The "New Jersey Town Center Microgrid Pilot Program Act."

S3629

SENATE, No. 3629

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED FEBRUARY 19, 2026

Sponsored by:

Senator� ANDREW ZWICKER

District 16 (Hunterdon, Mercer, Middlesex and Somerset)

SYNOPSIS

���� The "New Jersey Town Center Microgrid Pilot
Program Act."�

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act
concerning the provision of electric supply to critical
facilities through microgrids.

����
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 Town Center Microgrid Pilot Program
Act."

���� 2.��� As used in this act:

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

���� �Critical facilities� means
buildings and facilities that are essential for the delivery of vital services
or protection of a community.

���� �Department� means the New
Jersey Department of Environmental Protection.���

���� �Developer� means an entity
that enters into an agreement with a pilot agency for the design, financing,
construction, and operation, or any combination thereof, of a supply of
electrical power pursuant to this act.

���� �Distributed energy resource� or
�DER� means one or more electric power generation, management, or storage
technologies, excluding diesel fuel technologies, located in a pilot agency, that
is capable of providing the standard energy needs of a building or structure,
or group of buildings or structures, if the normal source of electricity is
disrupted due to a power outage.

���� �Division� means the Division
of Local Government Services in the Department of Community Affairs.

���� �Electrical distribution
company� means a public utility, as that term is defined in R.S.48:2-13,
holding a franchise from the Board of Public Utilities to provide electric
distribution service, and whose electrical distribution service territory
includes the pilot agency.

���� �Microgrid� means a group of
interconnected electrical supply loads and distributed energy resources within
clearly defined electrical boundaries that acts as a single controllable entity
with respect to the grid. �A microgrid can connect and disconnect from the grid
to enable it to operate in both grid-connected or island-mode.

���� �Microgrid tariff� means a
tariff approved by the board for the purpose of facilitating the development
and operation of a TCDER Microgrid, and which tariff may provide waivers of law
and rules, and impose conditions which the board determines to be necessary and
appropriate to facilitate the development and operation of a TCDER Microgrid. A
microgrid tariff shall not be construed as establishing a precedent with regard
to any other tariff subject to board approval.

���� �Offtaker� means a party purchasing
energy and related products that are produced and delivered from a TCDER
Microgrid.

���� �Pilot agency� means a municipal,
county, or State government entity that participated in the Board of Public
Utilities� TCDER Microgrid Feasibility Study Program and was informed by the
board to have met the feasibility study program requirements.

���� �Power purchase agreement�
means a contract, between a pilot agency and a developer, for the supply of
electrical power from a distributed energy resource to critical facilities
through a TCDER Microgrid, which contract may reference a project agreement for
the development of a distributed energy resource.

���� �Project� means a TCDER
Microgrid being developed by a pilot agency pursuant to this act.�

���� �Project agreement� means a
contract, between a pilot agency and a developer, setting forth terms and
conditions related to: the scope and location of the project, ownership rights,
rights-of-way access, land leases, insurance and bonding, fees and taxes,
operation, financing, and related issues not included in the terms and
conditions of the power purchase agreement. A project agreement may address the
terms of a proposed microgrid tariff and may be conditioned on approval of the
tariff.� A project agreement shall not relax or modify any applicable
requirement for approval under the "Municipal Land Use Law,"
P.L.1975, c.291 (C.40:55D-1 et seq.).

���� �Town Center Distributed
Energy Resources Microgrid� or �TCDER Microgrid� means critical facilities
within the municipal boundary of a pilot agency that are connected as a
microgrid to one or more distributed energy resources.

���� 3.��� a.� Pursuant to the
provisions of this act, and notwithstanding the provisions of any other law,
rule, or regulation to the contrary, for the purpose of developing a Town
Center Distributed Energy Resources Microgrid to supply electrical power for
critical facilities, a pilot agency may enter into a project agreement and a
power purchase agreement with a developer.�

���� b.��� A pilot agency and a
developer may enter into a power purchase agreement under this act for a term
not to exceed 20 years, subject to the review and approval of the Division of
Local Government Services and the Board of Public Utilities.

