STATE OF NEW JERSEY
222nd LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION
Sponsored by:
Senator BOB SMITH
District 17 (Middlesex and Somerset)
Senator ANDREW ZWICKER
District 16 (Hunterdon, Mercer, Middlesex and Somerset)
Co-Sponsored by:
Senators McKeon, Mukherji, Burgess, McKnight, Wimberly, Stack and Diegnan
SYNOPSIS
Requires BPU to establish beneficial building electrification and decarbonization program and requires electric public utilities to prepare and implement beneficial building electrification and decarbonization plans.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
An Act concerning building electrification and decarbonization and supplementing P.L.2018, c.17 (C.48:3-87.8 et al.).
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. For the purposes of this section:
"Beneficial building electrification and decarbonization " means a change in end-use equipment from a nonelectric type to an efficient electric type for any building end use, including water heating, space heating, industrial process, or transportation, provided that the change: reduces cost from a societal perspective; reduces greenhouse gas emissions ; or promotes the increased use of the electric grid in off-peak hours.
"Cost effective" means any beneficial building electrification and decarbonization program having a benefit-cost ratio of greater than one, consistent with the New Jersey Cost Test for Energy Efficiency adopted by the board, and any additional factors the board determines are necessary to achieve the goals of this section.
b. No later than one year after the date of enactment of this section, 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 beneficial building electrification and decarbonization program. As part of the program adopted pursuant to this section, the board shall develop greenhouse gas emission reduction targets for beneficial building electrification and decarbonization programs implemented by each electric public utility in the State and require electric public utilities to prepare and implement beneficial building electrification and decarbonization plans. The board shall:
(1) establish beneficial building electrification and decarbonization program targets expressed in the amount of on-site greenhouse gas emission reductions;
(2) establish program design elements and minimum filing requirements to achieve the goals of the energy master plan adopted pursuant to section 12 of P.L.1977, c.146 (C.52:27F-14);
(3) establish a cost recovery and performance incentive mechanism for programs established under this section;
(4) determine whether the electric public utilities or the board shall be responsible for the implementation of building electrification and decarbonization programs for new construction; and
(5) develop and provide direct incentives for the installation of electric heat pumps.
c. Each electric public utility shall develop and submit to the board for approval, a multi-year beneficial building electrification and decarbonization plan to achieve the targets established in subsection b. of this section. To qualify for approval, an electricity public utility plan shall:
(1) meet or exceed on-site greenhouse gas emission reduction targets set by the board; and
(2) be cost effective from a societal perspective utilizing a cost-effectiveness test that includes consideration of the environmental benefits of reducing greenhouse gas emissions, including methane emissions.
d. A beneficial building electrification and decarbonization plan may meet the greenhouse gas emission reduction targets set by the board pursuant to subsection b. of this section through the following means:
(1) conversion of fossil fuel-based space and water heating systems, including natural gas and propane systems as well as other unregulated fuels, to systems that employ high-efficiency electric heat pumps;
(2) replacement of fossil fuel based appliances with high-efficiency electric appliances such as induction cooking ranges and heat-pump clothes dryers;
(3) conversion of fossil fuel-based industrial equipment or processes to energy-efficient electric-powered equipment or processes; or
(4) market transformation programs aimed at educating and training contractors to use appliances, equipment, and systems that are high-efficiency.
2. This act shall take effect immediately.
STATEMENT
This bill would direct the New Jersey Board of Public Utilities (BPU) to establish a beneficial building electrification and decarbonization program, and would require electric public utilities to prepare and implement beneficial building electrification and decarbonization plans. As used in the bill, "beneficial electrification and decarbonization" means a change in end-use equipment from a nonelectric type to an efficient electric type for any building end use, including water heating, space heating, industrial process, or transportation, provided that the change: reduces cost from a societal perspective; reduces greenhouse gas emissions, or promotes the increased use of the electric grid in off-peak hours.
The bill directs the BPU to adopt, no later than one year after the bill becomes law, rules and regulations establishing a beneficial building electrification and decarbonization program. As part of the program, the BPU would develop greenhouse gas emission reduction targets for beneficial building electrification and decarbonization plans implemented by each electric public utility in the State. The bill would also require each electric public utility to prepare a multi-year beneficial electrification and decarbonization plan to achieve the targets established by the BPU. To be approved by the BPU, an electricity public utility plan would be required to meet or exceed on-site greenhouse gas emission reduction targets set by the board and be cost effective from a societal perspective utilizing a cost-effectiveness test that includes consideration of the environmental benefits of reducing greenhouse gas emissions and methane emissions. Subsection d. of section 1 of the bill would establish the means by which a utility's beneficial building and decarbonization plan could meet the greenhouse gas emission reduction targets.