New Jersey-2012-S2429-Introduced

An Act concerning electric and gas utility reliability standards and electric utility infrastructure improvements and supplementing Title 48 of the Revised Statutes.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. (New section) Sections one through 10 of P.L. , c. (C. ) (pending before the Legislature as this bill) shall be known and may be cited as the "Public Utility Reliability Investment Act."

2. (New section) The Legislature finds and declares that:

a. Climate change has resulted in an increase in severe weather, causing major weather events which have led to frequent disruptions in electric utility service;

b. Reliable electric and gas utility service is important to the health and safety of New Jersey residents as well as to the economic and financial well-being and security of New Jersey's businesses;

c. Capital investment and maintenance operation improvements must be made by electric public utilities doing business in the State to protect and fortify their utility infrastructure and networks and increase reliability during and immediately after major weather events;

d. The implementation of infrastructure improvement plans submitted by electric and gas utilities, for review and approval by the Board of Public Utilities, is necessary to improve electric utility service reliability and service restoration; and

e. The adoption of uniform Statewide standards of acceptable performance, in the areas of service reliability and restoration of service by electric and gas public utilities, will help minimize health and safety problems resulting from electric and gas utility service disruptions.

3. (New section) As used in P.L. , c. (C. ) (pending before the Legislature as this bill):

"Board" means the Board of Public Utilities.

"Electric utility" means a public utility, as that term is defined in R.S.48:2-13, that is under the jurisdiction of the Board of Public Utilities, is investor-owned, and transmits and distributes electricity to end users within this State.

"Flood hazard area" means any floodway and flood fringe area determined by the Department of Environmental Protection pursuant to section 3 of P.L.1962, c.19 (C.58:16A-52).

"Gas utility" means a public utility, as that term is defined in R.S.48:2-13, that is under the jurisdiction of the Board of Public Utilities, is investor-owned, and transmits and distributes natural gas to end users within this State.

"Plan" means an infrastructure improvement and reliability plan submitted by an electric utility to the board for board review and approval pursuant to section 5 of P.L. , c. (C. ) (pending before the Legislature as this bill).

"Smart grid infrastructure" means a system that includes the following components: (1) a smart meter at the customer's premises; (2) a communications network between the smart meter and the electric utility and electric power supplier, serving the customer; and (3) a smart meter data management application at the premises of the electric utility and electric power supplier.

"Smart meter" means an electrical meter that identifies a customer's electric power consumption in greater detail than a conventional meter and provides a customer with real-time usage information and pricing signals on at least an hourly basis, to record and store hourly usage data, and to report the status of the power supply for the customer's premises, including the ability to report to the customer any dynamic pricing data and any peak savings to the customer. "Smart meter" shall not mean an electrical meter that is used to disconnect service to the customer's premises due to non-payment through remote disconnection, but shall have the ability to restore service to the customer's premises through remote connection.

4. (New section) a. Consistent with federal law, the board shall establish uniform Statewide standards of acceptable performance for service reliability and restoration of service for electric and gas utilities doing business in the State. These standards shall replicate national standards for service reliability and restoration concerning the transmission of electricity and natural gas, including but not limited to, as appropriate, any standards adopted by the North American Electric Reliability Corporation, the Federal Energy Regulatory Commission, and the Office of Pipeline Safety, Pipeline and Hazardous Materials Safety Administration, in the United States Department of Transportation, subject to adjustment, as appropriate, to electricity and natural gas distribution service and to accommodate any factors unique to the State. The standards shall address the following components of utility service:

(1) electric power and natural gas supply resource and demand balancing, flow monitoring, and stabilization;

(2) critical infrastructure protection and control;

(3) communications coordination;

(4) emergency preparedness and operations;

(5) facilities design and operations maintenance;

(6) personnel performance, training, and qualifications requirements;

(7) electric power and natural gas system disturbance, contingency response, and system restoration; and

(8) reliability operating limits coordination.

b. Following the promulgation of any rules and regulations, pursuant to the "Administrative Procedure Act" P.L.1968, c.410 (C.52:14B-1 et seq.), necessary to effectuate the provisions of subsection a. of this section, the board may open a full investigation of any alleged failure of an electric or gas utility to meet the standards established pursuant to subsection a. of this section. The investigation shall seek to determine whether an electric or gas utility has committed a violation of the board's standards of acceptable performance.

