Sponsored by:
Assemblyman ALEX SAUICKIE
District 12 (Burlington, Middlesex, Monmouth and Ocean)
SYNOPSIS
“Energy Cost Fairness Act”; prohibits BPU from authorizing rate increases for electric and gas public utilities that charge inclining block rates for residential customers.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning inclining block rates and supplementing Title 48 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. This act shall be known and may be cited as the “Energy Cost Fairness Act.”
2. a. As used in this section:
“Board” means the Board of Public Utilities or any successor agency.
“Electric public utility” means a public utility, as that term is defined in R.S.48:2-13, that distributes electricity to end users within the State.
“Gas public utility” means a public utility, as that term is defined in R.S.48:2-13, that distributes gas to end users within the State.
“Inclining block rate” means a rate structure that imposes higher rates once usage exceeds certain thresholds, regardless of when the electricity or gas is consumed.
b. Notwithstanding any law, rule, regulation, or order to the contrary, the board shall not authorize any rate increase by an electric public utility or a gas public utility where the utility assesses a charge that includes an inclining block rate for residential customers.
c. The board shall adopt, pursuant to the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), rules and regulations as may be necessary to implement the provisions of this section.
3. This act shall take effect immediately.
STATEMENT
This bill, known as the “Energy Cost Fairness Act,” prohibits the Board of Public Utilities (board) from authorizing any rate increase by an electric public utility or a gas public utility where the utility assesses a charge that includes an inclining block rate for residential customers.
Utilities have historically utilized inclining block rates to encourage energy conservation by charging higher rates once a customer’s usage exceeds a certain threshold. However, according to the December 9, 2024 report prepared for the board titled, “An Assessment of Energy Affordability in New Jersey and Alternative Policy and Rate Options,” inclining block rates are outdated and are not cost-reflective, meaning that the rates do not reflect the actual cost of generating that power. It is the sponsor’s intent to eliminate this rate structure, which is expected to reduce electricity rates for residential customers during the summer months.