SENATE ENVIRONMENT AND ENERGY COMMITTEE
STATEMENT TO
SENATE, No. 684
with committee amendments
STATE OF NEW JERSEY
DATED: FEBRUARY 12, 2026
The Senate Environment and Energy Committee reports favorably and with committee amendments Senate Bill No. 684.
As amended, this bill would require the Board of Public Utilities (board) to establish a four-year pilot program to authorize a gas public utilities to recover the cost of one or more thermal energy network projects, which would establish thermal energy network infrastructure in lieu of existing new natural gas infrastructure for new or existing developments, particularly in areas with aging or leaking natural gas pipeline or without existing natural gas infrastructure, through the utility rates charged to its ratepayers. The board would be authorized to locate a maximum of one project in each of the northern, central, southern, and coastal regions of the State. To participate in the pilot program, a utility would submit a thermal infrastructure plan with any information regarding the proposed project that the board deems necessary. While reviewing a plan, the board would consider: (1) the size, scope, and scale of each project; (2) the lifecycle cost of each project; (3) the expected benefits of the project; (4) the project’s financial impact on the utility’s ratepayers; (5) whether each project’s benefits justify the cost of the project; (6) the extent to which each project serves low- to moderate-income households, residents of overburdened communities, and other vulnerable populations; (7) the degree to which each project targets or mitigates highly inefficient buildings; (8) the potential opportunities for cost-effective retrofits or the inclusion of future potential for thermal waste heat system tie-ins; (9) the extent to which the utility has identified non-ratepayer sources of funding; (10) the degree to which each project targets or mitigates old or leaking natural gas infrastructure, or presents an alternative to potential natural gas expansion; and (11) any other criteria that the board deems appropriate.
In addition, a utility would be required to submit certain information on the operations of the pilot program to the board. The bill would require, no later than six months after the expiration of the pilot program, the board to, at a minimum, summarize this information in an annual report to be published on its Internet website and submit to the Governor and the Legislature. The bill would also require the board to determine, no later than six months after the expiration of the pilot program, whether or not to extend the pilot program, convert the pilot program to a permanent program, or recommend that New Jersey allow the distribution of geothermal energy as a regulated public utility service. If the board decides to convert the pilot program to a permanent 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.
Finally, the bill amends current law to provide that the term “public utility” is to include an entity that owns, operates, manages, and controls thermal energy distribution within the State, and to provide exceptions to certain statutory provisions that prohibit the board from regulating the sale of thermal energy
This bill was prefiled for introduction in the 2026-2027 session pending technical review. As reported, the bill includes the changes required by technical review, which has been performed.
COMMITTEE AMENDMENTS:
The committee amendments to the bill:
(1) expand the scope of the pilot program to include all thermal energy sources and thermal energy technologies, rather than exclusively geothermal;
(2) revise certain terms and definitions and add the term “thermal energy network”;
(3) extend the length of the pilot program from three years to four years;
(4) require the thermal network projects to be located in the northern, central, southern, and coastal regions of the State;
(5) allow utilities to recover the cost of one or more thermal energy network projects rather than one project;
(6) provide that the board may establish a new tariff for the sale and delivery of thermal energy to participating customers;
(7) clarify that the board’s review process for submission of applications by utilities for the pilot program must include the minimum filing requirements established by the board;
(8) allow the board to establish one or more application periods for the pilot program and to approve, deny, request modifications, or partially approve and deny a submitted thermal infrastructure plan;
(9) expand the scope of what the board is to consider when reviewing a utility’s thermal infrastructure plan;
(10) clarify that no utility that provides safe, proper, and adequate thermal energy distribution services to customers via a project approved as a part of the pilot program is to be deemed to be in violation of subsection a. of R.S.48:3-3 because it refuses to also provide natural gas distribution services to such customers;
(11) require the board to publish on its Internet website and submit to the Governor and Legislature one final report rather than three annual reports;
(12) modify both the time for the board to issue the report on the pilot program from one year to six months and the scope of the report to include the implementation and results of the pilot program and whether or not to extend, convert to a permanent program, or allow distribution of geothermal energy as a regulated utility;
(13) extend the time for the board to issue an order implementing the pilot program and determine necessary rules and regulations from 60 days to 90 days;
(14) modify the bill’s effective date so that the bill takes effect immediately after enactment rather than on the first day of the sixth month after enactment; and
(15) make technical and clarifying changes.