An Act concerning the establishment and funding of certain energy conservation programs and supplementing P.L.2005, c.215 (C.48:2-92 et seq.).

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

1 a. Notwithstanding any law, rule, regulation, or order to the contrary, the board shall, within 60 days of the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), initiate a proceeding to establish, after notice and provision of the opportunity for comment and public hearing, programs to assist large commercial and industrial customers of electric public utilities and electric power suppliers, to reduce their energy demand.

b. The programs to be established pursuant to subsection a. of this section shall include, but not be limited to:

(1) initiatives to encourage customers within the board's commercial and industrial energy pricing class to participate in demand-response energy conservation programs offered by the PJM Interconnection, L.L.C. independent system operator or its successor with respect to electric public utilities and electric power suppliers; and

(2) initiatives to finance the installation of hourly meters, real-time telemetry equipment, and other advanced meter technology for such commercial and industrial customers.

c. The board shall, within 180 days of the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), conclude the proceeding initiated pursuant to subsection a. of this section and shall issue an order establishing the programs pursuant to subsection b. of this section.

d. The board shall, within one year after the issuance of the order establishing the programs pursuant to subsection c. of this section and during each subsequent one-year period following the date of issuance of that order, provide the Legislature with a report on the effectiveness of the programs, and any recommendation for any changes thereto, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1).

e. The programs established pursuant to subsection c. of this section shall be funded through the use of a portion of the monies received by the board as a result of the board's inclusion of a retail margin in the prices charged to certain larger non-residential customers under the board's continuing regulation of basic generation service pursuant to sections 3 and 9 of P.L.1999, c.23 (C.48:3-51 and 48:3-57). Nothing in P.L.2005, c.215 (C.48:2-92 et seq.) shall be interpreted to restrict the board's discretion to set the level of the retail margin. Should the board determine to reduce or eliminate the retail margin or take any action that might implicate the funding of the programs established pursuant to subsection c. of this section, the board shall assess the continuing need for such programs and upon a determination that such programs remain necessary and useful shall consider alternative funding options.

As used in this section, "commercial and industrial energy pricing class customers" means that group of larger non-residential customers, as determined by periodic board order, for which the basic generation service is hourly-priced.

2. This act shall take effect immediately.

STATEMENT

This bill directs the Board of Public Utilities (the "board") to establish programs to assist large commercial and industrial electric power customers with reduction of their energy usage through demand-side management programs offered by the PJM Interconnection, L.L.C., the regional electric power transmission organization serving New Jersey. The demand-side management programs include the installation of various energy-saving devices such as hourly meters, real-time telemetry equipment, and advanced meter technology, as well as other energy conservation programs that may be established by the board.

The PJM Interconnection, L.L.C. is the Independent System Operator serving all or part of five mid-Atlantic states including New Jersey as well as certain mid-Western states, and is responsible for maintaining the safety, adequacy, reliability, and security of the electric power transmission.

The bill provides for the funding of energy conservation programs to be established by the board through the use of a portion of the monies received by the board as a result of the board's inclusion of a retail margin in the prices charged to certain larger non-residential customers under the board's continuing regulation of basic generation service pursuant to P.L.1999, c.23 (C.48:3-51 and 48:3-57). The retail margin is that component of basic generation service which is added to the wholesale price of electric power to reflect the cost of providing electric service at retail.