Canadian border at Waddington, NY to Long

Island & NYC

•

78,100 HP of compression

•

1.2 Bcf/d of peak deliverability

•

Commenced operations in 1991

$0.8

$0.7

$1.0

$1.1

$1.5

$1.8

$2.6

$2.6

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

2003

2004

2005

2006

2007

2008

2009

2010

September 30

NJR's Iroquois Ownership Earnings

MIDSTREAM INVESTMENTS:

IROQUOIS PIPELINE

28

NJRES UPDATE

•

Value of capacity and storage has been affected by changing markets

and additional supplies

–

Resulted in lower margins

–

Continued focus on a long-option strategy

–

Disciplined risk management

•

Greater focus on Producer Services

–

Fee-based asset management

–

Over 350,000 dth/day currently under management

•

Contributed $3.2 million to Q1 2011 NFE vs. $2.5 million last year

•

Lower expected contribution to overall fiscal 2011 NFE

29

PRODUCER SERVICES

•

Producers Services encompasses two distinct efforts

–

Service Based

•

New gas resource plays have created a growing need for small to mid-

sized exploration and production companies to retain outside marketing

services to ensure flow assurance

–

Term gas supply purchase

–

Management of pipeline and storage assets

–

Nominations, scheduling and other operations functions

–

Hedging and risk management

–

Negotiation of gathering, processing, transport and other

commercial agreements

–

Asset Based

•

NJRES focus on producers with production where NJRES’

transportation and storage assets bring added value

•

Current efforts focused primarily on Marcellus Shale

30

OUR BUSINESS MODEL

Clean Energy and Retail Services

Residential solar  programs

Commercial solar projects

and ground mount solar farms

Residential and commercial

service contracts, installations

and repair services

The Fundamentals:

•

Stakeholder Relationships

•

Strong Financial Profile

•

Disciplined Capital Allocation

•

Infrastructure, Asset Mgmt. & Service

•

Consistent Earnings and Dividend Growth

31

•

Spun out from NJNG in 2000

•

Not capital intensive

•

Principally a service business                                 

(i.e., labor intensive)

•

Strong organic growth opportunities

•

High customer service levels

•

High productivity

NJR HOME SERVICES

32

2000

11%

89%

$11.3 million

$31.1 million

NJRHS –

GROWTH IN SERVICES AND

REVENUE

33

2010

2%

21%

1%

72%

4%

Service Contracts

Chargeable

Installations

Plumbing

Commercial

•

We have:

–

The fundamentals in place to achieve long-term NFE growth

•

Customer growth

•

AIP and SAVEGREEN

•

Steckman Ridge

•

Solar Investments

–

The ability to increase dividends

–

A strong financial profile

–

A collaborative relationship with regulators

–

A track record of growth and consistent results

A RECORD OF CONSISTENT

PERFORMANCE

34

NJR Strategy

REGARDING FORWARD-LOOKING

STATEMENTS

35

Certain statements contained in this presentation are forward-looking statements within the meaning of the Private Securities Litigation

Reform Act of 1995.  Forward-looking statements can also be identified by the use of forward-looking terminology such as “may,” “intend,”

“expect,” or “continue” or comparable terminology and are made based upon management’s current expectations and beliefs as of this date

concerning future developments and their potential effect upon New Jersey Resources (NJR or the Company). There can be no assurance

that future developments will be in accordance with management’s expectations or that the effect of future developments on the Company

will be those anticipated by management. 