���� (1)�� The Division of Local
Government Services shall have the duty and power to review and approve financial
matters and risks presented by a power purchase agreement.

���� (2)�� The Board of Public
Utilities shall have the duty and power to:

���� (a)�� review and approve electrical
supply and distribution matters of a power purchase agreement;

���� (b)�� provide guidance
concerning offtaker rates and fees that are necessary for a proposed power
purchase agreement; and

���� (c)�� adopt a microgrid tariff
affecting an electrical distribution company in order to facilitate the
development of a project.

���� c.���� The board and the
division shall each establish application forms and processes for approvals
under this act, however, the board and the division may establish a joint
application form and process for approvals.

���� d.��� (1)� The division shall
assist a pilot agency in developing a private agency�s developer procurement
process or request for proposals to ensure that the process or proposals
reflects the necessary knowledge, experience, financial capacity, and expertise
to develop, construct, and operate an energy supply facility in New Jersey.

���� (2)�� The board shall assist a
pilot agency in evaluating provisions of a proposed power purchase agreement
and tariff, including but not limited to, assistance in matters of energy
pricing, maintenance, termination of the agreement, removal of infrastructure,
assignment of contract, cybersecurity, liability insurance, electrical system
connection and interfaces, and system upgrades.

���� e.���� A pilot agency may
submit to the division a request for a waiver of specific provisions of law
that are within the division�s jurisdiction.� The division may grant a request
for a waiver and may adopt alternative provisions upon a finding of public need
for the project and general consistency with the applicable provisions of law
if the division determines that enforcing the requirements sought to be waived
are not necessary to protect the overall public interest and may compromise the
viability of the proposed project.

���� f.���� The board and the division
may each take actions not specifically authorized by this act that the board or
division deems reasonable, prudent, and necessary to accomplish the purposes of
this act if those actions are consistent with the purposes of this act and
address issues not specifically covered by this act.� For the purpose of this
subsection, the purposes of this act are to encourage energy efficiency,
reliability, resiliency, sound technical development and operation, while
ensuring the fiscal integrity of each pilot agency and developer with regard to
a power purchase agreement and project agreement.

���� 4.��� Notwithstanding the
provisions of the "Local Public Contracts Law," P.L.1971, c.198
(C.40A:11-1 et seq.), and of rules and regulations promulgated thereunder to
the contrary, a pilot agency may solicit proposals for the development of a
TCDER Microgrid project, and enter into a project agreement and a power
purchase agreement in the following manner:

���� a.���� A pilot agency shall
publish notice of the availability of request for proposal documentation at
least 30 days prior to the date established for the submission of proposals in at
least one newspaper of general circulation in the jurisdiction or service area
of the pilot agency to be served under the terms of the proposed agreements and
by posting notice on the website of the pilot agency.� A pilot agency shall
promptly provide request for proposal documentation to any known prospective
developers upon publication and to any others upon request.� The request for
proposals shall also be posted on the pilot agency�s internet website on a page
normally used for advertisement of bids.

���� b.��� A prospective developer
may submit a proposal, which shall include all the information required by the
request for proposals. A pilot agency may disqualify a prospective developer�s
proposal from consideration if the prospective developer does not comply with a
requirement set forth in the request for proposals.� A pilot agency may hold an
informational meeting to discuss a proposed project and answer questions so
long as the meeting is open to all prospective developers.� A pilot agency may
host an Internet website to answer questions submitted by prospective developers.

���� c.���� A pilot agency shall
conduct a preliminary review of the proposals received from prospective developers
to determine which proposals meet the minimum qualifications and standards. The
review of proposals shall be conducted in a manner that avoids disclosure of
the contents of a proposal to prospective developers that submitted competing
proposals. A pilot agency may conduct discussions with a prospective developer
that submitted a qualified proposal for the purpose of clarifying information
submitted in the proposal.� After completing a preliminary review of the
proposals submitted by prospective developers, a pilot agency may revise its request
for proposal documentation if the pilot agency simultaneously provides notice
of the revision to each prospective developer that submitted a proposal and
provides a uniform and reasonable period of time within which a prospective developer
that submitted a proposal may submit a revised proposal to the pilot agency.