5. (New section) a. Each electric and gas utility conducting business in the State shall annually, on or before May 15, submit to the board a service reliability plan for the board's review and approval. The service reliability plan shall be designed for the provision of safe, proper, and reliable service and the reasonably prompt restoration of service in the event of a widespread disruption in service in the service area of the electric or gas utility due to storms or other causes beyond the control of the utility, and the provisions of the plan shall reflect the standards established pursuant to subsection a. of section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill).

b. After review of an electric and gas utility's service reliability plan, the board may request that the utility amend the plan. If the board finds a material deficiency in the plan, the board may order the utility to make such modifications as it deems reasonably necessary to remedy the deficiency.

c. The board shall also have the authority to open an investigation to review the performance of any electric or gas utility in restoring service during a widespread disruption in service in the utility's service area. If, after evidentiary hearings or other investigatory proceedings, the board finds that, as a result of the failure of the utility to implement its service reliability plan, the length of the disruptions in service were materially longer than they would have been but for the utility's failure, the board may impose a civil administrative penalty pursuant to section 10 of P.L. c. (C. ) (pending before the Legislature as this bill).

6. (New section) a. Each electric utility conducting business in the State shall, no later than 180 days after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), submit to the board an infrastructure improvement and reliability plan for the board's review and approval. The plan shall be designed for the provision of safe, proper, and reliable service and the provisions of the plan shall reflect the requirements established pursuant to section 7 of P.L. , c. (C. ) (pending before the Legislature as this bill).

b. After review of an electric utility's service reliability plan, the board may modify the plan to require the electric utility to make such modifications as it deems reasonably necessary to remedy the deficiency if the board finds a material deficiency in the plan. The board shall approve the plan no later than 120 days after the date of submission by the electric utility to the board for board review and approval.

7. (New section) Any plan submitted by an electric utility to the board pursuant to section 6 of P.L. , c. (C. ) (pending before the Legislature as this bill) shall provide in adequate detail the infrastructure improvements, investments, and cost analyses and estimates, as appropriate, to be made by the electric utility and shall include, but not be limited to, the following:

a. Strategies to mitigate potential flooding of any substation or switching station that sustained flood damage within two years prior to the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), as well as substations and switching stations constructed within a flood-hazard area as delineated by the Department of Environmental Protection, addressing the feasibility of mitigation by, among other things, construction of flood barriers, raising equipment, or other measures that would make substations and switching stations flood resistant, including timeframes to implement the recommended measures and cost estimates for each scenario considered;

b. Consistent with federal law, the establishment of a comprehensive vegetation management program that prioritizes tree pruning and removal so that the program would result in substantially decreasing the possibility of electric transmission and distribution service line disruption, including, but not limited to, a provision whereby the services of tree experts shall be used to assess and recommend tree pruning or tree removal if a tree poses a substantial danger of striking an electric transmission or distribution service line;

c. The installation and use of smart grid infrastructure and smart meters that would have the ability to alert the electric utility when and where electric utility service is lost, find service disruption locations quickly, and notify a customer when to expect restoration of service. The plan shall allow a customer to opt out of receiving a smart meter. Where the electric utility reduces meter reader personnel as a result of the operation of smart grid infrastructure, the electric utility shall recognize any existing employee bargaining unit and shall continue to honor and abide by any existing collective bargaining agreement for the duration of the agreement. The electric utility shall be required to bargain in good faith with any existing collective bargaining unit when the existing collective bargaining agreement has expired and shall make available programs allowing existing employees whose functions include metering to be retrained to be employed in other areas of the electric utility;

d. A cost analysis and estimate of the installation and use of electric service delivery redundancy systems that have the ability to redirect power when electric generating stations incur power supply disruptions in any area of the electric utility's service territory where needed and would be practicable; and

e. The installation and use of underground electric distribution lines in new residential or commercial areas, where practicable.

