Bill Text: NJ S3676 | 2020-2021 | Regular Session | Introduced
Bill Title: Modifies rate-regulation over municipal electric utilities.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2021-04-26 - Introduced in the Senate, Referred to Senate Economic Growth Committee [S3676 Detail]
Download: New_Jersey-2020-S3676-Introduced.html
Sponsored by:
Senator JOSEPH PENNACCHIO
District 26 (Essex, Morris and Passaic)
SYNOPSIS
Modifies rate-regulation over municipal electric utilities.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning electric rates charged by municipal utilities, amending and supplementing Title 40 of the Revised Statutes, and amending P.L.1983, c.111.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. R.S.40:62-24 is amended to read as follows.
40:62-24. Every municipality in supplying electricity, gas, steam or other product beyond its corporate limits is hereby declared to be a public utility. [The] Except as otherwise provided in section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill), the Board of Public Utilities shall have the same supervision and regulation of, and jurisdiction and control over such municipality in respect to its acts in supplying electricity, gas, steam or other product beyond its corporate limits, and of and over the property, property rights, equipment, facilities and franchises used in supplying electricity, gas, steam or other product beyond its corporate limits as over other public utilities. [Every] Except as otherwise provided in section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill), every such municipality shall be subject as to its service, accounts, property rights, equipment, franchises, extensions, reports, issuance of bonds or other indebtedness maturing in more than 1 year from the date thereof, to the jurisdiction of the Board of Public Utilities to the same extent as other public utilities.
[Every] Except as otherwise provided in section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill), every municipality supplying electricity, gas, steam or other product beyond its corporate limits shall have the rates for these utilities subject to the jurisdiction of the Board of Public Utilities. The board in regulating these rates shall provide for a rate structure which allows the municipality, within the limits of any covenants made with bondholders pursuant to law, to:
a. Recoup all costs of operation, including but not limited to the costs of raw materials, administration, equipment, buildings, property, maintenance, taxes, debt service, fees and offsetting any budget deficit occurring in the immediately preceding fiscal year;
b. Establish a surplus sufficient to provide for the reasonable anticipation of contingencies which may affect the operation of the utility and for an amount which may be transferred from the accounts of the municipal utility and included in the local budget pursuant to section 5 of [this amendatory and supplementary act] P.L.1983, c.111 (C.40A:4-35.1).
(cf: P.L.1983, c.111, s.2)
2. (New section) a. Except as otherwise provided in subsection b. of this section, a municipality that provides electricity, gas, steam or other product pursuant to the provisions of R.S.40:62-12 et seq., and which supplies electricity to more than 10,000 billed customers located outside of the municipality, shall be subject to the jurisdiction, regulation and control of the Board of Public Utilities in accordance with the provisions of Title 48 of the Revised Statutes.
b. Notwithstanding any other provision of law, rule, order or regulation to the contrary, whenever a municipality providing electricity, gas, steam or other product pursuant to the provisions of R.S.40:62-12 et seq., charges the same rates to the billed customers located inside and outside of the municipality, the municipality shall be exempt from the jurisdiction, regulation and control of the Board of Public Utilities. The governing body of the municipality shall authorize any increase in rates by ordinance. Customers located outside of the supplying municipality shall have an opportunity to be heard at the public hearing.
c. Nothing in this section shall be construed to exempt a municipality supplying another local unit or billed customers outside of the municipality, from the jurisdiction, regulation and control of the Board of Public Utilities, with respect to service and reliability.
d. Supplying municipalities shall continue to pay an assessment to the Board of Public Utilities in accordance with any other applicable provision of law.
3. Section 5 of P.L.1983, c.111 (C.40A:4-35.1) is amended to read as follows:
5. To the extent there is available surplus revenue collected by a municipality pursuant to chapter 62 of Title 40 of the Revised Statutes for supplying a utility service which is regulated by the Board of Public Utilities pursuant to R.S.40:62-24 or subsection d. of N.J.S.40A:31-23, or to the extent there is available surplus revenue collected by a county or municipality from a stormwater utility established pursuant to P.L.2019, c.42 (C.40A:26B-1 et al.), an amount not to exceed five percent of the annual costs of operation of the utility may be transferred annually from the accounts of the municipal utility or county utility, as appropriate, and included in the local budget pursuant to N.J.S.40A:4-35.
(cf: P.L.2019, c.42, s.20)
4. This act shall take effect immediately.
STATEMENT
This bill would modify the circumstances under which municipal electric utilities' rates are subject to the jurisdiction of the Board of Public Utilities (BPU). Under current law, the rates of a municipal electric utility that supplies power to customers beyond its corporate limits are subject to the jurisdiction of the BPU. The bill would modify this by limiting BPU rate-jurisdiction to municipal electric utilities that service more than 10,000 billed customers outside of the supplying municipality. Further, municipal electric utilities would not be subject to BPU rate regulation if the utility charges customers the same rates, regardless of whether the customer is located inside or outside of the supplying municipality.
