Requires BPU to establish distributed energy storage incentive program.*

S631 SCS SEN Statement 6/8/26

SENATE ENVIRONMENT AND ENERGY COMMITTEE

STATEMENT TO

SENATE COMMITTEE SUBSTITUTE
FOR

SENATE, No.
631

STATE
OF NEW JERSEY

DATED:
�JUNE 8,
2026

����� The Senate Environment and Energy Committee reports
favorably a Senate Committee Substitute for Senate Bill No. 631.

����� As reported, the substitute requires the Board of
Public Utilities (BPU) to establish a distributed energy storage incentive
program (incentive program), to be administered by the State�s electric public
utilities, in order to provide incentives for the development of at least 2,000
megawatts (MW) of customer-sited energy storage systems and front-of-the-meter
energy storage systems (collectively, �energy storage systems) by 2030.� In the
first year of the incentive program, the BPU is required to establish a goal to
provide incentives for up to 350 MW in customer-sited and front-of the meter
energy storage, with applicants accepted on a first-come, first-served basis.�
In general, the incentive program is to be designed to achieve or exceed,
together with other energy storage programs established by the BPU, a total of
3,000 MW in new energy storage capacity by 2030.

����� Under the substitute, the BPU is to establish certain
filing requirements for the incentive program, which requirements are to
establish, at a minimum, incentive levels, a methodology for determining
electric public utility rates for front-of-the-meter energy storage systems, an
application process for the incentive program, and eligibility requirements for
applicants of the incentive program.� After the BPU issues its minimum filing
requirements, the substitute requires the State�s electric public utilities to
file a joint petition, or each electric public utility to file its own
petition, with the BPU to propose an implementation plan for the incentive
program.� The substitute establishes certain criteria for such petitions and
for the BPU�s review of each petition.� As part of its review, the BPU is
authorized to permit an electric public utility to recover costs associated
with implementing the incentive program through a process outlined in the
substitute.

����� In addition to those eligibility requirements
established by the BPU�s minimum filing requirements, applicants are to meet
certain other eligibility criteria as outlined in the substitute, including
eligibility criteria for stand-alone energy storage systems and energy storage
systems paired with certain renewable sources of electric power.� The
substitute also establishes certain requirements for the structure of the
incentives provided through the incentive program, including, but not limited
to, a requirement that the BPU establish certain performance standards to
measure and ensure a project�s compliance with the substitute�s requirements.

����� The substitute requires the BPU to reserve at least
one quarter of the incentives provided to customer-sited energy storage systems
for customer classes or deployment scenarios that face greater economic
hurdles, as outlined in the substitute.� In addition, the substitute provides
that the incentive program is not to prevent or discourage energy storage
systems from providing services to, or participating in, wholesale markets,
such as the PJM capacity market, with certain exceptions outlined in the substitute.�
Any evaluation of the costs and benefits of energy storage systems is required
to include benefits that accrue directly or indirectly to ratepayers due to the
participation of the energy storage systems in wholesale markets.

����� Finally, the substitute requires each electric public
utility to file a tariff with the BPU, based on certain criteria and subject to
certain limitations outlined in the substitute, no later than 12 months after
the substitute�s effective date for any front-of-the-meter energy storage
system participating in the incentive program.