8. (New section) In order to effectuate the infrastructure improvements required pursuant to P.L. , c. (C. ) (pending before the Legislature as this bill) in a timely and efficient manner, the board shall authorize an alternative methodology of recovering costs incurred in the implementation of the plan required pursuant to section 7 of P.L. , c. (C. ) (pending before the Legislature as this bill) independent of the methodology adopted by the board pursuant to R.S.48:2-21.

9. (New section) a. The board shall require each electric and gas utility conducting business in the State to annually submit to the board, on or before May 15th of each year, an emergency communications strategic plan for review and approval. This plan shall be reviewed in consultation with the State Office of Emergency Management in the Division of State Police in the Department of Law and Public Safety. After review of a utility's emergency communications strategic plan, the board may order the utility to make such modifications as it deems reasonably necessary to remedy any deficiency. The plan shall include, but not be limited to, an explanation of the utility's system for communicating with customers during and after an emergency that extends beyond normal business hours and the designation of utility staff to communicate with local officials and relevant regulatory agencies.

b. The board shall have the authority to open an investigation to review the communications of any electric and gas utility during a disruption of service in the utility's service area. If, after evidentiary hearings or other investigatory proceedings, the board finds that, as a result of the failure of the utility to implement its emergency communications strategic plan, the utility's communications were materially less effective than they would have been but for the utility's failure, the board may impose a civil administrative penalty pursuant to section 10 of P.L. c. (C. ) (pending before the Legislature as this bill).

10. (New section) a. Notwithstanding the provisions of any law, rule, regulation, or board order to the contrary, an electric or gas utility, that violates the provisions of any rule, regulation, or order of the board promulgated or issued pursuant to sections 1 through 9 of P.L. , c. (C. ) (pending before the Legislature as this bill) shall be liable for a civil administrative penalty not to exceed $25,000 for each violation, except that any maximum civil penalty may not exceed $2,000,000 for any related series of events. Each day during which the violation continues shall constitute an additional, separate, and distinct violation.

b. Any civil administrative penalty may be compromised by the board in an amount and with conditions the board deems appropriate. In determining the amount of the penalty, or the amount agreed upon in compromise, the board shall consider: the nature, circumstances, and gravity of the violation; the degree of the violator's culpability; any history of prior violations; any good faith effort on the part of the violator in attempting to achieve compliance; and any other factors the board determines to be appropriate.

c. Pursuit of any remedy specified in this section shall not preclude the pursuit of any other remedy.

d. Civil administrative penalties may be recovered, if necessary, in a summary proceeding pursuant to the "Penalty Enforcement Law of 1999," P.L.1999, c.274 (C.2A:58-10 et seq.). The Superior Court shall have jurisdiction to enforce the provisions of the "Penalty Enforcement Law of 1999" in connection with P.L. , c. (C. ) (pending before the Legislature as this bill).

e. Notwithstanding any law to the contrary, there is established in the board a nonlapsing, special revenue fund called the "Board of Public Utilities Civil Penalty Fund" into which all penalties imposed and obtained pursuant to P.L. , c. (C. ) (pending before the Legislature as this bill) shall be deposited. The moneys in the Board of Public Utilities Civil Penalty Fund shall be used for the improvement of electric and gas utility service quality and reliability.

f. Consistent with section 1 of P.L.1988, c.100, (C.48:2-21.14), any civil administrative penalty imposed under P.L. , c. (C. ) (pending before the Legislature as this bill) shall not be recoverable from ratepayers.

