Bill > A5436

This bill requires the New Jersey Board of Public Utilities (BPU) to determine and consider the lowest reasonable return on equity when approving rate cases for electric, gas, and water public utilities. The bill defines key terms such as "return on equity" as the profit percentage utilities can collect from ratepayers on their equity investment, and specifies that the BPU must develop or adopt analytic models that reflect state, federal, and industry standards for determining a fair and reasonable authorized return on equity. When evaluating rate increase requests from utilities, the BPU must now explicitly factor in the lowest reasonable return on equity as part of its determination of whether proposed rate changes are just and reasonable. The bill will take effect six months after enactment and will apply to utility rate petitions submitted to the BPU on or after that date. The BPU is also authorized to take preparatory administrative actions to implement the new requirements. This legislation aims to provide additional consumer protection by potentially limiting the profit margins utilities can charge ratepayers.

Budget and Finance, Transportation and Infrastructure

https://www.njleg.state.nj.us/bill-search/2024/A5436