"Powering Up New Jersey Act"; establishes requirements for certain public utility infrastructure investments.*

A3980 ACS

ASSEMBLY COMMITTEE SUBSTITUTE FOR

ASSEMBLY, No. 3980

STATE OF NEW JERSEY

222nd LEGISLATURE

�
ADOPTED
JUNE 4, 2026

Sponsored by:

Assemblyman� KEVIN P. EGAN

District 17 (Middlesex and Somerset)

Assemblywoman� MARGIE DONLON, M.D.

District 11 (Monmouth)

SYNOPSIS

���� �Powering Up New Jersey Act�; establishes
requirements for certain public utility infrastructure investments.

CURRENT VERSION OF TEXT

���� Substitute as adopted by the Assembly
Telecommunications and Utilities Committee.

An Act
concerning certain public utility infrastructure
investments and supplementing Title 48 of the Revised Statutes.

����
Be It Enacted

by the Senate and General Assembly of the State of New Jersey:

���� 1.��� This act shall be known
and may be cited as the �Powering Up New Jersey Act.�

���� 2.��� a.� As used in this
section:�

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

���� �Customer-generator facility�
means a customer-generator facility, as that term is defined pursuant to
N.J.A.C.14:8-5.1 or it successor, that is eligible for a level 1
interconnection review by an electric public utility pursuant to
N.J.A.C.14:8-5.4 or its successor or a level 2 interconnection review by an
electric public utility pursuant to N.J.A.C.14:8-5.5 or its successor.

���� �Distributed energy resource�
means distributed generation, energy storage systems, electric vehicles,
microgrids, fuel cells and demand-side management measures, including energy
efficiency, demand response, and demand flexibility, that are deployed at the
distribution level on either the customer or utility side of the meter.

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

���� �Energization� or �energize�
means connecting new customers to the electric distribution system,
establishing adequate load capacity to provide electric public utility service
to a new customer, or upgrading electric capacity to provide electric public utility
service to an existing customer.� �Energization� or �energize� does not include
activities relating to the interconnection of electricity supply resources.

���� �Energization time period�
means the period of time between when an electric public utility receives a
request for distribution service and when the distribution service is installed
and energized.

���� �Flexible interconnection or
energization tariff� means a way to energize a new load or interconnect a
distributed energy resource to an electric public utility�s distribution system
without necessitating immediate modifications to the distribution system, which
energization or interconnection is governed by a set of rules and requirements
and includes an agreement for curtailing the import or export of electricity
from and to the distribution system at certain times or operation conditions by
use of certified power control systems or other load management technologies.

���� �Hosting capacity� means the
amount of electric generation that can be interconnected to the electric
distribution system at a given time and at a given location under existing
electrical grid conditions and operations without adversely impacting safety,
power quality, reliability, or other operational criteria.

���� �Interconnection time period�
means the elapsed time between:�

���� (1)�� when an electric public
utility receives a substantially-complete interconnection application for a
customer-generator facility and when the utility issues a signed part 1
interconnection agreement, as established by the board; and

���� (2)�� when an electric public
utility receives confirmation of the construction official�s successful
inspections and permit closing for a customer-generator facility and when the
facility is granted permission to operate.

���� �Load capacity� means the
amount of load that can be added to the electric distribution system at a given
time and at a given location under existing electrical grid conditions and
operations without adversely impacting safety, power quality, reliability, or
other operational criteria.

���� b.��� To provide safe,
adequate, and proper electric public utility service, an electric public
utility shall:�

���� (1)�� conduct sufficient
advanced planning, engineering, and construction of electric distribution
system hosting capacity and load capacity and sufficient preordering of
transformers and other needed equipment so that electric public utility
customers can be energized and interconnected without substantial delay; and

���� (2)�� upgrade its electric
distribution system as needed and in time to allow for the achievement of
federal, State, regional, and local air quality and decarbonization standards,
plans, and regulations, including vehicle emissions standards.

���� c.���� An electric public
utility shall include infrastructure investments needed to comply with
subsection b. of this section as part of the utility�s Infrastructure
Investment Program filed pursuant to sections 3 through 10 of
P.L. , c.
(C. through
C. ) (pending before the
Legislature as this bill).

