Sponsored by:
Senator ANTHONY M. BUCCO
District 25 (Morris and Somerset)
Senator RICHARD J. CODEY
District 27 (Essex and Morris)
Co-Sponsored by:
Senators Holzapfel and Schepisi
SYNOPSIS
Exempts municipal electric utilities from regulation by BPU.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning the regulation of municipal electric utilities and amending R.S.40:62-24 and P.L.1983, c.78.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. R.S.40:62-24 is amended to read as follows:
40:62-24. Every municipality in supplying [electricity,] gas, steam, or other product, except for electricity, beyond its corporate limits is hereby declared to be a public utility. The Board of Public Utilities shall have the same supervision and regulation of, and jurisdiction and control over such municipality in respect to its acts in supplying [electricity,] gas, steam, or other product, except for electricity, beyond its corporate limits, and of and over the property, property rights, equipment, facilities, and franchises used in supplying [electricity,] gas, steam, or other product, except for electricity, beyond its corporate limits as over other public utilities. Every such municipality shall be subject as to its service, accounts, property rights, equipment, franchises, extensions, reports, issuance of bonds or other indebtedness maturing in more than [1] one year from the date thereof, to the jurisdiction of the Board of Public Utilities to the same extent as other public utilities.
Every municipality supplying [electricity,] gas, steam, or other product, except for electricity, beyond its corporate limits shall have the rates for these utilities subject to the jurisdiction of the Board of Public Utilities. The board in regulating these rates shall provide for a rate structure which allows the municipality, within the limits of any covenants made with bondholders pursuant to law, to:
a. Recoup all costs of operation, including but not limited to the costs of raw materials, administration, equipment, buildings, property, maintenance, taxes, debt service, fees, and offsetting any budget deficit occurring in the immediately preceding fiscal year;
b. Establish a surplus sufficient to provide for the reasonable anticipation of contingencies which may affect the operation of the utility and for an amount which may be transferred from the accounts of the municipal utility and included in the local budget pursuant to section 5 of [this amendatory and supplementary act] P.L.1983, c.111 (C.40A:4-35.1).
(cf: P.L.1983, c.111, s.2)
2. Section 1 of P.L.1983, c.78 (C.48:2-13.1) is amended to read as follows:
1. Notwithstanding the provisions of any other law, rule, or regulation to the contrary, with respect to a rural, electric cooperative which is exclusively owned and controlled by the consumers it serves or a municipal electric utility, the Board of Public Utilities shall not exercise any jurisdiction or control over the rates, charges, or operation of the cooperative or municipal electric utility, nor shall the approval of the board be required to authorize or validate any mortgage or encumbrance of real property of or the issuance or execution of any evidence of indebtedness by the cooperative or municipal electric utility, except that the board shall retain its jurisdiction to determine disputes concerning the territory served or to be served by an electric cooperative or municipal electric utility.
(cf: P.L.1983, c.78, s.1)
3. This act shall take effect on the first day of the third month following the date of enactment.
STATEMENT
This bill exempts municipal electric utilities from regulation by the Board of Public Utilities (BPU).
Under current law, municipal utilities generally are not regulated by the BPU. However, if a municipality provides any product, including electricity, beyond its boundaries, the municipality is considered to be a public utility and is regulated by the BPU. In this event, the BPU is responsible for regulating the rates imposed by the municipality for the provision of these regulated services.
Under the bill, if a municipality provides electricity to customers beyond its boundaries, the municipality would not be considered a public utility and would not be subject to regulation by the BPU. As a result, the bill provides that municipal electric utilities would no longer be subject to rate regulation by the BPU. However, the bill provides that the BPU would retain jurisdiction to determine disputes concerning the service territory of any municipal electric utility, consistent with current law governing rural electric cooperatives.