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A4490
ASSEMBLY, No. 4490
STATE OF NEW JERSEY
222nd LEGISLATURE
�
INTRODUCED FEBRUARY 24, 2026
Sponsored by:
Assemblyman� CLINTON CALABRESE
District 36 (Bergen and Passaic)
Assemblyman� JAMES J. KENNEDY
District 22 (Somerset and Union)
Assemblyman� ANDREW MACURDY
District 21 (Middlesex, Morris, Somerset and Union)
SYNOPSIS
���� Establishes thermal energy network pilot program for
gas public utilities.
CURRENT VERSION OF TEXT
���� As introduced.
��
An Act
establishing a thermal energy network pilot
program, supplementing Title 48 of the Revised Statutes, and amending
R.S.48:2-13
.
����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:
���� 1.��� (New section) a.� As
used in this section:�
���� �Board� means the New Jersey
Board of Public Utilities or its successor.
���� �Gas public utility� or
�utility� means a public utility, as that term is defined pursuant to
R.S.48:2-13, that distributes gas to end users in the State.
���� �Geothermal energy� means an
energy source derived from heat stored within the earth.� �Geothermal energy�
includes networked geothermal energy and deep geothermal energy.
���� �Thermal energy
infrastructure� means thermal extraction and distribution infrastructure that
supplies space heating or cooling, water heating, or refrigeration from
geothermal energy sources, or other sources of renewable thermal energy, such
as redistributed thermal waste heat or surface or underground water,
wastewater, or other heat sources.
���� �Thermal energy network� means
a project that supplies heating or cooling to multiple buildings connected via
underground piping containing fluids that, in concert with heat pumps, exchange
geothermal energy, or energy from other sources of renewable thermal energy,
such as redistributed thermal waste heat or surface or underground water, waste
water, or other heat sources.
���� �Thermal energy network
project� or �project� means a project undertaken by a gas public utility to
establish thermal energy network infrastructure in lieu of new or existing
natural gas infrastructure for new or existing developments, particularly in areas
with aging or leaking natural gas pipelines or without existing natural gas
infrastructure.
���� �Thermal infrastructure plan�
means the plan submitted by a gas public utility to the board pursuant to
subsection c. of this section.
���� b.��� The Board of Public
Utilities shall establish a four-year pilot program to authorize gas public
utilities to recover the cost of one or more thermal energy network projects
through the utility rates charged to the utility�s ratepayers.� The board shall
approve a maximum of one project in each of the northern, central, southern,
and coastal regions of the State.� The board and gas public utilities may
establish a new tariff for the sale and delivery of thermal energy to the
participating customers.� The purpose of the pilot program shall be to
demonstrate the benefits and cost of thermal energy networks as a means for
supplying space or water conditioning of thermal energy infrastructure among
gas public utilities.� The term of the pilot program may be extended in the
board�s discretion if the board so determines pursuant to paragraph (2) of
subsection g. of this section.� For purposes of this subsection: ��northern,�
when referring to regions of the State, means the counties of Bergen, Essex,
Hudson, Morris, Passaic, Sussex, and Warren; �central,� when referring to
regions of the State, means the counties of Hunterdon, Mercer, Middlesex,
Somerset, and Union; �southern,� when referring to regions of the State, means
the counties of Burlington, Camden, Cumberland, Gloucester, and Salem; and
�coastal,� when referring to regions of the State, means the counties of
Atlantic, Cape May, Monmouth, and Ocean.
���� c.���� To participate in the
pilot program, each gas public utility shall submit to the board, in accordance
with the minimum filing requirements set forth in the order issued by the board
pursuant to subsection i. of this section, a thermal infrastructure plan that
shall include any information regarding the utility�s proposed project or
projects that the board deems necessary for participation in the pilot
program.� The board may establish one or more application periods for the
submission of thermal infrastructure plans.� The board may approve, deny,
request modifications to, or partially approve and partially deny a submitted
thermal infrastructure plan.
