Bill
Bill > A5114
NJ A5114
NJ A5114Prohibits public utilities from being eligible for rate treatment or other incentive or rate mechanisms that provide additional revenue to utilities in certain circumstances.
summary
Introduced
12/12/2024
12/12/2024
In Committee
12/12/2024
12/12/2024
Crossed Over
Passed
Dead
01/12/2026
01/12/2026
Introduced Session
2024-2025 Regular Session
Bill Summary
This bill provides that an electric public utility or a gas public utility (collectively, "utility") is not permitted to impose or collect any rate adjustment mechanism that provides additional revenue to the utility to account for lost revenue from the decrease in energy usage due to customer participation in certain energy efficiency, peak demand reduction, conservation, or renewable energy programs. Under current law, a utility may provide and invest in energy efficiency, peak demand reduction, conservation and renewable energy programs in its service territory on a regulated basis and may, if approved by the Board of Public Utilities (board), be permitted to impose and collect rate adjustment mechanisms that provide additional revenue to the utility to offset a decrease in consumption for customers participating in certain programs. It is the sponsor's intent to prohibit a utility from implementing a conservation incentive program rate adjustment in response to the testimony provided by the Director of the Division of Rate Counsel during the October 2, 2024 Assembly Telecommunications and Utilities Committee meeting. The Division of Rate Counsel testified that a conservation incentive program rate adjustment enables a utility to make up for a portion of revenues lost due to customer participation in energy efficiency efforts by charging that loss back to all consumers. It is the sponsor's belief that the board needs to work harder for the consumer and less for the utility company. There is no logical reason why ratepayers should work to reduce their power consumption through conservation measures, such as purchasing Energy Star appliances, increasing weatherization, installing light-emitting diode (LED) lighting, using smart meters and thermostats, wearing warming clothing or siting in the dark, only to have these hard fought savings reduced or eliminated through rate increases to make up for the utility companies loss of revenue.
AI Summary
This bill prohibits electric and gas public utilities from receiving rate adjustments or incentives that would provide additional revenue to offset lost sales due to customer participation in energy efficiency, peak demand reduction, conservation, or renewable energy programs. Currently, utilities can request Board of Public Utilities (BPU) approval to recover lost revenue when customers reduce their energy consumption through various efficiency measures. The bill aims to eliminate these "lost revenue adjustment" mechanisms, which the sponsor believes unfairly penalize consumers who make efforts to reduce their energy usage through actions like purchasing energy-efficient appliances, improving home insulation, using LED lighting, and utilizing smart home technologies. Under the proposed changes, utilities would still be able to implement and invest in energy efficiency programs, but they would not be allowed to recoup lost revenue through rate increases. The bill modifies existing laws to explicitly prevent utilities from receiving financial compensation for reduced energy sales, with the intent of protecting ratepayers and encouraging genuine conservation efforts by removing financial disincentives for energy reduction.
Committee Categories
Transportation and Infrastructure
Sponsors (1)
Last Action
Introduced, Referred to Assembly Telecommunications and Utilities Committee (on 12/12/2024)
Official Document
bill text
bill summary
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bill summary
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bill summary
| Document Type | Source Location |
|---|---|
| State Bill Page | https://www.njleg.state.nj.us/bill-search/2024/A5114 |
| BillText | https://pub.njleg.gov/Bills/2024/A5500/5114_I1.HTM |
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