LEGISLATIVE FISCAL ESTIMATE
[First Reprint]
SENATE, No. 4361
STATE OF NEW JERSEY
221st LEGISLATURE
DATED: JULY 2, 2025
SUMMARY
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Synopsis: |
Establishes "Summer Termination Program" for certain utility customers. |
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Type of Impact: |
Increase in annual State expenditures; potential decrease in local revenue; potential decrease in local expenditures. |
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Agencies Affected: |
Department of Community Affairs; Board of Public Utilities; local utility companies. |
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Office of Legislative Services Estimate |
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Fiscal Impact |
Annual |
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State Expenditure |
Up to $3.5 million |
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Potential Local Expenditure Decrease |
Indeterminate |
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Potential Local Revenue Decrease |
Indeterminate |
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· The Office of Legislative Services (OLS) concludes that this bill will result in an annual State cost increase of up to $3.5 million for the administrative costs of the Department of Community Affairs and the Board of Public Utilities, which will be required to dedicate staff time and resources to establish and administer the Summer Termination Program. This estimate represents a maximum State cost increase based on annual State spending for a similar program, the Winter Termination Program, between FY 2023 and FY 2025.
· The OLS anticipates that the enactment of this bill may result in reduced local annual revenue. By eliminating the possibility of utility service disconnections during the summer months, local utilities may experience a reduction in revenue that would otherwise be generated from reconnection fees and additional penalties.
· Additionally, local expenditures may decrease annually as utilities will not have to dispatch resources to disconnect and reconnect services for customers from June 15 to August 31 of each year. However, this may be partially offset by increased expenditures due to the required restoration of service on June 15 of each year, with no reconnection fee charged, for any residential customer who is eligible for and seeks protection under the program and whose utility services were terminated for nonpayment prior to June 15.
BILL DESCRIPTION
This bill directs the Department of Community Affairs and the Board of Public Utilities to each establish a Summer Termination Program that prohibits a local authority, municipal utility, rural electric cooperative, or public utility from discontinuing electric, sewer, or water service to certain residential customers during the period of June 15 through August 31, unless the discontinuation of service is due to a utility emergency.
In addition, each year, the bill requires a local authority, municipal utility, rural electric cooperative, or public utility to restore service on June 15 to any residential customer who is eligible for and seeks protection under the program and whose utility services were terminated for nonpayment prior to June 15. The bill prohibits a local authority, municipal utility, rural electric cooperative, or public utility from charging a reconnection fee for restoring service under the bill but permits these entities to verify, prior to restoring service, that a residential customer still resides in or occupies the place of residence for which service was terminated for nonpayment. The bill also requires a local authority, municipal utility, rural electric cooperative, or public utility to discuss a deferred payment arrangement with any residential customer participating in the program who is in arrears.
Under the bill, a residential customer is eligible for the program if the customer: (1) meets one or more of the categorical eligibility criteria for the Winter Termination Program; or (2) is unable to pay the customer’s local authority, municipal utility, rural electric cooperative, or public utility bill due to certain circumstances outlined in the bill that are beyond the customer’s control.
The bill also requires the department and the board to each establish a process for residential customers to self-certify their inability to pay a local authority, municipal utility, rural electric cooperative, or public utility bill due to certain circumstances beyond the customer’s control.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
The OLS concludes that this bill will result in an annual State cost increase of up to $3.5 million for the administrative costs of the department and the board, which will be required to dedicate staff time and resources to establish and administer the Summer Termination Program. This estimate represents a maximum State cost increase based on annual State spending for a similar program, the Winter Termination Program, between FY 2023 and FY 2025.
The OLS anticipates that the enactment of this bill may result in reduced local annual revenue. By eliminating the possibility of utility service disconnections during the summer months, local utilities may experience a reduction in revenue that would otherwise be generated from reconnection fees and additional penalties. Additionally, local expenditures may decrease annually as utility companies will not have to dispatch resources to disconnect and reconnect services for customers from June 15 to August 31 of each year. However, this may be partially offset by increased expenditures due to the required restoration of service on June 15 of each year, with no reconnection fee charged, for any residential customer who is eligible for and seeks protection under the program and whose utility services were terminated for nonpayment prior to June 15.
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Section: |
Authorities, Utilities, Transportation and Communications |
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Analyst: |
Associate Fiscal Analyst |
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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.).