Requires State to bear costs of interconnection of net-metered, residential, Class I renewable energy systems.

A4365

ASSEMBLY, No. 4365

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED FEBRUARY 19, 2026

Sponsored by:

Assemblyman� ALEX SAUICKIE

District 12 (Burlington, Middlesex, Monmouth and Ocean)

SYNOPSIS

���� Requires State to bear costs of interconnection of
net-metered, residential, Class I renewable energy systems.

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act
concerning Class I renewable energy systems and
amending P.L.1999, c.23.

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

���� 1.��� Section 12 of P.L.1999,
c.23 (C.48:3-60) is amended to read as follows:

���� 12. a. Simultaneously with the
starting date for the implementation of retail choice as determined by the
board pursuant to subsection a. of section 5 of P.L.1999, c.23 (C.48:3-53), the
board shall permit each electric public utility and gas public utility to
recover some or all of the following costs through a societal benefits charge
that shall be collected as a non-bypassable charge imposed on all electric
public utility customers and gas public utility customers, as appropriate:

���� (1) the costs for the social
programs for which rate recovery was approved by the board prior to April 30,
1997.� For the purpose of establishing initial unbundled rates pursuant to
section 4 of P.L.1999, c.23 (C.48:3-52), the societal benefits charge shall be
set to recover the same level of social program costs as is being collected in
the bundled rates of the electric public utility on the effective date of
P.L.1999, c.23 (C.48:3-49 et al.).� The board may subsequently order, pursuant
to its rules and regulations, an increase or decrease in the societal benefits
charge to reflect changes in the costs to the utility of administering existing
social programs.� Nothing in P.L.1999, c.23 (C.48:3-49 et al.) shall be
construed to abolish or change any social program required by statute or board
order or rule or regulation to be provided by an electric public utility.� Any
such social program shall continue to be provided by the utility until
otherwise provided by law, unless the board determines that it is no longer
appropriate for the electric public utility to provide the program, or the
board chooses to modify the program;

���� (2) nuclear plant
decommissioning costs;

���� (3) the costs of demand side
management programs that were approved by the board pursuant to its demand side
management regulations prior to April 30, 1997.� For the purpose of
establishing initial unbundled rates pursuant to section 4 of P.L.1999, c.23 (C.48:3-52),
the societal benefits charge shall be set to recover the same level of demand
side management program costs as is being collected in the bundled rates of the
electric public utility on the effective date of P.L.1999, c.23 (C.48:3-49 et
al.).� Within four months of the effective date of P.L.1999, c.23 (C.48:3-49 et
al.), and every four years thereafter, the board shall initiate a proceeding
and cause to be undertaken a comprehensive resource analysis of energy
programs, and within eight months of initiating such proceeding and after
notice, provision of the opportunity for public comment, and public hearing,
the board, in consultation with the Department of Environmental Protection,
shall determine the appropriate level of funding for energy efficiency, light,
medium, and heavy-duty plug-in electric vehicles, including school buses, and
associated plug-in electric vehicle charging infrastructure, energy storage,
[
and
]
Class I
renewable energy programs that provide environmental benefits above and beyond
those provided by standard offer or similar programs in effect as of the
effective date of P.L.1999, c.23 (C.48:3-49 et al.);
[
provided that the
]

and the
costs of residential interconnections of net metered Class I renewable energy
systems pursuant to the program established by the board pursuant to paragraph
(2) of subsection e. of section 38 of P.L.1999, c.23 (C.48:3-87).� The

funding for such programs be no less than 50 percent of the total Statewide
amount being collected in electric and gas public utility rates for demand side
management programs on the effective date of P.L.1999, c.23 (C.48:3-49 et al.)
for an initial period of four years from the issuance of the first
comprehensive resource analysis following the effective date of P.L.1999, c.23
(C.48:3-49 et al.), and
[
provided
]
that 25
percent of this amount shall be used to provide funding for Class I renewable
energy projects in the State.� In each of the following fifth through eighth
years, the Statewide funding for such programs shall be no less than 50 percent
of the total Statewide amount being collected in electric and gas public
utility rates for demand side management programs on the effective date of
P.L.1999, c.23 (C.48:3-49 et al.), except that as additional funds are made
available as a result of the expiration of past standard offer or similar
commitments, the minimum amount of funding for such programs shall increase by
an additional amount equal to 50 percent of the additional funds made
available, until the minimum amount of funding dedicated to such programs
reaches $140,000,000 total.� After the eighth year the board shall make a
determination as to the appropriate level of funding for these programs.� Such
programs shall include a program to provide financial incentives for the
installation of Class I renewable energy projects in the State, and the board,
in consultation with the Department of Environmental Protection, shall
determine the level and total amount of such incentives as well as the
renewable technologies eligible for such incentives which shall include, at a
minimum, photovoltaic, wind, and fuel cells.� The board shall simultaneously
determine, as a result of the comprehensive resource analysis, the programs to
be funded by the societal benefits charge, the level of cost recovery and
performance incentives for old and new programs and whether the recovery of
demand side management programs� costs currently approved by the board may be
reduced or extended over a longer period of time.� The board shall make these
determinations taking into consideration existing market barriers and
environmental benefits, with the objective of transforming markets, capturing
lost opportunities, making energy services more affordable for low income
customers and eliminating subsidies for programs that can be delivered in the
marketplace without electric public utility and gas public utility customer
funding.� In addition to the determinations above, the board shall allocate
sufficient funding from the societal benefits charge to cover the remaining
cost of fully funding incentive awards issued for transmission-scale energy
storage systems that are eligible projects pursuant to P.L.2025, c.136
(C.48:3-121.2 et al.), after accounting for funding allocated to this purpose
from other sources;

���� (4) manufactured gas plant
remediation costs, which shall be determined initially in a manner consistent
with mechanisms in the remediation adjustment clauses for the electric public
utility and gas public utility adopted by the board; and

���� (5) the cost
[
,
]
of consumer
education, as determined by the board, which shall be in an amount that,
together with the consumer education surcharge imposed on electric power
supplier license fees pursuant to subsection h. of section 29 of P.L.1999, c.23
(C.48:3-78) and the consumer education surcharge imposed on gas supplier
license fees pursuant to subsection g. of section 30 of P.L.1999, c.23
(C.48:3-79), shall be sufficient to fund the consumer education program
established pursuant to section 36 of P.L.1999, c.23 (C.48:3-85).�

���� b.��� There is established in
the Board of Public Utilities a nonlapsing fund to be known as the �Universal
Service Fund.�� The board shall determine: the level of funding and the
appropriate administration of the fund; the purposes and programs to be funded
with monies from the fund; which social programs shall be provided by an
electric public utility as part of the provision of its regulated services
which provide a public benefit; whether the funds appropriated to fund the
�Lifeline Credit Program� established pursuant to P.L.1979, c.197 (C.48:2-29.15
et seq.), the �Tenants� Lifeline Assistance Program� established pursuant to
P.L.1981, c.210 (C.48:2-29.30 et seq.), the funds received pursuant to the Low
Income Home Energy Assistance Program established pursuant to 42 U.S.C. s.8621
et seq., and funds collected by electric and gas public utilities, as
authorized by the board, to offset uncollectible electricity and natural gas
bills should be deposited in the fund; and whether new charges should be
imposed to fund new or expanded social programs.

(cf:� P.L.2025, c.136, s.7)

���� 2.� Section 38 of P.L.1999,
c.23 (C.48:3-87) is amended to read as follows:

���� 38. a. The board shall require
an electric power supplier or basic generation service provider to disclose on
a customer�s bill or on customer contracts or marketing materials, a uniform,
common set of information about the environmental characteristics of the energy
purchased by the customer, including, but not limited to:

���� (1)�� Its fuel mix, including
categories for oil, gas, nuclear, coal, solar, hydroelectric, wind and biomass,
or a regional average determined by the board;

���� (2)�� Its emissions, in pounds
per megawatt hour, of sulfur dioxide, carbon dioxide, oxides of nitrogen, and
any other pollutant that the board may determine to pose an environmental or
health hazard, or an emissions default to be determined by the board; and

���� (3)�� Any discrete emission
reduction retired pursuant to rules and regulations adopted pursuant to
P.L.1995, c.188.

���� b.��� Notwithstanding any
provisions of the �Administrative Procedure Act,� P.L.1968, c.410 (C.52:14B-1
et seq.) to the contrary, the board shall initiate a proceeding and shall
adopt, in consultation with the Department of Environmental Protection, after
notice and opportunity for public comment and public hearing, interim standards
to implement this disclosure requirement, including, but not limited to:

���� (1)�� A methodology for
disclosure of emissions based on output pounds per megawatt hour;

���� (2)�� Benchmarks for all
suppliers and basic generation service providers to use in disclosing emissions
that will enable consumers to perform a meaningful comparison with a supplier�s
or basic generation service provider�s emission levels; and

���� (3)�� A uniform emissions
disclosure format that is graphic in nature and easily understandable by
consumers.� The board shall periodically review the disclosure requirements to
determine if revisions to the environmental disclosure system as implemented
are necessary.

���� Such standards shall be
effective as regulations immediately upon filing with the Office of
Administrative Law and shall be effective for a period not to exceed 18 months,
and may, thereafter, be amended, adopted or readopted by the board in
accordance with the provisions of the �Administrative Procedure Act.�

���� c. (1) The board may adopt, in
consultation with the Department of Environmental Protection, after notice and
opportunity for public comment, an emissions portfolio standard applicable to
all electric power suppliers and basic generation service providers, upon a
finding that:

���� (a)�� The standard is
necessary as part of a plan to enable the State to meet federal Clean Air Act
or State ambient air quality standards; and

���� (b)�� Actions at the regional
or federal level cannot reasonably be expected to achieve the compliance with
the federal standards.

���� (2)�� By July 1, 2009, the
board shall adopt, pursuant to the �Administrative Procedure Act,� P.L.1968,
c.410 (C.52:14B-1 et seq.), a greenhouse gas emissions portfolio standard to
mitigate leakage or another regulatory mechanism to mitigate leakage applicable
to all electric power suppliers and basic generation service providers that
provide electricity to customers within the State.� The greenhouse gas
emissions portfolio standard or any other regulatory mechanism to mitigate
leakage shall:

���� (a)�� Allow a transition
period, either before or after the effective date of the regulation to mitigate
leakage, for a basic generation service provider or electric power supplier to
either meet the emissions portfolio standard or other regulatory mechanism to
mitigate leakage, or to transfer any customer to a basic generation service
provider or electric power supplier that meets the emissions portfolio standard
or other regulatory mechanism to mitigate leakage.� If the transition period
allowed pursuant to this subparagraph occurs after the implementation of an
emissions portfolio standard or other regulatory mechanism to mitigate leakage,
the transition period shall be no longer than three years; and

���� (b)�� Exempt the provision of
basic generation service pursuant to a basic generation service purchase and
sale agreement effective prior to the date of the regulation.

���� Unless the Attorney General or
the Attorney General�s designee determines that a greenhouse gas emissions
portfolio standard would unconstitutionally burden interstate commerce or would
be preempted by federal law, the adoption by the board of an electric energy
efficiency portfolio standard pursuant to subsection g. of this section, a gas
energy efficiency portfolio standard pursuant to subsection h. of this section,
or any other enhanced energy efficiency policies to mitigate leakage shall not
be considered sufficient to fulfill the requirement of this subsection for the
adoption of a greenhouse gas emissions portfolio standard or any other
regulatory mechanism to mitigate leakage.

