Bill > S4306

Introduced Session

This bill establishes a framework for the restructuring of the electric and gas public utility industries in New Jersey. Restructuring the Electric Public Utility Industry This bill permits electric public utilities to own and operate electric generation facilities but requires any electric public utility that does not elect to own and operate electric generation facilities to comply with the provisions of the "Electric Discount and Energy Competition Act" (EDECA). Under the bill, an electric public utility that elects to own and operate electric generation facilities is to file an updated schedule of tariffs with the Board of Public Utilities (board) for approval, which schedule is to reflect any necessary changes to the electric public utility's rates as a result of the electric public utility's decision to own and operate electric generation facilities. Once the board has approved the updated schedule of tariffs, the bill prohibits any customer of that electric public utility from exercising retail choice through an electric power supplier. Restructuring the Gas Public Utility Industry This bill permits gas public utilities to discontinue retail choice for its residential customers. However, the bill provides that any gas public utility that does not elect to discontinue retail choice for its residential customers is to comply with the provisions of EDECA. Under the bill, a gas public utility that elects to discontinue retail choice for its residential customers is to file an updated schedule of tariffs with the board for approval, which schedule is to reflect any necessary changes to the gas public utility's rates as a result of the gas public utility's decision to discontinue retail choice for its residential customers. Once the board has approved the updated schedule of tariffs, the bill prohibits any customer of that gas public utility from exercising retail choice through a gas supplier. Electric Facility Needs Assessment This bill requires an electric public utility to obtain a certificate of public convenience and necessity (certificate) from the board prior to constructing an electric facility. Specifically, under the bill, one year prior to submitting a formal application for a certificate, an electric public utility is to submit a notice of intent to the board, which notice, once received, is to mark the beginning of the early assessment stage of the certificate process. After receiving the notice, the board is to hold public hearings in the area served by the electric public utility to: (1) solicit feedback from the public; (2) provide advice to the electric public utility regarding certain aspects of the proposed facility; and (3) analyze how the proposed electric facility will impact the State and serve the public interest. In the early assessment stage, the board is to publish interim reports on the progress of its analysis of the proposed electric facility. Moreover, no later than nine months after receiving the notice of intent, the board is to publish a comprehensive report addressing any major concerns regarding the proposed electric facility that were raised during the early assessment stage and comparing the proposed electric facility with feasible alternatives. Under the bill, a certificate application is to include any information that the board deems necessary. The bill requires the board, while reviewing the application based on certain criteria outlined in the bill, to determine whether a proposed electric facility is necessary to meet the projected need for electricity in the area served by the electric public utility and that no more efficient, economical, or environmentally-sound alternative exists. In addition, the bill authorizes the board to charge and collect a nonrefundable application fee of no more than $250,000 for the filing, processing, and review of a certificate application and for the board's review of certificate renewal applications. Once the board receives a completed application, the board is to forward a copy of the application to other appropriate State departments, agencies, and instrumentalities (State entities) for additional review. These State entities are to develop and forward recommendations on the application to the board and the electric public utility within 120 days of receiving a copy of the application. The State entities are to base their recommendations on the same criteria used by the board in the board's review of the application. Upon receiving a completed application, the board is to also transmit the application and all supporting documents, including the board's comprehensive report from the early assessment stage, to the Office of Administrative Law, which is to conduct a hearing on the application pursuant to the provisions of current law. Within six months of receiving a decision from the presiding administrative law judge, the board shall approve, conditionally approve, or deny the application and support its determination with a written report that is to address certain matters regarding the proposed electric facility. If the board conditionally approves the application, the bill requires the board to provide the electric public utility with a clear statement of conditions to be met for approval. Under the bill, a certificate is to be valid for three years and eligible for renewal subject to the board's review. If a certificate renewal application is denied, the electric public utility holding the certificate may either: (1) continue the project; or (2) terminate or alter the project under terms and conditions established by the board. Electric Public Utility Accident Fault Determination Under the bill, if an electric public utility files for a rate increase to recover costs in excess of $10 million attributable to an accident at an electric generating or transmission facility in which the electric public utility has a full or partial interest, the board is to conduct a hearing or series of hearings to investigate all circumstances related to the accident and to determine fault, if any, related to the accident. The bill stipulates that fault is to be assigned to any party whose negligent actions or omissions either contributed substantially to causing the accident or failed to mitigate its severity. Under the bill, in determining fault, the board is to consider any credible, fair, and public assessments rendered by certain, appropriate federal entities. The bill prohibits the board from authorizing an electric public utility that is determined by the board to be at fault to recover any fault-related repair costs, cleanup costs, additional incremental costs for purchased power, or damage costs resulting from an accident at an electric generating or transmission facility. However, the bill does require the board to consider whether and, if so, to what extent an electric public utility is permitted to mitigate denied fault costs through certain measures outlined in the bill. The bill establishes various restrictions for these cost mitigation measures but clarifies that nothing in the bill is to prevent the board from granting interim relief necessary to enable the electric public utility to provide safe, adequate, and proper service. In addition, the bill prohibits the board from authorizing an electric public utility to include, as an operating expense, any percentage of the repair, cleanup, or damage costs resulting from an accident at an electric generating or transmission facility greater than the electric public utility's percentage of ownership in the generating or transmission facility. The board is required to authorize as an operating expense, regardless of fault, any cost that the board certifies as appropriate to contribute to national cost-sharing formulas under federal law or voluntary cost-sharing plans under certain circumstances outlined in the bill. However, the bill provides that the authorization to recover these costs does not absolve the electric public utility from any assessment of fault or its obligation under the remedy imposed by the board.

AI Summary

Committee Categories

John Burzichelli (D)*,  Paul Sarlo (D)*, 

Introduced in the Senate, Referred to Senate Economic Growth Committee (on 05/12/2025)

Official Document