���� d.��� Within 240 days of the
date of enactment of P.L. , c.
(C. ) (pending before the
Legislature as this bill), an electric public utility shall file with the board
for approval:�

���� (1)�� detailed mapping of
electric distribution hosting capacity and available load capacity and any
underlying data with appropriate safeguards to protect confidentiality and
critical infrastructure;

���� (2)�� proposed reasonable
average and maximum target energization time periods that may vary depending on
the nature of the work required and factors beyond the electric public
utility�s control, along with a record of recent energization time periods for
various customer rate classifications and voltage service levels;

���� (3)�� a record of recent
interconnection time periods for customer-generator facilities, broken out by
whether the facilities meet screening criteria and other relevant attributes,
as proposed by an electric public utility and approved by the board;

���� (4)�� proposed reasonable average
and maximum target interconnection time periods for customer-generator
facilities.� However, the targets shall be less than the electric public
utility�s recent interconnection time periods, submitted pursuant to paragraph
(3) of this subsection, and the interconnection time periods specified in
regulations adopted under subchapter 5 of chapter 8 of title 14 of the New
Jersey Administrative Code;

���� (5)�� a plan to automate the
processing of interconnection applications to instantly issue signed part 1
interconnection agreements, as established by the board, for any
customer-generator facility that is eligible for level 1 interconnection review
pursuant to N.J.A.C.14:8-5.4 or its successor and meets all relevant screening
criteria for such review;

���� (6)�� optional flexible
interconnection or energization tariffs;

���� (7)�� a plan to use
distributed energy resources, which may include performance-based compensation
for aggregated distributed energy resources, to avoid or minimize the need for
traditional electric distribution system upgrades where feasible; and

���� (8)�� commercial and
industrial rates designed for high-voltage electric vehicle charging
applications, taking into account alternatives to traditional demand-based
charges that appropriately recover the marginal costs associated with such
applications.

���� e.���� An electric public
utility shall publish the information in paragraph (1) of subsection d. of this
section on its Internet website so the information is accessible to customers,
stakeholders, and verified third parties and shall, at a minimum, update the
information on a quarterly basis.

���� f.���� An electric public
utility shall publish the energization time periods adopted pursuant to
paragraph (2) of subsection d. of this section, and the interconnection time
periods adopted pursuant to paragraph (3) and (4) of subsection d. of this
section, on its Internet website so the information is accessible to
customers.� An electric public utility shall make such information available in
any other manner and by any other means as directed by the board.

���� g.��� In an Infrastructure
Investment Program, and in a base rate case, an electric public utility shall
report to the board, and the Department of Labor and Workforce Development, its
current qualified staffing levels for each job classification needed to achieve
the requirements of this section.� In its report, the electric public utility
shall include a review of anticipated needs for future electric public utility,
affiliate, and contractor personnel.

���� h.��� An electric public
utility shall provide an energization and interconnection report to the board
at least annually, which report shall contain the following information:�

���� (1)�� the utility�s average
and median energization time period and the standard deviation for such time
periods;

���� (2)�� the utility�s average
and median interconnection time period for customer-generation facilities and
the standard deviation for such time periods, broken out by whether the
facilities meet screening criteria or other relevant attributes, as proposed by
an electric public utility and approved by the board;

���� (3)�� an explanation for any
energization time period or interconnection time period that exceeds the
utility�s most recent maximum targets for such time periods, as filed with the
board pursuant to either paragraph (2) or paragraph (4) of subsection d. of
this section and as approved by the board; and

���� (3)�� a strategy for meeting
any missed targets for energization time periods and interconnection time
periods in the future.

���� i.���� To reflect changed
circumstances and new information, and to achieve the goal of shortening
energization time periods and interconnection time periods over time, the board
shall periodically update the energization time periods and interconnection
time periods submitted by an electric public utility pursuant to either paragraph
(2) or paragraph (4) of subsection d. of this section and the energization and
interconnection report requirements prescribed under subsection h. of this
section.

���� j.���� The board may establish
performance incentives or penalties and may require an electric public utility
to take remedial actions to achieve the requirements of this section.� However,
the board shall establish penalties for repeated violations of the requirements
adopted pursuant to this section, including for failure to undertake remedial
actions authorized pursuant to this subsection, and other relevant requirements
adopted by the board.

���� k.��� The board may adopt
rules and regulations, pursuant to the �Administrative Procedure Act,�
P.L.1968, c.410 (C.52:14B-1 et seq.), as may be necessary to effectuate the
provisions of this section.

���� 3.��� As used in sections 3
through 10 of P.L. , c.
(C. through
C. ) (pending before the
Legislature as this bill):�

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

���� �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.

���� �In service� means when a
project approved for inclusion in a public utility�s Infrastructure Investment
Program is functioning in its intended purpose, has finished construction and
is actively in use, and is actively helping the public utility to provide
efficient public utility service.

���� �Program� means the
Infrastructure Investment Program established by the board pursuant to
subsection a. of section 4 of P.L. ,
c. (C. )
(pending before the Legislature as this bill).

