Requires transmission owners to join regional transmission organizations approved by Federal Energy Regulatory Commission. **

S1673 2R

[Second Reprint]

SENATE, No. 1673

STATE OF NEW JERSEY

222nd LEGISLATURE

�

PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION

Sponsored by:

Senator ANDREW ZWICKER

District 16 (Hunterdon, Mercer, Middlesex and Somerset)

Co-Sponsored by:

Senator Timberlake

SYNOPSIS

���� Requires transmission owners to join regional
transmission organizations approved by Federal Energy Regulatory Commission.

CURRENT VERSION OF TEXT

���� As reported by the Senate Budget and Appropriations
Committee on June 28, 2026, with amendments.

��

An Act

concerning electric transmission facilities and
supplementing Title 48 of the Revised Statutes.

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

����
1
1.�� The
Legislature finds and declares that:�

����
a.���� The
reliable operation of the electric transmission system is essential to the
health, safety, and economic welfare of the residents of the State and to the
State�s ongoing response to the electricity affordability emergency declared by
the Governor;

����
b.
���
2
The regional
coordination of electric transmission facilities, through entities approved by
the Federal Energy Regulatory Commission (FERC) to serve as regional
transmission organizations, independent system operators, or functionally-similar
entities, promotes system reliability;

����
c.
2
�
Membership
in

2
[
an RTO, as
defined in section 2 of P.L. , c.
(C. ) (pending before the
Legislature as this bill), for electric transmission facilities placed in
service on or after January 1, 2027,
]

such entities
2

is necessary to provide regulatory certainty for transmission planning,
protect the State�s investment in regional transmission infrastructure, and
ensure that changes in the ownership or business strategy of any individual
transmission owner do not disrupt the reliable operation of the State�s
electric transmission system; and

����
2
[
c.
]

d.
2
����
It
is therefore in the public interest of the State to require
2
[
that
]
2

each
electric transmission facility located in New Jersey

2
[
and placed
in service on or after January 1, 2027 is
]

to be
2

owned and operated by a transmission owner that

2
is a
member of, and
2

has transferred operational control of those facilities to

2
,
2

an
entity approved by

2
[
the Federal
Energy Regulatory Commission
]

FERC
2

to serve as a regional transmission organization, independent system
operator, or functionally-similar entity.
1

����
1
[
1.
]

2.
1
����
2
a.
2
� As
used in
2
[
P.L. ,
c. (C. )
(pending before the Legislature as this bill)
]

this section
2
:�

����
1
[
�Affiliate�
means any individual or entity that directly or indirectly controls, is under
common control with, or is controlled by a public utility.

���� �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.
]
1

���� �Electric transmission
facility� means an interconnected group of electric transmission lines and
associated equipment for moving or transferring electric energy in bulk between
points of supply and points at which it is transformed for delivery over the
distribution system lines to consumers or is delivered to other electric
systems.

����
1
[
�Rate
pancaking� means the practice of multiple transmission providers charging
consumers multiple, duplicative transmission charges for electricity deliveries
crossing multiple transmission systems.

���� �Transmission entity�
]

�RTO�
1
means
an entity approved by the Federal Energy Regulatory Commission to serve as a
regional transmission organization, independent system operator, or
1
[
functionally
similar
]

functionally-similar
1

entity.

���� �Transmission owner� means the
owner or operator of an electric transmission facility.
1
[
�Transmission
owner� includes, but is not limited to, an electric public utility.

���� �User� means any entity or
affiliate of that entity that buys or sells electric energy in the transmission
entity�s region or in a neighboring region.
]
1

����
2
b.�� Notwithstanding
any law, rule, regulation, or order to the contrary, a transmission owner
located in this State on or after the effective date of P.L. ,
c. (C. )
(pending before the Legislature as this bill) shall be a member of, and
transfer control of any electric transmission facilities that it owns or
operates to, an RTO.

