Establishes alternative compliance payment to satisfy Class II renewable energy requirements.

A2407

ASSEMBLY, No. 2407

STATE OF NEW JERSEY

222nd LEGISLATURE

�

PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION

Sponsored by:

Assemblyman WILLIAM F. MOEN, JR.

District 5 (Camden and Gloucester)

Assemblywoman SHANIQUE SPEIGHT

District 29 (Essex and Hudson)

Assemblywoman HEATHER SIMMONS

District 3 (Cumberland, Gloucester and Salem)

SYNOPSIS

���� Establishes alternative compliance payment to satisfy
Class II renewable energy requirements.

CURRENT VERSION OF TEXT

���� Introduced Pending Technical Review by Legislative
Counsel.

��

An Act
concerning certain alternative compliance payments and amending
and supplementing P.L.1999, c.23.

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

���� 1.��� Section 3 of P.L.1999,
c.23 (C.48:3-51) is amended to read as follows:

���� 3.��� As used in P.L.1999,
c.23 (C.48:3-49 et al.):

����
"Alternative
compliance payment" or "ACP" means a payment of a certain dollar
amount per megawatt hour (MWh) which an electric power supplier or provider may
submit to the board in order to comply with a renewable energy generation
requirement, including the Class I and Class II renewable energy requirements
imposed under section 38 of P.L.1999, c.23 (C.48:3-87).

���� "Assignee" means a
person to which an electric public utility or another assignee assigns, sells,
or transfers, other than as security, all or a portion of its right to or
interest in bondable transition property.� Except as specifically provided in
P.L.1999, c.23 (C.48:3-49 et al.), an assignee shall not be subject to the
public utility requirements of Title 48 or any rules or regulations adopted
pursuant thereto.

���� "Base load electric power
generation facility" means an electric power generation facility intended
to be operated at a greater than 50 percent capacity factor including, but not
limited to, a combined cycle power facility and a combined heat and power
facility.

���� "Base residual
auction" means the auction conducted by PJM, as part of PJM's reliability
pricing model, three years prior to the start of the delivery year to secure
electrical capacity as necessary to satisfy the capacity requirements for that
delivery year.

���� "Basic gas supply
service" means gas supply service that is provided to any customer that
has not chosen an alternative gas supplier, whether or not the customer has
received offers as to competitive supply options, including, but not limited to,
any customer that cannot obtain such service for any reason, including
non-payment for services.� Basic gas supply service is not a competitive
service and shall be fully regulated by the board.

���� "Basic generation
service" or "BGS" means electric generation service that is
provided, to any customer that has not chosen an alternative electric power
supplier, whether or not the customer has received offers for competitive
supply options, including, but not limited to, any customer that cannot obtain
such service from an electric power supplier for any reason, including
non-payment for services.� Basic generation service is not a competitive
service and shall be fully regulated by the board.

���� "Basic generation service
provider" or "provider" means a provider of basic generation
service.

���� "Basic generation service
transition costs" means the amount by which the payments by an electric
public utility for the procurement of power for basic generation service and
related ancillary and administrative costs exceeds the net revenues from the
basic generation service charge established by the board pursuant to section 9
of P.L.1999, c.23 (C.48:3-57) during the transition period, together with
interest on the balance at the board-approved rate, that is reflected in a
deferred balance account approved by the board in an order addressing the
electric public utility's unbundled rates, stranded costs, and restructuring
filings pursuant to P.L.1999, c.23 (C.48:3-49 et al.).� Basic generation
service transition costs shall include, but are not limited to, costs of
purchases from the spot market, bilateral contracts, contracts with non-utility
generators, parting contracts with the purchaser of the electric public
utility's divested generation assets, short-term advance purchases, and
financial instruments such as hedging, forward contracts, and options.� Basic
generation service transition costs shall also include the payments by an
electric public utility pursuant to a competitive procurement process for basic
generation service supply during the transition period, and costs of any such
process used to procure the basic generation service supply.

���� "Board" means the
New Jersey Board of Public Utilities or any successor agency.

���� "Bondable stranded
costs" means any stranded costs or basic generation service transition
costs of an electric public utility approved by the board for recovery pursuant
to the provisions of P.L.1999, c.23 (C.48:3-49 et al.), together with, as approved
by the board: (1) the cost of retiring existing debt or equity capital of the
electric public utility, including accrued interest, premium and other fees,
costs, and charges relating thereto, with the proceeds of the financing of
bondable transition property; (2) if requested by an electric public utility in
its application for a bondable stranded costs rate order, federal, State, and
local tax liabilities associated with stranded costs recovery, basic generation
service transition cost recovery, or the transfer or financing of the property,
or both, including taxes, whose recovery period is modified by the effect of a
stranded costs recovery order, a bondable stranded costs rate order, or both;
and (3) the costs incurred to issue, service, or refinance transition bonds,
including interest, acquisition, or redemption premium, and other financing
costs, whether paid upon issuance or over the life of the transition bonds,
including, but not limited to, credit enhancements, service charges,
overcollateralization, interest rate cap, swap or collar, yield maintenance,
maturity guarantee or other hedging agreements, equity investments, operating
costs, and other related fees, costs, and charges, or to assign, sell, or
otherwise transfer bondable transition property.