���� �Public utility� means the
same as that term is defined pursuant to R.S.48:2-13.

���� �Water public utility� means
either:� (1) an investor-owned public utility that provides water public
utility service; or (2) a municipal public utility that provides water utility
service to more than 1,000 billed customers in another municipality and charges
a different rate to customers within the municipality than it charges to
customers outside of the municipality.

���� 4.��� a.� The Board of Public
Utilities shall permit, through a program to be known as an Infrastructure
Investment Program, a public utility to accelerate its investment in the
construction, installation, and rehabilitation of certain public utility plants
and facilities that enhance safety, reliability, and resiliency or support
economic growth and the achievement of applicable federal, State, regional, and
local air quality and decarbonization standards, including, but not limited to,
standards prescribed in section 2 of P.L. ,
c. (C. )
(pending before the Legislature as this bill).� The purpose of an
Infrastructure Investment Program shall be to provide a rate recovery mechanism
that encourages and supports necessary accelerated construction, installation,
and rehabilitation of certain public utility plants and equipment.� As set
forth in sections 3 through 10 of P.L. ,
c. (C.
through C. ) (pending before the
Legislature as this bill), such investment shall occur in a systematic and
sustained way to advance construction, installation, and rehabilitation of
public utility infrastructure needed for continued system safety, reliability,
and resiliency and for sustained economic growth in the State of New Jersey.

���� b.��� Through the
Infrastructure Investment Program, a public utility may obtain accelerated
recovery of qualifying investments, subject to the terms of sections 3 through 10
of P.L. , c.
(C. through
C. ) (pending before the
Legislature as this bill), and any other conditions set by the board in
approving a public utility�s Infrastructure Investment Program.� To participate
in the program, a public utility shall apply to the board in a manner and form
determined by the board.

���� c.���� The board shall require
frequent and detailed reporting of expenditures during all phases of an
Infrastructure Investment Program, as set forth in sections 3 through 10 of
P.L. , c.
(C. through
C. ) (pending before the
Legislature as this bill), to ensure prudent investment and compliance with the
provisions of sections 3 through 10 of P.L. ,
c. (C.
through C. ) (pending before the
Legislature as this bill).

���� 5.��� a.� The projects within
an Infrastructure Investment Program shall be:�

���� (1)�� related to safety,
reliability, or resiliency or are otherwise necessary to comply with section 2
of P.L. , c.
(C. ) (pending before the
Legislature as this bill);

���� (2)�� non-revenue producing
unless the project is necessary to comply with section 2 of
P.L. , c.
(C. ) (pending before the
Legislature as this bill);

���� (3)�� specifically identified
by the public utility within its petition in support of an Infrastructure
Investment Program; and

���� (4)�� approved by the board
for inclusion in a public utility�s Infrastructure Investment Program in
response to the public utility�s petition.

���� b.��� Projects within a public
utility�s Infrastructure Investment Program may include:�

���� (1)�� the replacement of gas
utilization pressure cast iron mains with elevated pressure mains and
associated services;

���� (2)�� the replacement of mains
and services that are identified as high risk in a gas public utility�s
Distribution Integrity Management Plan;

���� (3)�� the installation of gas
excess flow valves where existing gas public utility service line replacements
require them, excluding excess flow valves installed upon customer request
pursuant to 49 C.F.R. s.192.383;

���� (4)�� electric distribution
automation investments, including, but not limited to, supervisory control and
data acquisition equipment, cybersecurity investments, relays, reclosers,
voltage and reactive power control, communications networks, and distribution management
system integration;

���� (5)�� the installation of
break-predictive water sensors and wastewater sensors to curtail combined sewer
overflows;

���� (6)�� electric distribution
infrastructure investments, including, but not limited to, poles, wires,
substations, and other facilities; and

���� (7)�� other projects deemed
appropriate by the board.

���� c.���� A public utility shall
maintain its capital expenditures on projects similar to those proposed within
the public utility�s Infrastructure Investment Program approved by the board.�
These capital expenditures shall amount to at least 10 percent of any approved
Infrastructure Investment Program.� These capital expenditures shall be made in
the normal course of business and recovered in a base rate proceeding and shall
not be subject to the recovery mechanism set forth in N.J.A.C.14:3-2A.6 or it
successor.

���� 6.��� a.� A public utility
seeking to establish an Infrastructure Investment Program shall, within its
petition to the board, propose annual baseline spending levels to be maintained
by the public utility throughout the length of the proposed Infrastructure Investment
Program.� These expenditures shall be recovered by the public utility in the
normal course within the public utility�s next base rate case.

