Two proposals would separate much of New Jersey’s energy planning and development work from the agency that regulates utilities, as lawmakers examine whether the state’s current structure can expand electricity generation while protecting customers from higher costs.
MORRISTOWN, NJ – New Jersey lawmakers are considering a major reorganization of state energy policy that would move responsibility for energy planning, clean-energy programs and other functions out of the New Jersey Board of Public Utilities, separating some of the state’s work developing energy resources from the agency responsible for regulating utilities and reviewing rates.
The Assembly Telecommunications and Utilities Committee spent more than two hours discussing the proposal on Monday, Oct. 5, but took no vote. The committee considered two different models: Assembly Bill 4004, which would establish a Division of Energy Resource and Development, and Assembly Bill 3610, which would establish a cabinet-level Department of Energy.
The hearing was explicitly scheduled for lawmakers to receive testimony about transferring oversight of energy-related programs from the BPU to a new state agency. Both bills remain in the Assembly Telecommunications and Utilities Committee, and neither would change state government unless approved by the Legislature and signed into law.
The proposals arrive as New Jersey tries to address two connected problems: the cost of electricity and the amount of power available to meet future demand.
Electricity prices increased sharply in 2025 following higher prices in the regional PJM Interconnection capacity market. Gov. Mikie Sherrill declared a state of emergency over utility costs when she took office in January 2026 and directed the state to accelerate development of new electricity generation. Since then, New Jersey has enacted laws addressing utility infrastructure spending and data-center costs and started a procurement process for new nuclear generation.
The Legislature is now considering whether the state agency responsible for regulating utilities should continue to simultaneously administer much of New Jersey’s energy policy.
What the BPU does now
The Board of Public Utilities is a quasi-judicial state regulatory agency overseeing electric, natural gas, water, telecommunications and cable utilities. State law requires it to ensure regulated utilities provide safe and adequate service at reasonable rates.
Its responsibilities extend beyond deciding utility rate cases.
The BPU currently administers or participates in energy-efficiency programs, clean-energy incentives, electric-vehicle programs, electricity procurement, energy planning and other state energy initiatives. Its Division of Energy also examines utility costs and tariffs and reviews whether certain expenses were prudently incurred.
That combination is central to the argument for reorganizing the state’s energy agencies.
Supporters of creating a separate energy entity argue that developing power supplies can require long-term investments whose costs and benefits differ from the BPU’s immediate responsibility to protect utility customers. Assemblyman Robert Karabinchak, D-Middlesex and the lead sponsor of A4004, told the committee that he wants greater independence between those responsibilities, according to New Jersey Monitor.
The proposal would leave New Jersey with one entity focused more directly on developing and implementing energy policy while the BPU retained its utility-regulation role.
Exactly where that boundary should fall remains unresolved.
A4004 would create an independent energy division
A4004, sponsored by Karabinchak, Assemblyman Cody Miller and Assemblywoman Heather Simmons, would establish the Division of Energy Resource and Development “in but not of” the Department of the Treasury.
That formulation would place the division administratively within Treasury while giving it organizational independence.
The division would be led by a director appointed by the governor with the advice and consent of the Senate. The director would serve at the governor’s pleasure.
The bill broadly states that all BPU responsibilities relating to “energy policy and development” would transfer to the new division. It specifically identifies energy-efficiency programs, clean-energy programs, energy-generation planning, the BPU Office of the Business Ombudsman and electric-vehicle incentive programs.
A proportionate share of BPU employees and resources supporting the transferred programs would move with them. The new director and BPU president would determine the transition schedule and agree on the transfer of personnel, positions, facilities and funding.
The legislation goes considerably further than simply creating another state office.
Across more than 40 sections, it would amend existing laws to move specific responsibilities from the BPU to the new division. Those include administration and regulation of energy-efficiency and clean-energy programs, certain school energy-savings programs, portions of electric-vehicle incentive programs and energy-planning responsibilities.
The division would become the state’s central repository for energy information and would collect and analyze data on current and future energy demand and resources. It would have authority to require certain energy producers, distributors, transmission operators and other entities to submit information needed for state energy planning.
The division also would develop plans for energy emergencies and energy-system security and support state agencies working toward New Jersey’s energy and greenhouse-gas goals.
A4004 would transfer responsibilities associated with the Energy Master Plan, the state’s long-range planning document for energy production, distribution and conservation. Under the proposed structure, the new division’s director would sit on the Energy Master Plan Committee.
A3610 would create a cabinet department
A3610, sponsored by Assemblyman Louis Greenwald, D-Camden and Burlington, proposes a larger organizational change.
It would establish a Department of Energy as a principal department of the executive branch, putting energy alongside New Jersey’s other cabinet-level departments.
A commissioner appointed by the governor and confirmed by the Senate would run the department. The commissioner could appoint a deputy commissioner, subject to the governor’s approval, along with other personnel.