The Company cautions persons reading or hearing this presentation that the assumptions that form the basis for forward-looking statements

regarding the Company's clean energy strategy, particularly our solar energy projects for fiscal 2011 and thereafter include many factors that

are beyond the Company’s ability to control or estimate precisely, such as estimates of future market conditions and the behavior of other

market participants. The factors that could cause actual results to differ materially from NJR’s expectations include, but are not limited to,

weather and economic conditions; the impact of volatility in the credit markets that would result in the increased cost and/or limit the

availability of credit at NJR to fund and support working capital needs at its non-regulated subsidiaries; accounting effects and other risks

associated with hedging activities and use of derivatives contracts; risks associated with the Company’s investments in solar energy

projects, including the availability of regulatory and tax incentives, logistical risks and potential delays related to construction, permitting,

regulatory approvals and electric grid interconnection, the availability of viable projects and NJR's eligibility for federal investment tax credits

(ITCs) and the future market for Solar Renewable Energy Credits (SRECs) that are traded in a competitive marketplace in the state of New

Jersey; the regulatory and pricing policies of federal and state regulatory agencies; the costs of compliance with present and future

environmental laws, including potential climate change-related legislation; and environmental-related and other litigation and other

uncertainties. Projects referred to as “under evaluation” in this presentation are not under contract and are subject to negotiation of final

terms and all of the aforementioned  risks. Additional information and other factors are contained in NJR's filings with the Securities and

Exchange Commission (SEC), including NJR's Annual Reports on Form 10-K and subsequent Quarterly Reports on Form 10-Q, recent

Current Reports on Form 8-K, and other SEC filings, which are available at the SEC's web site, http:.//www.sec.gov.  Information included in

this presentation is representative as of today only and while the Company periodically reassesses material trends and uncertainties

affecting the Company’s results of operations and financial condition in connection with its preparation of management’s discussion and

analysis of results of operations and financial condition contained in its Quarterly and Annual Reports filed with the Securities and Exchange

Commission, the Company does not, by including this statement, assume any obligation to review or revise any particular forward-looking

statement referenced herein in light of future events. 

NJR SOLAR STRATEGY

•

Consistent with our core

energy strategy

•

Three sources of investment value

•

Energy savings for customers

•

Promotes economic development

and

job

creation

(1)

–

Approximately 5 jobs created for each $1 million investment

–

$425,000 in NJ Gross State Product created for each $1 million investment

•

Supports New Jersey’s environmental goals

37

(1)

Edward J. Bloustein School of Planning and Public Policy, Rutgers, The State University of New Jersey, Economic Impacts of

Energy Infrastructure Investments, July 2010

WHY NEW JERSEY?

•

History of innovation in electricity markets

•

Deregulated power market with multiple utilities

•

High retail electric rates

•

Densely populated state with constrained ability for

new generation and transmission capacity

•

High sensitivity to environmental issues

•

Strong support for renewable energy

38

WHY NEW JERSEY?

Year

Action

1999

Electric Discount and Energy Competition Act (EDECA)

law

defines net metering, RPS, and SBC

2001

New Jersey Clean Energy Program (NJCEP)

Solar rebate

program initiated with $120 million over 4 years

2003

EDECA

modified for solar RPS carve-out with Solar ACP

(SACP)

2004

NJCEP

solar rebate budget renewed at $270 million for next

four years

2005

EDECA

modified to limit SREC’s to only NJ facilities, extended

RPS to 2021, required LSE’s to meet RPS via SREC’s

2007-8

Solar Market Transition

from rebates to SREC’s; SACP

increased from $300 to $711

2009

Board of Public Utilities

enforces $40 million SACP penalty;

initiates utility securitization programs

2010

Solar Fair Competition Act

(A3520) doubles solar RPS and the

established solar RPS and SACP cannot be reduced by BPU

action

39

MAJOR GOVERNMENTAL ROLES

Issues Energy Master Plan that

defines state direction and priorities;

Board of Public Utilities reports to

Governor

Establishes EDECA which defines

Renewable Portfolio Standard (RPS)

and Solar Alternative Compliance

Payment (SACP)

Administers NJCEP SREC registration

program and implements EDECA

40

STRONG RPS CREATES LONG-TERM

SOLAR OPPORTUNITIES IN NEW JERSEY

Energy Year End

41

The

RPS

goes

from

171

GWH

in

2010

to

965

GWH

in

2015, 

an increase of almost 6x in five years.

306

596

772

965

442

15

Energy Year End

42

The RPS requirement of 5,316 GWh in 2026 is a 451%

increase from the 2015 requirement of 965 GWh.