���� d.��� (1)� A pilot agency
shall appoint the agency�s purchasing agent, legal counsel, engineer,
administrator, or other qualified person, to evaluate submitted proposals in
accordance with the methodology set forth in the request for proposals.� The
governing body may create a committee to assist the evaluating appointee in the
effort.� After completing the evaluation of submitted proposals, the person
appointed to evaluate proposals shall prepare a report explaining the
evaluations and making recommendations, which may include recommending the
award of a contract or contracts to a prospective developer.� The report shall
list each prospective developer and shall summarize each submitted proposal.�
The report shall rank prospective developers in order of preference, and may
recommend the selection of a developer.� If the report recommends the selection
of a developer, the report shall clearly state the reasons for recommending
selection of the prospective developer over other prospective developers.�

���� (2)�� The pilot agency shall
make the report available to the public, and to each prospective developer that
submitted a proposal, at least 48 hours prior to announcing selection of a
prospective developer and entering into negotiations with the selected prospective
developer.�

���� (3)�� After receipt and review
of the report, and at least 48 hours after making the report available to the
public and each prospective developer, the governing body of a pilot agency may,
by resolution, select a prospective developer and authorize the pilot agency to
enter into negotiations for a power purchase agreement with the selected prospective
developer.� If the governing body selects a prospective developer other than
the highest ranked developer, the governing body shall include an explanation
for doing so in the resolution.��

���� (4)�� The governing body of a
pilot agency may reject all proposals for any of the reasons set forth in
section 21 of P.L.1999, c.440 (C.40A:11-13.2).

���� e.���� (1)� A pilot agency
shall negotiate a preliminary project agreement and a preliminary power
purchase agreement with the selected prospective developer.

���� (2)�� If a pilot agency is
unable to negotiate satisfactory preliminary agreements with the selected
prospective developer, the pilot agency may, by resolution, abandon
negotiations with that prospective developer and select the next-highest-ranked
prospective developer.� The pilot agency shall notify each prospective
developer that submitted a proposal of the selection of the next-highest-ranked
prospective developer at least 48 hours prior to commencing negotiations with
the next-highest-ranked prospective developer.

���� (3)�� A pilot agency, the
selected prospective developer, and the applicable electrical distribution
company shall consult on issues relevant to the development and operation of a
proposed project, and shall negotiate the provisions of a proposed microgrid
tariff for the purpose of enabling a proposed project to operate in a manner
consistent with sound distribution grid engineering, safety requirements,
economics, and cross-subsidy standards.� An electrical distribution company shall
not unreasonably withhold its agreement to a proposed microgrid tariff and
shall negotiate in good faith with the pilot agency and the selected
prospective developer in order to facilitate the proposed project.� The terms
and conditions of the proposed microgrid tariff shall be contingent upon
approval by the board.

���� (a)�� If the pilot agency, the
selected prospective developer, and the applicable electrical distribution
company agree to the provisions of a proposed microgrid tariff, the electrical
distribution company shall submit the proposed microgrid tariff to the board
for the board�s approval.��

���� (b)�� If the pilot agency, the
selected prospective developer, and the applicable electrical distribution
company cannot agree on all necessary provisions of a proposed microgrid
tariff, the electrical distribution company shall provide the pilot agency and
the selected prospective developer a written statement setting forth each issue
necessary to be addressed in the tariff, indicating whether the parties have
agreed on each issue, and explaining the� electrical distribution company�s
recommendations on each issue of disagreement.� In this instance, the
application for review and approval of the proposed agreement, submitted
pursuant to subsection h. of this section, shall include the pilot agency�s
recommendations and the selected prospective developer�s recommendations on
each issue of disagreement together with the electrical distribution company�s
written statement on the proposed microgrid tariff.� As part of its action on
the application, the board shall consider the submitted recommendations on each
issue of disagreement and make a determination to resolve each issue.

���� (4)�� After satisfactory
completion of negotiations with a prospective developer, a pilot agency shall
set forth in a written document a summary of the terms and conditions of the
proposed agreements and shall, upon request, make this document available to
the public along with the proposed agreements.