���� "Bondable stranded costs
rate order" means one or more irrevocable written orders issued by the
board pursuant to P.L.1999, c.23 (C.48:3-49 et al.) which determines the amount
of bondable stranded costs and the initial amount of transition bond charges
authorized to be imposed to recover the bondable stranded costs, including the
costs to be financed from the proceeds of the transition bonds, as well as
on-going costs associated with servicing and credit enhancing the transition
bonds, and provides the electric public utility specific authority to issue or
cause to be issued, directly or indirectly, transition bonds through a
financing entity and related matters as provided in P.L.1999, c.23 (C.48:3-49
et al.), which order shall become effective immediately upon the written
consent of the related electric public utility to the order as provided in
P.L.1999, c.23 (C.48:3-49 et al.).

���� "Bondable transition
property" means the property consisting of the irrevocable right to
charge, collect, and receive, and be paid from collections of, transition bond
charges in the amount necessary to provide for the full recovery of bondable
stranded costs which are determined to be recoverable in a bondable stranded
costs rate order, all rights of the related electric public utility under the
bondable stranded costs rate order including, without limitation, all rights to
obtain periodic adjustments of the related transition bond charges pursuant to
subsection b. of section 15 of P.L.1999, c.23 (C.48:3-64), and all revenues,
collections, payments, money, and proceeds arising under, or with respect to,
all of the foregoing.

���� "British thermal
unit" or "Btu" means the amount of heat required to increase the
temperature of one pound of water by one degree Fahrenheit.

���� "Broker" means a
duly licensed electric power supplier that assumes the contractual and legal
responsibility for the sale of electric generation service, transmission, or
other services to end-use retail customers, but does not take title to any of
the power sold, or a duly licensed gas supplier that assumes the contractual
and legal obligation to provide gas supply service to end-use retail customers,
but does not take title to the gas.

���� "Brownfield" means
any former or current commercial or industrial site that is currently vacant or
underutilized and on which there has been, or there is suspected to have been,
a discharge of a contaminant.

���� "Buydown" means an
arrangement or arrangements involving the buyer and seller in a given power
purchase contract and, in some cases third parties, for consideration to be
given by the buyer in order to effectuate a reduction in the pricing, or the
restructuring of other terms to reduce the overall cost of the power contract,
for the remaining succeeding period of the purchased power arrangement or
arrangements.

���� "Buyout" means an
arrangement or arrangements involving the buyer and seller in a given power
purchase contract and, in some cases third parties, for consideration to be
given by the buyer in order to effectuate a termination of such power purchase
contract.

���� "Class I renewable
energy" means electric energy produced from solar technologies,
photovoltaic technologies, wind energy, fuel cells, geothermal technologies,
wave or tidal action, small scale hydropower facilities with a capacity of
three megawatts or less and put into service after the effective date of
P.L.2012, c.24, methane gas from landfills, methane gas from a biomass facility
provided that the biomass is cultivated and harvested in a sustainable manner,
or methane gas from a composting or anaerobic or aerobic digestion facility
that converts food waste or other organic waste to energy.

���� "Class II renewable
energy" means electric energy produced at a hydropower facility with a
capacity of greater than three megawatts, but less than 30 megawatts, or a
resource recovery facility, provided that the facility is located where retail
competition is permitted and provided further that the Commissioner of
Environmental Protection has determined that the facility meets the highest
environmental standards and minimizes any impacts to the environment and local
communities.� Class II renewable energy shall not include electric energy
produced at a hydropower facility with a capacity of greater than 30 megawatts
on or after the effective date of P.L.2015, c.51.

���� "Co-generation"
means the sequential production of electricity and steam or other forms of
useful energy used for industrial or commercial heating and cooling purposes.

���� "Combined cycle power
facility" means a generation facility that combines two or more
thermodynamic cycles, by producing electric power via the combustion of fuel
and then routing the resulting waste heat by-product to a conventional boiler
or to a heat recovery steam generator for use by a steam turbine to produce
electric power, thereby increasing the overall efficiency of the generating
facility.

���� "Combined heat and power
facility" or "co-generation facility" means a generation
facility which produces electric energy and steam or other forms of useful
energy such as heat, which are used for industrial or commercial heating or cooling
purposes.� A combined heat and power facility or co-generation facility shall
not be considered a public utility.

���� "Competitive
service" means any service offered by an electric public utility or a gas
public utility that the board determines to be competitive pursuant to section
8 or section 10 of P.L.1999, c.23 (C.48:3-56 or C.48:3-58) or that is not regulated
by the board.

���� "Commercial and
industrial energy pricing class customer" or "CIEP class
customer" means that group of non-residential customers with high peak
demand, as determined by periodic board order, which either is eligible or
which would be eligible, as determined by periodic board order, to receive
funds from the Retail Margin Fund established pursuant to section 9 of
P.L.1999, c.23 (C.48:3-57) and for which basic generation service is
hourly-priced.

���� "Comprehensive resource
analysis" means an analysis including, but not limited to, an assessment
of existing market barriers to the implementation of energy efficiency and
renewable technologies that are not or cannot be delivered to customers through
a competitive marketplace.

