ASSEMBLY TELECOMMUNICATIONS AND UTILITIES COMMITTEE
STATEMENT TO
ASSEMBLY, No. 577
STATE OF NEW JERSEY
DATED: DECEMBER 5, 2022
The Assembly Telecommunications and Utilities Committee reports favorably Assembly Bill No. 577.
As reported, this bill directs the Board of Public Utilities (BPU) to establish a renewable natural gas program to encourage gas public utilities (utilities) to procure renewable natural gas and invest in renewable natural gas infrastructure. As part of this program, the bill also requires the BPU to adopt a ratemaking mechanism to allow for the recovery of all costs prudently incurred by a utility under the program.
Specifically, the ratemaking mechanism would allow utilities to periodically recover the following costs from ratepayers, subject to approval by the BPU: (1) any capital investments in renewable natural gas infrastructure incurred by the utility for the purpose of providing renewable natural gas service under the program, including the cost of capital, as determined in the utility’s most recent rate case, and any other incremental costs associated with these investments; (2) any operating costs incurred by the utility associated with the program; and (3) any costs of procuring renewable natural gas from a third party, including affiliates of the utility.
When a utility procures renewable natural gas from a third party, the bill requires the utility to purchase the renewable natural gas supply at prices and on terms consistent with market conditions. The bill also requires the BPU to regulate the charges assessed to customers of the utility for the supply of renewable natural gas, which charges would be based on the utility’s cost of providing such supply, including renewable natural gas commodity and capacity costs, as well as any related ancillary and administrative costs.
This bill was pre-filed for introduction in the 2022-2023 session pending technical review. As reported, the bill includes the changes required by technical review, which has been performed.