Bill Text: NJ A1072 | 2026-2027 | Regular Session | Comm Sub
Bill Title: Requires BPU to establish distributed energy storage incentive program.
Sponsorship: Partisan Bill (Democrat 3)
Status: (Introduced) 2026-05-28 - Reported as an Assembly Committee Substitute and Referred to Assembly Appropriations Committee [A1072 Detail]
Download: New_Jersey-2026-A1072-Comm_Sub.html
ASSEMBLY COMMITTEE SUBSTITUTE FOR
ASSEMBLY, No. 1072
STATE OF NEW JERSEY
222nd LEGISLATURE
ADOPTED MAY 28, 2026
Sponsored by:
Assemblyman WAYNE P. DEANGELO
District 14 (Mercer and Middlesex)
Assemblyman KEVIN P. EGAN
District 17 (Middlesex and Somerset)
Assemblyman PAUL KANITRA
District 10 (Monmouth and Ocean)
SYNOPSIS
Requires BPU to establish distributed energy storage incentive program.
CURRENT VERSION OF TEXT
Substitute as adopted by the Assembly Telecommunications and Utilities Committee.
An Act concerning energy storage and supplementing Title 48 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. As used in P.L. , c. (C. ) (pending before the Legislature as this bill):
"Accredited capacity" means the same as that term is defined in section 1 of P.L.2025, c.136 (C.48:3-121.2).
"Board" means the New Jersey Board of Public Utilities or any successor agency.
"Critical community facility" means and includes, but is not limited to, any facility that has been formally identified by State or local offices of emergency management in a hazard mitigation plan or similar document as a critical community facility.
"Customer-sited energy storage system" means energy storage that operates in parallel with an electric distribution system, is connected on the customer side of the meter, and is owned by the customer or another party that is not the electric public utility that provides electric power to the customer.
"Electric public utility" means the same as the term is defined in section 3 of P.L.1999, c.23 (C.48:3-51).
"Energy storage" means the same as that term is defined pursuant to section 1 of P.L.2025, c.136 (C.48:3-121.2).
"Energy storage capacity" means the measure of the energy capacity in kilowatt-hours or megawatt-hours of energy storage.
"Front-of-the-meter energy storage system" means energy storage that is interconnected with the distribution system on the utility side of the meter. "Front-of-the-meter energy storage" shall include energy storage that is subject to a tariff from an electric public utility or from PJM.
"Incentive program" means the distributed energy storage incentive program established pursuant to section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill).
"Installed capacity" means the nameplate output of an energy storage system, measured in kilowatts or megawatts of alternating current, that is available to the electric grid.
"Overburdened community" means the same as the term is defined in section 2 of P.L.2020, c.92 (C.13:1D-158).
"PJM Interconnection, L.L.C." or "PJM" means the same as the term is defined in section 3 of P.L.1999, c.23 (C.48:3-51).
"Public utility" means the same as that term is defined pursuant to R.S.48:2-13.
2. a. (1) No later than 180 days after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), the Board of Public Utilities shall establish, by order, a distributed energy storage incentive program to be administered by electric public utilities, which incentive program shall provide incentives for the development of at least 2,000 megawatts of installed capacity of customer-sited energy storage systems and front-of-the-meter energy storage systems by 2030. The order establishing the incentive program shall specify minimum filing requirements for the incentive program, including, but not limited to:
(a) the incentive levels to be established for customer-sited energy storage systems and front-of-the-meter energy storage systems connected to the distribution system. However, the board may defer determination of incentive levels for front-of-the-meter energy storage systems until after an electric public utility files the tariffs required by section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill);
(b) a methodology for determining the rates for the tariffs filed by an electric public utility pursuant to section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill) for front-of-the-meter energy storage systems;
(c) an application process for applicants seeking an incentive through the incentive program; and
(d) eligibility requirements for applicants seeking an incentive through the incentive program.
(2) In the first year of the incentive program, the board shall set goals to provide incentives for up to 350 megawatts in customer-sited energy storage systems and front-of-the-meter energy storage systems, with applicants accepted on a first-come, first-served basis. In general, the incentive program shall be designed to achieve or exceed, together with other energy storage programs established by the board through law, rule, regulation, or order, a total of incentives for new energy storage capacity equal to 3,000 megawatts by 2030.
