An Act establishing uniform Statewide reliability standards for public utilities and electric power suppliers and amending P.L.1999, c.23 and supplementing Title 48 of the Revised Statutes.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. (New section) Sections 1 through 6 and section 8 of P.L. , c. (C. ) (pending before the Legislature as this bill) shall be known and cited as the "Electric and Gas Utility Service Reliability Act."

2. (New section) The Legislature finds and declares that:

a. Reliable electricity and natural gas utility service is essential to the health, welfare, and safety of the American people and necessary to serve our economy;

b. State agencies require enough information to make appropriate regulatory decisions affecting the electric and gas public utility industry and consumers in New Jersey;

c. There is a need for more proactive discussions among appropriate State government agencies, regional entities, and electric and gas public utilities about how to work together in order to ensure electric and gas service reliability;

d. There is a need for increased certainty and greater flexibility to preserve electric and gas service reliability and to mitigate additional rate increases through the timely maintenance of the electric and gas utility network infrastructure; and

e. The adoption of uniform Statewide standards of acceptable performance, in the areas of service reliability and restoration of service, by electric and gas public utilities doing business in the State will help minimize health and safety problems occurring due to utility service hazards or disruptions.

3. (New section) As used in P.L. , c. (C. ) (pending before the Legislature as this bill):

"Board" means the Board of Public Utilities.

"Public utility" means a public utility, as that term is defined in R.S.48:2-13, that is under the jurisdiction of the Board of Public Utilities, is investor-owned, and transmits and distributes either electricity or natural gas to end users within this State.

4. (New section) a. Consistent with federal law, the board shall establish uniform Statewide standards of acceptable performance for service reliability and restoration of service for public utilities doing business in the State. These standards shall replicate national standards for service reliability and restoration concerning the transmission of electricity and natural gas, including but not limited to, as appropriate, any standards adopted by the North American Electric Reliability Corporation, the Federal Energy Regulatory Commission, and the Office of Pipeline Safety, Pipeline and Hazardous Materials Safety Administration, in the United States Department of Transportation, subject to adjustment, as appropriate, to electricity and natural gas distribution service and to accommodate any factors unique to the State. The standards shall address the following components of utility service:

(1) Electric power and natural gas supply resource and demand balancing, flow monitoring, and stabilization;

(2) Critical infrastructure protection and control;

(3) Communications coordination;

(4) Emergency preparedness and operations;

(5) Facilities design and operations maintenance;

(6) Personnel performance, training, and qualifications requirements;

(7) Electric power and natural gas system disturbance, contingency response, and system restoration; and

(8) Reliability operating limits coordination.

b. Following the promulgation of any rules and regulations, pursuant to the "Administrative Procedure Act" P.L.1968, c.410 (C.52:14B-1 et seq.), necessary to effectuate the provisions of subsection a. of this section, the board may open a full investigation of any alleged failure of a public utility to meet the standards established pursuant to subsection a. of this section. The investigation shall seek to determine whether a public utility has committed a violation of the board's standards of acceptable performance.

5. (New section) a. Each public utility conducting business in the State shall annually, on or before May 15, submit to the board a service reliability plan for the board's review and approval. The service reliability plan shall be designed for the provision of safe and reliable service and the reasonably prompt restoration of service in the event of a widespread outage in the service area of the public utility due to storms or other causes beyond the control of the public utility, and the provisions of the plan shall reflect the standards established pursuant to subsection a. of section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill).

b. After review of a public utility's service reliability plan, the board may request that the public utility amend the plan. If the board finds a material deficiency in the plan, the board may order the public utility to make such modifications as it deems reasonably necessary to remedy the deficiency.

c. The board shall also have the authority to open an investigation to review the performance of any public utility in restoring service during a widespread outage in the utility's service area. If, after evidentiary hearings or other investigatory proceedings, the board finds that, as a result of the failure of the public utility to implement its service reliability plan, the length of the outages were materially longer than they would have been but for the public utility's failure, the board may impose a fine commensurate with the length and severity of the damage caused by that failure.

6. (New section) The Board of Public Utilities shall undertake a detailed study of electric and gas utility service reliability and its impact on electricity and natural gas prices, economic activity, the number of jobs created to maintain service reliability, and the reliability of electric and natural gas service in this State. Within three years after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), the board shall prepare a report of its study and shall provide a copy thereof to the Governor and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), to the Legislature.