����
c.���� The Board of Public
Utilities may adopt, pursuant to the �Administrative Procedure Act,� P.L.1968,
c.410 (C.52:14B-1 et seq.), rules and regulations as may be necessary to
implement this section.
2

�����
1
[
2.
]

2
[
3.
1�

a.� Notwithstanding any law,
rule, regulation, or order to the contrary,
1
[
no
]

but subject to subsections b., c., and d. of
this section, any
1
transmission owner
1
[
shall own or control an electric transmission
facility
]
1
located in this State on or after the effective
date of P.L. , c.
(C. ) (pending before the
Legislature as this bill)
1
[
unless that transmission owner is
]

shall be
1
a member of, and
1
[
transfers
]

transfer operational
1
control of
1
[
those
]

any
1
electric transmission facilities
1
it owns or operates that are located in New Jersey and placed in service
on or after January 1, 2027
1
to,
1
[
one or more transmission entities that are
operational and meet the specifications outlined in subsection b. of this
section.

����� b.�� A
transmission owner located in this State shall be in compliance with this
section if each transmission entity of which the transmission owner is a member
meets all of the following specifications:

����� (1)� the
transmission entity is approved by the Federal Energy Regulatory Commission;

����� (2)� the
transmission entity separates control of electric transmission facilities from
control of electric generation facilities;

����� (3)� the
transmission entity implements, to the extent reasonably possible, policies and
procedures designed to minimize rate pancaking within the State;

����� (4)� the
transmission entity improves service reliability within the State;

����� (5)� the
transmission entity achieves the objectives of an open and competitive electric
generation marketplace, including the elimination of barriers to market entry
and the preclusion of control of bottleneck electric transmission facilities in
the provision of electric retail choice;

����� (6)� the
transmission entity is of sufficient scope or otherwise operates to
substantially increase economical supply options for consumers;

����� (7)� the
governance structure or control of the transmission entity is independent of
the users of the electric transmission facilities, and no member of the
transmission entity�s board of directors has an affiliation with a user during
the member�s tenure on the board, such as to unduly affect the transmission
entity�s performance;

����� (8)� the
transmission entity operates under policies that promote positive performance
designed to satisfy the electricity requirements of consumers; and

����� (9)� the
transmission entity is capable of maintaining real-time reliability of the
electric transmission system, ensuring comparable and non-discriminatory
transmission access and necessary services, minimizing system congestion, and
further addressing real or potential transmission constraints
]

an RTO.

�����
b.�� A
transmission owner shall:�

�����
(1)� not
be required to transfer operational control of an electric transmission
facility placed in service prior to January 1, 2027 to an RTO;

�����
(2)� have
the right to voluntarily include any electric transmission facility constructed
prior to January 1, 2027 in an RTO; and

�����
(3)� shall
not be prohibited by P.L. ,
c. (C. )
(pending before the Legislature as this bill) from withdrawing any electric
transmission facility constructed prior to January 1, 2027 from an RTO, if
federal law otherwise permits the withdrawal.

�����
c.�� This
section shall not:� impact transmission rates, including adders, approved by
the Federal Energy Regulatory Commission with respect to electric transmission
facilities placed in service in this State prior to January 1, 2027; or be the
basis for any modification sought to any rate, charge, or incentive applicable
to such facilities.� Nothing in P.L. ,
c. (C. )
(pending before the Legislature as this bill) shall be construed to limit the
independent statutory authority of the Division of Rate Counsel pursuant to
sections 46 through 55 of P.L.2005, c.155 (C.52:27EE-46 through C.52:27EE-55)
with respect to any proceeding or filing not premised on
P.L. , c.
(C. ) (pending before the
Legislature as this bill).

�����
d.�� This
section shall not apply to any electric transmission facility, or project to
construct an electric transmission facility, commenced before or after January
1, 2027 that is cancelled and never placed in service.

�����
e.�� Nothing
in this section shall govern or operate as a condition upon the ownership,
operation, or control of any electric transmission facility placed in service
in this State before January 1, 2027.� Nothing in this section shall require
any transmission owner to divest, transfer, or relinquish any ownership
interest, contractual right, or operational arrangement in existence on the
effective date of P.L. , c.
(C. ) (pending before the
Legislature as this bill)
1
.
]
2

����
1
[
3.
]

2
[
4.
1
The
Board of Public Utilities may adopt, pursuant to the �Administrative Procedure
Act,� P.L.1968, c.410 (C.52:14B-1 et seq.), rules and regulations as may be
necessary for the implementation of P.L. ,
c. (C. )
(pending before the Legislature as this bill).
]
2

����
1
[
4.
]

2
[
5.
1
]

3.
2
���� This
act shall take effect
1
[
immediately
]

on January
1, 2027
1
.