SENATE BUDGET AND APPROPRIATIONS COMMITTEE

STATEMENT TO

[First Reprint]

ASSEMBLY, No. 5462

with committee amendments

STATE OF NEW JERSEY

DATED:  January 8, 2025

      The Senate Budget and Appropriations Committee reports favorably and with committee amendments Assembly Bill No. 5462 (1R).

      As amended, this bill requires each electric public utility in the State to develop and submit to the Board of Public Utilities (BPU) a tariff for large load customers. 

      As defined by the bill, “large load customer” means a commercial customer for retail electric service that is a centralized facility or facilities with an aggregate monthly demand of more than 100 megawatts.  Under the bill, facilities may be aggregated based upon factors such as common ownership, effective control, and electrical infrastructure.

      The bill requires the tariff to be designed to:  (1) ensure that other electric public utility customers do not subsidize large load customers and all costs attributable to the electric public utility’s large load customers are assigned to the large load customers; (2) contain protections necessary to ensure that other electric public utility customers are not placed at risk for paying stranded costs associated with the electric public utility serving the large load customer; and (3) incentivize large load customers to develop and utilize methods to increase energy efficiency, including through the use of technologies that capture and utilize the heat produced by the large load customer.  Beginning one year after the bill’s enactment, an electric public utility is to apply the tariff to each large load customer located in the electric public utility’s service area.

      The bill also provides that all rates, terms, and conditions established by the BPU for large load customers are to reasonably protect other electric public utility customers against increased costs resulting solely or primarily from serving large load customers.  The bill authorizes the BPU to impose certain requirements on electric public utilities in order to protect other electric public utility customers, including ensuring that any new large load customer provides adequate financial guarantees that they will pay for at least 85 percent of service they request for a period of not less than 10 years from when service commences.

      As amended and reported by the committee, Assembly Bill No. 5462 (1R) is identical to Senate Bill No. 4307 (1R), which was also amended and reported by the committee on this date.

COMMITTEE AMENDMENTS:

      The committee amendments to the bill:

      (1) extend the scope of the bill to all large load customers, rather than large load data centers only, and add a definition for “large load customer”;

      (2) modify the provisions that the large load customer tariff is required to contain;

      (3) authorize the BPU to require that any new large load customer provides adequate financial guarantees that they will pay for, rather than take, at least 85 percent of service they request for a period of 10 years;

      (4) clarify language concerning ratepayer protection in subsection e. of section 1 of the bill; and

      (5) make technical and clarifying changes.

FISCAL IMPACT:

      This bill has not been certified as requiring a fiscal note.