11. R.S.40:37-5 is amended to read as follows:

40:37-5. a. Except as hereinafter provided and consistent with the provisions of subsection b. of this section, the shade tree commission may exercise exclusive control over the regulation, planting, and care of shade and ornamental trees and shrubbery now situate or which may hereafter be planted [in] along any public road, street, highway, [park] or parkway or in any public park of the county, including:

[a.] (1) The planting, trimming, spraying, care, and protection thereof;

[b.] (2) The regulation and control of the use of the ground surrounding the same so far as may be necessary for their proper growth, care, and protection;

[c.] (3) The moving or requiring the removal of any tree or part thereof, dangerous to public safety;

[d.] (4) The care and control of the parks and parkways; and

[e.] (5) The encouragement of arboriculture.

b. Consistent with applicable State or federal law, an electric utility, as defined pursuant section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill), may clear, move, cut, or destroy any shade or ornamental tree or shrubbery for the purpose of erecting, installing, moving, removing, altering, protecting, or maintaining any structures or fixtures, necessary for the supply of electric light, heat, or power upon any lands in which it has acquired an easement or right-of-way or upon a public right-of-way. A shade tree commission shall not interfere with or restrict any vegetation management work conducted by an electric public utility complying with any vegetation management rule, regulation, or order of the Board of Public Utilities.

(cf: P.L.1958, c.41, s.2)

12. R.S.40:37-6 is amended to read as follows:

40:37-6. [The] a. Except as provided in subsection b. of this section, the shade tree commission, with the consent of the board of chosen freeholders, may make rules and regulations for the protection and care of the trees, shrubbery, or ornamental material planted or growing naturally within the highways and parks under its jurisdiction, as provided in this article; and with the consent of the board may prescribe a suitable fine for the violation of each rule or regulation, in an amount not exceeding [$200.00] $200 for each violation.

b. Any public utility, as defined pursuant to R.S.48:2-13, or a cable television company, as defined pursuant to section 3 of P.L.1972, c.186 (C.48:5A-3), that clears, moves, cuts, or destroys any trees, shrubs, or plants for the purpose of erecting, installing, moving, removing, altering, protecting, or maintaining any structures or fixtures, necessary for the supply of electric light, heat, or power, communication, or cable television services upon any lands in which it has acquired an easement or right-of-way or upon a public right-of-way, shall not be required to receive the permission of a commission to undertake such work or be subject to any penalty imposed by a shade tree commission pursuant to subsection a. of this section. This subsection shall not exempt any such public utility or cable television company from any penalty or replacement assessment imposed as a result of damage to a tree, shrub, or plant caused by the public utility's or cable television company's non-compliance with any such rule or regulation of the shade tree commission.

(cf: P.L.1958, c.41, s.3)

13. R.S.40:64-5 is amended to read as follows:

40:64-5. A shade tree commission organized under this chapter shall have power to:

a. Exercise full and exclusive control over the regulation, planting, and care of shade and ornamental trees and shrubbery now located, or which may hereafter be planted [in] along any public road, street, highway, [park] or parkway or in any public park of the municipality, except such as are excluded pursuant to section 40:64-1 of this Title in the municipality for which it was created, including the planting, trimming, spraying, care, and protection thereof; provided, however, where an electric utility, as defined pursuant to section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill), consistent with applicable State or federal law, is required to clear, move, cut, or destroy any shade or ornamental tree or shrubbery for the purpose of erecting, installing, moving, removing, altering, protecting, or maintaining any structures or fixtures, necessary for the supply of electric light, heat, or power upon any lands in which it has acquired an easement or right-of-way or upon a public right-of-way, shall to that extent, be exempt from the shade tree commission's exercise of such control, and provided, that a shade tree commission shall not interfere with or restrict any vegetation management work conducted by an electric public utility complying with any vegetation management rule, regulation, or order of the Board of Public Utilities;

b. Regulate and control the use of the ground surrounding the same, so far as may be necessary for their proper growth, care, and protection;

c. Move or require the removal of any tree, or part thereof, dangerous to public safety;

d. Care for and control such parks and parkways; encourage arboriculture; make, alter, amend, and repeal, in the manner prescribed for the passage, alteration, amendment, and repeal of ordinances by the governing body of the municipality, any and all ordinances necessary or proper for carrying out the provisions hereof; and

e. Administer treatment to, or remove, any tree situate upon private property which is believed to harbour a disease or insects readily communicable to neighboring healthy trees in the care of the municipality and enter upon private property for that purpose, with the consent of the owner thereof, provided the suspected condition is first confirmed by certificate issued by or on behalf of the Department of Agriculture.