STRONG RPS CREATES LONG-TERM

SOLAR OPPORTUNITIES IN NEW JERSEY

ASSET MANAGEMENT IS A KEY SKILL SET

43

Nameplate

Capacity

Operational

Performance

Operational

Capacity

Panel degradation

factors can

decrease system

output by

approximately

0.5% per year

Equipment

Degradation

Maintenance

Equipment

Performance

Shading and

soiling concerns

can inhibit system

production

Inverter or array

downtime can

severely impact

system output

_

=

Solar value is maximized by operational excellence. 

Infrastructure

reliability

and

performance

are

the

key

drivers

for investment value.

SOLAR RENEWABLE ENERGY

CERTIFICATES (SREC)

•

A SREC represents the environmental benefits or attributes of

one megawatt-hour of generation from a solar generating facility

•

Load Serving Entities (LSE) obtain SRECs to satisfy their RPS

requirements

•

An alternate to purchasing SRECs is for LSEs to pay a Solar

Alternate Compliance Payment (SACP)

44

New Jersey has moved from a rebate to a market

based pricing incentive model.

MULTI-SECTOR SOLAR

INVESTMENT STRATEGY

45

NJR CLEAN ENERGY VENTURES –

LEASE MODEL

46

Commercial Model

•

NJRCEV acquires

ground or rooftop

control through lease

agreement with

landlord

•

Solar electricity sold to

tenants (retail) or to

grid (wholesale)

•

Landlord get lease

payments

•

NJRCEV get ITC and

monetizes SRECs

Residential Model

•

NJRCEV acquires

rooftop control through

lease agreement with

homeowner

•

Homeowner gets

benefit of solar

produced electricity

•

NJRCEV gets lease

payments from

homeowner

•

NJRCEV gets ITC and

monetizes SRECs

Potential

Relationships

Developers

Manufacturers

Contractors

Support

Spano

American Capital Energy

Uni-Solar

Neuwing Renewable Energy

Tioga

Garden Solar

Sunpower

Green Oak Energy

Gloria

Solis Partners

NERC

Mercury Solar

Dynamic

Carlisle Energy Services

Sun Farm

Quadrillion

Con Edison Development

Mercury Solar

Carlisle Energy Services

Ray Angellini

Four Point Solar

AGT

All Season Solar

Solis Partners

GeoGenix

Sun Farm

NJ Solar Power

RPS

Advanced Solar Products

Uni-Solar

Gloria

SMA

MX Solar

Trina

SatCon

Andalay

Solyndra

PV Powered

Kyocera

Suntech

Schuko

Enphase

UniRac

Sunpower

Draker Labs

DPW

Locus Energy

Noveda  Technologies

The Dayhill Group

MVM Advisors

Innovative  Engineering

KZA Engineering

Broadlands

EnTech

Cooper Electric Supply

Duffy Dolcy McManus & Roesch

SOLAR MARKET PARTICIPANTS

47

Solar Information

SOLAR REGIONAL MARKET COMPARISON

Solar Markets Analysis

California

Solar Yield

1470 kWh/kW

Residential

Electric  Rate

$0.1523

Commercial

Electric Rate

$0.1421

Arizona

Solar Yield

1617 kWh/kW

Residential

Electric Rate

$0.1105

Commercial

Electric Rate

$0.0952

Florida

Solar Yield

1364 kWh/kW

Residential

Electric Rate

$0.1150

Commercial

Electric Rate

$0.0977

New Jersey

Solar Yield

1250 kWh/kW

Residential

Electric Rate

$0.1661

Commercial

Electric Rate

$0.1398

(2) Annual solar yield based on optimum PV Watts default orientation and tilt

Solar

markets

are

driven

by

two

factors

–

retail

energy rates

(1)

and solar panel yields

(2)

49

(1)

2010

Commercial

electric

rate

as

per

U.S.