���� f.���� Prior to entering into
a project agreement and a power purchase agreement with a prospective
developer, a pilot agency shall conduct a public hearing on the proposed
agreements. The pilot agency shall provide at least 14 days' prior notice of
the public hearing by publication in at least one newspaper of general
circulation in the jurisdiction or service area of the pilot agency to be
served under the terms of the proposed agreement and by posting notice of the
public hearing on the website of the pilot agency.� The publication shall
include notice of the date, time and place of the public hearing, and provide
notice of the place and times, or Internet website at which, a member of the
public may review the proposed agreements.

���� g.��� A pilot agency shall
produce a verbatim record of the public hearing. The pilot agency shall prepare
a written hearing report, which shall include a copy of the proposed
agreements, a copy of the statement setting forth the pilot agency�s reasons
for selecting the proposal, the verbatim record of the public hearing, written
statements submitted by interested parties, and a statement prepared by the
pilot agency summarizing the major issues raised at the public hearing and the pilot
agency 's specific responses to those issues. The pilot agency shall make
copies of the hearing report available to interested parties upon their
request.

���� h.��� (1)� Upon at least 10
days' prior written notice provided after the close of a public hearing on a
proposed project agreement and a proposed power purchase agreement, a pilot
agency shall submit:

���� (a)�� an application for
review of the proposed project agreement and for review and approval of the
proposed power purchase agreement to the division;

���� (b)�� an application for
review of the proposed project agreement and for review and approval of the
proposed power purchase agreement and proposed microgrid tariff to the board;
and

���� (c)�� a copy of each
application to the Department of Environmental Protection for the department�s
review and comment.

���� (2)�� A pilot agency shall
submit initial applications within three years of the effective date of this
act.

���� i.���� (1)� The division, the
board, and the department shall coordinate their reviews, insofar as
practicable, and may engage in discussions with each other and the pilot agency
to address any concerns.� The department shall provide any written comments to
the division, the board, and the pilot agency, for their consideration, no
later than 45 days after the department�s receipt of an application, or within 10
days of being notified by the division or board of their intent to act on the
application.

���� (2)�� Within 60 days of
receipt of an application, the board and the division shall each approve,
disapprove, or conditionally approve, the application.� The board and the
division shall disapprove an application unless it was initially submitted for
review within three years of the effective date of this act.� If the board or
division does not approve, disapprove, or conditionally approve an application
within 60 days of receipt, the application shall be deemed approved, unless the
public agency agrees to an extension of the period or the application was not
submitted within three years of the effective date of this act.

���� (3)�� If the board or division
conditionally approves an application, the board or division shall provide the
pilot agency suggested changes or language for a required revision to the
proposed agreement or tariff, in writing, inclusion of which would enable the
board or division to approve the proposed agreement or tariff.

���� (a)�� If the board or division
determines that the required revision is substantial, the pilot agency shall
hold a public hearing on the revision.� A substantial revision shall be a
change that materially changes the terms and conditions of the proposed agreement
or tariff.� A pilot agency shall submit a proposed revision to the board, the
division, and the department at least 15 days prior to the date of the public
hearing.��

���� (b)�� If the board or division
determines that the required revision is not substantial, the pilot agency
shall submit the proposed revision to the board and the division for approval
and to the department for review.� The board and the division, at their next
public meetings held at least 15 days after submission of a proposed revision,
shall either: approve the proposed revision, if it is found to be consistent
with the conditions set forth in the conditional approval; or disapprove the
proposed revision with a written explanation as to why the revision is not
consistent with the conditions set forth in the conditional approval.