(cf: P.L.1958, c.42, s.4)

14. R.S.40:64-12 is amended to read as follows:

40:64-12. a. The commission may prescribe a fine for the violation of each of its ordinances in an amount not exceeding [$1500.00] $1,500 for each violation, and the courts which now or hereafter shall have jurisdiction over actions for the violation of ordinances of the municipality in which the commission has been or shall be appointed shall have jurisdiction in actions for the violation of such ordinances as the commission shall enact.

The ordinances shall be enforced by like proceedings and process and the practice for the enforcement thereof shall be the same as that provided by law for the enforcement of the ordinances of the municipality in which the commission exists.

The officers authorized by law to serve and execute process in the aforementioned courts shall be the officers to serve and execute any process issued out of any court under this chapter.

A copy of any ordinance of the commission, certified to under the hand of its secretary [,] or chairman shall be received in any court of this State as full and legal proof of the existence of the ordinance, and that all requirements of law in relation to the ordaining, publishing, and making of the same, so as to make it legal and binding, have been complied with, unless the contrary be shown.

b. In addition to the penalties authorized by subsection a. of this section, the commission may require a person who removes or otherwise destroys a tree in violation of a municipal ordinance to pay a replacement assessment to the municipality. The replacement assessment shall be the value of the tree as determined by the appraisal of a trained forester or Certified Tree Expert retained by the commission for that purpose. In lieu of an appraisal, the commission may adopt a formula and schedule based upon the number of square inches contained in a cross section of the trunk of the tree multiplied by a predetermined value per square inch, not to exceed [$27.00] $27 per square inch. The square inch cross section shall be calculated from the diameter at breast height and, if there is a multiple stem tree, then each trunk shall be measured and an average shall be determined for the tree. For the purposes of this section, "diameter at breast height" shall mean the diameter of the tree taken at a point 4-1/2 feet above ground level. The commission shall modify the value of the tree based upon its species variety, location, and its condition at the time of removal or destruction.

c. Any public utility as defined pursuant to R.S.48:2-13 or cable television company as defined pursuant to section 3 of P.L.1972, c.186 (C.48:5A-3) that clears, moves, cuts, or destroys any trees, shrubs, or plants for the purpose of erecting, installing, moving, removing, altering, protecting, or maintaining any structures or fixtures, necessary for the supply of electric light, heat, or power, communication, or cable television services upon any lands in which it has acquired an easement or right-of-way or upon a public right-of-way, shall not be required to receive the permission of a commission to undertake such work or be subject to any penalty imposed by a commission pursuant to subsections a. or b. of this section. This subsection shall not exempt any such public utility or cable television company from any penalty or replacement assessment imposed as result of damage to a tree, shrub, or plant caused by the public utility's or cable television company's non-compliance with any such rule or regulation of the commission.

(cf: P.L.1991, c.396, s.1)

15. This act shall take effect immediately.

STATEMENT

This bill, entitled the "Public Utility Reliability Investment Act," requires the Board of Public Utilities (BPU) to establish uniform Statewide standards of acceptable performance for service reliability and restoration of service after a service interruption that every investor-owned electric and gas public utility in the State must follow. The standards shall address the following components of electric and gas utility service, as appropriate: 1) electric power and natural gas supply resource and demand balancing, flow monitoring, and stabilization; 2) critical infrastructure protection and control; 3) communications coordination; 4) emergency preparedness and operations; 5) facilities design and operations maintenance; 6) personnel performance, training, and qualifications requirements; 7) electric power and natural gas system disturbance, contingency response, and system restoration; and 8) reliability operating limits coordination.