���� b.��� In proposing annual
baseline spending levels pursuant to subsection a. of this section, the public
utility shall provide appropriate data to justify the proposed annual baseline
spending levels, which may include historical capital expenditure budgets, projected
capital expenditure budgets, depreciation expenses, and any other data relevant
to the public utility's proposed baseline spending level.

���� c.���� Upon approving a public
utility�s proposed Infrastructure Investment Program, the board shall
establish, within its order approving the public utility�s Infrastructure
Investment Program, annual baseline spending levels for each year of the
Infrastructure Investment Program.� In establishing the annual baseline
spending levels, the board shall set forth, within its order approving the
Infrastructure Investment Program, the factors used to establish the annual
baseline spending levels.� The board, in its discretion, may consider a public
utility�s historical capital expenditure budgets, projected capital expenditure
budgets, depreciation expenses, or any other data deemed relevant by the board
in establishing the annual baseline spending levels.

���� d.��� Only expenditures in
excess of the annual baseline spending levels, established by the board
pursuant to subsection c. of this section, and that meet the other requirements
of sections 3 through 10 of P.L. , c.
(C. ) (pending before the
Legislature as this bill) shall be eligible for accelerated recovery pursuant
to N.J.A.C.14:3-2A.6 or it successor.

���� 7.��� a.� A public utility may
petition the board for approval of an Infrastructure Investment Program
extending for a period of five years or less.

���� b.��� The board may limit the
size of a public utility�s Infrastructure Investment Program due to its
anticipated impact on public utility rates or for any other reason determined
by the board.

���� c.���� A public utility that
offers more than one regulated service may file separate petitions to establish
separate Infrastructure Investment Programs for each regulated service offered
by the public utility.� Under these circumstances, each Infrastructure Investment
Program approved by the board shall be subject to its own respective spending
cap.

���� d.��� A water public utility
shall not simultaneously maintain an Infrastructure Investment Program and
utilize the board's Distribution System Improvement Charge authorized pursuant
to N.J.A.C.14:9-10.1 et seq. or its successor.� Before filing a petition in
support of a proposed Infrastructure Investment Program pursuant to sections 3
through 10 of P.L. , c.
(C. through
C. ) (pending before the
Legislature as this bill), a water public utility shall first close out any
existing Distribution System Improvement Charge program.

���� e.���� Allowance for Funds
Used During Construction shall be permitted under an Infrastructure Investment
Program but a public utility shall not utilize Allowance for Funds Used During
Construction once Infrastructure Investment Program facilities are placed in
service.

���� f.���� Year-to-year variations
in a public utility�s approved Infrastructure Investment Program�s annual
budget of up to 10 percent shall be permitted, provided that the total budget
for a public utility�s Infrastructure Investment Program is not exceeded. Variations
in excess of 10 percent shall require the board�s approval.

���� 8.��� a.� The board shall not
require a public utility to establish an Infrastructure Investment Program.

���� b.��� A public utility
requesting approval of an Infrastructure Investment Program shall include
within its petition:�

���� (1)�� projected annual capital
expenditure budgets for a five-year period, identified by major categories of
expenditures;

���� (2)�� actual annual capital
expenditures for the previous five years, identified by major categories of
expenditures;

���� (3)�� an engineering
evaluation and report identifying the specific projects to be included in a
public utility�s proposed Infrastructure Investment Program with descriptions
of project objectives, including the specific expected resilience benefits,
detailed cost estimates, in-service dates, and any applicable cost-benefit
analysis for each project;

���� (4)�� an Infrastructure
Investment Program budget setting forth annual budget expenditures;

���� (5)�� a proposal addressing
when the public utility intends to file its next base rate case, consistent
with N.J.A.C.14:3-2A.6(f) or its successor;

���� (6)�� proposed annual baseline
spending levels, consistent with N.J.A.C. 14:3-2A.3(a) and (b) or its successor;

���� (7)�� the maximum dollar
amount, in aggregate, that the public utility seeks to recover through its
Infrastructure Investment Program; and

���� (8)�� the estimated rate
impact of the proposed Infrastructure Investment Program on the public
utility�s customers.