���� (4)�� In its review of an
application, the board shall apply the following criteria in determining
whether to approve a proposed power purchase agreement and microgrid tariff:

���� (a)�� The prospective
developer has the financial capacity and technical and administrative
experience to ensure continuity of service over the term of the agreement and
tariff and that the standards and requirements contained in the application
documents concerning the financial, technical and administrative capacity of
the prospective developer are necessary and sufficient to protect the public
interest.����

���� (b)�� The terms of the
proposed power purchase agreement and microgrid tariff are not unreasonable.�
In determining whether the terms of the proposed agreement and tariff are not
unreasonable, the board shall review the fees and charges to be charged or
assessed under the proposed agreement and tariff to determine that they are
reasonable to the pilot agency, taking into consideration all the obligations
to be undertaken by the prospective developer and all the benefits to be
obtained by the pilot agency.� In making this determination, the board shall
not use the traditional rate-based rate of return methodology, pursuant to the
provisions of Title 48 of the Revised Statutes.

���� (c)�� The franchise customers
of a public utility are protected from the risks of the proposed power purchase
agreement and are not subsidizing the agreement.� If a prospective developer is
not a public utility, the board shall ensure that the terms of the proposed
power purchase agreement address the risks the agreement imposes on all
offtakers, and that users of electricity who are not part of the TCDER
microgrid are not subsidizing the agreement through increased charges, rates,
or fees.����

���� (d)�� If a prospective developer
is not an electrical distribution company, the prospective developer shall not
be subject to laws, rules, and regulations applicable to regulated public
utilities, except for the terms and conditions set forth in the applicable
microgrid tariff.�

���� (e)�� A microgrid tariff may
include, but shall not be limited to, the following:

���� (i)��� provisions enabling a
developer to cross electric public utility rights of way and construct
distribution wires and facilities.

���� (ii)�� provisions enabling an electric
public utility to recover costs of switches and related costs of integrating
microgrid generated energy into their system.

���� (iii)� provisions addressing
the assessment of standby, access, and social benefit, market transition fees,
rates, or charges.�

���� (iv)� provisions allowing an
electric public utility to own and maintain distribution wiring, switches, and
other facilities that connect to or touch their system.

���� (v)�� provisions ensuring that
the cost of the added distribution infrastructure is passed on to the customers
of the TCDER Microgrid over the life of that infrastructure.

���� (vi)� provisions that
supersede other statutes and regulations, upon the board�s determination that
it is necessary, appropriate, and in the public interest to do so, in order to
facilitate the success of the proposed project and power purchase agreement.

���� (5)�� In its review of an
application, the division shall apply the following criteria in determining
whether to approve a proposed power purchase agreement:����

���� (a)�� The terms of the
proposed power purchase agreement do not materially impair the ability of the
pilot agency to punctually pay principal and interest due on its outstanding
indebtedness and to supply other essential public improvements and services.���

���� (b)�� The power purchase
agreement contains satisfactory provisions addressing:

���� (i)��� The allocation of the
risks of operating and maintaining the microgrid.

���� (ii)�� The allocation of the
financial risks of the power purchase agreement.

���� (iii)� The defaulting and
termination of the agreement.����

���� (iv)� The requirements for the
provision of a performance bond by the developer, if so required by the pilot
agency.�

���� The division shall also review
and specifically approve any agreement provision pursuant to which a pilot
agency may execute a financing instrument for the purposes set forth in the
agreement.� A bond authorization or other obligation that pledges the full
faith and credit of a pilot agency shall be subject to the approval of the
Local Finance Board.

���� (6)�� The board and the
division shall assess, and the pilot agency shall pay, a fee equal to the cost
incurred by the board or division for an analysis of an application by an
independent person who has expertise in the area of electric supply services if
during the review of an application the board or division determine that such
an analysis is required and a person with the required expertise is not readily
available from within any executive department of the State government.����

���� (7)�� If the pilot agency and
the developer require amendments to a power purchase agreement after approval
of an application by the board and division, the pilot agency shall submit
proposed amendments to the board and division for approval and to the
department for review.� At the next public meeting of the board and of the
division convened at least 20 days after receipt of proposed amendments, the
board and the division shall determine whether the proposed amendments are
substantial.� If the amendments are substantial in nature, as determined by
either the board or the division, the pilot agency shall conduct a hearing on
the proposed revision.� Within 45 days of the receipt of proposed amendments
that are not determined to be substantial, or within 60 days of the receipt of
an application for approval of proposed amendments that are determined to be
substantial, the board and division shall approve or conditionally approve the
amendments in accordance with the applicable procedures established for
approval of an original agreement.������

���� (8)�� Any requirement of this
section that requires notice in writing to prospective developers may be
provided by email in lieu of physical mail.