���� "Community solar
facility" means a solar electric power generation facility participating
in the Community Solar Energy Pilot Program or the Community Solar Energy
Program developed by the board pursuant to section 5 of P.L.2018, c.17
(C.48:3-87.11).

���� "Connected to the
distribution system" means, for a solar electric power generation
facility, that the facility is: (1) connected to a net metering customer's side
of a meter, regardless of the voltage at which that customer connects to the
electric grid; (2) an on-site generation facility; (3) qualified for net
metering aggregation as provided pursuant to paragraph (4) of subsection e. of
section 38 of P.L.1999, c.23 (C.48:3-87); (4) owned or operated by an electric
public utility and approved by the board pursuant to section 13 of P.L.2007,
c.340 (C.48:3-98.1); (5) directly connected to the electric grid at 69
kilovolts or less, regardless of how an electric public utility classifies that
portion of its electric grid, and is designated as "connected to the
distribution system" by the board pursuant to subsections q. through s. of
section 38 of P.L.1999, c.23 (C.48:3-87); or (6) is certified by the board, in
consultation with the Department of Environmental Protection, as being located
on a brownfield, on an area of historic fill, or on a properly closed sanitary
landfill facility.� Any solar electric power generation facility, other than
that of a net metering customer on the customer's side of the meter, connected
above 69 kilovolts shall not be considered connected to the distribution
system.

���� "Contaminated site or
landfill" means: (1) any currently contaminated portion of a property on
which industrial or commercial operations were conducted and a discharge
occurred, and its associated disturbed areas, where "discharge" means
the same as the term is defined in section 23 of P.L.1993, c.139 (C.58:10B-1);
or (2) a properly closed sanitary landfill facility and its associated
disturbed areas.

���� "Customer" means any
person that is an end user and is connected to any part of the transmission and
distribution system within an electric public utility's service territory or a
gas public utility's service territory within this State.

���� "Customer account
service" means metering, billing, or such other administrative activity
associated with maintaining a customer account.

���� "Delivery year" or
"DY" means the 12-month period from June 1st through May 31st,
numbered according to the calendar year in which it ends.

���� "Demand side
management" means the management of customer demand for energy service
through the implementation of cost-effective energy efficiency technologies,
including, but not limited to, installed conservation, load management, and
energy efficiency measures on and in the residential, commercial, industrial,
institutional, and governmental premises and facilities in this State.

���� "Electric generation
service" means the provision of retail electric energy and capacity which
is generated off-site from the location at which the consumption of such
electric energy and capacity is metered for retail billing purposes, including
agreements and arrangements related thereto.

���� "Electric power
generator" means an entity that proposes to construct, own, lease, or
operate, or currently owns, leases, or operates, an electric power production
facility that will sell or does sell at least 90 percent of its output, either
directly or through a marketer, to a customer or customers located at sites
that are not on or contiguous to the site on which the facility will be located
or is located.� The designation of an entity as an electric power generator for
the purposes of P.L.1999, c.23 (C.48:3-49 et al.) shall not, in and of itself,
affect the entity's status as an exempt wholesale generator under the Public
Utility Holding Company Act of 1935, 15 U.S.C. s.79 et seq., or its successor
act.

���� "Electric power
supplier" means a person or entity that is duly licensed pursuant to the
provisions of P.L.1999, c.23 (C.48:3-49 et al.) to offer and to assume the
contractual and legal responsibility to provide electric generation service to
retail customers, and includes load serving entities, marketers, and brokers
that offer or provide electric generation service to retail customers.� The
term excludes an electric public utility that provides electric generation
service only as a basic generation service pursuant to section 9 of P.L.1999,
c.23 (C.48:3-57).

���� "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 this State.

���� "Electric related
service" means a service that is directly related to the consumption of
electricity by an end user, including, but not limited to, the installation of
demand side management measures at the end user's premises, the maintenance,
repair, or replacement of appliances, lighting, motors, or other
energy-consuming devices at the end user's premises, and the provision of
energy consumption measurement and billing services.

���� "Electronic
signature" means an electronic sound, symbol, or process, attached to, or
logically associated with, a contract or other record, and executed or adopted
by a person with the intent to sign the record.

���� "Eligible generator"
means a developer of a base load or mid-merit electric power generation
facility including, but not limited to, an on-site generation facility that
qualifies as a capacity resource under PJM criteria and that commences construction
after the effective date of P.L.2011, c.9 (C.48:3-98.2 et al.).

���� "Energy agent" means
a person that is duly registered pursuant to the provisions of P.L.1999, c.23
(C.48:3-49 et al.), that arranges the sale of retail electricity or electric
related services, or retail gas supply or gas related services, between
government aggregators or private aggregators and electric power suppliers or
gas suppliers, but does not take title to the electric or gas sold.

���� "Energy consumer"
means a business or residential consumer of electric generation service or gas
supply service located within the territorial jurisdiction of a government
aggregator.

���� "Energy efficiency
portfolio standard" means a requirement to procure a specified amount of
energy efficiency or demand side management resources as a means of managing
and reducing energy usage and demand by customers.

���� "Energy year" or
"EY" means the 12-month period from June 1st through May 31st,
numbered according to the calendar year in which it ends.

