Bill Text: NJ S258 | 2024-2025 | Regular Session | Amended
Bill Title: Requires electric public utilities to develop and implement grid modernization plans; appropriates $300 million.
Spectrum: Partisan Bill (Democrat 3-0)
Status: (Introduced) 2024-03-14 - Referred to Senate Budget and Appropriations Committee [S258 Detail]
Download: New_Jersey-2024-S258-Amended.html
SENATE, No. 258
STATE OF NEW JERSEY
221st LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2024 SESSION
Sponsored by:
Senator BOB SMITH
District 17 (Middlesex and Somerset)
SYNOPSIS
Requires electric public utilities to develop and implement grid modernization plans; appropriates $300 million.
CURRENT VERSION OF TEXT
As reported by the Senate Environment and Energy Committee on March 14, 2024, with amendments.
An Act concerning the electric transmission and distribution system, supplementing Title 48 of the Revised Statues, amending P.L.1999, c.23 and P.L.2007, c.340, and making an appropriation.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. (New section) As used in sections 1 through 4 of P.L. , c. (C. ) (pending before the Legislature as this bill):
"Board" means the Board of Public Utilities.
"Distributed energy resource" means an electricity-producing resource or controllable load that is connected to an electric public utility's distribution infrastructure.
"Electric public utility" means the same as the term is defined in section 3 of P.L.1999, c.23 (C.48:3-51).
"Grid Modernization Plan," or "plan," means the plan prepared by each electric public utility pursuant to section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill), and implemented pursuant to section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill).
1["Transmission and distribution system" means the same as the term is defined in section 3 of P.L.1999, c.23 (C.48:3-51).]1
2. (New section) a. No later than one year after the effective date of this act, each electric public utility in the State shall prepare and submit to the board a Grid Modernization Plan. The purpose of the plan shall be to identify the most beneficial, cost-efficient, and practicable projects, to be undertaken by the electric public utility pursuant to section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill), to modernize the State's electric 1[transmission and]1 distribution system within the utility's service area.
b. A plan may include, but shall not be limited to, projects that:
(1) integrate energy storage systems into the electric 1[transmission or]1 distribution system;
(2) increase the capacity of the electric distribution system to interconnect distributed energy resources;
(3) prepare the electric 1[transmission and]1 distribution system to deliver power in accordance with the State's greenhouse gas emissions goals;
(4) decrease the risk of power outages, particularly outages caused by storms or other adverse weather events;
(5) improve the resilience of the electric 1[transmission and]1 distribution system against natural hazards associated with climate change, including increased temperatures and flood risk; and
(6) otherwise improve the ability of the electric public utility to provide uninterrupted electric power to customers, given the foreseeable changes in physical and market conditions.
c. A plan shall include a cost estimate for each project included in the plan and an appropriate timeline for the plan's implementation.
d. No later than 1[120] 2401 days after receipt of a Grid Modernization Plan, the board shall approve, conditionally approve, or disapprove the plan and provide written notice of the determination to the electric public utility. The board shall assess a plan on the basis of its ability to achieve the objectives enumerated in subsections a. and b. of this section, in addition to the plan's feasibility, cost effectiveness, and expected ratepayer impact considering all available revenue streams. If the board does not provide written notice of the determination made pursuant to this subsection, the plan shall be deemed to have been approved, and the electric public utility shall proceed to implement the plan as provided by paragraph (1) of subsection e. of this section.
e. (1) If a Grid Modernization Plan is approved, the electric public utility shall implement the approved plan within 90 days after receipt of the board's written notice or after the expiration of the 120-day period established by subsection d. of this section, as the case may be, or within another timeframe agreed to by the board.
(2) If a plan is conditionally approved, the board's written notice shall specify the conditions that are to be satisfied in order for the plan to be deemed approved pursuant to this section. The electric public utility shall implement the conditionally approved plan, in accordance with the conditions specified in the notice, either within 90 days after receipt of the board's notice or within another timeframe agreed to by the board.
(3) If a plan is disapproved, the board's written notice shall be accompanied by a detailed statement describing the reasons for disapproval. Not more than 30 days after receipt of the board's notice, the electric public utility shall submit a revised Grid Modernization Plan to the board, and the board shall approve, conditionally approve, or disapprove the revised plan in accordance with the provisions of this section.
