"Clean Firm Energy Reliability Act;" directs BPU to establish program to procure certain electricity generation facilities in State.

S4440

SENATE, No. 4440

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED JUNE 11, 2026

Sponsored by:

Senator� TROY SINGLETON

District 7 (Burlington)

SYNOPSIS

���� �Clean Firm Energy Reliability Act;� directs BPU to
establish program to procure certain electricity generation facilities in
State.

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act
concerning in-State electricity generation and
supplementing Title 48 of the Revised Statutes.

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

���� 1.� (New section) Sections 1
through 5 of P.L. , c.
(C. ) (pending
before the Legislature as this bill) shall be known and may be cited as the �Clean
Firm Energy Reliability Act.�

���� 2.� (New section) a.� The
Legislature finds and declares that:

���� (1) New Jersey faces rising
electricity demand and escalating PJM capacity costs, driven by load growth and
insufficient firm energy generation;

���� (2) nuclear energy currently
supplies approximately 40 percent of in-State electricity and 80 percent of
carbon free generation, providing proven, fuel-secure energy generation
capacity; and

���� (3) the recent enactment of
P.L.2026, c.9 removed outdated permitting barriers to new nuclear facilities,
enabling legislative action to advance the development of such facilities.

���� b.� The Legislature therefore
determines that it is in the public interest to establish a program in the
Board of Public Utilities for the procurement of additional clean firm
electricity generation facilities in the State.

���� 3.� (New section) As used in sections
1 through 5 of P.L. , c.
(C. ) (pending
before the Legislature as this bill):

���� �Advanced nuclear reactor� or �advanced
reactor� means a nuclear reactor that:

���� (1) has significant
improvements compared to reactors operating on December 27, 2020, including
improvements such as: (a) additional inherent safety features; (b) lower waste
yields; (c) improved fuel and material performance; (d) increased tolerance to loss
of fuel cooling; (e) enhanced reliability and improved resilience; (f)
increased proliferation resistance; (g) increased thermal efficiency; (h)
reduced consumption of cooling water and other environmental impacts; (i) the
ability to integrate into electric applications and nonelectric applications;
(j) modular sizes that allow for deployment that corresponds with the demand
for electricity or process heat; and (k) operational flexibility to respond to
changes in demand for electricity or process heat and to complement integration
with intermittent renewable energy or energy storage; or

���� (2) is of a design that has
received design certification, design approval or a combined license from the
Nuclear Regulatory Commission after January 1, 2000.

���� �Board� means the Board of
Public Utilities.

���� �Clean firm development charge�
or �CFDC� means the same as the term is defined in section 12 of P.L.1999, c.23
(C.48:3-60).

���� �Clean firm energy resource�
means an electric energy generation facility that: (1) produces zero or near-zero
greenhouse gas emissions; (2) is dispatchable, fuel secure, and capable of
continuous operation; and (3) is accredited by PJM for capacity and reliability
value.� �Clean firm energy resource� includes, but is not limited to, an
advanced nuclear reactor or an expansion unit at an existing nuclear site or
qualified brownfield.

���� �Nuclear energy� means
electric energy generated by a nuclear reactor.

���� �Nuclear reactor� means an
apparatus required to be licensed by the Nuclear Regulatory Commission that is
designed or used to sustain nuclear fission in a self-supporting chain
reaction.

���� �Nuclear Regulatory Commission�
or �NRC� means the United States Nuclear Regulatory Commission.

���� �PJM Interconnection, L.L.C.�
or �PJM,� means the same as the term is defined in section 3 of P.L.1999, c.23
(C.48:3-51), or any successor entity thereto.

���� �Qualified project� means a clean
firm energy resource project approved by the board pursuant to P.L. ,
c.
(C. ) (pending
before the Legislature as this bill).

���� �Qualified project entity�
means the person or entity that develops, owns, or operates a qualified project
and is bound by the terms of the final board order, together with any permitted
successor or assignee.