���� "Existing business
relationship" means a relationship formed by a voluntary two-way
communication between an electric power supplier, gas supplier, broker, energy
agent, marketer, private aggregator, sales representative, or telemarketer and
a customer, regardless of an exchange of consideration, on the basis of an
inquiry, application, purchase, or transaction initiated by the customer
regarding products or services offered by the electric power supplier, gas
supplier, broker, energy agent, marketer, private aggregator, sales
representative, or telemarketer; however, a consumer's use of electric
generation service or gas supply service through the consumer's electric public
utility or gas public utility shall not constitute or establish an existing
business relationship for the purpose of P.L.2013, c.263.

���� "Farmland" means
land actively devoted to agricultural or horticultural use that is valued,
assessed, and taxed pursuant to the "Farmland Assessment Act of
1964," P.L.1964, c.48 (C.54:4-23.1 et seq.).

���� "Federal Energy
Regulatory Commission" or "FERC" means the federal agency
established pursuant to 42 U.S.C. s.7171 et seq. to regulate the interstate
transmission of electricity, natural gas, and oil.

���� "Final remediation
document" shall have the same meaning as provided in section 3 of
P.L.1976, c.141 (C.58:10-23.11b).

���� "Financing entity"
means an electric public utility, a special purpose entity, or any other
assignee of bondable transition property, which issues transition bonds.�
Except as specifically provided in P.L.1999, c.23 (C.48:3-49 et al.), a financing
entity which is not itself an electric public utility shall not be subject to
the public utility requirements of Title 48 of the Revised Statutes or any
rules or regulations adopted pursuant thereto.

���� "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 this State.

���� "Gas related
service" means a service that is directly related to the consumption of
gas by an end user, including, but not limited to, the installation of demand
side management measures at the end user's premises, the maintenance, repair or
replacement of appliances or other energy-consuming devices at the end user's
premises, and the provision of energy consumption measurement and billing
services.

���� "Gas supplier" means
a person that is duly licensed pursuant to the provisions of P.L.1999, c.23
(C.48:3-49 et al.) to offer and assume the contractual and legal obligation to
provide gas supply service to retail customers, and includes, but is not
limited to, marketers and brokers. A non-public utility affiliate of a public
utility holding company may be a gas supplier, but a gas public utility or any
subsidiary of a gas utility is not a gas supplier.� In the event that a gas
public utility is not part of a holding company legal structure, a related
competitive business segment of that gas public utility may be a gas supplier,
provided that related competitive business segment is structurally separated
from the gas public utility, and provided that the interactions between the gas
public utility and the related competitive business segment are subject to the
affiliate relations standards adopted by the board pursuant to subsection k. of
section 10 of P.L.1999, c.23 (C.48:3-58).

���� "Gas supply service"
means the provision to customers of the retail commodity of gas, but does not
include any regulated distribution service.

���� "Government
aggregator" means any government entity subject to the requirements of the
"Local Public Contracts Law," P.L.1971, c.198 (C.40A:11-1 et seq.),
the "Public School Contracts Law," N.J.S.18A:18A-1 et seq., or the "County
College Contracts Law," P.L.1982, c.189 (C.18A:64A-25.1 et seq.), that
enters into a written contract with a licensed electric power supplier or a
licensed gas supplier for: (1) the provision of electric generation service,
electric related service, gas supply service, or gas related service for its
own use or the use of other government aggregators; or (2) if a municipal or
county government, the provision of electric generation service or gas supply
service on behalf of business or residential customers within its territorial jurisdiction.

���� "Government energy
aggregation program" means a program and procedure pursuant to which a
government aggregator enters into a written contract for the provision of
electric generation service or gas supply service on behalf of business or
residential customers within its territorial jurisdiction.

���� "Governmental
entity" means any federal, state, municipal, local, or other governmental
department, commission, board, agency, court, authority, or instrumentality
having competent jurisdiction.

���� "Green Acres
program" means the program for the acquisition of lands for recreation and
conservation purposes pursuant to P.L.1961, c.45 (C.13:8A-1 et seq.), P.L.1971,
c.419 (C.13:8A-19 et seq.), P.L.1975, c.155 (C.13:8A-35 et seq.), any Green Acres
bond act, P.L.1999, c.152 (C.13:8C-1 et seq.), and P.L.2016, c.12 (C.13:8C-43
et seq.).

���� "Greenhouse gas emissions
portfolio standard" means a requirement that addresses or limits the
amount of carbon dioxide emissions indirectly resulting from the use of
electricity as applied to any electric power suppliers and basic generation service
providers of electricity.

���� "Grid supply solar
facility" means a solar electric power generation facility that sells
electricity at wholesale and is connected to the State's electric distribution
or transmission systems.� "Grid supply solar facility" does not include:
(1) a net metered solar facility; (2) an on-site generation facility; (3) a
facility participating in net metering aggregation pursuant to section 38 of
P.L.1999, c.23 (C.48:3-87); (4) a facility participating in remote net
metering; or (5) a community solar facility.