3. (New section) a. No later than 90 days after a Grid Modernization Plan receives approval, or within another timeframe agreed to by the board pursuant to section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill), the electric public utility shall commence implementing the plan. The plan shall be fully implemented within the timeframe specified in the plan pursuant to subsection c. of section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill). In the event that an electric public utility is unable to fully implement its plan, it shall provide written notice to this effect to the board.
b. Subject to review by the board, an electric public utility shall be entitled to full and timely cost recovery for all costs incurred in the implementation of its plan.
4. (New section) a. No later than one year after the effective date of this act, the board shall develop a program to provide grants to electric public utilities for the purpose of providing financial relief to ratepayers for rate increases caused by the implementation of a Grid Modernization Plan.
b. The board shall develop
priority ranking criteria for the award of grants under the program. The
priority ranking criteria shall provide additional priority for a project that
receives funding pursuant to the federal "Infrastructure Investment and
Jobs Act," Pub.L.117-58, or the federal "Inflation Reduction Act,"
Pub.L.117-169.
c. There is established in the Board of Public Utilities a special, nonlapsing fund to be known as the Grid Modernization Ratepayer Relief Fund. Moneys in the fund shall be used by the board solely for the purpose of administering the grant program developed pursuant to this section. The fund shall be administered by the board and shall be credited with:
(1) moneys that are appropriated into the fund by the Legislature;
(2) moneys received from the societal benefits charge established pursuant to section 12 of P.L.1999, c.23 (C.48:3-60), as deemed appropriate by the board;
(3) moneys made available to the board pursuant to the implementation of the Regional Greenhouse Gas Initiative and P.L.2007, c.340 (C.26:2C-45 et seq.); and
(4) any return on investment of moneys deposited in the fund.
5. Section 12 of P.L.1999, c.23 (C.48:3-60) is amended to read as follows:
12. a. Simultaneously with the starting date for the implementation of retail choice as determined by the board pursuant to subsection a. of section 5 of P.L.1999, c.23 (C.48:3-53), the board shall permit each electric public utility and gas public utility to recover some or all of the following costs through a societal benefits charge that shall be collected as a non-bypassable charge imposed on all electric public utility customers and gas public utility customers, as appropriate:
(1) The costs for the social programs for which rate recovery was approved by the board prior to April 30, 1997. For the purpose of establishing initial unbundled rates pursuant to section 4 of P.L.1999, c.23 (C.48:3-52), the societal benefits charge shall be set to recover the same level of social program costs as is being collected in the bundled rates of the electric public utility on the effective date of P.L.1999, c.23 (C.48:3-49 et al.). The board may subsequently order, pursuant to its rules and regulations, an increase or decrease in the societal benefits charge to reflect changes in the costs to the utility of administering existing social programs. Nothing in P.L.1999, c.23 (C.48:3-49 et al.) shall be construed to abolish or change any social program required by statute or board order or rule or regulation to be provided by an electric public utility. Any such social program shall continue to be provided by the utility until otherwise provided by law, unless the board determines that it is no longer appropriate for the electric public utility to provide the program, or the board chooses to modify the program;
(2) Nuclear plant decommissioning costs;
(3) The costs of demand side management programs that were approved by the board pursuant to its demand side management regulations prior to April 30, 1997. For the purpose of establishing initial unbundled rates pursuant to section 4 of P.L.1999, c.23 (C.48:3-52), the societal benefits charge shall be set to recover the same level of demand side management program costs as is being collected in the bundled rates of the electric public utility on the effective date of P.L.1999, c.23 (C.48:3-49 et al.). Within four months of the effective date of P.L.1999, c.23 (C.48:3-49 et al.), and every four years thereafter, the board shall initiate a proceeding and cause to be undertaken a comprehensive resource analysis of energy programs, and within eight months of initiating such proceeding and after notice, provision of the opportunity for public comment, and public hearing, the board, in consultation with the Department of Environmental Protection, shall determine the appropriate level of funding for energy efficiency, light, medium, and heavy-duty plug-in electric vehicles, including school buses, and associated plug-in electric vehicle