A3253

An Act concerning State energy programs, amending P.L.1999, c.23 and P.L.2018, c.17, 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) a. As used in this section:

"Board" means the Board of Public Utilities

"Geothermal energy system" means a system, including, but not limited to, a bored geothermal heat exchanger, a groundwater thermal exchange device, or a submerged closed loop heat exchanger, which heats and cools one or more buildings by using the constant temperature of the earth as both a heat source and heat sink, and a heat exchanger consisting of an underground closed loop system of piping containing a liquid to absorb and relinquish heat within the earth.

b. No later than 18 months after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), the Board of Public Utilities shall adopt rules and regulations, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), establishing an incentive program for persons who own and maintain a geothermal energy system. The program shall be available to all ratepayer classes, including residential, commercial, industrial, and governmental entities.

c. The incentive program shall provide a fixed-rate, monthly incentive to the owner of the geothermal energy system, which is proportionate to the environmental and peak demand reduction benefits provided by the system. The board may establish appropriate levels for the incentives, provided that they are commensurate with the value of incentives for solar energy provided under P.L.2021, c.169 (C.48:3-114 et al.).

d. The board shall establish the terms and conditions for qualifying for the program, as well as application procedures.

e. The board may use funds collected through the societal benefits charge imposed pursuant to section 12 of P.L.1999, c.23 (C.48:3-60) in order to fund the incentive program established pursuant to this section.

2. (New section) No later than 18 months after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), the Board of Public Utilities shall develop and implement a grant program to incentivize counties and municipalities to become, or maintain their status as, a government aggregator pursuant to the provisions of sections 42 through 45 of P.L.1999, c.23 (C.48:3-91 through C.48:3-94). The board shall determine the eligibility and ranking criteria for the program, and the form and manner by which municipalities and counties may apply for the program. The board may use funds collected through the societal benefits charge imposed pursuant to section 12 of P.L.1999, c.23 (C.48:3-60) in order to fund the grant program established pursuant to this section.

3. 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] incentives for geothermal energy systems distributed pursuant to section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill), and grants to counties or municipalities that are government aggregators pursuant to section 2 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)

4. Section 5 of P.L.2018, c.17 (C.48:3-87.11) is amended to read as follows:

5. a. No later than 210 days after the date of enactment of P.L.2018, c.17 (C.48:3-87.8 et al.), the Board of Public Utilities shall adopt, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), rules and regulations establishing a "Community Solar Energy Pilot Program" to permit customers of an electric public utility to participate in a solar energy project that is remotely located from their properties but is within their electric public utility service territory to allow for a credit to the customer's utility bill equal to the electricity generated that is attributed to the customer's participation in the solar energy project.

b. The rules and regulations developed by the board shall establish:

(1) a capacity limit for individual solar energy projects to a maximum of five megawatts per project;

(2) an annual capacity limit for all solar energy projects under the pilot program;

(3) geographic limitations for solar energy projects and participating customers;

(4) a minimum number of participating customers for each solar energy project;

(5) the value of the credit on each participating customer's bill;

(6) standards to limit the land use impact of a solar energy project as required in subsection r. of section 38 of P.L.1999, c.23 (C.48:3-87);

(7) the provision of access to solar energy projects for low and moderate income customers;

(8) standards to ensure the ability of residential and commercial customers to participate in solar energy projects, including residential customers in multifamily housing;

(9) standards for connection to the distribution system of an electric public utility; and

(10) provisions to minimize impacts to the distribution system of an electric public utility.

c. The board shall make available on its Internet website information on solar energy projects whose owners are seeking participants.

d. The board shall establish standards and an application process for owners of solar energy projects who wish to be included in the Community Solar Energy Pilot Program. The standards for the Community Solar Energy Pilot Program shall include, but need not be limited to, a verification process to ensure that the solar energy projects are producing an amount of energy that is greater than or equal to the amount of energy that is being credited to its participating customer's electric utility bills pursuant to subsection b. of this section, and consumer protection measures. Projects approved by the board shall have at least two participating customers.