���� d.��� Notwithstanding any
provisions of the �Administrative Procedure Act,� P.L.1968, c.410 (C.52:14B-1
et seq.) to the contrary, the board shall initiate a proceeding and shall
adopt, after notice, provision of the opportunity for comment, and public
hearing, renewable energy portfolio standards that shall require:

���� (1)�� that two and one-half
percent of the kilowatt hours sold in this State by each electric power
supplier and each basic generation service provider be from Class II renewable
energy sources;

���� (2)�� beginning on January 1,
2020, that 21 percent of the kilowatt hours sold in this State by each electric
power supplier and each basic generation service provider be from Class I
renewable energy sources.� The board shall increase the required percentage for
Class I renewable energy sources so that by January 1, 2025, 35 percent of the
kilowatt hours sold in this State by each electric power supplier and each
basic generation service provider shall be from Class I renewable energy
sources, and by January 1, 2030, 50 percent of the kilowatt hours sold in this
State by each electric power supplier and each basic generation service
provider shall be from Class I renewable energy sources.� Notwithstanding the
requirements of this subsection, the board shall ensure that the cost to
customers of the Class I renewable energy requirement imposed pursuant to this
subsection shall not exceed nine percent of the total paid for electricity by
all customers in the State for energy year 2019, energy year 2020, and energy year
2021, respectively, and shall not exceed seven percent of the total paid for
electricity by all customers in the State in any energy year thereafter;
provided that, if in energy years 2019 through 2021 the cost to customers of
the Class I renewable energy requirement is less than nine percent of the total
paid for electricity by all customers in the State, the board may increase the
cost to customers of the Class I renewable energy requirement in energy years
2022 through 2024 to a rate greater than seven percent, as long as the total
costs to customers for energy years 2019 through 2024 does not exceed the sum
of nine percent of the total paid for electricity by all customers in the State
in energy years 2019 through 2021 and seven percent of the total paid for
electricity by all customers in the State in energy years 2022 through 2024.�
In calculating the cost to customers of the Class I renewable energy
requirement imposed pursuant to this subsection, the board shall not include
the costs of the offshore wind energy certificate program established pursuant
to paragraph (4) of this subsection.� In calculating the cost to customers of
the Class I renewable energy requirement, the board shall reflect any energy
and environmental savings attributable to the Class I program in its
calculation, which shall include, but not be limited to, the social cost of
carbon dioxide emissions at a value no less than the most recently published
three percent discount rate scenario of the United States Government Interagency
Working Group on Social Cost of Greenhouse Gases.� The board shall take any
steps necessary to prevent the exceedance of the cap on the cost to customers
including, but not limited to, adjusting the Class I renewable energy
requirement.

���� An electric power supplier or
basic generation service provider may satisfy the requirements of this
subsection by participating in a renewable energy trading program approved by
the board in consultation with the Department of Environmental Protection;

���� (3)�� that the board establish
a multi-year schedule, applicable to each electric power supplier or basic
generation service provider in this State, beginning with the one-year period
commencing on June 1, 2010, and continuing for each subsequent one-year period
up to and including, the one-year period commencing on June 1, 2033, that
requires the following number or percentage, as the case may be, of
kilowatt-hours sold in this State by each electric power supplier and each
basic generation service provider to be from solar electric power generators
connected to the distribution system or transmission system in this State:

���� EY 2011���������������� 306
Gigawatthours (Gwhrs)

���� EY 2012���������������� 442
Gwhrs

���� EY 2013���������������� 596
Gwhrs

���� EY 2014���������������� 2.050%

���� EY 2015���������������� 2.450%

���� EY 2016���������������� 2.750%

���� EY 2017���������������� 3.000%

���� EY 2018���������������� 3.200%

���� EY 2019���������������� 4.300%

���� EY 2020���������������� 4.900%

���� EY 2021���������������� 5.100%

���� EY 2022���������������� 5.100%

���� EY 2023���������������� 5.100%

���� EY 2024���������������� 4.900%

���� EY 2025���������������� 4.800%

���� EY 2026���������������� 4.500%

���� EY 2027���������������� 4.350%

���� EY 2028���������������� 3.740%

���� EY 2029���������������� 3.070%

���� EY 2030���������������� 2.210%

���� EY 2031���������������� 1.580%

���� EY 2032���������������� 1.400%

���� EY 2033���������������� 1.100%

���� No later than 180 days after
the date of enactment of P.L.2018, c.17 (C.48:3-87.8 et al.), the board shall
adopt rules and regulations to close the SREC program to new applications upon
the attainment of 5.1 percent of the kilowatt-hours sold in the State by each
electric power supplier and each basic generation provider from solar electric
power generators connected to the distribution system.� The board shall
continue to consider any application filed before the date of enactment of
P.L.2018, c.17 (C.48:3-87.8 et al.).� The board shall provide for an orderly
and transparent mechanism that will result in the closing of the existing SREC
program on a date certain but no later than June 1, 2021.

���� No later than 24 months after
the date of enactment of P.L.2018, c.17 (C.48:3-87.8 et al.), the board shall
complete a study that evaluates how to modify or replace the SREC program to
encourage the continued efficient and orderly development of solar renewable
energy generating sources throughout the State.� The board shall submit the
written report thereon to the Governor and, pursuant to section 2 of P.L.1991,
c.164 (C.52:14-19.1), to the Legislature.� The board shall consult with public
utilities, industry experts, regional grid operators, solar power providers and
financiers, and other State agencies to determine whether the board can modify
the SREC program such that the program will:

���� -����� continually reduce,
where feasible, the cost of achieving the solar energy goals set forth in this
subsection;

���� -����� provide an orderly
transition from the SREC program to a new or modified program;

���� -����� develop megawatt
targets for grid connected and distribution systems, including residential and
small commercial rooftop systems, community solar systems, and large scale
behind the meter systems, as a share of the overall solar energy requirement,
which targets the board may modify periodically based on the cost, feasibility,
or social impacts of different types of projects;

���� -����� establish and update
market-based maximum incentive payment caps periodically for each of the above
categories of solar electric power generation facilities;

���� -����� encourage and
facilitate market-based cost recovery through long-term contracts and energy
market sales; and

���� -����� where cost recovery is
needed for any portion of an efficient solar electric power generation facility
when costs are not recoverable through wholesale market sales and direct
payments from customers, utilize competitive processes such as competitive procurement
and long-term contracts where possible to ensure such recovery, without
exceeding the maximum incentive payment cap for that category of facility.

���� The board shall approve,
conditionally approve, or disapprove any application for designation as
connected to the distribution system of a solar electric power generation
facility filed with the board after the date of enactment of P.L.2018, c.17
(C.48:3-87.8 et al.), no more than 90 days after receipt by the board of a
completed application.� For any such application for a project greater than 25
kilowatts, the board shall require the applicant to post a notice escrow with
the board in an amount of $40 per kilowatt of DC nameplate capacity of the
facility, not to exceed $40,000.� The notice escrow amount shall be reimbursed
to the applicant in full upon either denial of the application by the board or
upon commencement of commercial operation of the solar electric power
generation facility.� The escrow amount shall be forfeited to the State if the
facility is designated as connected to the distribution system pursuant to this
subsection but does not commence commercial operation within two years following
the date of the designation by the board.

