SENATE ENVIRONMENT AND ENERGY COMMITTEE

STATEMENT TO

SENATE, No. 4424

STATE OF NEW JERSEY

DATED:  MAY 22, 2025

      The Senate Environment and Energy Committee reports favorably Senate Bill No. 4424.

      This bill requires the Board of Public Utilities (board) to establish a three-year pilot program to authorize a gas public utility (utility) to recover the cost of a geothermal energy project (project), which project involves the replacement of aging or leaking natural gas pipelines with geothermal energy infrastructure, through the utility rates charged to its ratepayers.  To participate in the pilot program, a utility is to submit an infrastructure plan with any information regarding the project that the board deems necessary.  While reviewing a plan, the board is to consider:  (1) the size, scope, and scale of the project; (2) the cost of the project; (3) the expected benefits of the project; (4) the project’s financial impact on the utility’s ratepayers; (5) whether the project’s benefits justify the cost of the project; and (6) any other criteria that the board deems appropriate. 

     In addition, a utility is required to submit certain information on the operations of the pilot program to the board.  The bill requires the board to, at a minimum, summarize this information in an annual report to the Governor and the Legislature until the expiration of the pilot program.  In its third and final report, the board is required to also determine whether to expand the pilot program to a permanent program.  If the board decides to expand the pilot program, after considering laws, rules, and regulations in other states with similar programs, the board is to adopt rules and regulations to effectuate the transition from a pilot program to a permanent program.  The pilot program is to expire 30 days after the board’s submission of its third and final report on the pilot program, provided that the board has not decided to expand the pilot program to become a permanent program.  The board is to publish the reports on its Internet website. 

     In addition, the bill amends current law to provide that the term “public utility” is to include an entity that owns, operates, manages, and controls geothermal energy within the State. 

     Under the bill, “geothermal energy” means a renewable energy source derived from heat stored within the earth.  “Geothermal energy” includes networked geothermal energy and deep geothermal energy.  In addition, the bill defines “geothermal energy infrastructure” to mean utility-scale distribution infrastructure that supplies heating or cooling from geothermal energy sources.