7. Section 29 of P.L.1999, c.23 (C.48:3-78) is amended to read as follows:

29. a. A person shall not offer to provide or provide electric generation service to retail customers in this State unless that person has applied for and obtained from the board, pursuant to standards adopted by the board, an electric power supplier license. Persons providing such services on the effective date of [this act] P.L.1999, c.23 (C.48:3-49 et al.) shall have 120 days to apply for and receive the requisite license.

b. The board shall issue a license to an electric power supplier that is in compliance with the licensing standards adopted pursuant to subsection c. of this section. A license shall expire one year from the date of issuance unless the holder thereof pays to the board, within 30 days before the expiration date, a renewal fee accompanied by a renewal application on a form prescribed by the board. If a licensee has made, in accordance with this section and any applicable board rules or regulations, timely and sufficient application for renewal, the license shall not expire until the application has been reviewed and acted upon by the board. Nothing in this section shall limit the authority of the board to deny, suspend or revoke a license at any time, consistent with the provisions of [this act] P.L.1999, c.23 (C.48:3-49 et al.).

c. Notwithstanding any provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) to the contrary, the board shall initiate a proceeding and shall adopt, in consultation with the Division of Consumer Affairs in the Department of Law and Public Safety, after notice, provision of the opportunity for comment, and public hearing, interim electric power supplier licensing standards within 90 days of the effective date of [this act] P.L.1999, c.23 (C.48:3-49 et al.). Such standards shall be effective as regulations immediately upon filing with the Office of Administrative Law and shall be effective for a period not to exceed 18 months, and may, thereafter, be amended, adopted or readopted by the board in accordance with the provisions of the "Administrative Procedure Act." The standards shall include, but need not be limited to, the following requirements that an electric power supplier:

(1) Register with the board, which shall include the filing of basic information pertaining to the supplier, such as name, address, telephone number, and company background and profile, and a list of the services or products offered by the supplier. A supplier shall provide annual updates of this information to the board. The registration shall also include:

(a) Evidence of financial integrity;

(b) Information on any disciplinary proceedings or actions by law enforcement authorities in which the electric power supplier, its subsidiaries, affiliates or parent has been involved in this State or any other states;

(c) The ownership interests of the supplier including the interests owned by the supplier and the interests owning the supplier;

(d) The name and address of the in-State agent of the supplier that is authorized to receive service of process;

(e) The name and address of the in-State customer service agent for the supplier; and

(f) The quantity of retail electric sales made in this State during the 12 months preceding the application.

(2) Agree to meet all reliability standards established by the Mid-Atlantic Area Council of the North American Electric Reliability Council or its successor, the PJM Interconnection, L.L.C. independent system operator or its successor, the Federal Energy Regulatory Commission, the board, or any other state, regional, federal or industry body with authority to establish reliability standards. The board may establish specific standards applicable to electric power suppliers to ensure the adequacy of electric power capacity, if it determines that standards established by any other state, regional, federal or industry bodies are not sufficient to assure the provision of safe, adequate, proper and reliable electric generation service to retail customers in this State. Such reliability standards shall ensure bulk power system operations and security, and shall ensure the adequacy of electric power capacity necessary to meet retail loads;

(3) Maintain an office within this State for the purposes of accepting service of process, maintaining such records as the board requires and ensuring accessibility to the board, consumers and electric public utilities;

(4) Maintain a surety bond under terms and conditions as determined by the board;

(5) Provide a description of the products and services to be rendered;

(6) Comply with such specific standards of conduct for electric power suppliers as the board shall adopt; and

(7) Provide through legal certification by an officer of the electric power supplier such information as the board or its staff shall require to assist the board in making any determination concerning revocation, suspension, issuance or renewal of the supplier's license pursuant to section 32 of [this act] P.L.1999, c.23 (C.48:3-81).

d. An electric public utility shall:

(1) Incorporate by reference the board's licensing requirements in its tariffs for transmission and distribution service;

(2) Apply the licensing requirements and other conditions for access to the transmission and distribution system uniformly to all electric power suppliers; and

(3) Report alleged violations of the board's licensing requirements of which it becomes aware to the board.

e. The board shall establish an alternative dispute resolution program to resolve any licensure or access dispute between an electric power supplier and an electric public utility. The board may establish reasonable fees, not to exceed actual costs, for the provision of alternate dispute resolution services. If informal resolution of the dispute is unsuccessful, the board shall adjudicate the dispute as a contested case pursuant to the "Administrative Procedure Act."