���� For all applications for
designation as connected to the distribution system of a solar electric power
generation facility filed with the board after the date of enactment of
P.L.2018, c.17 (C.48:3-87.8 et al.), the SREC term shall be 10 years.

���� (a)�� The board shall
determine an appropriate period of no less than 120 days following the end of
an energy year prior to which a provider or supplier must demonstrate
compliance for that energy year with the annual renewable portfolio standard;

���� (b)�� No more than 24 months
following the date of enactment of P.L.2012, c.24, the board shall complete a
proceeding to investigate approaches to mitigate solar development volatility
and prepare and submit, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1),
a report to the Legislature, detailing its findings and recommendations.� As
part of the proceeding, the board shall evaluate other techniques used
nationally and internationally;

���� (c)�� The solar renewable
portfolio standards requirements in this paragraph shall exempt those existing
supply contracts which are effective prior to the date of enactment of
P.L.2018, c.17 (C.48:3-87.8 et al.) from any increase beyond the number of
SRECs mandated by the solar renewable energy portfolio standards requirements
that were in effect on the date that the providers executed their existing
supply contracts.� This limited exemption for providers� existing supply
contracts shall not be construed to lower the Statewide solar sourcing
requirements set forth in this paragraph. Such incremental requirements that
would have otherwise been imposed on exempt providers shall be distributed over
the providers not subject to the existing supply contract exemption until such
time as existing supply contracts expire and all providers are subject to the
new requirement in a manner that is competitively neutral among all providers
and suppliers.� Notwithstanding any rule or regulation to the contrary, the
board shall recognize these new solar purchase obligations as a change required
by operation of law and implement the provisions of this subsection in a manner
so as to prevent any subsidies between suppliers and providers and to promote
competition in the electricity supply industry.

���� An electric power supplier or
basic generation service provider may satisfy the requirements of this
subsection by participating in a renewable energy trading program approved by
the board in consultation with the Department of Environmental Protection, or
compliance with the requirements of this subsection may be demonstrated to the
board by suppliers or providers through the purchase of SRECs.

���� The renewable energy portfolio
standards adopted by the board pursuant to paragraphs (1) and (2) of this
subsection shall be effective as regulations immediately upon filing with the
Office of Administrative Law and shall be effective for a period not to exceed
18 months, and may, thereafter, be amended, adopted or readopted by the board
in accordance with the provisions of the �Administrative Procedure Act.�

���� The renewable energy portfolio
standards adopted by the board pursuant to this paragraph shall be effective as
regulations immediately upon filing with the Office of Administrative Law and
shall be effective for a period not to exceed 30 months after such filing, and
shall, thereafter, be amended, adopted or readopted by the board in accordance
with the �Administrative Procedure Act�; and

���� (4)�� within 180 days after
the date of enactment of P.L.2010, c.57 (C.48:3-87.1 et al.), that the board
establish an offshore wind renewable energy certificate program to require that
a percentage of the kilowatt hours sold in this State by each electric power
supplier and each basic generation service provider be from offshore wind
energy in order to support at least 3,500 megawatts of generation from
qualified offshore wind projects.

���� The percentage established by
the board pursuant to this paragraph shall serve as an offset to the renewable
energy portfolio standard established pursuant to paragraph (2) of this
subsection and shall reduce the corresponding Class I renewable energy requirement.

���� The percentage established by
the board pursuant to this paragraph shall reflect the projected OREC
production of each qualified offshore wind project, approved by the board
pursuant to section 3 of P.L.2010, c.57 (C.48:3-87.1), for 20 years from the
commercial operation start date of the qualified offshore wind project which
production projection and OREC purchase requirement, once approved by the
board, shall not be subject to reduction.

���� An electric power supplier or
basic generation service provider shall comply with the OREC program
established pursuant to this paragraph through the purchase of offshore wind
renewable energy certificates at a price and for the time period required by the
board.� In the event there are insufficient offshore wind renewable energy
certificates available, the electric power supplier or basic generation service
provider shall pay an offshore wind alternative compliance payment established
by the board.� Any offshore wind alternative compliance payments collected
shall be refunded directly to the ratepayers by the electric public utilities.

���� The rules established by the
board pursuant to this paragraph shall be effective as regulations immediately
upon filing with the Office of Administrative Law and shall be effective for a
period not to exceed 18 months, and may, thereafter, be amended, adopted or
readopted by the board in accordance with the provisions of the �Administrative
Procedure Act,� P.L.1968, c.410 (C.52:14B-1 et seq.).

���� e.���� Notwithstanding any
provisions of the �Administrative Procedure Act,� P.L.1968, c.410 (C.52:14B-1
et seq.) to the contrary, the board shall initiate a proceeding and shall
adopt, after notice, provision of the opportunity for comment, and public
hearing:

���� (1)�� net metering standards
for electric power suppliers and basic generation service providers.� The
standards shall require electric power suppliers and basic generation service
providers to offer net metering at non-discriminatory rates to industrial, large
commercial, residential and small commercial customers, as those customers are
classified or defined by the board, that generate electricity, on the customer�s
side of the meter, using a Class I renewable energy source, for the net amount
of electricity supplied by the electric power supplier or basic generation
service provider over an annualized period.� Systems of any sized capacity, as
measured in watts, are eligible for net metering.� If the amount of electricity
generated by the customer-generator, plus any kilowatt hour credits held over
from the previous billing periods, exceeds the electricity supplied by the
electric power supplier or basic generation service provider, then the electric
power supplier or basic generation service provider, as the case may be, shall
credit the customer-generator for the excess kilowatt hours until the end of
the annualized period at which point the customer-generator will be compensated
for any remaining credits or, if the customer-generator chooses, credit the
customer-generator on a real-time basis, at the electric power supplier�s or
basic generation service provider�s avoided cost of wholesale power or the PJM
electric power pool�s real-time locational marginal pricing rate, adjusted for
losses, for the respective zone in the PJM electric power pool.� Alternatively,
the customer-generator may execute a bilateral agreement with an electric power
supplier or basic generation service provider for the sale and purchase of the
customer-generator�s excess generation.� The customer-generator may be credited
on a real-time basis, so long as the customer-generator follows applicable
rules prescribed by the PJM electric power pool for its capacity requirements
for the net amount of electricity supplied by the electric power supplier or
basic generation service provider.� The board may authorize an electric power
supplier or basic generation service provider to cease offering net metering to
customers that are not already net metered whenever the total rated generating
capacity owned and operated by net metering customer-generators Statewide
equals 5.8 percent of the total annual kilowatt-hours sold in this State by
each electric power supplier and each basic generation service provider during
the prior one-year period;

