Three new laws change how transmission projects, utility incentives and large data centers are treated, while the state says all 3.6 million ratepayers will receive a $25 credit and some households an additional $150.
MORRISTOWN, NJ – New Jersey has enacted three laws intended to change how electric-grid investments and large data centers affect ratepayers while announcing immediate summer bill credits, including $25 for all 3.6 million New Jersey ratepayers and an additional $150 for eligible lower- to moderate-income families.
Gov. Mikie Sherrill signed the package Tuesday, July 7. The laws address a federal return-on-equity incentive available to utilities, establish additional state review of certain transmission projects, and create a separate rate structure for data centers. The administration says its energy actions over the past six months, including the newly signed measures, are projected to save ratepayers more than $1 billion annually, citing an estimate from Synapse Energy Economics. That figure is an administration-cited projection, not a guarantee of future individual bill savings.
Immediate bill credits
The state announced a $25 Residential Universal Bill Credit for all 3.6 million New Jersey ratepayers. Lower- to moderate-income families may also receive an additional $150 Residential Energy Assistance Payment, according to the Governor’s Office.
The administration also said the New Jersey Board of Public Utilities renewed the Summer Termination Program, which protects qualifying households from utility shutoffs during extreme heat, and approved 12 solar projects that the state estimates could generate enough electricity to power approximately 45,000 homes.
Utility return incentive
The first law, identified by the Governor’s Office as S1673/A2757, addresses a federal incentive known as the regional transmission organization participation adder.
Under the state’s description of the law, eligible utilities that voluntarily participate in a regional transmission organization can receive a 50-basis-point addition to their return on equity under Federal Energy Regulatory Commission policy. Because the new state law mandates regional transmission organization membership for New Jersey utilities, the administration says participation would no longer be voluntary and utilities would lose eligibility for that adder.
New review for supplemental transmission projects
The Advanced Grid Technologies Act, S4411/A5188, establishes additional state review for certain supplemental transmission projects, including projects involving wires, poles and substations.
According to the Governor’s Office, utilities will be required to pursue a Certificate of Public Convenience and Necessity before constructing covered supplemental projects. The state described a standard review track with a decision within 180 days and a faster 120-day process when advanced transmission technologies are used.
The administration said supplemental projects accounted for 79% of New Jersey ratepayer transmission expenses from 2008 through 2025, totaling $14.7 billion. It also cited Rocky Mountain Institute figures stating that New Jersey represents about 12% of total demand in the PJM regional grid but nearly 22% of PJM supplemental-project spending. Those figures come from sources cited by the administration and should be understood as part of the state’s case for the legislation.
Separate rate treatment for data centers
The third law, S731/A796, creates a new ratepayer class and rate structure for data centers.
According to the state’s summary, the law is intended to require data centers to pay for their electricity use and associated grid infrastructure rather than shifting those costs to other customers. It also provides for data centers to reduce consumption before residential customers are affected when the grid is strained, according to the Governor’s Office.
The law also establishes a retail demand-offset mechanism outside the PJM capacity market. Under the administration’s description, a new large electric load could offset capacity obligations by paying for reductions in demand elsewhere on the system.
The practical effects of the three laws will depend on implementation by state regulators, utilities and, where federal transmission rules are involved, the interaction between state requirements and the regional and federal regulatory systems. The immediate bill-credit component is separate from those longer-term structural changes.