(3) The incentives provided through the incentive program shall be structured as an administratively-determined, fixed incentive paid on an annual basis for a period of 15 years, or another period as may be established by the board, based on the energy storage capacity of the energy storage system, as measured in kilowatt-hours. The amount of the incentive shall be expressed in dollars per rated kilowatt-hour of energy storage capacity per year. The board shall establish different incentive levels that distinguish between different projects sizes, whether the energy storage system is customer-sited or front-of-the-meter, and other criteria as established by the board. The total present value of an incentive provided through the incentive program over the 15-year incentive term, or other term as may be established by the board, shall not exceed 40 percent of a project's total cost, based on a seven percent discount rate or other discount rate set by the board. The board may develop a system of incentive bonuses to differentiate between projects by attributes, including, but not limited to, those serving overburdened communities and those providing resilient power to critical community facilities.
b. Stand-alone energy storage systems or energy storage systems that are paired with a renewable source of electric power, including, but not limited to, a solar photovoltaic array, shall be eligible for the incentive program. However, the incentive program shall only be available to an energy storage system that becomes operable on or after the date on which the incentive program is established pursuant to subsection a. of this section and is either: a customer-sited energy storage system that is owned, hosted, leased, or operated by a residential or non-residential customer of an electric public utility; or a front-of-the-meter energy storage system located in the service area of an electric public utility and connected to the distribution system.
c. The board shall reserve at least one quarter of the incentives provided to customer-sited energy storage systems for customer classes or deployment scenarios that face greater economic hurdles, including, but not limited to, low-to-moderate income customers and customers located in overburdened communities.
d. The incentive program shall not prevent or discourage customer-sited energy storage systems or front-of-the-meter energy storage systems from providing services to, or participating in, the wholesale markets, particularly the PJM capacity market, unless such restrictions are temporarily needed to ensure the peak load reduction value of energy storage systems supported by the incentive program is reflected in PJM load forecasts prior to the first delivery year in which the energy storage systems can act as capacity suppliers. Any evaluation of costs and benefits of customer-sited energy storage systems or front-of-the-meter energy storage systems shall include benefits that accrue directly or indirectly to ratepayers due to the participation of the customer-sited energy storage system or front-of-the-meter energy storage system in wholesale markets.
e. An applicant seeking an incentive award through the incentive program for a customer-sited energy storage system shall complete the project by no later than 30 months after the date on which the applicant's application is approved. An applicant seeking an incentive award through the incentive program for a front-of-the-meter energy storage system shall complete the project by no later than 42 months after the date on which the applicant's application is approved. However, the project timeline requirements established by this subsection may be waived or extended for an applicant that demonstrates extenuating circumstances that caused a delay in the completion of the project, including, but not limited to, delays caused by an electric public utility, PJM, a permit authority, or supply chain disruption.
f. The board, with input from stakeholders, shall establish minimum performance standards for customer-sited energy storage systems and a method for measuring and ensuring compliance with those standards for energy storage systems receiving an incentive through the incentive program, which performance standards may include, but shall not be limited to, capability to increase distributed renewable energy hosting capacity, congestion relief, capacity value or peak load reduction, voltage control services such as Volt/Var control systems and Volt/Watt control systems, ramp rate control, and transmission and distribution infrastructure investment deferral or avoidance. The performance standards may be autonomous or respond to signals from the local distribution utility.
The board may include within the minimum filing requirements established in subsection a. of this section, an adjustment to the incentive payments according to a project's degree of compliance for program years after the initial program year. The board may apply a preliminary version of these performance standards to the first year of performance for the initial program year incentive recipients.
g. After the board issues minimum filing requirements pursuant to subsection a. of this section, each electric public utility shall file with the board a petition, or all electric public utilities shall file with the board a joint petition if the board so directs, proposing how to implement the incentive program. Any individual petitions shall maximize common public utility elements and minimize public utility-specific elements.
h. The board shall review each petition or the joint petition and may direct changes to the implementation plan presented in the submitted petitions or joint petition prior to board action. The board shall approve, approve in part, or deny each submitted petition and shall determine the appropriate level of spending for each electric public utility's implementation plan and allow each electric public utility to recover its costs through a separate component of the utility's rate. Each electric public utility's cost recovery shall be limited to the actual cost of implementing the incentive program and administering the incentive payments, inclusive of any carrying costs needed to account for any difference between the timing of incentive program expenditures and cost recovery. Notwithstanding the foregoing, the board may allow an electric public utility to earn a rate of return, which may be less than the rate of return established in the electric public utility's most recent base rate case, if the electric public utility successfully meets incentive program implementation benchmarks established by the board.
i. Beginning in 2027 and ending in the first calendar year after cost recovery ends under the incentive program established by this section, the board shall report annually to the Governor, and to the Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), information pertaining to the incentive program.
3. Each electric public utility in the State shall file a tariff with the board no later than 12 months after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), which tariff shall apply only to front-of-the-meter energy storage systems. The tariff shall be formulated to maximize common elements among each electric public utility and compensate front-of-the-meter energy storage systems for their value to the grid, as described in P.L. , c. (C. ) (pending before the Legislature as this bill). The tariff shall establish a new rate design for front-of-the-meter energy storage systems that reflects cost causation. The tariff may distinguish between different sizes and types of front-of-the-meter energy storage systems. The tariff shall exempt front-of-the-meter energy storage systems from charges intended for customers who consume electricity, including, but not limited to, the societal benefits charge imposed pursuant to section 12 of P.L.1999, c.23 (C.48:3-60).
4. The board shall, in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), adopt rules and regulations as necessary to implement this act.
5. This act shall take effect immediately.
