SENATE ECONOMIC GROWTH COMMITTEE

STATEMENT TO

SENATE, No. 4304

with committee amendments

STATE OF NEW JERSEY

DATED:  JUNE 12, 2025

      The Senate Economic Growth Committee reports favorably and with committee amendments Senate Bill No. 4304.

      As amended and reported, this bill requires the Board of Public Utilities (board) to determine and consider the lowest reasonable return on equity (ROE) in determining whether an electric public utility’s, gas public utility’s, or water public utility’s rate increase proposed as part of a base rate case is just and reasonable.  To determine the lowest reasonable ROE, the board is required to develop or adopt and apply analytic models that reflect, at a minimum, State, federal, and industry standards for determining a fair and reasonable authorized ROE for electric public utilities, gas public utilities, and water public utilities.

     Under current law, the board may approve a petition by an electric public utility, gas public utility, or water public utility to increase, change, or alter any existing utility rates upon a determination that the increase, change, or alteration is just and reasonable.  When determining whether a requested rate adjustment is just and reasonable, the board considers:  (1) the public utility’s property valuation (i.e., the rate base); (2) the public utility’s expenses; and (3) the public utility’s rate of return, which includes the ROE.

COMMITTEE AMENDMENTS:

      The committee amended the bill to require the board to develop or adopt and apply more than one analytic model to determine the lowest reasonable return on equity.