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A1072 ACS ACS FISCAL ESTIMATE
LEGISLATIVE FISCAL ESTIMATE
ASSEMBLY COMMITTEE SUBSTITUTE FOR
ASSEMBLY COMMITTEE SUBSTITUTE FOR
ASSEMBLY, No. 1072
STATE OF NEW JERSEY
222nd LEGISLATURE
DATED: JULY 1, 2026
SUMMARY
Synopsis:
Directs BPU to establish certain incentive programs for
energy storage and management.�
Type of Impact:
Annual increase in State expenditures.
Agencies Affected:
New Jersey Board of Public Utilities.
Office of
Legislative Services Estimate
Fiscal Impact
Annual
State Expenditure Increase
Indeterminate
�
The Office of Legislative Services (OLS) estimates that the bill
may result in an indeterminate increase in annual State administrative expenses
to the New Jersey Board of Public Utilities associated with establishing and
administering the Distributed Energy Storage Incentive Program, the Virtual
Power Plant Program, and new tariff and regulatory proceedings for
front-of-the-meter energy storage systems.
�
The bill further requires incentive payments under the incentive
program to be made for periods of up to 15 years and authorizes electric public
utilities to recover approved implementation and administration costs through
utility rates.� Accordingly, the bill may result in an increase in costs borne
by electric public utility ratepayers.� The total cost of the incentive program
cannot be determined because the board has not yet established incentive
levels, procurement schedules, or program design requirements.�
�
The bill requires electric public utilities to develop
implementation plans, conduct cost analyses, prepare tariff filings, and
potentially undertake cost-of-service studies.� These activities will increase
electric public utility administrative and regulatory expenditures.� To the
extent approved by the board, certain implementation costs under the incentive
program may be recovered through electric public utility rates.
BILL DESCRIPTION
����� This bill requires the board to establish an incentive
program designed to achieve or exceed, together with other board-established
energy storage programs, a total of 3,000 megawatts of new energy storage
capacity by 2032.� However, based on a cost-benefit analysis, the board may
reduce the total procurement goal to less than 2,000 megawatts.� Further, the
bill specifically requires the board to provide incentives under the incentive
program for the development of at least 1,000 megawatts of customer-sited and
front-of-the-meter energy storage capacity by 2030, of which incentives for at
least 350 megawatts in capacity are to be awarded by no later than December 31,
2027; and 2,000 megawatts by 2032, which additional incentives may be reduced
or waived if the board finds that the procurement costs will exceed ratepayer
savings.�
����� The bill requires the board to establish incentive
levels, an application process, eligibility requirements, performance
standards, and utility implementation plans for the incentive program.� In
addition, the bill authorizes electric public utilities to recover approved
program implementation and administration costs through a separate component of
utility rates.�
����� The bill also requires the board to establish minimum
filing requirements for a Virtual Power Plant Program designed to incentivize
customers to reduce electricity consumption during periods of peak demand and
requires electric public utilities to develop proposals and cost-benefit
analyses for participation in the program.�
����� Finally, the bill requires the board to establish
minimum filing requirements for electric public utility tariffs governing the
interconnection of, rates applicable to, and compensation of front-of-the-meter
energy storage systems and authorizes related analyses.�
FISCAL ANALYSIS
EXECUTIVE BRANCH
����� None received.�
OFFICE OF LEGISLATIVE SERVICES
����� The OLS estimates that the bill may result in an
indeterminate increase in annual State administrative expenses to the board
associated with establishing and administering the incentive program, the
Virtual Power Plant Program, and new tariff and regulatory proceedings for
front-of-the-meter energy storage systems.�
����� The OLS notes that the bill requires the
incentivization of at least 3,000 megawatts of energy storage capacity by 2032
through the incentive program and other board-established programs.� The bill
further requires incentive payments made under the incentive program to be made
for periods of up to 15 years and authorizes electric power utilities to
recover approved implementation and administration costs through utility
rates.� Accordingly, the bill may result in an increase in costs borne by
electric utility ratepayers.� The total cost of the incentive program cannot be
determined because the board has not yet established incentive levels,
procurement schedules, or program design requirements.�
����� The bill requires electric public utilities to develop
implementation plans, conduct cost analyses, prepare tariff filings, and
potentially undertake cost-of-service studies.� These activities will increase
electric public utility administrative and regulatory expenditures.� To the
extent approved by the board, electric public utilities may recover certain
implementation costs under the incentive program through electric public
utility rates.�
����� The bill may also produce economic benefits and
utility system savings through reduced peak electricity demand, deferred
transmission and distribution infrastructure investments, enhanced grid
reliability, and increased utilization of distributed energy resources.� The
magnitude and timing of any such savings are uncertain and depend upon future
program participation levels, wholesale electricity market conditions, energy
storage technology costs, and implementation decisions made by the board and
electric public utilities.�
Section:
Authorities, Utilities, Transportation and
Communications
Analyst:
Michael D. Walker Jr.
Associate Fiscal Analyst
Approved:
Thomas Koenig
Legislative Budget and Finance Officer
This legislative fiscal estimate has been produced by the
Office of Legislative Services due to the failure of the Executive Branch to
respond to our request for a fiscal note.
This fiscal estimate has been prepared pursuant to P.L.1980,
c.67 (C.52:13B-6 et seq.).