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Bill > A1208
NJ A1208
NJ A1208Requires BPU to determine and consider lowest reasonable return on equity before approving electric, gas, and water public utility base rate cases.
summary
Introduced
01/13/2026
01/13/2026
In Committee
01/13/2026
01/13/2026
Crossed Over
Passed
Dead
Introduced Session
2026-2027 Regular Session
Bill Summary
This bill requires the Board of Public Utilities (board) to determine and consider the lowest reasonable return on equity (ROE) in determining whether an electric public utility's, gas public utility's, or water public utility's rate increase proposed as part of a base rate case is just and reasonable. To determine the lowest reasonable ROE, the board is required to develop or adopt and apply an analytic model that reflects, at a minimum, State, federal, and industry standards for determining a fair and reasonable authorized ROE for electric public utilities, gas public utilities, and water public utilities. Under current law, the board may approve a petition by an electric public utility, a gas public utility, or a water public utility to increase, change, or alter any existing public utility rates upon a determination that the increase, change, or alteration is just and reasonable. When determining the justness and reasonableness of a requested rate adjustment, the board is to consider: (1) the public utility's property valuation (i.e., the rate base); (2) the public utility's expenses; and (3) the public utility's rate of return, which includes the ROE.
AI Summary
This bill mandates that the Board of Public Utilities (BPU), when reviewing requests from electric, gas, and water companies to increase their rates, must actively determine and consider the "lowest reasonable return on equity" (ROE) as a key factor in deciding if the proposed rate hike is fair. The ROE is the profit a utility is allowed to make on the money invested by its shareholders. To establish this lowest reasonable ROE, the BPU will need to create or use analytical models that align with state, federal, and industry standards for setting fair ROEs for these utility companies, which currently can approve rate increases if they are deemed just and reasonable based on factors like property value, expenses, and rate of return.
Committee Categories
Transportation and Infrastructure
Sponsors (3)
Last Action
Introduced, Referred to Assembly Telecommunications and Utilities Committee (on 01/13/2026)
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/2026/A1208 |
| BillText | https://pub.njleg.gov/Bills/2026/A1500/1208_I1.HTM |
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