f. The board shall monitor the retail supply market in this State, and shall consider information available from the PJM Interconnection, L.L.C. independent system operator or its successor with respect to the conduct of electric power suppliers. The board shall monitor proposed acquisitions of electric generating facilities by electric power suppliers as it deems necessary, in order to ascertain whether an electric power supplier has or is proposed to have control over electric generating facilities of sufficient number or strategic location to charge non-competitive prices to retail customers in this State. The board shall have the authority to deny, suspend or revoke an electric power supplier's license, after hearing, if it determines that an electric power supplier has or may acquire such control, or if the electric power supplier's violations of the rules, regulations or procedures of the PJM Interconnection, L.L.C. independent system operator or its successor may adversely affect the reliability of service to retail customers in this State or may result in retail customers being charged non-competitive prices.

g. The board [may] shall establish uniform reliability, safety, and service quality standards for electric power suppliers, and nothing in [this act] P.L.1999, c.23 (C.48:3-49 et al.) shall limit the authority of the board to promulgate such uniform reliability, safety, or service quality standards or to resolve complaints regarding the quality of electric generation service.

h. The board may establish, by written order pursuant to subsection c. of this section or by rule, a licensure fee to cover the costs of licensing electric power suppliers. The fee shall include a reasonable surcharge to fund a consumer education program in this State established pursuant to section 36 of [this act] P.L.1999, c.23 (C.48:3-85).

i. Any provision of [this act] P.L.1999, c.23 (C.48:3-49 et al.) to the contrary notwithstanding, any person acting as an energy agent shall be required to register with the board. This registration shall include, but need not be limited to, the name, address, telephone number, and business affiliation or profile of the energy agent, evidence of financial integrity as determined by the board, and evidence of knowledge of the energy industry. This registration shall be updated annually. Nothing in this subsection shall be construed to limit or exempt an energy agent from liability under any other law pertaining to any activity which an energy agent may engage in.

(cf: P.L.1999, c.23, s.29)

8. (New section) The board shall promulgate any rules and regulations pursuant to the "Administrative Procedure Act" P.L.1968, c.410 (C.52:14B-1 et seq.) necessary to effectuate the provisions of this act.

9. This act shall take effect immediately, but subsection b. of section 4 and subsection c. of section 5 shall remain inoperative for 180 days following the date of enactment.

STATEMENT

This bill requires the Board of Public Utilities ("board") to establish uniform Statewide standards of acceptable performance for service reliability and restoration of service after an outage that every investor-owned electric and gas public utility ("utility") in the State must follow. The standards are intended to foster the adoption of best operational practices and shall replicate national standards for service reliability and restoration, subject to adjustment as appropriate to accommodate any factors unique to the State. The standards shall address the following components of utility service: 1) electric power and natural gas supply resource and demand balancing, flow monitoring, and stabilization; 2) critical infrastructure protection and control; 3) communications coordination; 4) emergency preparedness and operations; 5) facilities design and operations maintenance; 6) personnel performance, training, and qualifications requirements; 7) electric power and natural gas system disturbance, contingency response, and system restoration; and 8) reliability operating limits coordination.

The bill provides that, following the promulgation of any rules and regulations implementing the board's service reliability standards, the board may open a full investigation of any alleged failure of a utility to meet these standards. The investigation shall seek to determine whether a utility has committed a violation of the board's standards.

The bill also requires every utility to file a service reliability plan with the board for the board's review and approval. The service reliability plan shall be designed for the provision of safe and reliable service and the reasonably prompt restoration of service in the event of a widespread outage in the service area of the utility due to storms or other causes beyond the control of the utility, and the provisions of the plan shall reflect the board's service reliability standards. The bill gives the board the authority to open an investigation to review the performance of any utility in restoring service during a widespread outage in the utility's service area. If, after evidentiary hearings or other investigatory proceedings, the board finds that, as a result of the failure of the utility to implement its service reliability plan, the length of the outages were materially longer than they would have been but for the public utility's failure, the board may impose a fine commensurate with the length and severity of the damage caused by that failure.

Further, the bill requires the board to undertake a detailed study and, within three years of the effective date of the bill, submit to the Governor and Legislature a report of electric and gas utility service reliability and its impact on electricity and natural gas prices, economic activity, the number of jobs created to maintain service reliability, and the reliability of electric and natural gas service in this State.

Finally, the bill revises the provisions of the "Electric Discount and Energy Competition Act," P.L.1999, c.23 (C.48:3-49 et al.) requiring the board to establish service standards for electric power suppliers licensed within this State to mandate that these standards, too, be uniform and address reliability.