Energy

Information

Administration

–

Electric

Power

Monthly

Generation

Transmission

Distribution

SOLAR GENERATION MODEL

50

Customer

Jurisdiction

FERC

NJBPU

NJBPU

Method of Interconnection

Pricing Mechanism

Solar

Array

N/A

Grid

Connected

Net

Metered

N/A

Wholesale Rate

set by Tariff OR

Market Trade

Retail

Offset

Distributed Model with differing off-take possibilities

NET METERED SOLAR PV CONFIGURATION

51

Design considerations:

•

Site orientation

•

Shading and obstructions

•

Roof integrity or ground

mounting space

•

Thin film or crystalline panels

(cost and aesthetics)

•

System sizing

MATCHING TECHNOLOGY TO APPLICATION

Advantages

Disadvantages

Crystalline

(Mono and Multi)

•

High energy density

•

Good for space constrained

applications

•

Temperature sensitive

•

Weight

•

Mounting may require roof

penetration

Thin Film

•

Wide spectrum of light

•

Building integrated product

•

Weight

•

Energy density

•

Module degradation

Thin Film      

(Solyndra)

•

Weight

•

Potential for added performance

•

Less impact from snow and soil

•

Energy density

•

Applicable only to certain roof

types

52

SYSTEM PRODUCTION MONITORING

System production information is monitored by NJRCEV and is actively processed in

order to achieve recognition of SREC revenue in a timely fashion.

•

The system meter is monitoring energy production flow continually

•

The system meter is read on a monthly basis for the purposes of SREC reporting

•

SREC

generation

data

is

uploaded

into

the

PJM

–

Generation

Attribute

Tracking

System (PJM-GATS)

•

The

following

month

PJM

–

GATS

credits

NJR

with

the

appropriate

SREC

production

53

Solar Project -

Development Process

BUSINESS DEVELOPMENT STRATEGY

Project

Closeout

Installation

Final

Engineering

Design  &

Permitting

Sales

Commitment

Relative Times by Project

Category

Residential

Retail Commercial

Wholesale Commercial

Solar Farms

Timeline

(Illustrative)

Estimated Completion 3-4 months

Estimated Completion 4-8 months

Estimated Completion 6-12 months

Estimated Completion 12-24+ months

Residential and commercial projects have similar processes.  Time

frames and complexity are dependent on project.

55

PROJECT PROFILE: A CONTINUUM OF

APPROVAL POINTS

Project

Operation

Project

Closeout

Installation

Final

Engineering

Design  &

Permitting

Site Control

NJR Approval

NJCEP Initial Application

Local/Regional Permit Application

Interconnection Phase I

NJR QC/QA

NJCEP QC/QA

Local/Regional  Permit Approval

Interconnection Phase II

NJCEP “As-Built”

Application

NJCEP Final

Application

SREC Registration

PJM GATS Initiation

NJR Close-out

Once project documents are executed a detailed process of permits and

approvals are required to interconnect and construct.  This process varies

widely by location and utility region.

56

PJM INTERCONNECTION

PROCESS OVERVIEW

All generation projects interconnecting through a PJM transmission owner must follow the

same process for requesting approval to connect to the system.

3 Months

4 Months

6 Months

57

* Interconnection Service Agreement/Construction Service Agreement

Interconnection

Request

Studies

Execution of

ISA/CSA *

ISA/CSA

Implementation

Commercial

Operation

Feasibility

Study

Impact Study

Facility

Study

The study phases highlighted above are regulated by FERC.

•

All projects follow the same timeline

•

Study process is 12 to 18 months

•

Actual construction of the interconnect can range from several months to years if

