Sponsored by:
Senator BOB SMITH
District 17 (Middlesex and Somerset)
Senator ANDREW ZWICKER
District 16 (Hunterdon, Mercer, Middlesex and Somerset)
SYNOPSIS
Requires BPU to establish beneficial building electrification program and requires electric public utilities to prepare and implement beneficial building electrification plans.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning building electrification and supplementing P.L.2018, c.17 (C.48:3-87.8 et al.).
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. For the purposes of this section:
“Beneficial electrification” means a change in end-use equipment from a nonelectric type to an efficient electric type for any building end use, including water heating, space heating, industrial process, or transportation, provided that the change: reduces cost from a societal perspective; reduces greenhouse gas emission; or promotes the increased use of the electric grid in off-peak hours.
“Cost effective” means any beneficial electrification program having a benefit-cost ratio of greater than one, consistent with the New Jersey Cost Test for Energy Efficiency adopted by the board, and any additional factors the board determines are necessary to achieve the goals of this section.
b. No later than one year after the date of enactment of this section, the Board of Public Utilities shall adopt, pursuant to the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), rules and regulations establishing a beneficial building electrification program. As part of the program adopted pursuant to this section, the board shall develop greenhouse gas emission reduction targets for beneficial building electrification programs implemented by each electric public utility in the State and require electric public utilities to prepare and implement beneficial building electrification plans. The board shall:
(1) establish beneficial building electrification program targets expressed in the amount of on-site greenhouse gas emission reductions;
(2) establish program design elements and minimum filing requirements to achieve the goals of the energy master plan adopted pursuant to section 12 of P.L.1977, c.146 (C.52:27F-14);
(3) establish a cost recovery and performance incentive mechanism for programs established under this section;
(4) determine whether the electric public utilities or the board shall be responsible for the implementation of building electrification programs for new construction; and
(5) develop and provide direct incentives for the installation of electric heat pumps.
c. Each electric public utility shall develop and submit to the board for approval, a multi-year beneficial building electrification plan to achieve the targets established in subsection b. of this section. To qualify for approval, an electricity public utility plan shall:
(1) meet or exceed on-site greenhouse gas emission reduction targets set by the board; and
(2) be cost effective from a societal perspective utilizing a cost-effectiveness test that includes consideration of the environmental benefits of reducing greenhouse gas emissions, including methane emissions.
d. A beneficial building electrification plan may meet the greenhouse gas emission reduction targets set by the board pursuant to subsection b. of this section through the following means:
(1) conversion of fossil fuel-based space and water heating systems, including natural gas and propane systems as well as other unregulated fuels, to systems that employ high-efficiency electric heat pumps;
(2) replacement of fossil fuel based appliances with high-efficiency electric appliances such as induction cooking ranges and heat-pump clothes dryers;
(3) conversion of fossil fuel-based industrial equipment or processes to energy-efficient electric-powered equipment or processes; or
(4) market transformation programs aimed at educating and training contractors to use appliances, equipment, and systems that are high-efficiency.
2. This act shall take effect immediately.
STATEMENT
This bill would direct the New Jersey Board of Public Utilities (BPU) to establish a beneficial building electrification program, and would require electric public utilities to prepare and implement beneficial building electrification plans. As used in the bill, “beneficial electrification” means a change in end-use equipment from a nonelectric type to an efficient electric type for any building end use, including water heating, space heating, industrial process, or transportation, provided that the change: reduces cost from a societal perspective; reduces greenhouse gas emission, or promotes the increased use of the electric grid in off-peak hours.
The bill directs the BPU to adopt, no later than one year after the bill becomes law, rules and regulations establishing a beneficial building electrification program. As part of the program, the BPU would develop greenhouse gas emission reduction targets for beneficial building electrification programs implemented by each electric public utility in the State and require electric public utilities to prepare and implement beneficial building electrification plans. The BPU would:
(1) establish beneficial electrification program targets expressed in the amount of on-site greenhouse gas emission reductions;
(2) establish program design elements and minimum filing requirements to achieve the goals of the energy master plan;
(3) establish a cost recovery and performance incentive mechanism for programs established under the bill;
(4) determine whether the electric public utilities or the board would be responsible for the implementation of building electrification programs for new construction; and
(5) develop and provide direct incentives for the installation of electric heat pumps.
The bill would require each electric public utility to prepare a multi-year beneficial electrification plan to achieve the targets established by the BPU. To be approved by the BPU, an electricity public utility plan would be required to meet or exceed on-site greenhouse gas emission reduction targets set by the board and be cost effective from a societal perspective utilizing a cost-effectiveness test that includes consideration of the environmental benefits of reducing greenhouse gas emissions and methane emissions.
Under the bill, a beneficial building electrification plan may meet the greenhouse gas emission reduction targets set pursuant to the bill through the following:
(1) conversion of fossil fuel-based space and water heating systems, including natural gas and propane systems as well as other unregulated fuels, to systems that employ high-efficiency electric heat pumps;
(2) replacement of fossil fuel based appliances with high-efficiency electric appliances such as induction cooking ranges and heat-pump clothes dryers;
(3) conversion of fossil fuel-based industrial equipment or processes to energy-efficient electric-powered equipment or processes; or
(4) market transformation programs aimed at educating and training contractors to use appliances, equipment, and systems that are high-efficiency.