���� (2)�� safety and power quality
interconnection standards for Class I renewable energy source systems used by a
customer-generator that shall be eligible for net metering.� Such standards or
rules shall take into consideration the goals of the New Jersey Energy Master
Plan, applicable industry standards, and the standards of other states and the
Institute of Electrical and Electronics Engineers.�
Notwithstanding the
provisions of any law, rule, or regulation to the contrary, commencing six
months after the effective date of P.L. ,
c. (pending before the Legislature as this bill), the State
shall bear the reasonable costs of the interconnection of net-metered,
residential, Class I renewable energy systems.� The board shall develop a
program to distribute grants to customers or electric public utilities, as
applicable, to cover the reasonable costs of the interconnection of
net-metered, residential, Class I renewable energy systems, and the board may
use funds collected through the societal benefits charge established pursuant
to section 12 of P.L.1999, c.23 (C.48:3-60) to fund the program.
� The board
shall allow electric public utilities to recover the costs of any new net
meters, upgraded net meters, system reinforcements or upgrades, and
interconnection costs through either their regulated rates or from the net
metering customer-generator
, provided that the electric public utility shall
not recover the costs of an interconnection for which the utility has received
a grant under the program established by the board pursuant to this paragraph
;

���� (3)�� credit or other
incentive rules for generators using Class I renewable energy generation
systems that connect to New Jersey�s electric public utilities� distribution
system but who do not net meter; and

���� (4)�� net metering aggregation
standards to require electric public utilities to provide net metering
aggregation to single electric public utility customers that operate a solar
electric power generation system installed at one of the customer�s facilities
or on property owned by the customer, provided that any such customer is a
State entity, school district, county, county agency, county authority,
municipality, municipal agency, or municipal authority.� The standards shall
provide that, in order to qualify for net metering aggregation, the customer
must operate a solar electric power generation system using a net metering
billing account, which system is located on property owned by the customer,
provided that: (a) the property is not land that has been actively devoted to
agricultural or horticultural use and 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.) at any time within the 10-year period prior to the effective date of
P.L.2012, c.24, provided, however, that the municipal planning board of a
municipality in which a solar electric power generation system is located may
waive the requirement of this subparagraph (a), (b) the system is not an
on-site generation facility, (c) all of the facilities of the single customer
combined for the purpose of net metering aggregation are facilities owned or
operated by the single customer and are located within its territorial
jurisdiction except that all of the facilities of a State entity engaged in net
metering aggregation shall be located within five miles of one another, and (d)
all of those facilities are within the service territory of a single electric
public utility and are all served by the same basic generation service provider
or by the same electric power supplier.� The standards shall provide that, in
order to qualify for net metering aggregation, the customer�s solar electric
power generation system shall be sized so that its annual generation does not
exceed the combined metered annual energy usage of the qualified customer
facilities, and the qualified customer facilities shall all be in the same
customer rate class under the applicable electric public utility tariff.� For
the customer�s facility or property on which the solar electric generation
system is installed, the electricity generated from the customer�s solar
electric generation system shall be accounted for pursuant to the provisions of
paragraph (1) of this subsection to provide that the electricity generated in
excess of the electricity supplied by the electric power supplier or the basic
generation service provider, as the case may be, for the customer�s facility on
which the solar electric generation system is installed, over the annualized
period, is credited at the electric power supplier�s or the basic generation
service provider�s avoided cost of wholesale power or the PJM electric power
pool real-time locational marginal pricing rate.� All electricity used by the
customer�s qualified facilities, with the exception of the facility or property
on which the solar electric power generation system is installed, shall be
billed at the full retail rate pursuant to the electric public utility tariff
applicable to the customer class of the customer using the electricity.� A
customer may contract with a third party to operate a solar electric power
generation system, for the purpose of net metering aggregation.� Any
contractual relationship entered into for operation of a solar electric power
generation system related to net metering aggregation shall include contractual
protections that provide for adequate performance and provision for
construction and operation for the term of the contract, including any
appropriate bonding or escrow requirements.� Any incremental cost to an
electric public utility for net metering aggregation shall be fully and timely
recovered in a manner to be determined by the board.� The board shall adopt net
metering aggregation standards within 270 days after the effective date of
P.L.2012, c.24.

���� Such rules shall require the
board or its designee to issue a credit or other incentive to those generators
that do not use a net meter but otherwise generate electricity derived from a
Class I renewable energy source and to issue an enhanced credit or other
incentive, including, but not limited to, a solar renewable energy credit, to
those generators that generate electricity derived from solar technologies.

���� Such standards or rules shall
be effective as regulations immediately upon filing with the Office of
Administrative Law and shall be effective for a period not to exceed 18 months,
and may, thereafter, be amended, adopted or readopted by the board in accordance
with the provisions of the �Administrative Procedure Act.�

���� f.���� The board may assess,
by written order and after notice and opportunity for comment, a separate fee
to cover the cost of implementing and overseeing an emission disclosure system
or emission portfolio standard, which fee shall be assessed based on an electric
power supplier�s or basic generation service provider�s share of the retail
electricity supply market.� The board shall not impose a fee for the cost of
implementing and overseeing a greenhouse gas emissions portfolio standard
adopted pursuant to paragraph (2) of subsection c. of this section.