transmission line upgrade work is required

NJRCEV Project Pipeline

COMMERCIAL

PROJECT

–

DRIVERS/VALUES

59

COMMERCIAL

PROJECT

–

DRIVERS/VALUES

60

COMMERCIAL SOLAR MODEL

•

Real estate brokers, property managers, land developers

–

Project development opportunities

•

Engineering Procurement Construction (EPC) contractors

–

Lead generation

–

System design and engineering

–

Installation

•

NJR Clean Energy Ventures

–

Oversee construction process

•

Owner’s representative support

–

Meter and monitor system performance

61

OVERVIEW OF COMMERCIAL

PROJECT PIPELINE

General Summary

•

$17 million closed and in construction

phase

•

$250 million of projects under

evaluation

•

Contract commitments are not

finalized, stage is determined by status

of our contract negotiations, customer

acceptance, permitting, approvals and

date of commercial operations

•

Annual capital currently estimated at

$40 -

$60 million

•

Robust mix of project types to balance

portfolio

–

Rooftop vs. ground mount

–

Wholesale vs. retail

$110 MM

$54 MM

$86 MM

62

PROJECTS IN CONSTRUCTION PHASE

•

NJRCEV is currently constructing a number of commercial projects

along with building out its residential program

Location

Size (MW)

Capital ($MM)

Project Type

Edison,

NJ

*

0.5

2.2

Rooftop

Avenel,

NJ

1.5

6.6

Rooftop

Cranbury,

NJ

0.9

3.9

Rooftop

South Brunswick,

NJ

1.0

4.3

Rooftop

TOTAL

3.9

17.0

63

*  Completed in February 2011

MID AND LATE STAGE PROJECTS

UNDER EVALUATION

Location

Size (MW)

Capital ($MM)

Project Type

Southern,

NJ

5.0

27.4

Ground

Central,

NJ

3.6

17.2

Ground

Central,

NJ

10.0

43.0

Ground

Southern,

NJ

4.2

18.0

Ground

Central,

NJ

0.5

2.5

Rooftop

Northern,

NJ

0.36

1.8

Rooftop

Northern,

NJ

0.5

2.5

Rooftop

Central,

NJ

1.5

6.4

Rooftop

Southern,

NJ

10.0

45.0

Ground

TOTAL  

35.7

163.8

64

Projects are pending completion of due diligence and final

contract negotiations

RESIDENTIAL LEASE PROGRAM DRIVERS

66

RESIDENTIAL PROJECT –

DRIVERS/VALUES

67

2011 Goals

•

$9.4 million capital

•

2.2 MW

•

350 projects

RESIDENTIAL SOLAR LEASING MODEL

•

Installation channel partners

–

Lead generation

–

Sales

–

Installations

•

NJR Clean Energy Ventures

–

Marketing

–

Material procurement

–

Quality assurance

–

Metering and monitoring

68

TRANSFORMING THE RESIDENTIAL MARKET

From

To

High income

Moderate income

High risk tolerance

Low risk tolerance

Be green

Save green

Construction/techno savvy

Less expensive electricity

NJR is appealing to a new type of customer by shifting solar from a

capital expenditure to a service model

69

Clean & Green

No Money Down

Fixed Monthly Cost

No Fine Print

We Manage Everything

$100 per month

$1,200 per year

$20,000 system life

Backed By A Company You Trust

PRODUCT POSITIONING

70

Critical Success Factor

NJRCEV Strategy

Obtain and sustain rapid market

penetration

•

Create superior customer value to accelerate  sales cycles

•

Add channel partners to increase market coverage

•

Leverage local contacts to speed permitting processes

Leverage scale to drive down cost of

installations

•

Standardized installations with limited customization

•

Adopt bulk purchasing model

•

Set prices with channel partners with expected reductions

•

Ongoing in-source of  functions where scale and standardization

add value

Maximize system performance at minimum

cost

•

Maintain flexibility to source best of breed technologies

•

Implement remote monitoring tools

•

Leverage NJR best practices in customer service, billing and

warranty management

DRIVING SUSTAINABLE

COMPETITIVE ADVANTAGE

71

SRECs

SREC REGISTRATION

AND TRANSFERS

Energy

Producer

GATS

SREC

Registry

Monetization

Load

Serving

Entity

73

Electronic exchanges and retail providers

create liquidity for SREC monetization

Bi-lateral

agreements

Electronic

Exchange

Utility

Auctions

Spot Sales

Term Sales

Aggregator

Broker

As

SREC’s

Created

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

SREC MONETIZATION

135

135

117

100

72

47

36

67

78

105

117

128

135

270

387

487

559

606

642

709

787

892

1,009

1,137

Monetize in current

energy year –

transact by 8/31

Cumulative

SREC Credited

Monetize in following

energy year or SREC

expires

Balance Carries Forward……………………

74

Energy Year Timeline (Illustrated for a 1 MW project)

