S4062

An Act establishing certain protections against demand by large-load addition customers in the State and supplementing Title 48 of the Revised Statutes.

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

1. As used in P.L. , c. (C. ) (pending before the Legislature as this bill):

“Board” means the New Jersey Board of Public Utilities or a successor agency.

“Electric public utility” means the same as that term is defined in section 3 of P.L.1999, c.23 (C.48:3-51).

“Large-load addition customer” means individual additions of load at or above 50 MW at a single point of interconnection.

“Load-serving entity” means an entity, or the duly-designated agent of the entity, including a load aggregator or power marketer, that serves end-users within the State and is authorized to sell electric energy to end-users located within the State.

“PJM Interconnection, L.L.C.” or “PJM” means the same as that term is defined in section 3 of P.L.1999, c.23 (C.48:3-51).

“Reliability backstop procurement” means a PJM-approved mechanism to procure long-term contracts from new capacity resources, however constituted, deemed necessary to ensure electric system reliability during periods when market-based outcomes are insufficient to meet forecasted needs.

2. When issued a curtailment obligation or directive from PJM due to a load-serving entity’s provision of service to a large-load addition customer, the load-serving entity shall impose PJM’s curtailment obligation or directive solely on the load-serving entity’s large-load addition customers. However, nothing in this section shall be construed to prevent a load-serving entity from taking necessary action to maintain system reliability and adopting voluntary load curtailment programs.

3. Any financial or other obligation associated with the reliability backstop procurement, or other comparable assignment of long-term capacity obligations, that is assigned to a load-serving entity shall be passed through to large-load addition customers under substantially-similar terms as PJM assigns the financial or other obligations to the load-serving entity.

4. In order to receive electric public utility service from an electric public utility in the State, a large-load addition customer shall: provide appropriate financial security in a manner approved by the board, to either the load serving entity or the electric public utility, as appropriate, to ensure that costs associated with reliability backstop procurement are not passed through to other New Jersey customers, if the large-load addition customer’s demand on the electrical grid necessitates reliability backstop procurement through PJM; and submit detailed information to PJM, including, but not limited to, expected load usage, peak load, utilization, dependency on other proposed projects, and any other information requested by PJM.

5. The board shall, in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), adopt rules and regulations as necessary to implement the provisions of this act, including the form of the appropriate financial security pursuant to section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill).

6. This act shall take effect immediately.

STATEMENT

This bill prohibits certain costs and obligations related to the large load addition customers from being passed to non-large load addition customers.

The regional grid operator for the State, PJM Interconnection, L.L.C. or PJM, has been developing options for new load customers whose electricity demand can be curtailed in times of system need. Further, PJM has engaged stakeholders in a proposal for creating a reliability backstop procurement auction that is to procure long-term energy contracts from new capacity resources.

Under the bill, when issued a curtailment obligation or directive from PJM due to a load-serving entity’s provision of service to a large-load addition customer, the load-serving entity is required to impose PJM’s curtailment obligation or directive solely on the load-serving entity’s large-load addition customers. However, the bill does not prevent a load-serving entity from taking necessary action to maintain system reliability and adopting voluntary load curtailment programs.

Additionally, the bill requires any financial or other obligation associated with reliability backstop procurement, or other comparable assignment of long-term capacity obligations, that is assigned to a load-serving entity to be passed through to large-load addition customers under substantially-similar terms as PJM assigns the financial or other obligations to the load-serving entity.

Finally, under the bill, in order to receive electric public utility service in the State, a large-load addition customer is required to: (1) provide appropriate financial security to either the load serving entity or the electric public utility, as appropriate, to ensure that costs associated with reliability backstop procurement are not passed through to other New Jersey customers, if the large-load addition customer’s demand on the electrical grid necessitates reliability backstop procurement through PJM; and (2) submit detailed information to PJM as outlined in the bill.