���� c.���� In considering a public
utility�s petition in support of an Infrastructure Investment Program, the
board may require that the public utility:�

���� (1)�� provide any supplemental
information, beyond the information required under N.J.A.C.14:3-2A.5(b) or its
successor, that the board deems necessary to evaluate the public utility�s
petition in support of its Infrastructure Investment Program;

���� (2)�� retain an independent
Infrastructure Investment Program monitor, as a condition of approval of the
public utility�s petition, to review and provide quarterly or semi-annual
reports to the board and to the Division of Rate Counsel, where the monitor
shall be paid by the public utility.� If the board requires an independent
Infrastructure Investment Program monitor, the monitor�s reports shall
address:�

���� (a)�� the effectiveness of
Infrastructure Investment Program investments in meeting project objectives;

���� (b)�� the cost-effectiveness
and efficiency of investments;

���� (c)�� the appropriateness of
cost assignments; and

���� (d)�� any other information
required by the board.

���� d.��� Before the board
approves a public utility�s Infrastructure Investment Program, the board shall
conduct a public hearing.� Notice of the public hearing shall contain the
maximum dollar amount the public utility seeks to recover through its
Infrastructure Investment Program and the estimated rate impact of the public
utility�s Infrastructure Investment Program on the public utility�s customers.

���� e.���� Following the board�s
approval of a public utility�s petition in support of the public utility�s
Infrastructure Investment Program, the public utility shall file supportive
semi-annual status reports with the board and the Division of Rate Counsel for
project management and oversight purposes that, at a minimum, contain the
following:�

���� (1)�� forecasted and actual
costs of the public utility�s Infrastructure Investment Program for the
applicable reporting period, and for the Infrastructure Investment Program to
date, where Infrastructure Investment Program projects are identified by major
category;

���� (2)�� the estimated total
quantity of work completed under the public utility�s Infrastructure Investment
Program identified by major category.� If the work cannot be quantified, major
tasks completed shall be provided;

���� (3)�� estimated completion
dates for the public utility�s Infrastructure Investment Program as a whole and
estimated completion dates for each major Infrastructure Investment Program
category;

���� (4)�� anticipated changes to
Infrastructure Investment Program projects, if any;

���� (5)�� actual capital
expenditures made by the public utility in the normal course of business on
similar projects, identified by major category; and

���� (6)�� any other performance
metrics concerning a public utility�s Infrastructure Investment Program as may
be required by the board.

���� 9.��� a.� A public utility may
file for annual or semi-annual rate recovery for facilities constructed and
placed in service under an Infrastructure Investment Program.

���� b.��� Each filing made by a
public utility seeking accelerated recovery under an Infrastructure Investment
Program shall seek recovery, at a minimum, of at least 10 percent of overall
Infrastructure Investment Program expenditures.

���� c.���� A public utility�s
expenditures made prior to the board�s approval of an Infrastructure Investment
Program shall not be eligible for accelerated recovery.

���� d.��� Rates approved by the
board for recovery of expenditures under an Infrastructure Investment Program
shall be accelerated and recovered through a separate clause of the utility�s
board-approved tariff.� However, the separate clause shall not exceed five percent
of the amount billed to the public utility�s customers under the applicable
delivery rates of the public utility.� The board may, upon petition by a public
utility, waive the five percent-limit under this subsection to ensure and
maintain adequate, efficient, safe, reliable, and reasonable public utility
service.

���� e.���� Rates approved by the
board for recovery of expenditures under a public utility�s Infrastructure
Investment Program shall be provisional, subject to refund and interest.�
Prudence of Infrastructure Investment Program expenditures shall be determined
in the public utility�s next base rate case.

���� f.���� A public utility shall
file its next base rate case not later than five years after the board�s
approval of the public utility�s Infrastructure Investment Program start date.�
However, the board may require a public utility to file its next base rate case
within a shorter period.

���� g.��� A public utility may
continue to file for accelerated recoveries during the approved Infrastructure
Investment Program period notwithstanding the filing of the public utility�s
next base rate case.

���� h.��� An earnings test shall
be required, where return on equity shall be determined based on the actual net
income of the public utility for the most recent 12-month period divided by the
average of the beginning and ending common equity balances for the corresponding
period.

���� i.���� For any Infrastructure
Investment Program approved by the board, if the calculated return on equity
exceeds the allowed return on equity from the public utility�s last base rate
case by 50 basis points or more, accelerated recovery shall not be allowed for
the applicable filing period.

���� 10.� The board shall adopt
rules and regulations, pursuant to the �Administrative Procedure Act,�
P.L.1968, c.410 (C.52:14B-1 et seq.), as may be necessary to effectuate the
provisions of sections 3 through 9 of P.L. ,
c. (C.
through C. ) (pending before the
Legislature as this bill), including, but not limited to, rules and regulations
updating the board�s existing Infrastructure Investment Program established
pursuant to regulations adopted under subchapter 2A of chapter 3 of Title 14 of
the New Jersey Administrative Code.

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