���� "Historic fill"
means generally large volumes of non-indigenous material, no matter what date
they were emplaced on the site, used to raise the topographic elevation of a
site, which were contaminated prior to emplacement and are in no way connected
with the operations at the location of emplacement and which include, but are
not limited to, construction debris, dredge spoils, incinerator residue,
demolition debris, fly ash, and non-hazardous solid waste.� "Historic
fill" shall not include any material which is substantially chromate
chemical production waste or any other chemical production waste or waste from
processing of metal or mineral ores, residues, slags, or tailings.

���� "Incremental
auction" means an auction conducted by PJM, as part of PJM's reliability
pricing model, prior to the start of the delivery year to secure electric
capacity as necessary to satisfy the capacity requirements for that delivery
year, that is not otherwise provided for in the base residual auction.

���� "Leakage" means an
increase in greenhouse gas emissions related to generation sources located
outside of the State that are not subject to a state, interstate, or regional
greenhouse gas emissions cap or standard that applies to generation sources
located within the State.

���� "Locational
deliverability area" or "LDA" means one or more of the zones
within the PJM region which are used to evaluate area transmission constraints
and reliability issues including electric public utility company zones,
sub-zones, and combinations of zones.

���� "Long-term capacity
agreement pilot program" or "LCAPP" means a pilot program
established by the board that includes participation by eligible generators, to
seek offers for financially-settled standard offer capacity agreements with eligible
generators pursuant to the provisions of P.L.2011, c.9 (C.48:3-98.2 et al.).

���� "Market transition
charge" means a charge imposed pursuant to section 13 of P.L.1999, c.23
(C.48:3-61) by an electric public utility, at a level determined by the board,
on the electric public utility customers for a limited duration transition
period to recover stranded costs created as a result of the introduction of
electric power supply competition pursuant to the provisions of P.L.1999, c.23
(C.48:3-49 et al.).

���� "Marketer" means a
duly licensed electric power supplier that takes title to electric energy and
capacity, transmission, and other services from electric power generators and
other wholesale suppliers and then assumes the contractual and legal obligation
to provide electric generation service, and may include transmission and other
services, to an end-use retail customer or customers, or a duly licensed gas
supplier that takes title to gas and then assumes the contractual and legal
obligation to provide gas supply service to an end-use customer or customers.

���� "Mid-merit electric power
generation facility" means a generation facility that operates at a
capacity factor between baseload generation facilities and peaker generation
facilities.

���� "Net metered solar
facility" means a solar electric power generation facility participating
in the net metering program developed by the board pursuant to subsection e. of
section 38 of P.L.1999, c.23 (C.48:3-87) or in a substantially similar program
operated by a utility owned or operated by a local government unit.

���� "Net metering
aggregation" means a procedure for calculating the combination of the
annual energy usage for all facilities owned by a single customer where such
customer is a State entity, school district, county, county agency, county
authority, municipality, municipal agency, or municipal authority, and which
are served by a solar electric power generating facility as provided pursuant
to paragraph (4) of subsection e. of section 38 of P.L.1999, c.23 (C.48:3-87).

���� "Net proceeds" means
proceeds less transaction and other related costs as determined by the board.

���� "Net revenues" means
revenues less related expenses, including applicable taxes, as determined by
the board.

���� "Offshore wind
energy" means electric energy produced by a qualified offshore wind
project.

���� "Offshore wind renewable
energy certificate" or "OREC" means a certificate, issued by the
board or its designee, representing the environmental attributes of one
megawatt hour of electric generation from a qualified offshore wind project.

���� "Off-site end use thermal
energy services customer" means an end use customer that purchases thermal
energy services from an on-site generation facility, combined heat and power
facility, or co-generation facility, and that is located on property that is
separated from the property on which the on-site generation facility, combined
heat and power facility, or co-generation facility is located by more than one
easement, public thoroughfare, or transportation or utility-owned right-of-way.

���� "On-site generation
facility" means a generation facility, including, but not limited to, a
generation facility that produces Class I or Class II renewable energy, and
equipment and services appurtenant to electric sales by such facility to the
end use customer located on the property or on property contiguous to the
property on which the end user is located.� An on-site generation facility
shall not be considered a public utility.� The property of the end use customer
and the property on which the on-site generation facility is located shall be
considered contiguous if they are geographically located next to each other,
but may be otherwise separated by an easement, public thoroughfare,
transportation or utility-owned right-of-way, or if the end use customer is
purchasing thermal energy services produced by the on-site generation facility,
for use for heating or cooling, or both, regardless of whether the customer is
located on property that is separated from the property on which the on-site
generation facility is located by more than one easement, public thoroughfare,
or transportation or utility-owned right-of-way.

���� "Open access offshore
wind transmission facility" means an open access transmission facility,
located either in the Atlantic Ocean or offshore, used to facilitate the
collection of offshore wind energy or its delivery to the electronic transmission
system in this State.

���� "Person" means an
individual, partnership, corporation, association, trust, limited liability
company, governmental entity, or other legal entity.

���� "PJM Interconnection,
L.L.C." or "PJM" means the privately-held, limited liability
corporation that serves as a FERC-approved Regional Transmission Organization,
or its successor, that manages the regional, high-voltage electricity grid
serving all or parts of 13 states including New Jersey and the District of
Columbia, operates the regional competitive wholesale electric market, manages
the regional transmission planning process, and establishes systems and rules
to ensure that the regional and in-State energy markets operate fairly and
efficiently.