���� 4.� (New section) a.� The Board
or Public Utilities shall establish a program, in accordance with the
provisions of P.L. , c.
(C. ) (pending
before the Legislature as this bill), to promote the construction of clean firm
energy resources in the State.

���� b.� No later than 180 days
after the effective date of P.L. , c.
(C. ) (pending
before the Legislature as this bill), the board shall issue a request for
expressions of interest for the construction of clean firm energy resources in
the State.

���� c.� Any entity wishing to
construct a clean firm energy resource and obtain qualified project status
shall file with the board, no later than 60 days following publication of the
request pursuant to subsection b. of this section, an expression of interest,
which shall include, but need not be limited to, the following:

���� (1) a letter of intent filed
with the Nuclear Regulatory Commission, if applicable;

���� (2) a proposed licensing
pathway under the Nuclear Regulatory Commission, if applicable, including
identification of any applicable Early Site Permit, design certification, or
other prior Nuclear Regulatory Commission determinations on which the project
intends to rely;

���� (3) proposed State and
municipal permitting pathways;

���� (4) a regulatory engagement
plan, which contains the developer�s organizational structure, the project�s
design and indicative construction timeline, including the anticipated
completion date, and any pre-application engagement materials submitted to, or
prepared for, the Nuclear Regulatory Commission;

���� (5) a technical description of
the proposed system design and technology structure;

���� (6) the proposed capital
structure and financing plan, identifying committed or prospective investors or
lenders, and any proposed or anticipated sources of construction-phase funding;

���� (7) the rated output of the
project per year in megawatt hours and the proposed amount of energy to be made
available to the PJM Reliability Pricing Model capacity market or Fixed
Resource Requirement, as appropriate, from the project per year in megawatt hours;

���� (8) a projection of the
anticipated monthly bill impact on ratepayers resulting from the proposed clean
firm energy resource;

���� (9) the requested amount of CFDC
funding; and

���� (10) any additional
information deemed necessary by the board.

���� d.� The board shall undertake
a preliminary evaluation of all proposed projects and provisionally qualify, or
deny provisional qualification of, each proposed project no more than 90 days
after receipt by the board of a complete expression of interest.� The board may
grant provisional qualification to one or more proposed projects.� The board
shall grant provisional qualification status upon a threshold finding that:

���� (1)� the proposal is
reasonably likely to significantly contribute to meeting the State�s energy
reliability, resilience, and capacity needs, consistent with the State�s clean
energy goals;

���� (2) the proposal will
significantly increase the amount of electricity generated in New Jersey; and

���� (3) the proposal will result
in a positive impact to New Jersey ratepayers in the long term.

���� e.� An expression of interest
shall create no contractual obligation between the State and the applicant, and
the board�s preliminary evaluation shall not commit the State to issue a final
board order approving a project.

���� 5.� (New section) a.� After
granting provisional qualification status to a proposed project, the board
shall enter into negotiations with the developers of the project concerning the
CFDC funding, any real estate terms, agreements on supply chain guarantees, or
any other terms and conditions the board deems necessary based on the
information provided in the expression of interest.� The board may request and
consider any additional information they find necessary in connection with its
evaluation and negotiations.� Throughout the negotiation process, the board
shall consult with the Department of Environmental Protection and other State
agencies with applicable expertise.� The Division of Rate Counsel shall have,
with respect to P.L. , c.
(C. ) (pending
before the Legislature as this bill), the right to receive all filings and
submissions made to the board, to submit written comments and evidence, and to
petition the board for reconsideration of any final board order.

���� b.� If the board and a
provisionally qualified project entity reach an agreement, all key terms and
conditions shall be memorialized in a final board order designating the project
as a qualified project.� The final board order shall not be subject to change
except with the consent of the board and the qualified project entity.� Key
terms to be specified in the final board order shall include, but need not be
limited to:

���� (1) the commercial operation
date of the qualified project;

���� (2) a project construction
cost estimate;

���� (3) critical project
development milestones and the consequences for failing to meet the milestones;

���� (4) any CFDC funding to be
provided to the project and the schedule for disbursements of the funding;

���� (5) provisions for the
treatment of construction cost decreases or allowable cost increases; and

���� (6) project reporting
requirements.

