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Bill > A3608
NJ A3608
NJ A3608"Public Utility Rate Stabilization Act"; permits gas and electric public utilities to employ alternative ratemaking mechanisms.
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, to be known as the "Public Utility Rate Stabilization Act," permits gas public utilities and electric public utilities (utilities) to employ alternative ratemaking mechanisms, which include, but are not limited to, performance-based rates, formula rates, multi-year rate plans, earnings-sharing mechanisms, decoupling mechanisms, and other ratemaking mechanisms authorized by the Board of Public Utilities (board). A utility is required to submit a petition to the board for approval of an alternative ratemaking plan prior to employing an alternative ratemaking mechanism. Within 180 days of the bill's enactment, the board is required to adopt rules and regulations to effectuate the bill, including, but not limited to, rules and regulations establishing certain evaluation criteria to assist the board in determining whether to approve without modifications, approve with modifications, or deny an alternative ratemaking plan submitted by a utility. The bill requires the board to make its determination regarding an alternative ratemaking plan within nine months of the plan's submission. The board is also required to hold a public hearing and provide opportunity for public comments prior to making its determination regarding an alternative ratemaking plan. If the board approves an alternative ratemaking plan with modifications, the utility is to accept or reject the modified plan by filing a notice within 30 days of the date on which the board issued its order containing the board's determination regarding the plan. Under the bill, if the utility files a notice rejecting the modified plan, such plan is to be considered withdrawn and the rates that were in effect prior to the plan's submission are to remain in effect until changed or modified by the board. In addition, the bill permits utilities to use fully-projected future test years to: (1) determine rate bases, revenues, expenses, or other items as part of a utility's base rate case; (2) petition the board for the approval of an alternative ratemaking plan; and (3) fulfill any other purpose, as determined by the board.
AI Summary
This bill, known as the "Public Utility Rate Stabilization Act," allows gas and electric public utilities to use alternative methods for setting their rates, beyond the traditional process. These alternative methods, called "alternative ratemaking mechanisms," can include things like performance-based rates (where rates are tied to how well the utility performs), formula rates (where rates automatically adjust based on a set formula), multi-year rate plans (setting rates for several years at once), earnings-sharing mechanisms (where utilities share excess profits with customers), and decoupling mechanisms (which separate a utility's revenue from the amount of gas or electricity sold). Before a utility can use any of these new methods, they must submit a plan, called an "alternative ratemaking plan," to the Board of Public Utilities (the "board") for approval. The board has 180 days after the bill becomes law to create rules for evaluating these plans, and they must decide on a plan within nine months of it being submitted, after holding a public hearing and considering public comments. If the board approves a plan with changes, the utility has 30 days to accept or reject the modified plan; if they reject it, the old rates remain in place. The bill also permits utilities to use "fully-projected future test years," which means they can use anticipated future costs and revenues when calculating rates, whether for a standard rate case or when proposing an alternative ratemaking plan.
Committee Categories
Transportation and Infrastructure
Sponsors (1)
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/A3608 |
| BillText | https://pub.njleg.gov/Bills/2026/A4000/3608_I1.HTM |
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