���� "Preliminary
assessment" shall have the same meaning as provided in section 3 of
P.L.1976, c.141 (C.58:10-23.11b).

���� "Preserved farmland"
means land on which a development easement was conveyed to, or retained by, the
State Agriculture Development Committee, a county agriculture development
board, or a qualifying tax exempt nonprofit organization pursuant to the
provisions of section 24 of P.L.1983, c.32 (C.4:1C-31), section 5 of P.L.1988,
c.4 (C.4:1C-31.1), section 1 of P.L.1989, c.28 (C.4:1C-38), section 1 of
P.L.1999, c.180 (C.4:1C-43.1), sections 37 through 40 of P.L.1999, c.152
(C.13:8C-37 through C.13:8C-40), or any other State law enacted for farmland
preservation purposes.

���� "Private aggregator"
means a non-government aggregator that is a duly-organized business or
non-profit organization authorized to do business in this State that enters
into a contract with a duly licensed electric power supplier for the purchase
of electric energy and capacity, or with a duly licensed gas supplier for the
purchase of gas supply service, on behalf of multiple end-use customers by
combining the loads of those customers.

���� "Properly closed sanitary
landfill facility" means a sanitary landfill facility, or a portion of a
sanitary landfill facility, for which performance is complete with respect to
all activities associated with the design, installation, purchase, or
construction of all measures, structures, or equipment required by the
Department of Environmental Protection, pursuant to law, in order to prevent,
minimize, or monitor pollution or health hazards resulting from a sanitary
landfill facility subsequent to the termination of operations at any portion
thereof, including, but not necessarily limited to, the placement of earthen or
vegetative cover, and the installation of methane gas vents or monitors and
leachate monitoring wells or collection systems at the site of any sanitary
landfill facility.

���� "Public utility holding
company" means: (1) any company that, directly or indirectly, owns,
controls, or holds with power to vote, 10 percent or more of the outstanding
voting securities of an electric public utility or a gas public utility or of a
company which is a public utility holding company by virtue of this definition,
unless the Securities and Exchange Commission, or its successor, by order
declares such company not to be a public utility holding company under the
Public Utility Holding Company Act of 1935, 15 U.S.C. s.79 et seq., or its
successor; or (2) any person that the Securities and Exchange Commission, or
its successor, determines, after notice and opportunity for hearing, directly
or indirectly, to exercise, either alone or pursuant to an arrangement or
understanding with one or more other persons, such a controlling influence over
the management or policies of an electric public utility or a gas public
utility or public utility holding company as to make it necessary or
appropriate in the public interest or for the protection of investors or
consumers that such person be subject to the obligations, duties, and
liabilities imposed in the Public Utility Holding Company Act of 1935, 15
U.S.C. s.79 et seq., or its successor act.

���� "Qualified offshore wind
project" means a wind turbine electricity generation facility in the
Atlantic Ocean and connected to the electric transmission system in this State,
and includes the associated transmission-related interconnection facilities and
equipment, and approved by the board pursuant to section 3 of P.L.2010, c.57
(C.48:3-87.1).

���� "Registration
program" means an administrative process developed by the board pursuant
to subsection u. of section 38 of P.L.1999, c.23 (C.48:3-87) that requires all
owners of solar electric power generation facilities connected to the distribution
system that intend to generate SRECs, to file with the board documents
detailing the size, location, interconnection plan, land use, and other project
information as required by the board.

���� "Regulatory asset"
means an asset recorded on the books of an electric public utility or gas
public utility pursuant to the Statement of Financial Accounting Standards, No.
71, entitled "Accounting for the Effects of Certain Types of Regulation,"
or any successor standard and as deemed recoverable by the board.

���� "Related competitive
business segment of an electric public utility or gas public utility"
means any business venture of an electric public utility or gas public utility
including, but not limited to, functionally separate business units, joint
ventures, and partnerships, that offers to provide or provides competitive
services.

���� "Related competitive
business segment of a public utility holding company" means any business
venture of a public utility holding company, including, but not limited to,
functionally separate business units, joint ventures, and partnerships and
subsidiaries, that offers to provide or provides competitive services, but does
not include any related competitive business segments of an electric public
utility or gas public utility.

���� "Reliability pricing
model" or "RPM" means PJM's capacity-market model, and its
successors, that secures capacity on behalf of electric load serving entities
to satisfy load obligations not satisfied through the output of electric generation
facilities owned by those entities, or otherwise secured by those entities
through bilateral contracts.

���� "Renewable energy
certificate" or "REC" means a certificate representing the
environmental benefits or attributes of one megawatt-hour of generation from a
generating facility that produces Class I or Class II renewable energy, but shall
not include a solar renewable energy certificate or an offshore wind renewable
energy certificate.

���� "Resource clearing
price" or "RCP" means the clearing price established for the
applicable locational deliverability area by the base residual auction or
incremental auction, as determined by the optimization algorithm for each
auction, conducted by PJM as part of PJM's reliability pricing model.

���� "Resource recovery
facility" means a solid waste facility constructed and operated for the
incineration of solid waste for energy production and the recovery of metals
and other materials for reuse, which the Department of Environmental Protection
has determined to be in compliance with current environmental standards,
including, but not limited to, all applicable requirements of the federal
"Clean Air Act" (42 U.S.C. s.7401 et seq.).

