"New Jersey Energy Security & Affordability Act"; permits electric public utilities to own, operate, develop, or otherwise procure generation in certain circumstances.

A5168

ASSEMBLY, No. 5168

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED JUNE 1, 2026

Sponsored by:

Assemblyman� CODY D. MILLER

District 4 (Atlantic, Camden and Gloucester)

Assemblywoman� ANDREA KATZ

District 8 (Atlantic and Burlington)

SYNOPSIS

���� �New Jersey Energy Security & Affordability Act�;
permits electric public utilities to own, operate, develop, or otherwise
procure generation in certain circumstances.

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act
concerning electric generation in the State 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 �New Jersey Energy Security & Affordability Act.�

���� 2.��� The Legislature finds
and declares that:�

���� a.���� New Jersey residents
and businesses are experiencing sustained increases in electricity costs driven
in part by insufficient in-State generation capacity, regional transmission
congestion, and exposure to wholesale market volatility.

���� b.��� The State�s current
electric generation framework under the �Electric Discount and Energy
Competition Act,� P.L.1999, c.23 (C.48:3-49 et al.), was designed to promote
competition. �However, market conditions have materially changed, resulting in
increased reliance on out-of-State generation resources.

���� c.���� Ensuring reliable,
affordable, and resilient electric public utility service is a matter of public
interest and economic necessity.

���� d.��� By authorizing, in a
limited fashion, electric public utilities to procure or own strategic in-State
electric generation resources and subjecting them to strict oversight and
ratepayer protections, the State can reduce long-term energy costs, improve
system reliability, and strengthen the State�s energy security.

���� e.���� Therefore, it is in the
public interest to establish a narrow framework authorizing the development of
strategic in-State energy resources while preserving the State�s competitive
wholesale markets and protecting ratepayers.

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

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

���� �Electric public utility� means
a public utility, as that term is defined in R.S.48:2-13, that transmits and
distributes electricity to end users within the State.

���� �Net bill benefit� means a
measurable reduction in total electric public utility costs to New Jersey
ratepayers, including energy-related, capacity-related, congestion-related, and
transmission-related charges, as determined by the board.

���� �
Strategic
in-State energy resource
� means an electric generation resource, storage
resource, or hybrid resource that combines generation and storage, located
within the State that, as determined by the board, provides firm, dispatchable,
or reliability-enhancing capacity; reduces or mitigates wholesale electricity
costs, capacity charges, or transmission congestion for New Jersey ratepayers;
and serves a demonstrated public need that is not adequately addressed through
existing competitive market mechanisms.� �Strategic in-State energy resource�
shall include, but not be limited to:� energy storage systems, including
long-duration storage; dispatchable generation facilities designed to replace
or reduce reliance on higher-emission or higher-cost resources; repowering,
modernizing, or extending the life of existing in-State generation assets that
are critical to system reliability; hybrid resources combining generation and
storage; and clean firm generation or other emerging generation technologies,
provided such resources meet emissions and performance standards established by
the board.

���� 4.��� a.� Notwithstanding the
provisions of the �Electric Discount and Energy Competition Act,� P.L.1999,
c.23 (C.48:3-49 et al.), or any other law, rule, regulation, or order to the
contrary, an electric public utility may:�

���� (1)�� own, develop, or operate
a strategic in-State energy resource; or

���� (2)�� enter into a long-term
contract to procure capacity, energy, or ancillary services from an entity that
operates a strategic in-State energy resource.

���� However, an electric public
utility that elects to own, develop, operate, or otherwise procure generation
capacity pursuant to this subsection shall not receive preferential treatment
with respect to any State-regulated approval, permitting, or cost recovery
processes.

���� b.��� An electric public
utility�s authority to own, develop, or operate a strategic in-State energy
resource shall be limited to the provisions of P.L. ,
c. (C. )
(pending before the Legislature as this bill).� Nothing in P.L. ,
c. (C. )
(pending before the Legislature as this bill) shall be construed to constitute
a general repeal of the State�s competitive electric generation framework
established pursuant to the �Electric Discount and Energy Competition Act,�
P.L.1999, c.23 (C.48:3-49 et al.).

���� c.���� Charges assessed to
customers for basic generation service provided pursuant to subsection a. of
this section shall be transparent and based on the just and reasonable prudent
cost to the electric public utility for providing basic generation service, taking
into account the comparable cost of power purchased at prices consistent with
market conditions by the utility in the competitive wholesale marketplace and any
related ancillary and administrative costs, as determined by the board.�
Charges assessed to customers pursuant to this subsection may include a retail
margin, as determined by the board.

