New Jersey § 48:2-21

§ 48:2-21.

a. As used in this section: “ Base rates ” means the rates, including minimum bills, charged for utility commodities or service

subject to the board's jurisdiction, other than the rates charged under a utility's

levelized energy adjustment clause, hereinafter “LEAC,” or levelized gas adjustment

clause, hereinafter “LGAC,” or equivalent rate provision; “ Base year ” means the calendar year 1996; “ Board ” means the Board of Public Utilities; “ Manufacturing facility ” means a facility: (1) with respect to which the owner of the facility shall have entered into an off-tariff

rate agreement with an electric public utility, pursuant to the provisions of P.L.1995, c. 180 ( C.48:2-21.24 et seq. ); (2) that manufactures products made from using “postconsumer material,” as that term

is defined in section 247.3 of title 40, Code of Federal Regulations , and other recovered material feedstocks that meet the requirements of the Comprehensive

Procurement Guideline For Products Containing Recovered Materials as promulgated by

the United States Environmental Protection Agency in section 247.1 et seq. of title 40, Code of Federal Regulations , pursuant to the “Resource Conservation and Recovery Act,” Pub.L.94-580 ( 42 U.S.C. s.6901 et seq. ) and Executive Order No. 13101 , issued by the President of the United States on September 14, 1998, provided that

at least 75 percent of the manufacturing facility's total annual sales dollar volume

of such products that are produced in New Jersey meet the recycled content standards

within such guidelines; (3) for which a “comprehensive energy audit,” as that term is defined in section 2

of P.L.1995, c. 180 ( C.48:2-21.25 ), shall have been undertaken within 90 days after the effective date of P.L.2007, c. 94 ( C.48:2-21.36 et al.), which audit shall have evaluated cost-effective energy efficiency and conservation

measures as part of the efforts to reduce energy costs; (4) that has been in operation in this State for at least 25 years as of the effective

date of P.L.2007, c. 94 ( C.48:2-21.36 et al.); and (5) at which at least 800 employees are employed on the first business or work day

after the expiration of such off-tariff rate agreement ; “ Postconsumer material manufacturing facility ” means a facility that: (1) received service under an electric public utility rate schedule that applied only

to the owner of the facility on January 1, 2004; (2) manufactures products made from “postconsumer material,” as that term is defined

in 40 C.F.R. s.247.3 ; provided however, that not less than 75 percent of the facility's total annual

sales dollar volume of such products produced in this State meet the definition of

“postconsumer material”; (3) completed a “comprehensive energy audit,” as that term is defined pursuant to

section 2 of P.L.1995, c. 180 ( C.48:2-21.25 ), not more than 48 months before but not later than 90 days after the effective date

of P.L.2009, c. 90 ( C.52:27D-489a et al.); and (4) employed, individually or collectively with affiliated facilities, not less than

150 employees in this State on April 1, 2009; “ Sales and use tax ” means the sales and use tax liability computed on sales and use of energy and utility

service as defined in section 2 of P.L.1966, c. 30 ( C.54:32B-2 ); “ Utility ” means a public utility subject to regulation by the board pursuant to Title 48 of

the Revised Statutes; and “ Utility service ” means the supply, transmission, distribution or transportation of electricity, natural

gas or telecommunications services or any combination of such commodities, processes

or services. b. No later than 60 days after the date this act is enacted, each electric, gas and

telecommunications utility subject to the provisions of this act shall file with the

board, and shall simultaneously provide copies to the Director of the Division of

the Ratepayer Advocate, revised tariffs and such other supporting schedules, narrative

and documentation required by this act, as set forth in this section, to reflect in

the utility's rates the changes in tax liability effected pursuant to this act. No later than 90 days after the date of the utility's filing, and after determining

that the filing and the rate changes provided for therein are in compliance with the

provisions of this act, the board shall approve the utility's filing and associated

rates for billing to the utility's customers, effective for utility service rendered

on and after January 1, 1998. If the board determines that the utility's filing and the associated rate changes

provided for therein are not in compliance with the provisions of this act, the board

shall require the utility to amend or otherwise modify its filing to render it in

compliance. The board may also permit the rates provided for in the utility's filing to be implemented

on an interim basis pending the board's final determination in the event the board,

in its discretion, determines that due to the filing's complexity, or for other valid

reasons, including but not limited to the enactment of this act after June 30, 1997,

additional time is needed for the board to complete its review of the filing. If the rates approved by the board upon its final determination are less than the

rates implemented on an interim basis, the difference shall be refunded to the utility's