���� "Restructuring related
costs" means reasonably incurred costs directly related to the
restructuring of the electric power industry, including the closure, sale,
functional separation, and divestiture of generation and other competitive
utility assets by a public utility, or the provision of competitive services as
those costs are determined by the board, and which are not stranded costs as
defined in P.L.1999, c.23 (C.48:3-49 et al.) but may include, but not be
limited to, investments in management information systems, and which shall
include expenses related to employees affected by restructuring which result in
efficiencies and which result in benefits to ratepayers, such as training or
retraining at the level equivalent to one year's training at a vocational or
technical school or county community college, the provision of severance pay of
two weeks of base pay for each year of full-time employment, and a maximum of
24 months' continued health care coverage.� Except as to expenses related to
employees affected by restructuring, "restructuring related costs"
shall not include going forward costs.

���� "Retail choice"
means the ability of retail customers to shop for electric generation or gas
supply service from electric power or gas suppliers, or opt to receive basic
generation service or basic gas service, and the ability of an electric power
or gas supplier to offer electric generation service or gas supply service to
retail customers, consistent with the provisions of P.L.1999, c.23 (C.48:3-49
et al.).

���� "Retail margin"
means an amount, reflecting differences in prices that electric power suppliers
and electric public utilities may charge in providing electric generation
service and basic generation service, respectively, to retail customers, excluding
residential customers, which the board may authorize to be charged to
categories of basic generation service customers of electric public utilities
in this State, other than residential customers, under the board's continuing
regulation of basic generation service pursuant to sections 3 and 9 of
P.L.1999, c.23 (C.48:3-51 and 48:3-57), for the purpose of promoting a
competitive retail market for the supply of electricity.

���� "Sales
representative" means a person employed by, acting on behalf of, or as an
independent contractor for, an electric power supplier, gas supplier, broker,
energy agent, marketer, or private aggregator who, by any means, solicits a
potential residential customer for the provision of electric generation service
or gas supply service.

���� "Sanitary landfill
facility" shall have the same meaning as provided in section 3 of
P.L.1970, c.39 (C.13:1E-3).

���� "School district"
means a local or regional school district established pursuant to chapter 8 or
chapter 13 of Title 18A of the New Jersey Statutes, a county special services
school district established pursuant to article 8 of chapter 46 of Title 18A of
the New Jersey Statutes, a county vocational school district established
pursuant to article 3 of chapter 54 of Title 18A of the New Jersey Statutes,
and a district under full State intervention pursuant to P.L.1987, c.399
(C.18A:7A-34 et al.).

���� "Shopping credit"
means an amount deducted from the bill of an electric public utility customer
to reflect the fact that the customer has switched to an electric power
supplier and no longer takes basic generation service from the electric public
utility.

���� "Site investigation"
shall have the same meaning as provided in section 3 of P.L.1976, c.141
(C.58:10-23.11b).

���� "Small scale hydropower
facility" means a facility located within this State that is connected to
the distribution system, and that meets the requirements of, and has been
certified by, a nationally recognized low-impact hydropower organization that
has established low-impact hydropower certification criteria applicable to: (1)
river flows; (2) water quality; (3) fish passage and protection; (4) watershed
protection; (5) threatened and endangered species protection; (6) cultural
resource protection; (7) recreation; and (8) facilities recommended for
removal.

���� "Social program"
means a program implemented with board approval to provide assistance to a
group of disadvantaged customers, to provide protection to consumers, or to
accomplish a particular societal goal, and includes, but is not limited to, the
winter moratorium program, utility practices concerning "bad debt"
customers, low income assistance, deferred payment plans, weatherization
programs, and late payment and deposit policies, but does not include any
demand side management program or any environmental requirements or controls.

���� "Societal benefits
charge" means a charge imposed by an electric public utility, at a level
determined by the board, pursuant to, and in accordance with, section 12 of
P.L.1999, c.23 (C.48:3-60).

���� "Solar alternative
compliance payment" or "SACP" means a payment of a certain
dollar amount per megawatt hour (MWh) which an electric power supplier or
provider may submit to the board in order to comply with the solar electric
generation requirements under section 38 of P.L.1999, c.23 (C.48:3-87).

���� "Solar renewable energy
certificate" or "SREC" means a certificate issued by the board
or its designee, representing one megawatt hour (MWh) of solar energy that is
generated by a facility connected to the distribution system in this State and
has value based upon, and driven by, the energy market.

���� "Solar renewable energy
certificate II" or "SREC-II" means a transferable certificate,
issued by the board or its designee pursuant to P.L.2021, c.169 (C.48:3-114 et
al.), which is capable of counting towards the renewable energy portfolio
standards of an electric power supplier or basic generation service provider in
the State pursuant to section 38 of P.L.1999, c.23 (C.48:3-87).

���� "SREC-II program"
means the program established pursuant to section 2 of P.L.2021, c.169
(C.48:3-115) to distribute SREC-IIs.

���� "SREC-II value per
megawatt-hour" means the value, in dollars-per-megawatt-hour, assigned by
the board to each solar electric power generation facility eligible to receive
SREC-IIs, which is paid to the facility and which represents the environmental
attributes of the facility.