INDICATIVE VALUE OF SRECS

75

$300

$350

$400

$450

$500

$550

$600

$650

$700

2011

2012

2013

2014

2015

2016

SACP

JCP&L/ACE Solicitation (10 Yr)

Broker market 2011-2013

$350

Spot Price $655

$425

Broker market 2012-2014

PSEG Solar Loan II (15 Yr)

Hedging

HEDGING OBJECTIVES

•

Maximize SREC revenue while protecting project payback returns

•

Develop a portfolio approach as SREC volumes increase with

additional projects

•

Mitigate SREC revenue uncertainty

77

TYPICAL PROJECT HEDGING

•

Hedge through pay-back period

–

Approximately 5 years

•

Hedging results of three-year strip strategy

–

70% of capital commitment

•

Selling a three-year strip of SRECs at market prices

•

ITC recognition

•

After each year of operation, additional SREC sales to be evaluated

78

Accounting for Investment Tax Credits (ITC)

80

ITC -

BACKGROUND INFORMATION

•

The Emergency Economic Stabilization Act of 2008 extends  30

percent investment tax credit on solar facilities through the end of

2016 (tax basis reduced by 50 percent of the credit)

•

American Recovery and Reinvestment Act of 2009 provides for a 30

percent cash grant in lieu of ITC

•

The 30 percent cash grant option recently extended to December

2011

Project owners have a choice of cash grant or ITC

81

ITC -

BACKGROUND INFORMATION

•

ITC Process

•

Qualifying investments claimed as a credit on federal income tax

return

•

Results in a reduction of tax payment  (i.e., cash saved at time

of

estimated tax payment)

•

Subject to review customarily associated with audit of tax return by IRS

•

Grant

•

Application filed for each project with Department of Treasury

–

Includes engineering design documents, costing of project, and

independent auditor certification if over $500,000

•

Payment is received 60 days after application is deemed complete

Companies with liquidity and tax appetite prefer ITC

82

ACCOUNTING

FOR

ITC

–

BACKGROUND

•

Accounting literature for ITC dates back to 1962, and has not

changed from original conclusions

–

APB 2: Accounting for the “Investment  Credit”

–

APB 4: Accounting for the “Investment Credit”

•

Under the guidance there are two methods to account for ITC

–

Tax

reduction

(“flow

through”)

–

immediate

recognition

of

the

tax

benefit

–

Cost

reduction

(“deferred”)

–

recognized

over

the

life

of

the

asset

NJR

has

elected

the

“flow

through”

method

of

accounting for ITC

83

EXAMPLE –

ACCOUNTING FOR

$10 MM SOLAR INSTALLATION

Tax credit on investment ($10mm x 30%)

$3,000,000

Tax basis reduction ($1.5 mm x 40%)

(600,000)

Net tax benefit

$2,400,000

The resulting Day 1 tax benefit from solar is 24 percent

of the qualifying investment

ANNUAL EFFECTIVE TAX RATE

•

Under ASC 740, an entity is required to calculate an annual effective

tax rate and use that rate to estimate tax expense/benefit during

interim annual periods

•

Annual Effective Tax Rate (“AETR”) calculations must include

anticipated Investment Tax Credits (“ITC”)

Quarterly effective tax rate dependent on forecast of

expected ITC eligible capital expenditures

84

SUMMARY

•

Consistent with NJR strategy

•

Strong NJ RPS goals / incentives

•

Potentially large market opportunities

•

Diversified network of suppliers, developers and installers

•

Tax appetite for ITC

•

Short (4-5 year) payback mitigates capital at risk

•

Strong contributor to NJR earnings

85