���� d.��� An electric public
utility that elects to own, develop, or operate a strategic in-State energy
resource pursuant to subsection a. of this section shall file with the board an
updated schedule of tariffs for approval, which schedule shall reflect any
necessary changes to the electric public utility�s rates as a result of the
utility�s decision to own and operate electric generation facilities, which
changes shall include, but not be limited to, the bundling of the electric
public utility�s rates.

���� 5.��� a.� Prior to owning,
developing, or operating a strategic in-State energy resource pursuant to
section 4 of P.L. , c.
(C. ) (pending before the
Legislature as this bill), an electric public utility shall conduct a
competitive solicitation process to evaluate the merits of:�

���� (1)�� electric public utility
ownership;

���� (2)�� build-transfer
arrangements; or

���� (3)�� long-term contractual
procurement from third-party developers.

���� b.��� After the competitive
solicitation required pursuant to subsection a of this section has been
completed, the electric public utility shall submit a project proposal to the
board for approval.

���� c.���� (1)� If the project
proposal submitted by the electric public utility pursuant to subsection b. of
this section is for contractual procurement pursuant to paragraph (3) of
subsection a. of this section, the board shall approve the proposal if the
board determines that it provides the greatest net bill benefit while meeting
State reliability and policy objectives.

���� (2)�� If the project proposal
submitted by the electric public utility pursuant to subsection b. of this
section is for ownership, pursuant to paragraph (1) of subsection a. of this
section, or for a build-transfer agreement, pursuant to paragraph (2) of subsection
a. of this section, the board shall approve the proposal if the board
determines that:�

���� (a)�� the project provides a
net bill benefit to ratepayers over the project�s expected life;

���� (b)�� the project includes
enforceable cost caps and construction milestones;

���� (c)�� the electric public
utility assumes a reasonable share of financial risk for the project, including
cost overruns or underperformance; and

���� (d)�� the project does not
result in unjust or unreasonable rates.

���� However, the board may
condition its approval of a project proposal pursuant to this paragraph on
performance-based ratemaking, clawback provisions, or earnings adjustments tied
to project outcomes.

���� d.��� The board shall employ
an independent consultant to oversee each solicitation required pursuant to
subsection a. of this section and to submit findings to the board.� The
findings shall include, but not be limited to:�

���� (1)�� impacts to ratepayers;

���� (2)�� system reliability
benefits;

���� (3)�� environmental
considerations; and

���� (4)�� how the proposal
compares with available alternatives.

���� e.���� Each strategic in-State
energy resource approved by the board pursuant to this section shall be subject
to ongoing board oversight.

���� f.���� An electric public
utility whose project proposal has been approved by the board pursuant to
subsection c. of this section shall submit an annual report to the board, and
the Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1),
detailing:�

���� (1)�� project performance;

���� (2)�� actual versus projected
costs;

���� (3)�� ratepayer impacts;

���� (4)�� reliability benefits;
and

���� (5)�� emissions impacts, where
applicable.

���� 6.��� The board 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 within
180 days of enactment, including, but not limited to, rules and regulations
preventing self-dealing, cross-subsidization, or market distortion, including
affiliate transaction safeguards, by any electric public utility that procures
generation pursuant to subsection a. of section 4 of
P.L. , c.
(C. ) (pending before the
Legislature as this bill).

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

STATEMENT

���� This bill permits electric
public utilities to own, develop, or operate a strategic in-State energy
resource or to enter into a long term contract with a strategic in-State energy
resource.� Under the bill, an electric public utility that elects to own,
develop, or operate a strategic in-State energy resource is to file an updated
schedule of tariffs with the Board of Public Utilities (board) for approval,
which schedule is to reflect any necessary changes to the electric public
utility�s rates as a result of the utility�s decision to own and operate electric
generation facilities.

���� The bill defines the term
�strategic in-State energy resource� to mean an electric generation resource,
storage resource, or hybrid resource that combines generation and storage,
located within the State that, as determined by the board, provides firm,
dispatchable, or reliability-enhancing capacity; reduces or mitigates wholesale
electricity costs, capacity charges, or transmission congestion for New Jersey
ratepayers; and serves a demonstrated public need that is not adequately
addressed through existing competitive market mechanisms.

���� This bill requires electric public
utilities to conduct a competitive solicitation to evaluate utility ownership,
build-transfer arrangements, and long-term contractual procurement from
third-party developers.� After the competitive solicitation has occurred, an
electric public utility is required to submit a project proposal to the board.�
The board is required to approve an electric public utility�s project proposal
if the board determines that the proposal meets certain conditions outlined in
the bill.

���� New Jersey residents and
businesses are experiencing sustained increases in electricity costs.� The
State�s current electric generation framework under the Electric Discount and Energy
Competition Act was designed to promote competition. �However, market
conditions have materially changed, resulting in an increased reliance on
out-of-State generation resources.� This bill would establish a narrow
framework authorizing the development of strategic in-State energy resources.