���� d.��� While reviewing a
utility�s thermal infrastructure plan, the board shall consider:�
���� (1)�� the size, scope, and
scale of the proposed project or projects;
���� (2)�� the lifecycle cost of
the proposed project or projects;
���� (3)�� the expected benefits of
the proposed project or projects, which shall include, but not be limited to:�
(a) the information that the project will provide about efficiency of thermal
energy networks in New Jersey, the benefits and costs for New Jersey customers
of using thermal energy networks as a source of heating and cooling, and the
opportunities and challenges related to construction and installation; (b) the
anticipated energy capacity deferment; (c) the jobs associated with the
project, including the extent to which existing natural gas utility workforce
will be used for the project; and (d) the social value of greenhouse gas
emissions reductions for the utility�s customers and for residents across the
State;
���� (4)�� the proposed project�s
or projects� financial impact on the utility�s ratepayers;
���� (5)�� whether the proposed
project�s or projects� benefits, identified pursuant to paragraph (3) of this
subsection, justify the cost of the project or projects, determined pursuant to
paragraph (2) of this subsection;
���� (6)�� the extent to which the
proposed project or projects serve low- to moderate-income households,
residents of overburdened communities, and other vulnerable populations;
���� (7)�� the degree to which the
proposed project or projects target or mitigate highly inefficient buildings;
���� (8)�� the potential
opportunities for cost-effective retrofits or the inclusion of future potential
for thermal waste heat system tie-ins;
���� (9)�� the extent to which the
utility has identified non-ratepayer sources of funding to implement the
proposed project or projects;
���� (10)� the degree to which the
proposed project or projects target or mitigates old or leaking natural gas
infrastructure, or presents an alternative to potential natural gas expansion;
and
���� (11) �any other criteria that
the board deems appropriate.
���� e.���� A gas public utility
shall share with the board certain information to be determined by the board
regarding the operations of projects approved as part of the pilot program.
���� f.���� No gas public utility
that provides safe, proper, and adequate thermal energy distribution services
to customers via a project approved as a part of the pilot program shall be
deemed to be in violation of subsection a. of R.S.48:3-3 because it refuses to
also provide natural gas distribution services to such customers.
���� g.��� (1)� No later than six
months after the expiration of the pilot program, the board shall publish on
its Internet website and submit to the Governor and, pursuant to section 2 of
P.L.1991, c.164 (C.52:14-19.1), to the Legislature, a written report detailing
the implementation and results of the pilot program.� At a minimum, the report
shall summarize the information provided by the gas public utilities to the
board pursuant to subsection e. of this section.
���� (2)�� No later than six months
after the expiration of the pilot program, the board shall also determine
whether or not to extend the pilot program, convert the pilot program to a
permanent program, or recommend that New Jersey allow the distribution of
geothermal energy as a regulated public utility service.� The board�s
recommendations shall be included in the report issued pursuant to paragraph
(1) of this subsection.
���� h.��� If the board determines,
pursuant to paragraph (2) of subsection g. of this section, that the pilot
program shall become a permanent program, then the board shall adopt, pursuant
to the �Administrative Procedure Act,� P.L.1968, c.410 (C.52:14B-1 et seq.),
rules and regulations to facilitate the pilot program�s transition to a
permanent program.� In adopting said rules and regulations, the board shall
consider similar laws, rules, and regulations in other states that have similar
pilot programs or permanent programs at the state level.
���� i.���� (1) Within 90 days
after the date of enactment of P.L. , c.
(C. ) (pending before the
Legislature as this bill), the board shall issue an order implementing the
provisions of P.L. , c. (C. )
(pending before the Legislature as this bill).� If the board determines that
rules and regulations are necessary for the implementation of P.L. ,
c. (C. )
(pending before the Legislature as this bill), notwithstanding the provisions
of the �Administrative Procedure Act,� P.L.1968, c.410 (C.52:14B-1 et seq.), to
the contrary, the board may, immediately upon filing proper notice with the
Office of Administrative Law, adopt rules and regulations necessary for the
implementation of P.L. , c. (C. )
(pending before the Legislature as this bill).
���� (2)�� The rules and
regulations adopted pursuant to paragraph (1) of this subsection shall be in
effect for a period not to exceed one year after the date of filing.� These
rules and regulations shall thereafter be adopted, amended, or readopted by the
board in accordance with the requirements of the �Administrative Procedure
Act,� P.L.1968, c.410 (C.52:14B-1 et seq.).
���� 2.��� R.S.48:2-13 is amended
to read as follows:�
���� 48:2-13.����� a.� The board
shall have general supervision and regulation of and jurisdiction and control
over all public utilities as defined in this section and their property,
property rights, equipment, facilities and franchises so far as may be
necessary for the purpose of carrying out the provisions of this Title.
���� The term �public utility�
shall include every individual, copartnership, association, corporation or
joint stock company, their lessees, trustees or receivers appointed by any
court whatsoever, their successors, heirs or assigns, that now or hereafter may
own, operate, manage or control within this State any railroad, street railway,
traction railway, autobus, charter bus operation, special bus operation, canal,
express, subway, pipeline, gas,
thermal energy distribution pursuant to
section 1 of P.L. , c.
