Exempts municipal electric utilities from regulation by BPU.
Impact
If enacted, SB 877 would significantly alter the regulatory landscape for municipal electric utilities within New Jersey. By removing the requirement for BPU regulation, these utilities would gain greater autonomy in setting rates and managing their operations without state oversight. This change could lead to different pricing structures and operational policies that could be more favorable for the municipalities but less predictable from a consumer protection standpoint.
Summary
Senate Bill 877 proposes to exempt municipal electric utilities from regulation by the Board of Public Utilities (BPU). Under existing law, municipal utilities are generally not regulated by the BPU unless they provide electricity beyond their own boundaries, in which case they are treated as public utilities and subject to BPU oversight. This bill seeks to amend existing regulations so that municipal utilities would not be deemed public utilities, thereby relieving them of the obligation to have their rates and operations regulated by the BPU.
Contention
Notably, the bill raises questions around consumer protection and the potential for increased costs for residents who are served by these utilities. Opponents may argue that without regulatory oversight, municipal utilities could exploit their lack of accountability to increase rates or alter service quality. Proponents, on the other hand, may contend that this deregulation would foster greater efficiency and can reduce the burdens of compliance for municipalities, ultimately benefiting consumers through more competitive rates.
An Act Concerning The Public Utilities Regulatory Authority, The Regulation Of Electric Rates And State Public Policy Concerning Electricity Generation.