The board may restrict qualified solar energy projects to those located on brownfields, landfills, areas designated in need of redevelopment, in underserved communities, or on commercial rooftops.

e. Subject to review by the board, an electric public utility shall be entitled to full and timely cost recovery for all costs incurred in implementation and compliance with this section.

f. No later than 36 months after adoption of the rules and regulations required pursuant to subsection b. of this section, the board shall adopt rules and regulations, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), to convert the Community Solar Energy Pilot Program to a permanent program. The board shall adopt rules and regulations for the permanent program that set forth standards for projects owned by electric public utilities, special purpose entities, and nonprofit entities. The rules and regulations shall also:

(1) limit the capacity of each solar energy project to a maximum of five megawatts;

(2) establish a goal for the conditional registration of 225 megawatts of solar energy projects prior to June 1, 2024, with an additional 275 megawatts prior to June 1, 2024 if qualified applications exceed 225 megawatts, an additional 250 megawatts prior to June 1, 2025 if qualified applications exceed 500 megawatts, and at least an additional [150] 200 megawatts per year thereafter, taking into account any changes to the SREC program;

(3) set geographic limitations for solar energy projects and participating customers;

(4) provide for a minimum number of participating customers for each solar energy project;

(5) require the provision of access to solar energy projects for low and moderate income customers;

(6) establish standards to ensure the ability of residential and commercial customers to participate in solar energy projects, including residential customers in multifamily housing;

(7) establish a method for determining the value of the credit on each participating customer's bill;

(8) establish timeframes for the credit available to the customer;

(9) establish standards and methods to verify solar electric energy generation on a monthly basis for a solar energy project;

(10) establish standards consistent with the land use provisions for solar energy projects as provided in subsections r., s., and t. of section 38 of P.L.1999, c.23 (C.48:3-87);

(11) establish standards, fees, and uniform procedures for solar energy projects to be connected to the distribution system of an electric public utility;

(12) minimize impacts to the distribution system of an electric public utility;

(13) require monthly reporting requirements for the operators of solar energy projects to the electric public utility, project customers, and the board;

(14) require reporting by the electric public utility to the operator of a solar energy project on the value of credits to the participating customer's bills;

(15) require transferability, portability, and buy-out provisions for customers who participate in community solar energy projects;

(16) establish requirements and standards that provide for the auditing and enforcement of a solar energy project's compliance with the provisions of this section and the rules and regulations adopted pursuant thereto, including the project's compliance with commitments related to providing access to solar energy projects to low- and moderate-income customers and bill crediting; and

(17) allow, in a form and manner to be determined by the board, low- and moderate-income residential customers to self-attest to the customer's income as an acceptable income verification method for participation in a solar energy project.

g. As used in this section:

"Solar energy project" means a system containing one or more solar panels and associated equipment.

"Solar panel" means an elevated panel or plate, or a canopy or array thereof, that captures and converts solar radiation to produce electric power, and is approved by the board to be included in the Community Solar Energy Pilot Program.

"Solar power" includes flat plate, focusing solar collectors, or photovoltaic solar cells and excludes the base or foundation of the panel, plate, canopy, or array.

(cf: P.L.2023, c.200, s.1)

5. This act shall take effect immediately.

STATEMENT

This bill would direct the Board of Public Utilities to establish an incentive program for geothermal energy systems, and a program to provide grants to counties and municipalities who participate in the State's government energy aggregation program. The bill would also increase the annual target for the growth of the State's community solar program.

Specifically, the bill would direct the BPU to establish an incentive program for persons who own and operate geothermal energy systems 18 months after the bill's enactment. Under the bill, the incentive program would provide a fixed-rate, monthly incentive to the owner of the geothermal energy system, which is proportionate to the environmental and peak demand reduction benefits provided by the system. The BPU would be authorized to establish the amounts of the incentives, provided that they are commensurate with the value of SREC-IIs provided under P.L.2021, c.169 (C.48:3-114 et al.). The bill would authorize the BPU to utilize funds collected through the societal benefits charge to fund the incentives.

The bill would also direct the BPU to establish a program to incentivize counties and municipalities to become government aggregators pursuant to sections 42 through 45 of the "Energy Discount and Energy Competition Act," P.L.1999, c.23 (C.48:3-91 through C.48:3-94). Government aggregators are counties or municipalities that negotiate with third-party energy providers to provide electricity or natural gas to their residents at a lower rate, or with a higher mix of renewable energy sources, than could normally have been achieved by the individual customer. The bill would authorize the BPU to utilize funds collected through the societal benefits charge to fund the grants.

Finally, the bill would increase the annual target for the growth of the community solar program from 150 megawatts per year to 200 megawatts per year.