Sponsored by:
Assemblyman ALEXANDER "AVI" SCHNALL
District 30 (Monmouth and Ocean)
Assemblywoman ROSAURA "ROSY" BAGOLIE
District 27 (Essex and Passaic)
Assemblywoman ELIANA PINTOR MARIN
District 29 (Essex and Hudson)
SYNOPSIS
Requires BPU to determine and consider lowest reasonable return on equity before approving electric, gas, and water public utility base rate cases.
CURRENT VERSION OF TEXT
As amended by the General Assembly on May 22, 2025.
An Act concerning the approval process for electric, gas, and water public utility rate increases and supplementing Title 48 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. As used in this section:
“Board” means the Board of Public Utilities.
“Electric public utility” means a public utility, as that term is defined in R.S.48:2-13, that transmits and distributes electricity to end users within the State.
“Gas public utility” means a public utility, as that term is defined in R.S.48:2-13, that distributes gas to end users within the State.
“Return on equity” means the return on the equity portion of the rate base that electric public utilities, gas public utilities, or water public utilities are authorized to collect as part of a rate charged to ratepayers.
“Water public utility” means a public utility, as that term is defined in R.S.48:2-13, that transports and provides water to end users within the State.
b. In determining just and reasonable rates for any electric public utility, any gas public utility, or any water public utility pursuant to R.S.48:2-21, R.S.48:2-21.1, or section 31 of P.L.1962, c.198 (C.48:2-21.2), the board shall determine and consider the lowest reasonable return on equity as a factor in determining if an increase, change, or alteration to any existing rates, charges, or schedules thereof is just and reasonable.
c. To determine the lowest reasonable return on equity pursuant to subsection b. of this section, the board shall develop or adopt and apply 1[an analytic model] analytic models1 that 1[reflects] reflect1, at a minimum, State, federal, and industry standards for determining a fair and reasonable authorized return on equity for electric public utilities, gas public utilities, and water public utilities.
d. The board shall adopt, pursuant to the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), rules and regulations as may be necessary for the implementation of this act.
2. This act shall take effect on the first day of the sixth month next following enactment and shall apply to petitions submitted to the Board of Public Utilities pursuant to R.S.48:2-21, R.S.48:2-21.1, or section 31 of P.L.1962, c.198 (C.48:2-21.2) on or after the effective date. The Board of Public Utilities may take any anticipatory administrative action in advance as shall be necessary for the implementation of this act.