The bill requires all electric and gas public utilities to file a service reliability plan and an emergency communications strategic plan for review and approval by the BPU. After review of a utility's service reliability plan and communications plan, the BPU may order the utility to make such modifications as it deems reasonably necessary to remedy any deficiency.

The bill requires electric utilities regulated by BPU, within 180 days of the bill's effective date, to file plans with the BPU to make necessary infrastructure improvements to limit service disruptions. The BPU would have up to 120 days from the date of the electric utilities' filing to review and approve the utilities' plans.

The plans to be submitted to the BPU shall provide in adequate detail the infrastructure improvements, investments, and cost analyses and estimates to be made by electric utilities, including, but not limited to: 1) strategies to mitigate potential flooding of any substation that sustained flood damage within two years prior to the effective date of the bill, as well as substations constructed within a flood-hazard area as delineated by the Department of Environmental Protection, addressing the feasibility of mitigation by, among other things, construction of flood barriers, raising equipment, or other measures that would make substations flood resistant, including timeframes to implement the recommended measures and cost estimates for each scenario considered; 2) consistent with federal law, the establishment of a comprehensive tree pruning and removal program that would prioritize the substantial decrease in the possibility of power line disruption and tree experts shall be used to assess and recommend tree pruning or tree removal if a tree poses a substantial danger of striking a power line; 3) the installation and use of smart grid infrastructure and smart meters which would alert utilities when and where power is lost, using technology to find service disruption locations quickly, and notify customers when they can expect restoration of service. The plan shall allow a customer to opt out of receiving a smart meter; 4) a cost analysis and estimate of the installation and operation of power delivery redundancy systems where needed and are practicable to redirect power when generating stations incur power supply disruptions; and 5) the installation of underground electric distribution lines in new residential and commercial developments, where practicable.

The bill provides that, in order to effectuate the infrastructure improvements required pursuant to the bill in a timely and efficient manner, the BPU shall authorize an alternative methodology of recovering costs incurred in the implementation of the plan required pursuant to section 7 of the bill independent of the methodology adopted by the BPU pursuant to R.S.48:2-21.

If an electric or gas utility violates sections 1 through 9 of the bill, the BPU may impose a civil administrative penalty not to exceed $25,000 for each violation, except that any maximum civil penalty may not exceed $2,000,000 for any related series of events. Any civil administrative penalty may be compromised by the BPU in an amount and with conditions the BPU deems appropriate. In determining the amount of the penalty, or the amount agreed upon in compromise, the BPU shall consider: the nature, circumstances, and gravity of the violation; the degree of the violator's culpability; any history of prior violations; any good faith effort on the part of the violator in attempting to achieve compliance; and any other factors the BPU determines to be appropriate Funds generated from collected penalties will be allocated to the "Board of Public Utilities Civil Penalty Fund." The money in the fund will be used to increase electric and gas public utilities' service quality and reliability. Costs associated with civil penalties will not be recoverable from ratepayers.

Finally, the bill provides that, in order to allow electric utilities to clear, move, cut, or destroy trees, shrubs, or plants for the purpose of erecting, installing, moving, removing, altering, protecting, or maintaining any structures or fixtures, necessary for the supply of electric light, heat, or power upon any lands in which it has acquired an easement or right-of-way or upon any public right-of-way, those entities would not be required to receive the permission of any county or municipal shade tree commission to undertake such work and would not be subject to any penalty imposed by any commission as provided by law. The bill also exempts telephone utilities and cable television companies providing communication or cable television services from paying those penalties. Electric and telephone utilities and cable television companies are not exempt from any penalty or replacement assessment imposed as a result of damage to a tree, shrub, or plant caused by non-compliance with any such rule or regulation of a county or municipal shade tree commission. Further, telephone utilities and cable television companies are required to receive the permission of a county or municipal shade tree commission to undertake such work.