Sponsored by:
Senator THOMAS GOODWIN
District 14 (Mercer and Middlesex)
SYNOPSIS
Prohibits implementation of formula-based rates for sewerage authorities and electric, gas and water public utilities.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning certain sewerage authority and public utility rates and supplementing P.L.1946, c.138 (C.40:14A-1 et seq.) and Title 48 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. Notwithstanding any law, rule, regulation or order to the contrary, rates and service charges for sewerage authorities shall not be established through implementation of a formula-based rate setting system.
b. As used in this section, "formula-based rate setting system" means a methodology which utilizes certain spreadsheet equations to initially determine, and thereafter annually adjust, a sewerage authority’s rates and service charges, based on various schedules and protocols set forth in the authority’s schedule of rates and service charges, and which includes such factors as the authority’s historical and forecasted financial data to project the authority's revenue requirements and rates and service charges rather than relying on the methods of establishing the sewerage authority’s rates and service charges, as set forth in section 8 of P.L.1946, c.138 (C.40:14A-8).
2. a. Notwithstanding any law, rule, regulation or order to the contrary, base rates for electric, gas, and water public utilities shall not be established through implementation of a formula-based rate setting system.
b. As used in this section, "formula-based rate setting system" means a methodology which utilizes certain spreadsheet equations to initially determine, and thereafter annually adjust, electric, gas or water public utility rates, based on various schedules and protocols set forth in a utility’s tariff, and which includes such factors as a utility’s historical and forecasted financial data to project a utility's revenue requirements and rates rather than relying on the rate base, rate-of-return methodologies set forth in R.S.48:2-21 or an alternative plan of regulation pursuant to section 5 of P.L.1995, c.180 (C.48:2-21.28), to achieve a utility's authorized return on equity.
3. This act shall take effect immediately.
STATEMENT
This bill prohibits the implementation of a formula-based rate setting system to determine sewerage authority rates and service charges as an alternative to having such authority rates and service charges established through the methodology set forth in section 8 of P.L.1946, c.138 (C.40:14A-8). The bill also prohibits the implementation of a formula-based rate setting system to determine electric, gas and water public utility rates as an alternative to having such utility rates established through traditional rate base, rate of return methodologies pursuant to R.S.48:2-21, or alternative plans of regulation pursuant to section 5 of P.L.1995, c.180 (C.48:2-21.28).
As used in the bill, "formula-based rate setting system" means a methodology which utilizes certain spreadsheet equations to initially determine, and thereafter annually adjust, rates and service charges, based on various schedules and protocols set forth in an authority’s schedule of rates and service charges, or a utility’s tariff, as appropriate, and which includes such factors as historical and forecasted financial data to project future revenue requirements and rates, rather than relying on more traditional rate-setting methods.