���� g.��� The board shall adopt,
pursuant to the �Administrative Procedure Act,� P.L.1968, c.410 (C.52:14B-1 et
seq.), an electric energy efficiency program in order to ensure investment in
cost-effective energy efficiency measures, ensure universal access to energy
efficiency measures, and serve the needs of low-income communities that shall
require each electric public utility to implement energy efficiency measures
that reduce electricity usage in the State pursuant to section 3 of P.L.2018,
c.17 (C.48:3-87.9).� Nothing in this subsection shall be construed to prevent
an electric public utility from meeting the requirements of this subsection by
contracting with another entity for the performance of the requirements.

���� h.��� The board shall adopt,
pursuant to the �Administrative Procedure Act,� P.L.1968, c.410 (C.52:14B-1 et
seq.), a gas energy efficiency program in order to ensure investment in
cost-effective energy efficiency measures, ensure universal access to energy
efficiency measures, and serve the needs of low-income communities that shall
require each gas public utility to implement energy efficiency measures that
reduce natural gas usage in the State pursuant to section 3 of P.L.2018, c.17
(C.48:3-87.9).� Nothing in this subsection shall be construed to prevent a gas
public utility from meeting the requirements of this subsection by contracting
with another entity for the performance of the requirements.

���� i.���� After the board
establishes a schedule of solar kilowatt-hour sale or purchase requirements
pursuant to paragraph (3) of subsection d. of this section, the board may
initiate subsequent proceedings and adopt, after appropriate notice and
opportunity for public comment and public hearing, increased minimum solar
kilowatt-hour sale or purchase requirements, provided that the board shall not
reduce previously established minimum solar kilowatt-hour sale or purchase
requirements, or otherwise impose constraints that reduce the requirements by
any means.

���� j.���� The board shall
determine an appropriate level of solar alternative compliance payment, and
permit each supplier or provider to submit an SACP to comply with the solar
electric generation requirements of paragraph (3) of subsection d. of this
section.� The value of the SACP for each Energy Year, for Energy Years 2014
through 2033 per megawatt hour from solar electric generation required pursuant
to this section, shall be:

���� EY 2014���� $339

���� EY 2015���� $331

���� EY 2016���� $323

���� EY 2017���� $315

���� EY 2018���� $308

���� EY 2019���� $268

���� EY 2020���� $258

���� EY 2021���� $248

���� EY 2022���� $238

���� EY 2023���� $228

���� EY 2024���� $218

���� EY 2025���� $208

���� EY 2026���� $198

���� EY 2027���� $188

���� EY 2028���� $178

���� EY 2029���� $168

���� EY 2030���� $158

���� EY 2031���� $148

���� EY 2032���� $138

���� EY 2033���� $128.

���� The board may initiate
subsequent proceedings and adopt, after appropriate notice and opportunity for
public comment and public hearing, an increase in solar alternative compliance
payments, provided that the board shall not reduce previously established
levels of solar alternative compliance payments, nor shall the board provide
relief from the obligation of payment of the SACP by the electric power
suppliers or basic generation service providers in any form.� Any SACP payments
collected shall be refunded directly to the ratepayers by the electric public
utilities.

���� k.��� The board may allow
electric public utilities to offer long-term contracts through a competitive
process, direct electric public utility investment and other means of
financing, including but not limited to loans, for the purchase of SRECs and
the resale of SRECs to suppliers or providers or others, provided that after
such contracts have been approved by the board, the board�s approvals shall not
be modified by subsequent board orders.� If the board allows the offering of
contracts pursuant to this subsection, the board may establish a process, after
hearing, and opportunity for public comment, to provide that a designated segment
of the contracts approved pursuant to this subsection shall be contracts
involving solar electric power generation facility projects with a capacity of
up to 250 kilowatts.

���� l.���� The board shall
implement its responsibilities under the provisions of this section in such a
manner as to:

���� (1)�� place greater reliance
on competitive markets, with the explicit goal of encouraging and ensuring the
emergence of new entrants that can foster innovations and price competition;

���� (2)�� maintain adequate
regulatory authority over non-competitive public utility services;

���� (3)�� consider alternative
forms of regulation in order to address changes in the technology and structure
of electric public utilities;

���� (4)�� promote energy
efficiency and Class I renewable energy market development, taking into
consideration environmental benefits and market barriers;

���� (5)�� make energy services
more affordable for low and moderate income customers;

���� (6)�� attempt to transform the
renewable energy market into one that can move forward without subsidies from
the State or public utilities;

���� (7)�� achieve the goals put
forth under the renewable energy portfolio standards;

���� (8)�� promote the lowest cost
to ratepayers; and

���� (9)�� allow all market
segments to participate.

���� m.�� The board shall ensure
the availability of financial incentives under its jurisdiction, including, but
not limited to, long-term contracts, loans, SRECs, or other financial support,
to ensure market diversity, competition, and appropriate coverage across all
ratepayer segments, including, but not limited to, residential, commercial,
industrial, non-profit, farms, schools, and public entity customers.

���� n.��� For projects which are
owned, or directly invested in, by a public utility pursuant to section 13 of
P.L.2007, c.340 (C.48:3-98.1), the board shall determine the number of SRECs
with which such projects shall be credited; and in determining such number the
board shall ensure that the market for SRECs does not detrimentally affect the
development of non-utility solar projects and shall consider how its
determination may impact the ratepayers.

���� o.��� The board, in
consultation with the Department of Environmental Protection, electric public
utilities, the Division of Rate Counsel in, but not of, the Department of the
Treasury, affected members of the solar energy industry, and relevant
stakeholders, shall periodically consider increasing the renewable energy
portfolio standards beyond the minimum amounts set forth in subsection d. of
this section, taking into account the cost impacts and public benefits of such
increases including, but not limited to:

���� (1)�� reductions in air
pollution, water pollution, land disturbance, and greenhouse gas emissions;

���� (2)�� reductions in peak
demand for electricity and natural gas, and the overall impact on the costs to
customers of electricity and natural gas;

���� (3)�� increases in renewable
energy development, manufacturing, investment, and job creation opportunities
in this State; and

���� (4)�� reductions in State and
national dependence on the use of fossil fuels.