charging infrastructure, [and] Class I renewable energy programs that provide environmental benefits above and beyond those provided by standard offer or similar programs in effect as of the effective date of P.L.1999, c.23 (C.48:3-49 et al.); [provided that the] and ratepayer relief grants issued pursuant to section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill). The funding for such programs shall be no less than 50 percent of the total Statewide amount being collected in electric and gas public utility rates for demand side management programs on the effective date of P.L.1999, c.23 (C.48:3-49 et al.) for an initial period of four years from the issuance of the first comprehensive resource analysis following the effective date of P.L.1999, c.23 (C.48:3-49 et al.), and [provided that] 25 percent of this amount shall be used to provide funding for Class I renewable energy projects in the State. In each of the following fifth through eighth years, the Statewide funding for such programs shall be no less than 50 percent of the total Statewide amount being collected in electric and gas public utility rates for demand side management programs on the effective date of P.L.1999, c.23 (C.48:3-49 et al.), except that as additional funds are made available as a result of the expiration of past standard offer or similar commitments, the minimum amount of funding for such programs shall increase by an additional amount equal to 50 percent of the additional funds made available, until the minimum amount of funding dedicated to such programs reaches $140,000,000 total. After the eighth year, the board shall make a determination as to the appropriate level of funding for these programs. Such programs shall include a program to provide financial incentives for the installation of Class I renewable energy projects in the State, and the board, in consultation with the Department of Environmental Protection, shall determine the level and total amount of such incentives as well as the renewable technologies eligible for such incentives which shall include, at a minimum, photovoltaic, wind, and fuel cells. The board shall simultaneously determine, as a result of the comprehensive resource analysis, the programs to be funded by the societal benefits charge, the level of cost recovery and performance incentives for old and new programs and whether the recovery of demand side management programs' costs currently approved by the board may be reduced or extended over a longer period of time. The board shall make these determinations taking into consideration existing market barriers and environmental benefits, with the objective of transforming markets, capturing lost opportunities, making energy services more affordable for low income customers and eliminating subsidies for programs that can be delivered in the marketplace without electric public utility and gas public utility customer funding;
(4) Manufactured gas plant remediation costs, which shall be determined initially in a manner consistent with mechanisms in the remediation adjustment clauses for the electric public utility and gas public utility adopted by the board; and
(5) The cost[,] of consumer
education, as determined by the board, which shall be in an amount that,
together with the consumer education surcharge imposed on electric power
supplier license fees pursuant to subsection h. of section 29 of P.L.1999, c.23
(C.48:3-78) and the consumer education surcharge imposed on gas supplier
license fees pursuant to subsection g. of section 30 of P.L.1999, c.23
(C.48:3-79), shall be sufficient to fund the consumer education program
established pursuant to section 36 of P.L.1999, c.23 (C.48:3-85).
b. There is established in the Board of Public Utilities a nonlapsing fund to be known as the "Universal Service Fund." The board shall determine: the level of funding and the appropriate administration of the fund; the purposes and programs to be funded with monies from the fund; which social programs shall be provided by an electric public utility as part of the provision of its regulated services which provide a public benefit; whether the funds appropriated to fund the "Lifeline Credit Program" established pursuant to P.L.1979, c.197 (C.48:2-29.15 et seq.), the "Tenants' Lifeline Assistance Program" established pursuant to P.L.1981, c.210 (C.48:2-29.30 et seq.), the funds received pursuant to the Low Income Home Energy Assistance Program established pursuant to 42 U.S.C. s.8621 et seq., and funds collected by electric and gas public utilities, as authorized by the board, to offset uncollectible electricity and natural gas bills should be deposited in the fund; and whether new charges should be imposed to fund new or expanded social programs.
(cf: P.L.2022, c.86, s.2)
6. Section 7 of P.L.2007, c.340 (C.26:2C-51) is amended to read as follows:
7. a. The agencies administering programs established pursuant to this section shall maximize coordination in the administration of the programs to avoid overlap between the uses of the fund prescribed in this section.