���� 5.��� a.� Subject to the
provisions of a microgrid tariff approved by the board pursuant to this act, and
with the approval of the pilot agency, a developer chosen to supply energy under
a power purchase agreement may sell and distribute energy to other critical facilities
that are located within the municipal boundary of the pilot agency.

���� b.��� Pursuant to the �Uniform
Shared Services and Consolidation Act,� sections 1 through 35 of P.L.2007, c.63
(C.40A:65-1 through C.40A:65-35), a pilot agency may enter into a shared
service agreement with a local unit or units for the resale of electrical power
purchased under a power purchase agreement.

���� c.���� A pilot agency may
enter into agreements with State or federal entities and not-for profit health
care organizations for the resale of electrical power purchased under a power
purchase agreement.

���� 6.��� The board, in
consultation with the division and the department, shall prepare and submit,
not later than four years after the effective date of this act, to the Governor
and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), to the
Legislature, a report describing the implementation of the "New Jersey
Town Center Microgrid Pilot Program Act."�

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

STATEMENT

���� This bill establishes the
"New Jersey Town Center Microgrid Pilot Program Act" for the purpose
of facilitating implementation of a program currently before the New Jersey
Board of Public Utilities (BPU).� The BPU initiated the Town Center Distributed
Energy Resources (TCDER) Microgrid program after Superstorm Sandy in order to
help New Jersey become more energy resilient, particularly with respect to
critical facilities.� A TCDER Microgrid is a cluster of critical facilities
within a municipal boundary, which facilities may operate as shelter for the
public during and after an emergency event or provide services that are
essential to function during and after an emergency situation.� A microgrid
connects critical facilities with distributed energy resources, which can
operate when the main electric grid suffers a power outage.

���� During 2018, the BPUs �Phase
I� TCDER Microgrid Feasibility Study Incentive Program funded thirteen
Feasibility Studies. �During 2019, BPU informed twelve Feasibility Study
applicants that their studies met program requirements and that they were
eligible to apply for the �Phase II� TCDER Microgrid incentive program (one
Feasibility Study applicant withdrew from the program). �The BPU limited
eligibility to apply for the Phase II TCDER Microgrid Incentive Program to
those applicants who met the Feasibility Study program requirements.

���� The Phase II TCDER Microgrid
Incentive Program provides funding, on a competitive basis, for the design of a
TCDER Microgrid, in order to help move projects towards the development and
construction phase.� Phase II TCDER Microgrid Incentive Program guidelines
require applicants to certify that projects are legally permissible, i.e., that
they conform to existing law, code, and standing Board Orders.� This bill
establishes a framework to enable program participants that are unable to move
their projects forward due to legal or statutory impediments to do so consistent
with this process.� Those program participants, defined as �pilot agencies� in
the bill, are Atlantic City, Camden County and its utilities authority,
Galloway Township, Highland Park Borough, Hoboken City, Hudson County,
Middletown Township, Montclair Township, Neptune Township, Paterson City,
Trenton City (together with the State Department of Treasury), and Woodbridge
Township.

���� Under the bill, a pilot agency
may enter into a project agreement, concerning the development of a TCDER
Microgrid, and a power purchase agreement, concerning the procurement of
electrical power supply for critical facilities.� A pilot agency and a developer
may enter into a power purchase agreement, for a term not to exceed 20 years,
subject to the review and approval of the Division of Local Government Services
(DLGS) and the BPU.� The DLGS is to have power to review and approve financial
matters and risks associated with a proposed power purchase agreement.� The BPU
is to have power to: review and approve electrical supply and distribution
matters for a proposed power purchase agreement; provide guidance concerning
offtaker rates and fees that are necessary for a proposed power purchase
agreement; and adopt specifically authorized microgrid tariffs affecting the
electrical distribution company in order to facilitate the development of a
TCDER Microgrid project.