���� b.� Any final agreement issued
by the board pursuant to this section shall, at a minimum, include conditions
to ensure the following:

���� (1) the qualified project
entity will reimburse the board and the State for all reasonable costs incurred
for review of the project by the board, including, but not limited to,
consulting services, oversight, inspections, and audits;

���� (2) the qualified project
entity will undertake all reasonable wildlife protection efforts necessary to
sustain the natural population of wildlife present in the areas surrounding the
nuclear energy generation facility; and

���� (3) the qualified project
entity will undertake community engagement and public education for the
duration of operations;

���� (4) the project shall be
constructed utilizing a project labor agreement and pay prevailing wages, in
accordance with the �New Jersey Prevailing Wage Act,� P.L.1963, c.150
(C.34:11-56.25 et seq.), for any construction services in State;

���� (5) not less than 15 percent
of the total labor hours of the construction work performed by a contractor or
subcontractor, with respect to the facility shall be performed by apprentices.�
The requirements of this paragraph shall be subject to any applicable
requirements for apprentice-to-journeyworker ratios of the United States
Department of Labor or the Department of Labor and Workforce Development.� The
board may establish an exemption from the provisions of this paragraph for
facilities that are unable to acquire sufficient apprentices to meet the
required percentage of labor hours; and

���� (6) be constructed using
materials with a supply chain based in the United States, wherever feasible.

���� c.� If the board and a
provisionally qualified project entity do not reach an agreement within 12
months from the date of provisional qualification, the provisional
qualification shall expire and the project shall no longer be considered a
provisionally qualified project, except if the board and the provisionally
qualified project entity both agree to extend the time to reach agreement.

���� d.� Notwithstanding any
procurement threshold established under R.S.52:25-23, any circular issued
pursuant thereto by the Division of Purchase and Property in the Department of
the Treasury, or any board-specific procurement threshold, the board may engage
consulting services on a non-advertised basis using the procedures authorized
by R.S.52:25-23 and set forth by the Director of the Division of Purchase and
Property in Circular No. 26-02-DPP to assist in carrying out its duties under P.L. ,
c. (C. )
(pending before the Legislature as this bill).� Any such engagement shall not
be applied against the board�s delegated procurement authority threshold.

���� 6.� 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
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.

����
c.� Upon designating a
qualified clean firm energy resource project pursuant to section 5 of P.L. ,
c.
(C. ) (pending
before the Legislature as this bill), the board shall establish, by board
order, a non-bypassable charge to be known as the clean firm development
charge, or CFDC, which shall be imposed on all electric utility customers.� The
board shall determine the amount of the charge necessary to provide the
agreed-upon funding, and shall establish, and adjust from time to time as
necessary, the amount that each electric public utility is required to collect
accordingly.� The board shall require each electric public utility to begin
assessing the charge on all customer bills no later than 180 days after the
designation of a clean firm energy resource project, or other date specified by
the board.� Monies collected through the CFDC shall be deposited in the �Clean
Firm Energy Development Fund� for the purposes described in subsection d. of
this section.

����
d.� There is established in
the Board of Public Utilities a nonlapsing fund to be known as the �Clean Firm
Energy Development Fund.� �The monies in the fund shall be used to support the
development of one or more qualified clean firm energy resource projects.� The
level of funding to be provided to a qualified clean firm energy project shall
be established by the board in any order designating a qualified clean firm
energy resource project pursuant to section 5 of P.L. ,
c.
(C. ) (pending before
the Legislature as this bill).

����
e.� The �Clean Firm Energy
Development Fund� shall be administered by the board and shall be credited
with:

����
(1) monies received from
the CFDC pursuant to subsection c. of this section;

����
(2) such monies as are
appropriated by the Legislature for this purpose; and

����
(3) any return on
investment of monies deposited in the fund.