���� p.��� Class I RECs and ORECs
shall be eligible for use in renewable energy portfolio standards compliance in
the energy year in which they are generated, and for the following two energy
years.� SRECs shall be eligible for use in renewable energy portfolio standards
compliance in the energy year in which they are generated, and for the
following four energy years.

���� q. (1) During the energy years
of 2014, 2015, and 2016, a solar electric power generation facility project
that is not: (a) net metered; (b) an on-site generation facility; (c) qualified
for net metering aggregation; or (d) certified as being located on a
brownfield, on an area of historic fill or on a properly closed sanitary
landfill facility, as provided pursuant to subsection t. of this section may
file an application with the board for approval of a designation pursuant to
this subsection that the facility is connected to the distribution system.� An
application filed pursuant to this subsection shall include a notice escrow of
$40,000 per megawatt of the proposed capacity of the facility.� The board shall
approve the designation if: the facility has filed a notice in writing with the
board applying for designation pursuant to this subsection, together with the
notice escrow; and the capacity of the facility, when added to the capacity of
other facilities that have been previously approved for designation prior to
the facility�s filing under this subsection, does not exceed 80 megawatts in
the aggregate for each year. The capacity of any one solar electric power
supply project approved pursuant to this subsection shall not exceed 10
megawatts.� No more than 90 days after its receipt of a completed application
for designation pursuant to this subsection, the board shall approve,
conditionally approve, or disapprove the application.� The notice escrow shall
be reimbursed to the facility in full upon either rejection by the board or the
facility entering commercial operation, or shall be forfeited to the State if
the facility is designated pursuant to this subsection but does not enter
commercial operation pursuant to paragraph (2) of this subsection.

���� (2)�� If the proposed solar
electric power generation facility does not commence commercial operations
within two years following the date of the designation by the board pursuant to
this subsection, the designation of the facility shall be deemed to be null and
void, and the facility shall not be considered connected to the distribution
system thereafter.

���� (3)�� Notwithstanding the
provisions of paragraph (2) of this subsection, a solar electric power
generation facility project that as of May 31, 2017 was designated as �connected
to the distribution system,� but failed to commence commercial operations as of
that date, shall maintain that designation if it commences commercial
operations by May 31, 2018.

���� r. (1) For all proposed solar
electric power generation facility projects except for those solar electric
power generation facility projects approved pursuant to subsection q. of this
section, and for all projects proposed in energy year 2019 and energy year
2020, the board may approve projects for up to 50 megawatts annually in
auctioned capacity in two auctions per year as long as the board is accepting
applications.� If the board approves projects for less than 50 megawatts in
energy year 2019 or less than 50 megawatts in energy year 2020, the difference
in each year shall be carried over into the successive energy year until 100
megawatts of auctioned capacity has been approved by the board pursuant to this
subsection.� A proposed solar electric power generation facility that is
neither net metered nor an on-site generation facility, may be considered �connected
to the distribution system� only upon designation as such by the board, after
notice to the public and opportunity for public comment or hearing.� A proposed
solar� electric power generation facility seeking board designation as �connected
to the distribution system� shall submit an application to the board that
includes for the proposed facility: the nameplate capacity; the estimated
energy and number of SRECs to be produced and sold per year; the estimated
annual rate impact on ratepayers; the estimated capacity of the generator as
defined by PJM for sale in the PJM capacity market; the point of
interconnection; the total project acreage and location; the current land use
designation of the property; the type of solar technology to be used; and such
other information as the board shall require.

���� (2)�� The board shall approve
the designation of the proposed solar electric power generation facility as �connected
to the distribution system� if the board determines that:

���� (a)�� the SRECs forecasted to
be produced by the facility do not have a detrimental impact on the SREC market
or on the appropriate development of solar power in the State;

���� (b)�� the approval of the
designation of the proposed facility would not significantly impact the
preservation of open space in this State;

���� (c)�� the impact of the
designation on electric rates and economic development is beneficial; and

���� (d)�� there will be no
impingement on the ability of an electric public utility to maintain its
property and equipment in such a condition as to enable it to provide safe,
adequate, and proper service to each of its customers.

���� (3)�� The board shall act
within 90 days of its receipt of a completed application for designation of a
solar electric power generation facility as �connected to the distribution
system,� to either approve, conditionally approve, or disapprove the
application. If the proposed solar electric power generation facility does not
commence commercial operations within two years following the date of the
designation by the board pursuant to this subsection, the designation of the
facility as �connected to the distribution system� shall be deemed to be null
and void, and the facility shall thereafter be considered not �connected to the
distribution system.�

���� s.���� In addition to any
other requirements of P.L.1999, c.23 or any other law, rule, regulation or
order, a solar electric power generation facility that is not net metered or an
on-site generation facility and which is located on land that has been 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.) at any time within the 10-year period prior to the
effective date of P.L.2012, c.24, shall only be considered �connected to the
distribution system� if (1) the board approves the facility�s designation
pursuant to subsection q. of this section; or (2) (a) PJM issued a System
Impact Study for the facility on or before June 30, 2011, (b) the facility
files a notice with the board within 60 days of the effective date of P.L.2012,
c.24, indicating its intent to qualify under this subsection, and (c) the
facility has been approved as �connected to the distribution system� by the
board.� Nothing in this subsection shall limit the board�s authority concerning
the review and oversight of facilities, unless such facilities are exempt from
such review as a result of having been approved pursuant to subsection q. of
this section.

���� t. (1) No more than 180 days
after the date of enactment of P.L.2012, c.24, the board shall, in consultation
with the Department of Environmental Protection and the New Jersey Economic
Development Authority, and, after notice and opportunity for public comment and
public hearing, complete a proceeding to establish a program to provide SRECs
to owners of solar electric power generation facility projects 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, including those owned or operated by an
electric public utility and approved pursuant to section 13 of P.L.2007, c.340
(C.48:3-98.1).� Projects certified under this subsection shall be considered �connected
to the distribution system�, shall not require such designation by the board,
and shall not be subject to board review required pursuant to subsections q.
and r. of this section.� Notwithstanding the provisions of section 3 of
P.L.1999, c.23 (C.48:3-51) or any other law, rule, regulation, or order to the
contrary, for projects certified under this subsection, the board shall
establish a financial incentive that is designed to supplement the SRECs
generated by the facility in order to cover the additional cost of constructing
and operating a solar electric power generation facility on a brownfield, on an
area of historic fill or on a properly closed sanitary landfill facility.� Any
financial benefit realized in relation to a project 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), as a result of the provision of a financial
incentive established by the board pursuant to this subsection, shall be
credited to ratepayers.� The issuance of SRECs for all solar electric power
generation facility projects pursuant to this subsection shall be deemed �Board
of Public Utilities financial assistance� as provided under section 1 of
P.L.2009, c.89 (C.48:2-29.47).