customers with interest computed in accordance with N.J.A.C.14:3-7.5(c) . The rate adjustments implemented pursuant to this act shall not constitute a fixing

of rates pursuant to R.S.48:2-21 and shall not be subject to the hearing requirements set forth in that section. c. As of the effective date of the rate changes implemented pursuant to this act,

and except for rates applicable to sales that were or are currently exempt from the

unit-based energy taxes formerly imposed pursuant to P.L.1940, c. 5 ( C.54:30A-49 et seq. ) and rates applicable to sales to which section 59 of P.L.1997, c. 162 ( C.48:2-21.31 ) applies, the board shall remove from the base rates of each electric public utility

and gas public utility the unit tax rates included therein for the recovery of those

unit-based energy taxes, and include therein provision for the recovery of corporation

business tax imposed pursuant to P.L.1945, c. 162 ( C.54:10A-1 et seq. ), and additionally shall authorize the collection of the sales and use tax imposed

pursuant to P.L.1966, c. 30 ( C.54:32B-1 et seq. ), as follows: (1) The base rates of each gas and electric utility shall be reduced by the amount

of the unit-based energy taxes per kilowatthour or per therm included therein. (2) The provision for corporation business tax initially included in the base rates

of each gas and electric utility shall be based on the utility's after-tax net income

earned in the base year as booked, unless the board determines, in its discretion,

that such income as booked is unusually high or low or otherwise unrepresentative

of the utility's prospective net income, in which case the utility's base year net

income shall be adjusted as determined by the board. To permit the board to make this determination, in addition to including in its filing

schedules showing its net income earned in the base year as booked, the utility shall

include adjustments to such booked income to eliminate the effect of revenues, expenses

and extraordinary or other charges that are non-recurring, atypical, or both, including,

but not limited to an adjustment to eliminate the effect of unusually hot or cold

weather, and that would otherwise make the utility's base year net income unusually

high or low or otherwise unrepresentative of the utility's prospective net income. If the adjustment is being made to eliminate the effect of unusually hot or cold

weather, associated revenue and expense adjustments shall also be made. Subject to the board's approval, such adjusted income shall be the basis for the

calculation of the initial provision for corporation business tax to be included in

the utility's base rates. The utility shall also include a calculation of its rate of return on common equity

achieved in the base year, both as booked and as adjusted in accordance with the foregoing. The calculation shall be made employing the methodology set forth in N.J.A.C.14:12-4.2(b)1 , and shall separately show the effect of reflecting adjustments to the calculation,

if any, that may have been employed historically in establishing the utility's rate

of return on common equity allowed for ratemaking purposes. The utility's filing shall also include copies of its audited financial statements

for the base year and associated quarterly and other reports filed with the Securities

and Exchange Commission. To reflect the provision for corporation business tax in base rates, the demand charges,

or charges per kilowatt, decatherm or million cubic feet; the energy charges, or

charges per kilowatthour or per therm; and the customer charges, or charges other

than demand and energy charges, set forth in each base rate schedule, and the floor

price employed in parity rate schedules, included in the utility's tariff filed with

and approved by the board shall be increased by amounts determined by multiplying

such charges by the adjustment factor, “A e, g” derived below: A e, g = ((I e, g) x (Rs/(1-Re))  (Br e, g) where: “ A e, g ” means the adjustment factor applicable to electric base rates (e), gas base rates

(g), or both, other than rates applicable to sales that were exempt from unit-based

energy taxes formerly imposed pursuant to P.L.1940, c. 5 ( C.54:30A-49 et seq. ) or to which section 59 of P.L.1997, c. 162 ( C.48:2-21.31 ) applies; “ I e, g ” means the utility's base year after-tax net income from electric or gas sales, or

both, and transportation service subject to the board's jurisdiction and other operating

revenue if such revenue is reflected in the utility's cost of service for ratemaking

purposes, adjusted as approved by the board; “ Br e, g ” means the utility's base year revenue from base rates applicable to electric or

gas sales, or both, and transportation service subject to the board's jurisdiction,

but excluding sales that were exempt from unit-based energy taxes formerly imposed

pursuant to P.L.1940, c. 5 ( C.54:30A-49 et seq. ) or to which section 59 of P.L.1997, c. 162 (C.48: 2-21.31) applies; “ Rs ” means the corporation business tax rate, expressed as a decimal; “ Rf ” means the applicable federal corporation income tax rate expressed as a decimal;

and “ Re ” equals Rs + Rf(1-Rs). The utility shall account for the changes in tax liability provided for by this act