Like A4004, the bill would transfer BPU responsibilities involving energy policy, energy-efficiency guidance, generation planning, electric-vehicle incentives and the business ombudsman.
It would also transfer the Division of Energy Planning and Conservation to the new department and move a proportionate share of BPU staff and resources supporting the affected programs.
A3610 contains another consequential provision governing the relationship between the proposed department and the BPU.
The Department of Energy would provide administrative, technical and staff support to the BPU for its regulatory and adjudicatory functions. The department could investigate matters coming before the BPU, advocate its own position before the board and automatically become a party to every BPU proceeding.
That means the proposed department could participate formally in proceedings before the regulator even after energy-policy responsibilities were moved out of the BPU.
The bill also would restructure the Energy Master Plan Committee. The energy commissioner, or the commissioner’s designee, would chair it, while the BPU president would remain a member.
The two proposals are not identical
Both bills would move substantial energy-policy responsibilities out of the BPU, but their structures differ.
A4004 creates a specialized division associated with Treasury. A3610 creates an entire cabinet department with a commissioner, deputy commissioner and broader administrative structure.
A3610 also expressly gives the new department a continuing role in proceedings before the BPU. A4004 focuses more directly on transferring energy-policy and development responsibilities to the new division.
Both would leave significant regulatory functions with the BPU.
The board would continue to exist, and neither bill abolishes its fundamental role as New Jersey’s utility regulator. The question lawmakers are examining is how much of its current energy-policy portfolio should remain attached to that regulatory role.
Ratepayer review emerged as a central concern
Moving programs out of the BPU creates another question: who determines whether energy projects are financially prudent before their costs are passed to utility customers?
Brian Lipman, director of the New Jersey Division of Rate Counsel, raised that concern during Monday’s hearing.
Rate Counsel is the state office charged with representing consumers in utility matters. According to the Monitor’s account of the hearing, Lipman questioned where prudency and affordability reviews would occur under the proposed structures and warned lawmakers about exposing customers to the expense of energy projects without sufficient safeguards.
That issue is particularly relevant because the BPU currently performs both policy and regulatory work. Its Division of Energy reviews utility costs in rate proceedings to determine whether expenses are properly accounted for and prudently incurred, while other BPU divisions examine infrastructure investments and their effects on customers.
Transferring policy and development programs therefore requires lawmakers to decide which entity would authorize projects, which would evaluate their costs and which would determine whether those costs can ultimately be collected from customers.
Ray Cantor of the New Jersey Business and Industry Association raised a different concern: the expense of creating another state department. He also acknowledged that a cabinet department could give energy policy greater prominence within an administration, according to the Monitor.
Katie Mettle of Advanced Energy United recommended that lawmakers examine how other states organize their energy agencies before settling on a structure.
Why lawmakers are considering the change now
The organizational debate comes during a broader overhaul of New Jersey energy policy.
New Jersey customers experienced an approximately 20% increase in electricity bills in June 2025, driven largely by higher wholesale capacity costs in PJM, the regional grid operator serving New Jersey and 12 other states plus the District of Columbia.
Sherrill responded after taking office in January by declaring a state of emergency over utility costs and directing the BPU to offset increases while accelerating additional in-state generation.
The state has since moved on several fronts.
In July, Sherrill signed legislation intended to increase oversight of utility infrastructure investments and prevent data centers from shifting certain electricity-system costs onto other customers. The state also enacted the Power NJ Act, which established a BPU-led process to solicit proposals for advanced nuclear generation.
Solar generation, battery storage, natural gas and nuclear power have all been included in the administration’s effort to increase electricity supplies.
The current debate asks whether New Jersey has the governmental structure to plan and execute those policies over the longer term.
Former Murphy administration climate official Eric Miller told lawmakers at Monday’s hearing that New Jersey’s Energy Master Plan provides a broad policy blueprint but does not function as the kind of detailed resource plan needed to determine exactly what generation the state needs, where and when, according to the Monitor.
The BPU’s current statutory mission illustrates the problem lawmakers are trying to address. The agency is simultaneously charged with ensuring safe and adequate utility service at reasonable rates and developing energy policy, while also overseeing programs intended to change how New Jersey produces and consumes energy.
Whether those responsibilities belong together is now before the Legislature.
New Jersey has made a similar organizational change before. The state previously operated a Department of Energy, which was abolished under Gov. Thomas Kean in 1987 as part of an effort to reduce the size and cost of state government.
For now, the Oct. 5 hearing changed none of those responsibilities. The committee did not vote on A4004 or A3610, and neither proposal has become law.
Committee Chairman Assemblyman Wayne DeAngelo, D-Mercer, described the hearing as part of the process of determining what structure lawmakers should pursue. That could ultimately involve a standalone department, a hybrid structure or changes within the existing BPU, according to the Monitor.
Any version that advances would still have to move through the Legislature and receive the governor’s signature before New Jersey’s energy agencies are reorganized.