���� (2)�� Notwithstanding the
provisions of the �Spill Compensation and Control Act,� P.L.1976, c.141
(C.58:10-23.11 et seq.) or any other law, rule, regulation, or order to the
contrary, the board, in consultation with the Department of Environmental
Protection, may find that a person who operates a solar electric power
generation facility project that has commenced operation on or after the
effective date of P.L.2012, c.24, which project is certified by the board, in
consultation with the Department of Environmental Protection pursuant to
paragraph (1) of this subsection, as being located on a brownfield for which a
final remediation document has been issued, on an area of historic fill or on a
properly closed sanitary landfill facility, which projects shall include, but
not be limited to projects located on a brownfield for which a final
remediation document has been issued, on an area of historic fill or on a
properly closed sanitary landfill facility owned or operated by an electric
public utility and approved pursuant to section 13 of P.L.2007, c.340
(C.48:3-98.1), or a person who owns property acquired on or after the effective
date of P.L.2012, c.24 on which such a solar electric power generation facility
project is constructed and operated, shall not be liable for cleanup and
removal costs to the Department of Environmental Protection or to any other
person for the discharge of a hazardous substance provided that:

���� (a)�� the person acquired or
leased the real property after the discharge of that hazardous substance at the
real property;

���� (b)�� the person did not
discharge the hazardous substance, is not in any way responsible for the
hazardous substance, and is not a successor to the discharger or to any person
in any way responsible for the hazardous substance or to anyone liable for
cleanup and removal costs pursuant to section 8 of P.L.1976, c.141
(C.58:10-23.11g);

���� (c)�� the person, within 30
days after acquisition of the property, gave notice of the discharge to the
Department of Environmental Protection in a manner the Department of
Environmental Protection prescribes;

���� (d)�� the person does not
disrupt or change, without prior written permission from the Department of
Environmental Protection, any engineering or institutional control that is part
of a remedial action for the contaminated site or any landfill closure or post-closure
requirement;

���� (e)�� the person does not
exacerbate the contamination at the property;

���� (f)�� the person does not
interfere with any necessary remediation of the property;

���� (g)�� the person complies with
any regulations and any permit the Department of Environmental Protection
issues pursuant to section 19 of P.L.2009, c.60 (C.58:10C-19) or paragraph (2)
of subsection a. of section 6 of P.L.1970, c.39 (C.13:1E-6);

���� (h)�� with respect to an area
of historic fill, the person has demonstrated pursuant to a preliminary
assessment and site investigation, that hazardous substances have not been
discharged; and

���� (i)��� with respect to a
properly closed sanitary landfill facility, no person who owns or controls the
facility receives, has received, or will receive, with respect to such
facility, any funds from any post-closure escrow account established pursuant
to section 10 of P.L.1981, c.306 (C.13:1E-109) for the closure and monitoring
of the facility.

���� Only the person who is liable
to clean up and remove the contamination pursuant to section 8 of P.L.1976,
c.141 (C.58:10-23.11g) and who does not have a defense to liability pursuant to
subsection d. of that section shall be liable for cleanup and removal costs.

���� u.��� No more than 180 days
after the date of enactment of P.L.2012, c.24, the board shall complete a
proceeding to establish a registration program.� The registration program shall
require the owners of solar electric power generation facility projects connected
to the distribution system to make periodic milestone filings with the board in
a manner and at such times as determined by the board to provide full
disclosure and transparency regarding the overall level of development and
construction activity of those projects Statewide.

���� v.��� The issuance of SRECs
for all solar electric power generation facility projects pursuant to this
section, for projects connected to the distribution system with a capacity of
one megawatt or greater, shall be deemed �Board of Public Utilities financial
assistance� as provided pursuant to section 1 of P.L.2009, c.89
(C.48:2-29.47).�

���� w.�� No more than 270 days
after the date of enactment of P.L.2012, c.24, the board shall, after notice
and opportunity for public comment and public hearing, complete a proceeding to
consider whether to establish a program to provide, to owners of solar electric
power generation facility projects certified by the board as being three
megawatts or greater in capacity and being net metered, including facilities
which are 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), a financial
incentive that is designed to supplement the SRECs generated by the facility to
further the goal of improving the economic competitiveness of commercial and
industrial customers taking power from such projects.� If the board determines
to establish such a program pursuant to this subsection, the board may
establish a financial incentive to provide that the board shall issue one SREC
for no less than every 750 kilowatt-hours of solar energy generated by the certified
projects.� Any financial benefit realized in relation to a project 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), as a result of the provisions of a
financial incentive established by the board pursuant to this subsection, shall
be credited to ratepayers.

���� x.��� Solar electric power
generation facility projects that are located on an existing or proposed
commercial, retail, industrial, municipal, professional, recreational, transit,
commuter, entertainment complex, multi-use, or mixed-use parking lot with a
capacity to park 350 or more vehicles where the area to be utilized for the
facility is paved, or an impervious surface may be owned or operated by an
electric public utility and may be approved by the board pursuant to section 13
of P.L.2007, c.340 (C.48:3-98.1).

(cf:� P.L.2021, c.169, s.10)

���� 3.� The Board of Public
Utilities 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 this act.

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

STATEMENT

���� This bill would require the
State to bear the reasonable costs of the interconnection of all new
net-metered, residential, Class I renewable energy systems to the grid,
beginning six months after the bill�s enactment.� The bill would also require
the Board of Public Utilities (BPU) to establish a grant program to distribute
funds to electric public utilities or their customers, in order to cover the
interconnection costs.� The bill would authorize the BPU to utilize moneys
collected through the societal benefits charge to fund the grant program.