New Jersey Assembly Bill A577

New Jersey 2022-2023 Regular Session

• Introduced: 1/11/22
• Refer: 1/11/22
• Refer: 12/5/22

Caption

Directs BPU to establish program concerning renewable natural gas; provides gas public utilities with customer rate recovery mechanism for costs associated with program.

Impact

The passage of A577 is expected to have significant implications on state laws relating to energy and environmental policy. By allowing gas public utilities to actively procure RNG and invest in related infrastructure, the bill aligns with New Jersey's strategy to transition towards a low carbon energy economy. The BPU will need to establish regulations governing the procurement process and the cost recovery model to ensure that consumer costs remain fair and reasonable. This regulatory framework will be critical in monitoring how public utilities implement RNG programs and the impact on overall energy pricing for consumers.

Summary

Assembly Bill A577 is a legislative proposal aimed at establishing a program in New Jersey for the procurement and utilization of renewable natural gas (RNG) by public utilities. The bill directs the Board of Public Utilities (BPU) to develop a systematic approach that includes the creation of a ratemaking mechanism allowing gas public utilities to recover the prudent costs associated with implementing the RNG program. This initiative is intended to incentivize investments in RNG infrastructure, thereby promoting the use of cleaner energy sources and contributing to the state's goals of reducing greenhouse gas emissions.

Contention

While the bill has garnered support for its focus on renewable energy, some contention arises around concerns regarding how the costs associated with RNG infrastructure will be passed on to consumers. Critics argue that consumers might bear the financial burden if utility companies incur excessive costs, particularly if these costs exceed a specified threshold without proper oversight. This could raise questions about the effectiveness of the regulatory framework put forward by the BPU in protecting ratepayers' interests. Additionally, there may be discussions over how well the RNG efforts align with other renewable energy strategies in the state.