effective January 1, 1998. Such accounting shall include the recording on the utility's income statement and

balance sheet of deferred corporation business tax defined, for book accounting purposes,

as differences in corporation business tax expense arising from timing differences

in the recognition of revenue and expenses for book and tax purposes. (3) When billed to the utility's customers, the adjusted base rate charges determined

pursuant to paragraphs (1), (2), and (4) of this subsection, and the charges determined

pursuant to the utility's levelized energy adjustment clause, levelized gas adjustment

clause, or both, as determined both upon the effective date of the rate changes authorized

by this act and as revised prospectively in accordance with the utility's tariff filed

with and approved by the board, and the transitional energy facility assessment unit

rate surcharges, hereinafter, “TEFA unit rate surcharges,” determined in accordance

with subsection d. of this section, shall be increased by an amount determined by

multiplying such charges by the sales and use tax rate imposed under P.L.1966, c.

30 ( C.54:32B-1 et seq. ). In addition to the utility's rates for service included in its tariff, for informational

purposes the tariff shall include such rates after application of the sales and use

tax authorized by this section. (4) The utility's filing with the board to implement the rate changes provided for

by this act shall include an analysis, description, and quantification of the effect

of the changes in rates and tax payments implemented pursuant to this act on the utility's

requirement for cash working capital, and if such requirement is less than the cash

working capital allowed for the collection and payment of unit-based energy taxes

formerly imposed pursuant to P.L.1940, c. 5 ( C.54:30A-49 et seq. ) in determining the utility's base rates in effect prior to the rate changes implemented

pursuant to this act, and to the extent the working capital reduction is not offset

by a reduction in net deferred taxes as provided for below, such base rates shall

be reduced by the reduction in the utility's revenue requirement associated with the

remaining reduction in the working capital requirement not so offset, if any. The reduction in working capital shall be determined by using the same methodology

employed in establishing the working capital allowance related to unit-based energy

taxes reflected in the utility's base rates in effect prior to the rate changes implemented

pursuant to this act. The reduction in the utility's revenue requirement associated with the reduced working

capital requirement shall be calculated using the utility's last overall rate of return

allowed by the board, including provision for federal income taxes and the corporation

business tax implemented pursuant to this act payable on the equity portion of the

return, and shall be implemented on the effective date of the rate changes provided

for, and in the manner set forth in paragraph (2) of this subsection. If the utility's requirement for cash working capital is increased as a result of

the changes in rates and tax payments implemented pursuant to this act, the utility

may accrue carrying costs, calculated at its last overall rate of return allowed by

the board and applied on a simple annual interest basis without compounding, on the

increased working capital requirement and request recovery of such carrying costs

in a rate proceeding before the board. The working capital-related base rate changes and carrying cost accruals shall be

subject to the board's approval, and shall not be included in the determination of

the TEFA unit tax surcharges provided for in subsection d. of this section. The utility's filing with the board to implement the rate changes provided for by

this act shall also include an analysis, description and quantification of net deferred

taxes. For the purposes of this section, “ net deferred taxes ” means deferred corporation business taxes, net of federal deferred income taxes,

associated with the tax and rate changes implemented pursuant to this act, including

deferred corporation business tax recorded in accordance with section 4 of P.L.1945,

c. 162 ( C.54:10A-4 ), projected for the calendar year in which this act takes effect and for each year

of the tax life of the asset giving rise to the deferred corporation business taxes

pursuant to section 4 of P.L.1945, c. 162 ( C.54:10A-4 ). If the change in such net deferred taxes projected for the calendar year in which

the rate changes implemented pursuant to this act take effect is negative and if the

utility's requirement for working capital is reduced as a result of the changes in

rates and tax payments implemented pursuant to this act, the working capital-related

rate reduction that otherwise would have been implemented pursuant to this subsection

shall be treated as set forth in subparagraph (a) or (b) of this paragraph. For the purposes of this act, a change in net deferred taxes is considered negative

when it reduces an existing deferred tax liability or creates a deferred tax asset

on the utility's balance sheet. An appropriate rate adjustment for the working capital impacts of this act, reflecting

all relevant facts and circumstances at the time of the adjustment, shall be made

in the year when the earlier of the following events occur: (a) The year in which the reduction in carrying costs assumed for the rate reduction

for working capital that would have been made but for this paragraph is no longer

required to offset, on a present value basis, the annual carrying costs calculated

on the accumulated balance of negative net deferred taxes projected to be recorded

by the utility, its successors and assigns, over the tax life of the single asset

account giving rise to such net deferred taxes pursuant to section 4 of P.L.1945,

c. 162 ( C.54:10A-4 ). For the purposes of this subparagraph (a): (i) Carrying costs and present values are to be computed using the weighted average

after-tax rate of return approved by the board in the utility's last base rate proceeding. (ii) The accumulated balance of such negative net deferred taxes shall include net

deferred taxes associated with all assets and liabilities originally placed in service

by the utility and held by the utility or a company affiliated with the utility regardless

of whether or not such assets continue to be subject to regulation by the New Jersey