����
f.� The board shall
disburse the monies collected in the �Clean Firm Energy Development Fund� to a
qualified clean firm energy resource project entity based on the construction
milestone and payment schedule agreed to and specified in the board�s order
issued pursuant to section 5 of P.L. ,
c.
(C. ) (pending
before the Legislature as this bill).� The disbursement of funds shall be
directed by the board upon submission of documentation satisfactory to the
board of costs incurred and construction progress, and a determination by the
board that such costs were prudently incurred.� Submissions shall include proof
of actual expenditures and any other information the board deems necessary to
verify eligibility for disbursement of funds.� The board shall not disburse
monies for any qualified advanced nuclear reactor project until the project has
been issued a construction permit, combined construction permit and operating
license, or Limited Work Authorization by the United States Nuclear Regulatory
Commission, as applicable.� The board shall report collections to the fund as
revenues, and disbursements from the fund as expenditures, for the purposes of
the Governor�s annual budget message to the Legislature.

����
g.� When all disbursements
to a qualified clean firm energy resources have been made pursuant to
subsection f. of this section, or if the designation of the qualified advanced
nuclear reactor has been terminated by the board, the board shall direct each
electric public utility to immediately cease collecting the CFDC for that clean
firm energy resource.

����
h.� As used in this
section:

����
�Clean firm development
charge� or �CFDC� means a charge imposed by an electric public utility at a
level determined by the board, pursuant to the provisions of subsections c.
through g. of this section.

����
�Clean firm energy
resource� means the same as the term is defined in section 3 of
P.L. , c.
(C. ) (pending
before the Legislature as this bill).

(cf:� P.L.2025, c.136, s.7)

���� 7.� 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.

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

STATEMENT

���� This bill, to be known as the �Clean
Firm Energy Reliability Act,� would direct the Board of Public Utilities (BPU)
to establish a program to procure clean firm energy resources in the State.

���� As defined in the bill, �clean
firm energy resource� means an electric energy generation facility that: (1)
produces zero or near-zero greenhouse gas emissions; (2) is dispatchable, fuel
secure, and capable of continuous operation; and (3) is accredited by PJM for
capacity and reliability value.� �Clean firm energy resource� includes, but is
not limited to, an advanced nuclear reactor or an expansion unit at an existing
nuclear site or qualified brownfield.

���� The bill would direct the BPU
to issue a request for expressions of interest within 180 days of the bill�s
enactment.� Entities that are interested in participating in the program would
then have 60 days to submit an expression of interest.� The bill would
establish certain minimum content requirements for an expression of interest,
including, for nuclear energy projects, that it contain a letter of intent
filed with the United States Nuclear Regulatory Commission (NRC) and a proposed
licensing pathway under the NRC.

���� The BPU would then have 90
days to review an expression of interest and would be authorized to grant
provisional qualification status to those projects that sufficiently meet the
BPU�s criteria, are reasonably likely to significantly contribute to meeting
the State�s energy reliability, resilience, and capacity needs, and provide a
net benefit to ratepayers.� The BPU would then enter into negotiations with the
developer of the proposed clean firm energy resource concerning the terms of
the project.� If an agreement is reached, the BPU would approve the project by
issuing a board order, which would not be subject to change, except by mutual
agreement between the BPU and the project developer.

���� If approved, a qualified clean
firm energy resource project would be authorized to receive financial support
through a clean firm development charge (CFDC).� Under the CFDC, a qualified clean
firm energy resource project would be eligible to receive funding for a
negotiated percentage of construction costs through a non-bypassable charge
which would be imposed on all electric utility customers and deposited into a
fund to be known as the �Clean Firm Development Fund.�� The bill would require
the BPU to include revenues and expenditures from the fund in the Governor�s
annual budget message to the Legislature.� Finally, the bill would authorize
the BPU to adopt rules and regulations as necessary to implement the bill�s
provisions.