���� "Standard offer capacity
agreement" or "SOCA" means a financially-settled transaction
agreement, approved by board order, that provides for eligible generators to
receive payments from the electric public utilities for a defined amount of
electric capacity for a term to be determined by the board but not to exceed 15
years, and for such payments to be a fully non-bypassable charge, with such an
order, once issued, being irrevocable.

���� "Standard offer capacity
price" or "SOCP" means the capacity price that is fixed for the
term of the SOCA and which is the price to be received by eligible generators
under a board-approved SOCA.

���� "State entity" means
a department, agency, or office of State government, a State university or
college, or an authority created by the State.

���� "Stranded cost"
means the amount by which the net cost of an electric public utility's electric
generating assets or electric power purchase commitments, as determined by the
board consistent with the provisions of P.L.1999, c.23 (C.48:3-49 et al.),
exceeds the market value of those assets or contractual commitments in a
competitive supply marketplace and the costs of buydowns or buyouts of power
purchase contracts.

���� "Stranded costs recovery
order" means each order issued by the board in accordance with subsection
c. of section 13 of P.L.1999, c.23 (C.48:3-61) which sets forth the amount of
stranded costs, if any, the board has determined an electric public utility is
eligible to recover and collect in accordance with the standards set forth in
section 13 of P.L.1999, c.23 (C.48:3-61) and the recovery mechanisms therefor.

���� "Telemarketer" shall
have the same meaning as set forth in section 2 of P.L.2003, c.76 (C.56:8-120).

���� "Telemarketing sales
call" means a telephone call made by a telemarketer to a potential
residential customer as part of a plan, program, or campaign to encourage the
customer to change the customer's electric power supplier or gas supplier.� A telephone
call made to an existing customer of an electric power supplier, gas supplier,
broker, energy agent, marketer, private aggregator, or sales representative,
for the sole purpose of collecting on accounts or following up on contractual
obligations, shall not be deemed a telemarketing sales call.� A telephone call
made in response to an express written request of a customer shall not be
deemed a telemarketing sales call.

���� "Thermal efficiency"
means the useful electric energy output of a facility, plus the useful thermal
energy output of the facility, expressed as a percentage of the total energy
input to the facility.

���� "Transition bond
charge" means a charge, expressed as an amount per kilowatt hour, that is
authorized by and imposed on electric public utility ratepayers pursuant to a
bondable stranded costs rate order, as modified at any time pursuant to the
provisions of P.L.1999, c.23 (C.48:3-49 et al.).

���� "Transition bonds"
means bonds, notes, certificates of participation, beneficial interest, or
other evidences of indebtedness or ownership issued pursuant to an indenture,
contract, or other agreement of an electric public utility or a financing
entity, the proceeds of which are used, directly or indirectly, to recover,
finance or refinance bondable stranded costs and which are, directly or
indirectly, secured by or payable from bondable transition property. References
in P.L.1999, c.23 (C.48:3-49 et al.) to principal, interest, and acquisition or
redemption premium with respect to transition bonds which are issued in the
form of certificates of participation or beneficial interest or other evidences
of ownership shall refer to the comparable payments on such securities.

���� "Transition period"
means the period from August 1, 1999 through July 31, 2003.

���� "Transmission and
distribution system" means, with respect to an electric public utility,
any facility or equipment that is used for the transmission, distribution, or
delivery of electricity to the customers of the electric public utility including,
but not limited to, the land, structures, meters, lines, switches, and all
other appurtenances thereof and thereto, owned or controlled by the electric
public utility within this State.

���� "Universal service"
means any service approved by the board with the purpose of assisting
low-income residential customers in obtaining or retaining electric generation
or delivery service.

���� "Unsolicited
advertisement" means any advertising claims of the commercial availability
or quality of services provided by an electric power supplier, gas supplier,
broker, energy agent, marketer, private aggregator, sales representative, or telemarketer
which is transmitted to a potential customer without that customer's prior
express invitation or permission.

(cf: P.L.2021, c.169, s.9)

���� 2.��� (New section)� The board
shall permit each electric power supplier or basic generation service provider
to submit an alternative compliance payment to comply with the Class II
renewable energy generation requirements of paragraph (1) of subsection d. of P.L.1999,
c.23 (C.48:3-87).� The value of the alternative compliance payment shall be
$10.� Any alternative compliance payments collected shall be refunded directly
to the ratepayers by the electric public utilities.�

���� 3.��� This act shall take
effect immediately.

STATEMENT

���� This bill establishes a new
alternative compliance payment for Class II renewable energy generation
requirements at the value of $10 per megawatt hour.� Currently, the Board of
Public Utilities (BPU) sets the price for alternative compliance payments.� Energy
suppliers and producers are required to sell a minimum amount of qualified
renewable energy each energy year as set by BPU.� Suppliers and producers can
meet this requirement by purchasing and retiring Renewable Energy Certificate�s
(RECs) to meet their renewable energy requirements for that energy year.

���� If an energy supplier or
provider has not met their minimum renewable energy requirements by the
submission of RECs, the supplier or provider can instead pay an alternative
compliance payment for the amount of RECs that were required but not submitted.