New Jersey Senate Bill S1366

New Jersey 2022-2023 Regular Session

• Introduced: 2/3/22
• Refer: 2/3/22

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 legislation sets specific portfolio targets for the proportion of RNG that gas public utilities are to use in their sales. For example, the bill establishes an initial target of up to 5% of gas sales being renewable by 2024, scaling up incrementally to 30% by 2050. This progressive mandating of RNG is intended to decrease greenhouse gas emissions associated with traditional natural gas usage. The BPU is tasked with creating a mechanism for rate recovery, allowing utilities to recoup costs associated with qualifying investments in RNG infrastructure, ensuring that these expenses do not burden ratepayers unduly while promoting a greener energy policy.

Summary

Senate Bill S1366 aims to establish a program directing the New Jersey Board of Public Utilities (BPU) to encourage the procurement of renewable natural gas (RNG) and develop infrastructure for its distribution. This initiative is a strategic move toward facilitating the transition to a low-carbon energy economy in New Jersey, aiming to augment the state's energy portfolio with more sustainable gas options. The bill defines RNG broadly to include biogas and hydrogen gas, as well as methane from renewable sources, thereby encompassing various innovative forms of energy production.

Contention

Debate surrounding S1366 may arise over the implications of allying public utility cost recovery with the state's broader environmental goals. Proponents may argue that fostering renewable alternatives provides much-needed momentum toward cleaner energy and economic sustainability. Critics, however, may raise concerns about potential costs being passed on to consumers and whether the ambitious targets set by the bill could compromise the stability of gas services, especially in a fluctuating energy market. Additionally, there may be anxiety around regulations affecting the operational flexibility of public utilities as they transition their energy mix.