���� The bill sets forth a
procurement process, outside of the "Local Public Contracts Law," for
a pilot agency to solicit a developer, with whom it would enter into a project
agreement and a power purchase agreement.� After completing a request for
proposals process, the bill authorizes a pilot agency to select a prospective
developer, by resolution, and to enter into negotiations for a power purchase
agreement with the selected developer.�

���� A pilot agency that intends to
enter into a project agreement and a power purchase agreement with a developer is
to conduct a public hearing on the proposed agreements.� Within 30 days after
the public hearing, the pilot agency is to submit:

�

an application
for review of the proposed project agreement and for review and approval of the
proposed power purchase agreement to the DLGS;

�

an application
for review of the proposed project agreement and for review and approval of the
proposed power purchase agreement and proposed microgrid tariff to the BPU; and

�

a copy of each
application to the Department of Environmental Protection (DEP) for the
department�s review and comment.

���� A pilot agency is to submit
initial applications within three years of the effective date of this bill.

���� The bill directs BPU and DLGS
to specify application forms and processes for a pilot agency to seek approvals
under the bill.� The DLGS is to assist pilot agencies in developing procurement
processes and requests for proposals.� The BPU is to assist pilot agencies in
evaluating provisions of proposed power purchase agreements and tariffs.

���� The bill allows a pilot agency
to submit to the DLGS a request for a waiver of specific provisions of law that
are within the DLGS�s jurisdiction.� The DLGS may grant a request for a waiver
and may adopt alternative provisions upon a finding of public need for the
project and general consistency with the applicable provisions of law, if the DLGS
determines that enforcing the requirements sought to be waived: is not
necessary to protect the overall public interest and may compromise viability
of the proposed TCDER microgrid project.

���� The bill empowers the BPU and
the DLGS to each take actions not specifically authorized under the bill that
the BPU or DLGS deems reasonable, prudent, and necessary to accomplish the
bill�s purposes if those actions are consistent with the bill�s purposes and
address issues not specifically covered by the bill.� For this purpose, the
bill specifies that the purposes of the bill are to encourage energy
efficiency, reliability, resiliency, sound technical development and operation,
while ensuring fiscal integrity of each pilot agency and its power purchase or
related agreements with a TCDER microgrid developer.

���� The bill directs the DLGS, the
BPU, and the DEP to coordinate their reviews, insofar as practicable, and to
engage in discussions with each other and the pilot agency to address any
concerns.� Within 60 days of receipt of an application, the BPU and DLGS are to
each either approve, disapprove, or conditionally approve the application.� The
BPU and the DLGS are to disapprove an application unless it was initially
submitted for review within three years of the effective date of the bill.� If
the BPU or DLGS does not approve, disapprove, or conditionally approve an
application within 60 days of receipt, the application is to be deemed
approved, unless the public agency has agreed to an extension of the review
period or the application was not submitted within three years of the effective
date of the bill.

���� If the BPU or DLGS
conditionally approve an application, the BPU or DLGS are to provide the pilot
agency suggested language for a required revision to the proposed agreement or
tariff, in writing, inclusion of which would enable the BPU or DLGS to approve
the proposed agreement or tariff.� If the BPU or DLGS determines that the
required revision is substantial, the pilot agency must hold a public hearing
on the revision.� The bill provides that a substantial revision is to be a
change that materially changes the terms and conditions of the proposed
agreement or tariff.� If the BPU or DLGS determines that the required revision
is not substantial, the pilot agency is to submit the proposed revision to the BPU
and the DLGS for approval and to the DEP for review.� The BPU and the DLGS are
to approve the proposed revision if it is found to be consistent with the
conditions set forth in the conditional approval, or disapprove the application
with a written explanation as to why the revision is not consistent with the
conditions set forth in the conditional approval.

���� The bill sets forth criteria
that the BPU and the DLGS are to apply when determining whether to approve a
proposed power purchase agreement and tariff.

���� The bill directs BPU in
consultation with the DLGS and the DEP, to prepare a report describing
implementation of the bill, and submit the report to the Governor and to the
Legislature within four years of the bill�s effective date.