(C. ) (pending before the
Legislature as this bill),
electricity distribution, water, oil, sewer,
solid waste collection, solid waste disposal, telephone or telegraph system,
plant or equipment for public use, under privileges granted or hereafter to be
granted by this State or by any political subdivision thereof.
���� b.��� Nothing contained in
this Title shall extend the powers of the board to include any supervision and
regulation of, or jurisdiction and control over any vehicles engaged in
ridesharing arrangements with a maximum carrying capacity of not more than 15
passengers, including the driver, where the transportation of passengers is
incidental to the purpose of the driver or any vehicles engaged in the
transportation of passengers for hire in the manner and form commonly called
taxicab service unless such service becomes or is held out to be regular
service between stated termini; hotel buses used exclusively for the
transportation of hotel patrons to or from local railroad or other common
carrier stations, including local airports, or bus employed solely for transporting
school children and teachers, to and from school, or any autobus with a
carrying capacity of not more than 10 passengers now or hereafter operated
under municipal consent upon a route established wholly within the limits of a
single municipality or with a carrying capacity of not more than 20 passengers
operated under municipal consent upon a route established wholly within the
limits of not more than four contiguous municipalities within any county of the
fifth or sixth class, which route in either case does not in whole or in part
parallel upon the same street the line of any street railway or traction
railway or any other autobus route.
���� c.���� Except as provided in
section 7 of P.L.1995, c.101 (C.58:26-25), the board shall have no regulatory
authority over the parties to a contract negotiated between a public entity and
a private firm pursuant to P.L.1995, c.101 (C.58:26-19 et al.) in connection
with the performance of their respective obligations thereunder. �Nothing
contained in this title shall extend the powers of the board to include any
supervision and regulation of, or jurisdiction and control over, any
public-private contract for the provision of water supply services established
pursuant to P.L.1995, c.101 (C.58:26-19 et al.).
���� d.��� Unless otherwise
specifically provided pursuant to P.L.1999, c.23 (C.48:3-49 et al.), all
services necessary for the transmission and distribution of electricity and
gas, including but not limited to safety, reliability, metering, meter reading
and billing, shall remain the jurisdiction of the Board of Public Utilities.�
The board shall also maintain the necessary jurisdiction with regard to the
production of electricity and gas to assure the reliability of electricity and
gas supply to retail customers in the State as prescribed by the board or any
other federal or multi-jurisdictional agency responsible for reliability and
capacity in the State.
���� e.���� Notwithstanding the
provisions of subsection a. of this section, the board shall have the authority
to classify as regulated the sale of any thermal energy service by a
cogenerator or district heating system, for the purpose of providing heating or
cooling to a residential dwelling if, after notice and hearing, it determines
that the customer does not have sufficient space on its property to install an
alternative source of equivalent thermal energy, there is no contract governing
the provision of thermal energy service for the relevant period of time, and
that sufficient competition is no longer present, based upon consideration of
such factors as:� ease of market entry; presence of other competitors; and the
availability of like or substitute services in the relevant geographic area.�
Upon such a classification, the board may determine such rates for the thermal
energy service for the purpose of providing heating or cooling to a residential
dwelling as it finds to be consistent with the prevailing cost of alternative
sources of thermal energy in similar situations.� The board, however, shall
continue to monitor the thermal energy service to such residential dwellings
and, whenever the board finds that the thermal energy service has again become
sufficiently competitive pursuant to the criteria listed above, the board shall
cease to regulate the sale or production of the service.� The board shall not
have the authority to regulate the sale or production of steam or any other
form of thermal energy, including hot and chilled water, to non-residential
customers.�
The provisions of this subsection shall not apply to the
distribution of thermal energy pursuant to section 1 of
P.L. , c.
(C. ) (pending before the
Legislature as this bill).
���� f.���� Nothing contained in
this Title shall extend the powers of the board to include supervision and
regulation of, or jurisdiction and control over, an entity engaged in the
provision or use of sewage effluent for the purpose of providing a cooling
medium to an end user or end users on a single site, which provision results in
the conservation of potable water which would otherwise have been used for such
purposes.�
The provisions of this subsection shall not apply to the
distribution of thermal energy pursuant to section 1 of
P.L. , c.
(C. ) (pending before the
Legislature as this bill).