b. Moneys in the fund, after appropriation annually for payment of administrative costs authorized pursuant to subsection c. of this section, shall be annually appropriated and used for the following purposes:
(1) Sixty percent shall be allocated to the New Jersey Economic Development Authority to provide grants and other forms of financial assistance to commercial, institutional, and industrial entities to support end-use energy efficiency projects and new, efficient electric generation facilities that are state of the art, as determined by the department, including but not limited to energy efficiency and renewable energy applications, to develop combined heat and power production and other high efficiency electric generation facilities, to stimulate or reward investment in the development of innovative carbon emissions abatement technologies with significant carbon emissions reduction or avoidance potential, to develop qualified offshore wind projects pursuant to section 3 of P.L.2010, c.57 (C.48:3-87.1), and to provide financial assistance to manufacturers of equipment associated with qualified offshore wind projects. The authority, in consultation with the board and the department, shall determine: (a) the appropriate level of grants or other forms of financial assistance to be awarded to individual commercial, institutional, and industrial sectors and to individual projects within each of these sectors; (b) the evaluation criteria for selecting projects to be awarded grants or other forms of financial assistance, which criteria shall include the ability of the project to result in a measurable reduction of the emission of greenhouse gases or a measurable reduction in energy demand, provided, however, that neither the development of a new combined heat and power production facility, nor an increase in the electrical and thermal output of an existing combined heat and power production facility, shall be subject to the requirement to demonstrate such a measurable reduction; and (c) the process by which grants or other forms of financial assistance can be applied for and awarded including, if applicable, the payment terms and conditions for authority investments in certain projects with commercial viability;
(2) Twenty percent shall be allocated to the board: to support programs that are designed to reduce electricity demand or costs to electricity customers in the low-income and moderate-income residential sector with a focus on urban areas, including efforts to address heat island effect and reduce impacts on ratepayers attributable to the implementation of P.L.2007, c.340 (C.26:2C-45 et al.) [or] ; to support the light duty plug-in electric vehicle incentive program and the incentive program for in-home electric vehicle service equipment established pursuant to sections 4 and 6 of P.L.2019, c.362 (C.48:25-4 and C.48:25-6); or to provide ratepayer relief grants pursuant to section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill) . For the purposes of this paragraph, the board, in consultation with the authority and the department, shall determine the types of programs to be supported and the mechanism by which to quantify benefits to ensure that the supported programs result in: a measurable reduction in energy demand [or] ; accomplishment of the plug-in electric vehicle goals established pursuant to section 3 of P.L.2019, c.362 (C.48:25-3); or effective subsidization of grid modernization projects pursuant to P.L. , c. (C. ) (pending before the Legislature as this bill);
(3) Ten percent shall be allocated to the department to support programs designed to promote local government efforts to plan, develop and implement measures to reduce greenhouse gas emissions, including but not limited to technical assistance to local governments, and the awarding of grants and other forms of assistance to local governments to conduct and implement energy efficiency, renewable energy, and distributed energy programs and land use planning where the grant or assistance results in a measurable reduction of the emission of greenhouse gases or a measurable reduction in energy demand. For the purpose of conducting any program pursuant to this paragraph, the department, in consultation with the authority and the board, shall determine: (a) the appropriate level of grants or other forms of financial assistance to be awarded to local governments; (b) the evaluation criteria for selecting projects to be awarded grants or other forms of financial assistance; (c) the process by which grants or other forms of financial assistance can be applied for and awarded; and (d) a mechanism by which to quantify benefits; and
(4) Ten percent shall be allocated to the department to support programs that enhance the stewardship and restoration of the State's forests and tidal marshes that provide important opportunities to sequester or reduce greenhouse gases.
c. (1) The department may use
up to four percent of the total amount in the fund each year to pay for
administrative costs justifiable and approved in the annual budget process,
incurred by the department in administering the provisions of P.L.2007, c.340
(C.26:2C-45 et al.) and in administering programs to reduce the emissions of
greenhouse gases including any obligations that may arise under subsection a.
of section 11 of P.L.2007, c.340
(C.26:2C-55).
(2) The board may use up to two percent of the total amount in the fund each year to pay for administrative costs justifiable and approved in the annual budget process, incurred by the board in administering the provisions of P.L.2007, c.340 (C.26:2C-45 et al.) and in administering programs to reduce the emissions of greenhouse gases including any obligations that may arise under subsection a. of section 11 of P.L.2007, c.340 (C.26:2C-55).
(3) The New Jersey Economic Development Authority may use up to two percent of the total amount in the fund each year to pay for administrative costs justifiable and approved in the annual budget process, incurred by the authority in administering the provisions of P.L.2007, c.340 (C.26:2C-45 et al.) and in administering programs to reduce the emissions of greenhouse gases.
d. The State Comptroller shall conduct or supervise independent audit and fiscal oversight functions of the fund and its uses.
(cf: P.L.2019, c.362, s.12)
7. There is appropriated from the General Fund to the Grid Modernization Ratepayer Relief fund established pursuant to subsection c. of section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill) the sum of $300 million to develop and implement the grant program established by the Board of Public Utilities pursuant to section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill).
8. This act shall take effect immediately.