Board of Public Utilities. (b) The year in which both an appropriate working capital adjustment and the accumulated

balance of negative deferred taxes, as described in sub-subparagraph (ii) of sub-paragraph

(a) of this paragraph (4), are reflected in the utility's rate base in a rate proceeding

before the board. It is the intent of this section to fully compensate utilities on a present value

basis, for the carrying costs associated with negative net deferred taxes arising

as a result of this act, and to remit to ratepayers any credit due them as a result

of any overcompensation as may have occurred due to the treatment of working capital

and deferred taxes as set forth herein or in subparagraph (a) of this paragraph (4). At the time the above base rate adjustment is made, an analysis shall be made to

determine if such carrying costs have been or will be fully recovered pursuant to

the intent of this provision and any additional credit or charge to ratepayers to

adjust for ratepayer overpayments or underpayments, if any shall be addressed. If the change in net deferred taxes is positive, the increase shall be added to, or

increase, the reduction in the utility's requirement for working capital if the requirement

is reduced as a result of the rate and tax payment changes implemented pursuant to

this act, or subtracted from the working capital requirement if it is increased, and

the resultant net working capital requirement shall be reflected in rates or accrue

carrying costs in the same manner as prescribed for changes in the utility's requirement

for working capital above. The deferred tax-related rate changes or carrying cost accruals shall be subject to

the board's approval and shall not be included in the determination of the TEFA unit

rate surcharges provided for in subsection d. of this section. d. (1) Electric and gas utilities shall file, for the board's review and approval,

initial TEFA unit rate surcharges determined by deducting from each unit-based energy

tax unit tax rate effective January 1, 1997 the following: (a) An amount per kilowatthour or per therm determined by multiplying the total revenue

received in the base year from sales to which that unit tax rate would have been applicable

by the factor Ru/(1 + Ru), where Ru is the sales and use tax rate imposed under P.L.1966,

c. 30 ( C.54:32B-1 et seq. ) expressed as a decimal, and dividing the result by the kilowatthours or therms billed

in that unit tax rate class in the base year; and (b) An amount per kilowatthour or per therm determined by dividing the revenue that

would have been received in the base year from the inclusion, in the manner prescribed

in paragraph (2) of subsection c. of this section, of the corporation business tax

in the rates applicable to sales billed in that unit tax rate class by the kilowatthours

or therms billed in that rate class. In each case, the determination shall reflect the effect of adjustments that affect

the level of sales and revenue, if any, as provided in subsection c. of this section. Of the resultant rate per kilowatthour or per therm, the portion for recovery of

the utility's transitional energy facilities assessment liability shall be determined

by multiplying such rate by the factor (1 - Rs), where Rs is the corporation business

tax rate expressed as a decimal. The TEFA unit rate surcharges shall constitute non-bypassable wires and/or mains charges

of the utility, and shall be applied to all sales within the customer classes to which

they apply, regardless of whether such customers are purchasing bundled or unbundled

services from the utility, but shall not be applied to sales: (i) that were or are currently exempt from unit-based energy taxes formerly imposed

pursuant to P.L.1940, c. 5 ( C.54:30A-49 et seq. ) or to which section 59 of P.L.1997, c. 162 ( C.48:2-21.31 ) applies, (ii) for a period of seven years commencing on the first day after the expiration

of an off-tariff rate agreement, entered into or negotiated pursuant to the provisions

of P.L.1995, c. 180 ( C.48:2-21.24 et seq. ), to a manufacturing facility for use or consumption directly and primarily in the

production of tangible personal property, other than energy , and (iii) for a period of seven years beginning on January 1, 2010, to a postconsumer

material manufacturing facility for use or consumption directly and primarily in the

production of tangible personal property, other than energy . Notwithstanding the provisions of the exemption provided in sub-subparagraph (ii) and sub-subparagraph (iii) of subparagraph (b) of paragraph (1) of subsection d. of this section, the TEFA unit

