A1072

An Act concerning energy storage 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 the same as the term is defined in section 3 of P.L.1999, c.23 (C.48:3-51).

“Overburdened community” means the same as the term is defined in section 2 of P.L.2020, c.92 (C.13:1D-158).

b. The board shall establish, by board order, a distributed capacity program to support the development by electric public utilities of 500 megawatts of battery storage capacity in the State by 2030, with the goal of increasing grid stability, reducing interconnection timeframes, and reducing system cost.

c. No later than 12 months after the effective date of this section, the board shall establish minimum requirements for the distributed capacity program, including, but not limited to:

(1) the number of megawatt hours of storage capacity each electric public utility shall develop;

(2) minimum and maximum size and other requirements for storage resources participating in the program;

(3) provisions concerning the compatibility and alignment of storage asset deployment with any demand optimization programs established by the board, as well as any other programs that compensate participants for grid services;

(4) standards for electric public utility selection of developers and vendors, including use of competitive procurement processes where practicable;

(5) enhanced incentives for storage resources sited in overburdened communities and areas of redevelopment;

(6) options for leasing storage assets to customers;

(7) requirements to ensure that low- and moderate-income customers and customers in overburdened communities benefit from the program;

(8) provisions to leverage all available funding sources, including any available financing from the United States Department of Energy and any applicable federal tax credits to reduce costs to New Jersey ratepayers; and

(9) any categories of costs associated with the electric public utilities’ implementation of the program that may be recovered from ratepayers.

d. After the board issues minimum filing requirements, each electric public utility shall file an implementation and reporting plan with the board for its proposed implementation of the program and its proposed use of battery storage and other distributed assets in the program. The board shall review each plan and may request changes to the submitted plan prior to board action. The board may approve, approve in part, or deny each submitted plan, and shall determine the appropriate level of spending for each electric public utility’s program and establish an appropriate rate of return on equity, which may be less than the rate of return established in the electric public utility’s last base rate case. In determining the appropriate level of spending and appropriate procurement targets, the board shall consider the impact on electric customer bills and shall ensure that program results in cost savings to ratepayers, taking into account, among other things, avoided distribution system upgrades, and impact on energy, capacity, and ancillary services markets.

e. Each electric public utility shall file an annual report with the board to demonstrate its compliance with its approved implementation and reporting plan and the board’s minimum requirements. If the electric public utility fails to achieve required program metrics, including, but not limited to, required peak demand reduction, and avoided energy system cost, the board may disallow recovery of all or some costs, unless such failure is due to factors beyond the electric public utility’s control and reasonable ability to predict.

2. The board shall, in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), adopt rules and regulations as necessary to implement this act.

3. This act shall take effect immediately.

STATEMENT

This bill would direct the Board of Public Utilities (BPU) to establish a distributed capacity program, which would be designed to support the development by electric public utilities of 500 megawatts of battery storage capacity in the State by 2030. The bill would require the BPU to establish minimum requirements for the program, but electric public utilities would be responsible for implementation. Each electric public utility would be required to file an implementation and reporting plan with the BPU, as well as an annual report.