LEGISLATIVE FISCAL ESTIMATE

[First Reprint]

ASSEMBLY, No. 3781

STATE OF NEW JERSEY

221st LEGISLATURE

 

DATED: JUNE 24, 2024

 

 

SUMMARY

 

Synopsis:

Requires BPU to develop program to promote certain energy businesses in State.

Type of Impact:

Annual State expenditure increase.

Agencies Affected:

Board of Public Utilities.

 

 

Office of Legislative Services Estimate

Fiscal Impact

 

Annual

 

 

State Expenditure Increase

 

Indeterminate

 

 

 

 

 

·         The Office of Legislative Services (OLS) estimates the bill would result in an indeterminate but incidental annual State expenditure increase to establish a new program that would promote women-owned, minority-owned, veteran-owned, or lesbian, gay, bisexual, transgender, or questioning (LGBTQ)-owned energy businesses. 

·         The higher costs would stem from an increase in the Board of Public Utilities’ administrative workload to develop and administer the new program and to monitor context specific energy-use percentages for each energy business, but notes that these additional tasks may be subsumed within existing staff duties. 

·         Under the bill, the program may include public information campaigns, marketing, advertising, incentives, or other means and methods to promote the program.  The scope of the campaigns will depend on decisions made by the Board of Public Utilities.

 

BILL DESCRIPTION

 

      The bill requires the Board of Public Utilities to develop a new program with the objective of promoting women-owned, minority-owned, veteran-owned, or LGBTQ-owned energy businesses in the State. Energy businesses are defined as energy brokers, electric power suppliers, energy agents, gas suppliers, marketers, board-licensed energy agents, energy consultants, or private energy aggregators.

     The bill authorizes the program to include public information campaigns, marketing, advertising, incentives, or other means and methods determined appropriate by the board.  The bill establishes certain target percentages for the energy procured by businesses and public entities that utilize third-party energy suppliers.  These target percentages are to culminate, in the fourth energy year after the program is established and thereafter, with the goal that 25 percent of the energy procured by businesses and public entities that utilize third-party energy suppliers be procured from a women-owned, minority-owned, veteran-owned, or LGBTQ-owned energy business.  The target percentages for the program are to be measured according to graduated annual rates as follows:

 

Year of Implementation

Target Rate of Natural Gas/Electricity Purchased

1st energy year

5 percent

2nd energy year

11 percent

3rd energy year

18 percent

4th energy year

25 percent

 

     The bill establishes certain requirements for determining which businesses qualify for the program and directs the board to develop an application process for businesses that seek to participate in the program.  Finally, the bill requires the board, and each electric and gas public utility, to post a list of approved energy businesses on their websites.  It also requires the board to track the success of the program in meeting the targets established by the bill and post updates on the board’s website.

 

 

FISCAL ANALYSIS

 

EXECUTIVE BRANCH

 

      None received.

 

OFFICE OF LEGISLATIVE SERVICES

 

      The OLS estimates the bill would result in an indeterminate but incidental annual State expenditure increase to establish a new program that would promote women-owned, minority-owned, veteran-owned, and LGBTQ-owned energy businesses.  The higher costs would stem from an increase in the Board of Public Utilities’ administrative workload to develop and administer the new program and to monitor procurement percentages for the targeted energy businesses, but notes that these additional tasks may be subsumed within existing staff duties.

      Under the bill, the program may include a public information campaign, marketing, advertising, the provision of incentives, or other means and methods to promote the program.  The scope of the campaign will depend on decisions made by the Board of Public Utilities.

      Other states with similar legislation, such as Florida and California, estimate minor expenditure increases as a result of requiring comparable minority-owned business promotion activities. Florida practices small business promotion by identifying participation target percentages for minority-owned businesses in each water management district. The promotion program encourages small businesses that are owned by women and minorities to participate in the procurement and contract activities of the water management district.  The fiscal analysis estimated no tax or fee issues, private sector impact, or government sector impact as a result of the bill.  

 

Section:

Environment, Agriculture, Energy, and Natural Resources

Analyst:

Anna Heckler

Assistant Fiscal Analyst

Approved:

Thomas Koenig

Legislative Budget and Finance Officer

 

This legislative fiscal estimate has been produced by the Office of Legislative Services due to the failure of the Executive Branch to respond to our request for a fiscal note.

 

This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).