���� g.��� Except as provided
herein, the board shall have no regulatory authority over the parties to a
contract entered into between the governing body of a city of the first class
and a duly incorporated nonprofit association in connection with the
performance of their respective obligations thereunder when the governing body
of a city of the first class shall determine by ordinance that it is in the
public interest to contract with that duly incorporated nonprofit association
for the provision of water supply services as defined in subsection (16) of
section 15 of P.L.1971, c.198 (C.40A:11-15), or for the provision of wastewater
treatment services as defined in subsection (19) of section 15 of P.L.1971,
c.198 (C.40A:11-15), or the designing, financing, construction, operation, or
maintenance, or any combination thereof, of a water supply facility as defined
in subsection (16) of section 15 of P.L.1971, c.198 (C.40A:11-15) or a
wastewater treatment system as defined in subsection (19) of section 15 of
P.L.1971, c.198 (C.40A:11-15), or any component part or parts thereof,
including a water filtration system as defined in subsection (16) of section 15
of P.L.1971, c.198 (C.40A:11-15), upon approval of the contract pursuant to the
provisions of section 6 of P.L.2002, c.47 (C.58:28-7).
���� Notwithstanding any other
provision of P.L.2002, c.47 whenever the governing body of a city of the first
class enters into a contract with a duly incorporated nonprofit association for
the provision of water supply services as defined in subsection (16) of section
15 of P.L.1971, c.198 (C.40A:11-15), or the designing, financing, construction,
operation, or maintenance, or any combination thereof, of a water supply
facility as defined in subsection (16) of section 15 of P.L.1971, c.198
(C.40A:11-15), and that governing body operates water supply facilities as
authorized pursuant to the provisions of N.J.S.40A:31-4, which supply water to
customers within another local unit, the nonprofit association or governing
body shall be subject to the jurisdiction, rate regulation and control of the
Board of Public Utilities as provided in N.J.S.40A:31-23, to the extent the
nonprofit association or governing body supplies water to customers within that
other local unit.
(cf: P.L.2002, c.47, s.10)
���� 3.��� This act shall take
effect immediately.
STATEMENT
���� This bill would require the
Board of Public Utilities (board) to establish a four-year pilot program to
authorize gas public utilities to recover the cost of one or more thermal
energy network projects, which would establish thermal energy network infrastructure
in lieu of existing new natural gas infrastructure for new or existing
developments, particularly in areas with aging or leaking natural gas pipeline
or without existing natural gas infrastructure, through the utility rates
charged to its ratepayers.� The board would be authorized to locate a maximum
of one project in each of the northern, central, southern, and coastal regions
of the State.� To participate in the pilot program, a utility would submit a
thermal infrastructure plan with any information regarding the proposed project
that the board deems necessary.� While reviewing a plan, the board would
consider:� (1) the size, scope, and scale of each project; (2) the lifecycle
cost of each project; (3) the expected benefits of the project; (4) the project�s
financial impact on the utility�s ratepayers; (5) whether each project�s
benefits justify the cost of the project; (6) the extent to which each project
serves low- to moderate-income households, residents of overburdened
communities, and other vulnerable populations; (7) the degree to which each
project targets or mitigates highly inefficient buildings; (8) the potential
opportunities for cost-effective retrofits or the inclusion of future potential
for thermal waste heat system tie-ins; (9) the extent to which the utility has
identified non-ratepayer sources of funding; (10) the degree to which each
project targets or mitigates old or leaking natural gas infrastructure, or
presents an alternative to potential natural gas expansion; and (11) any other
criteria that the board deems appropriate.
���� In addition, a utility would
be required to submit certain information on the operations of the pilot
program to the board.� The bill would require, no later than six months after
the expiration of the pilot program, the board to, at a minimum, summarize this
information in an annual report to be published on its Internet website and
submit to the Governor and the Legislature.� The bill would also require the
board to determine, no later than six months after the expiration of the pilot
program, whether or not to extend the pilot program, convert the pilot program
to a permanent program, or recommend that New Jersey allow the distribution of
geothermal energy as a regulated public utility service.� If the board decides
to convert the pilot program to a permanent program, after considering laws,
rules, and regulations in other states with similar programs, the board is to
adopt rules and regulations to effectuate the transition from a pilot program
to a permanent program.
���� Finally, the bill amends
current law to provide that the term �public utility� is to include an entity
that owns, operates, manages, and controls thermal energy distribution within
the State, and to provide exceptions to certain statutory provisions that
prohibit the board from regulating the sale of thermal energy.