S2712

An Act requiring a study on the de-privatization of certain public utilities and making an appropriation.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. a. As used in this section:

“Division” means the New Jersey Division of the Rate Counsel or a successor agency.

“Clean energy program” means a program administered by a public entity, which program incentivizes or otherwise promotes increased energy efficiency and the use of clean, renewable sources of energy, which sources shall include, but shall not be limited to, solar, wind, geothermal, and sustainable biomass.

“Electric public utility” means a public utility, as that term is defined in R.S.48:2-13, that transmits and distributes electricity to end users within the State.

“Gas public utility” means a public utility, as that term is defined in R.S.48:2-13, that distributes gas to end users within the State.

“Public entity” means any of the principal departments in the Executive Branch of the State government, and any division, board, bureau, office, commission, or other instrumentality within or created by such department or by any political subdivision.

“Third party” means an entity that has no past or present ownership interest, financial stake, contractual obligation, spousal affiliation, lobbying activities, employment or contractor status, or formal connection with an electric public utility, a gas public utility, or a public entity, ensuring complete independence from direct or indirect influence by an electric public utility, a gas public utility, or a public entity in the third party’s decision-making or operations. b. The Division of the Rate Counsel shall engage a third party to conduct a study on the feasibility of and cost savings associated with the de-privatization of electric public utilities and gas public utilities in this State and shall direct the third party to conduct such analysis as the division shall deem appropriate for purposes of the study. The third party engaged by the division shall have the authority to request information and reasonable assistance from any electric public utility, gas public utility, or public entity in order to conduct the study. The study conducted pursuant to this section shall examine the feasibility of and cost savings associated with de-privatization options, including, but not limited to:

(1) acquisition or operation of existing electric public utilities and gas public utilities, in part or in whole, by a public entity; and

(2) joint ownership or operation of existing electric public utilities and gas public utilities, in part or in whole, between a public entity and existing electric public utilities and gas public utilities.

c. The study conducted pursuant to this section shall include, but not be limited to:

(1) the short- and long-term challenges and benefits of each option examined, including, but not limited to, any anticipated environmental effect, impact on service, and cost to ratepayers;

(2) the strengths and weaknesses of selecting each public entity considered for potential acquisition, ownership, or operation, in whole or in part, of electric public utilities and gas public utilities, as well as potential organizational structures. Public entities to be considered shall include the division and any other appropriate public entity;

(3) an estimation of costs, including, but not limited to, financial costs, as well as the long-term financial impact on the State and any public entity involved in each option;

(4) an estimation of the cost savings associated with each option examined;

(5) an estimation of the amount of revenue generated by clean energy programs; and

(6) any other analysis as the division shall direct the third party to conduct.

d. Any electric public utility, gas public utility, or public entity shall promptly respond to, cooperate fully with, and provide any requested information to the third party engaged by the division pursuant to subsection b. of this section.

e. Within one year after the effective date of this act, the division shall submit a written report to the Governor and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), to the Legislature summarizing the findings from the study and providing recommendations as to the feasibility of, need for, cost savings associated with, and plan for the de-privatization of electric public utilities and gas public utilities in the State. The report shall include recommendations for legislative, executive, and other actions.

2. There is appropriated from the General Fund to the Division of the Rate Counsel a sum of $100,000 for the purpose of effectuating this act.

3. This act shall take effect immediately and shall expire upon submission of the report pursuant to subsection e. of section 1 of this act.

STATEMENT

This bill requires the Division of the Rate Counsel (division) to engage a third party to conduct a feasibility and cost savings study on the de-privatization of electric public utilities and gas public utilities in the State. The third party is authorized to request information and reasonable assistance from any electric public utility, gas public utility, or public entity in order to conduct the study, which is to examine the feasibility of and cost savings associated with de-privatization options, including, but not limited to: (1) acquisition or operation of existing electric public utilities and gas public utilities, in part or in whole, by a public entity; and (2) joint ownership or operation of existing electric public utilities and gas public utilities, in part or in whole, between a public entity and existing electric public utilities and gas public utilities.

The study is to include: (1) the short- and long-term challenges and benefits of each option examined, including, but not limited to, any anticipated environmental effect, impact on service, and cost to ratepayers; (2) the strengths and weaknesses of selecting each public entity considered for potential acquisition, ownership, or operation, in whole or in part, of electric public utilities and gas public utilities, as well as potential organizational structures; (3) an estimation of costs, including, but not limited to, financial costs, as well as the long-term financial impact on the State and any public entity involved in each option; (4) an estimation of the cost savings associated with each option examined; (5) an estimation of the amount of revenue generated by clean energy programs; and (6) any other analysis as the division directs.

Any electric public utility, gas public utility, or public entity is required to promptly respond to, cooperate fully with, and provide any requested information to the third party.

Within a year of the bill’s effective date, the division is required to submit a report to the Governor and the Legislature summarizing the findings from the study and providing recommendations as to the feasibility of, need for, cost savings associated with, and plan for the de-privatization of electric public utilities and gas public utilities in this State. The report is to include recommendations for legislative, executive, and other actions.

The bill appropriates $100,000 from the General Fund to the division to implement the provisions of the bill.

The board approved an increase in electricity rates, which will become effective in June 2025. According to the board, this increase will raise electricity bills by approximately 17 to 20 percent, depending on a ratepayer’s electric public utility. Electricity and gas are not luxuries; they are essential services powering homes, schools, medical devices, and transportation. As the cost of living continues to rise and many wages stagnate, New Jersey residents need protection from utility rate increases, which exacerbate the effects of inflation on consumers. With this bill, the sponsor intends to encourage the State to explore opportunities to provide electric public utility and gas public utility services as a public good for electric public utility and gas public utility customers across New Jersey. This measure is a crucial step in addressing economic hardships and promoting fair electric public utility and gas public utility pricing. New Jersey families, individuals, and businesses deserve reliable, affordable energy without facing undue financial strain.