rate surcharge shall be applied to the sales to the owner of the manufacturing facility or the postconsumer material manufacturing facility and the owner shall be refunded an amount equal to the TEFA unit rate surcharge paid

by the filing, within 30 days following the close of a calendar quarter in which the

exemption applies, of a claim with the Director of the Division of Taxation in the Department of the Treasury for a refund of the TEFA unit rate surcharge paid, which refund shall be paid within 60 days of the refund claim being filed. Proof of claim for refund shall be made by the submission of such records and other

documentation as the director may require. If the owner of the manufacturing facility or the postconsumer material manufacturing facility at any time during the exemption period provided in sub-subparagraph (ii) or sub-subparagraph (iii) of subparagraph (b) of

paragraph (1) of subsection d. of this section relocates the manufacturing facility to a location outside of this State, the owner

shall pay to the director the amount of TEFA unit rate surcharge for which an exemption shall have been allowed

and refund obtained under this section. The State Treasurer shall notify the director of the relocation of a manufacturing

facility or a postconsumer material manufacturing facility to a location outside of this State, and the director shall issue a tax assessment

for the recapture of tax, equal to the amount of TEFA unit rate surcharge for which

an exemption shall have been allowed and refund obtained under this section. The recapture of tax shall be a State tax subject to the State Uniform Tax Procedure

Law, R.S.54:48-1 et seq. , and shall be deposited in the General Fund. If, following the effective date of this act, a customer taking bundled service from

the utility shall elect to obtain its requirements from another supplier and take

transportation or wheeling service from the utility, the TEFA unit rate surcharge

applicable to the bundled service shall continue to apply to the transportation or

wheeling service. The TEFA components of the unit rate surcharges determined pursuant to this subsection

(the components of the surcharges remaining after deducting the provision for corporation

business tax included therein) shall be used to determine the transitional energy

facility assessment liability pursuant to sections 36 through 49 of P. L.1997, c. 162 ( C.54:30A-100 through C.54:30A-113 ). (2) Unless reduced pursuant to paragraphs (3) and (4) of this subsection, the initial

TEFA unit rate surcharges are to be reduced annually on January 1, 1999 through January

1, 2001 by the following percentages: January 1, 1999, 20% January 1, 2000, 40% January 1, 2001, 60% (3) For each year beginning with calendar year 1998 and ending with calendar year

2001, the TEFA surcharge adjustment shall be determined as the difference between: (a) The sum of the estimated, or actual when known, (i) TEFA liabilities, as defined

in section 43 of P.L.1997, c. 162 ( C.54:30A-107 ), and sales and use taxes collected and corporation business taxes booked for the

year 1998 by the gas and electric utilities and other entities subject to the TEFA

provisions of this act (the year 1998 liability), and (ii) the TEFA liabilities of

those utilities and entities in all years following the year 1998 through the year

in which a determination is being made pursuant to this subsection (the determination

year); and (b) The sum of (i) the total of each remitter's base year liability, as defined in

section 37 of P.L.1997, c. 162 ( C.54:30A-101 ), and (ii) the cumulative TEFA obligation, defined as the sum through the determination

year of the amounts calculated by multiplying, for the applicable year, the percentage

in the second column of the following table: Determination Year % of Year 1998 TEFA  1999 80% 2000 60% by the Year 1998 TEFA, where the Year 1998 TEFA is calculated as the total of each remitter's base year liability

less the sales and use taxes collected and the corporation business taxes booked for

the privilege period ending in calendar year 1998 by the gas and electric utilities

and other entities subject to the TEFA provisions of this act. For purposes of this subsection, the amounts assumed for the determination year,

including the year 1998 liability when first determined for the purposes of this subsection,

shall be estimates based on nine months of actual data through and including the month

of September, and three months of data forecast for the months of October through

December. (4) If the TEFA surcharge adjustment determined for the determination year is positive

