As part of the Assembly Democrats’ continued efforts to lower utility costs for ratepayers, the Assembly Telecommunications and Utilities Committee on Monday advanced A2757, which would close a critical loophole in the Federal Power Act that has resulted in added costs for New Jersey ratepayers. The legislation is sponsored by Assembly members Andrea Katz, Clinton Calabrese, and Ellen Park.
During Monday’s committee hearing, New Jersey’s Rate Counsel Brian Lipman testified that this legislation could save New Jersey ratepayers $60 million per year.
“By closing this loophole, we are ensuring that we are putting New Jersey ratepayers first,” said Assemblywoman Katz (D-Atlantic, Burlington). “We must do all we can to keep energy costs affordable for our residents, and this bill is part of our multi-prong approach to lower utility expenses. $60 million is real savings that would go back into the pockets of our ratepayers every year.”
The legislation would mandate that transmission operators in New Jersey become members of a regional transmission organization (RTO) such as PJM Interconnection, and would eliminate a surcharge passed onto consumers related to utility transmission projects. The surcharge serves as an added profit incentive for the companies that build and operate the projects. Recently, the Federal Energy Regulatory Commission ruled that utilities required by state law to participate in an RTO are no longer eligible for this additional profit incentive.
“New Jersey ratepayers should not be footing the bill to incentivize what has already become standard practice across the energy industry,” said Assemblyman Calabrese (D-Bergen, Passaic). “A2757 helps eliminate unnecessary costs for ratepayers while supporting a reliable electric grid that residents and businesses depend on every day.”
When the incentive was established more than 20 years ago, it was designed to encourage utilities across the country to join RTOs to improve energy reliability, increase efficiency, and lower costs. But as RTO membership has become commonplace, this incentive has become an unnecessary burden on New Jersey ratepayers.
“This bill would not only lower costs for ratepayers; it would also deliver a more reliable electric grid for New Jersey,” said Assemblywoman Park (D-Bergen). “This legislation ensures that singular, independently operated transmission systems never become a burden on the reliability of our grid or on the wallets of the ratepayers.”