(that is, if the amount determined pursuant to subparagraph (a) of paragraph (3) of

this subsection is greater than the amount determined pursuant to subparagraph (b)

of paragraph (3) of this subsection), no reduction shall be made in the reduction

in the TEFA unit rate surcharges provided for in paragraph (2) of this subsection

for the year following the determination year. If the TEFA surcharge adjustment is negative, the reduction in the TEFA unit rate

surcharges that otherwise would have been implemented on January 1 of the year following

the determination year pursuant to paragraph (2) of this subsection shall be reduced

by an amount (by percentage points) equal to the percentage the TEFA surcharge adjustment

is of the total of the base year transitional energy facility assessment of all remitters,

as defined in section 37 of P.L.1997, c. 162 ( C.54:30A-101 ), provided however, that such reduction in the reduction in the TEFA unit rate surcharges

shall not exceed the percentage shown in paragraph (2) of this subsection for that

year; and provided further that in the first two years, that such reduction shall

not exceed 10 percentage points for each year. (5)(a) The TEFA unit rate surcharges for calendar years 2002 through 2011 shall be

the same as the TEFA unit rate surcharges in effect for calendar year 2001. (b) The TEFA unit rate surcharges in effect for calendar year 2011 shall be reduced

on January 1, 2012 and January 1, 2013 by the following percentages: January 1, 2012 25% January 1, 2013 50% e. The utility's filing with the board to implement the rate changes provided for

by this act shall include proof of revenue schedules that show for each rate schedule

included in the utility's tariff, aggregated by unit-based energy tax unit tax classes,

the number of customers billed under the rate schedule, the billing determinants of

such customers (i.e. the kilowatts of billing demand and kilowatthours of electric

energy consumed, and the million cubic feet/decatherm subject to gas capacity-related

charges and decatherm of gas consumed) and the associated revenue, both as booked

in the base year and on a pro forma basis reflecting the rate changes implemented

pursuant to this act. The proof of revenue shall additionally show the amount of unit-based energy taxes

included in the base year revenue as booked, the unit-based energy taxes that would

have been collected at the unit-based energy tax unit tax rates effective January

1, 1997, if different, as well as the corporation business tax, sales and use tax

and transitional energy facility assessment revenue that would have been collected

or received on a pro forma basis if the rates implemented pursuant to this act had

been in effect in the base year. f. The board may, in its discretion, permit the rate changes provided for in this

act to be implemented as part of a pending base rate case or other proceeding in which

the utility's rates are to be changed, provided that the effective date of the changes

is not delayed beyond the date on which the changes would have been implemented under

subsection c. of this section. The board may also, pursuant to its powers provided by law, permit or require further

modifications in the implementation of this section to address unforeseen consequences

arising out of the implementation of this act. g. Customers of the utility who are exempt from the sales and use tax imposed on sales

of gas and/or electricity or as a result of rate changes occurring prior to the effective

date of this act or for other valid reasons are due a refund of sales or use tax inadvertently

imposed on such customers as a result of implementing the rate changes provided for

by this act shall file with the State Treasurer to obtain such refunds. The State Treasurer shall promptly notify the utility of customers granted refunds

under this provision in order to prevent additional collections of the sales and use

tax from such customers. h. Public utilities providing telecommunications service regulated by the board shall

file for the board's review and approval revised tariffs that eliminate from the rates

applicable to such service the excise tax liability included therein pursuant to P.L.1940,

c. 4 ( C.54:30A-16 et seq. ), and shall include therein the corporation business tax calculated using the methodology

used in calculating the adjustment factor set forth in paragraph (2) of subsection

c. of this section. Subsection d. of this section shall not apply to telecommunication utilities, and

telecommunication utilities subject to a plan of regulation other than rate base/rate

of return shall additionally not be required to file the rate of return information

required by paragraph (2) of subsection c. Such utilities shall, however, include a narrative and/or other documentation as

required by the board to support the reasonableness of the after-tax income, which

may be adjusted to eliminate the effect of non-recurring or other atypical events,

on which the corporate business tax inclusion in rates is based. Telecommunications utilities shall comply with all other applicable provisions of

this section. i. (1) The board shall not adjust the rates of a public utility, as provided in subsections

c. and d. of this section, for a purchase by a cogenerator of natural gas and the

transportation of that gas, that is exempt from sales and use tax pursuant to paragraph

(2) of subsection b. of section 26 of P.L.1997, c. 162 ( C.54:32B-8.46 ). The board shall not allocate, in any future rate case, any sales and use tax, corporation

business tax, or transitional energy facility assessment to rates for this purpose. (2) The board shall adjust the rates, as provided in subsection c. of this section,

for a purchase by a cogenerator of any quantity of natural gas and the transportation

of that gas that is not exempt from sales and use tax pursuant to paragraph (2) of

subsection b. of section 26 of P.L.1997, c. 162 ( C.54:32B-8.46 ). (3) For the purposes of this section, “ cogenerator ” means a person or business entity that owns or operates a cogeneration facility

in the State of New Jersey, which facility is a plant, installation or other structure

whose primary purpose is the sequential production of electricity and steam or other

forms of useful energy which are used for industrial, commercial, heating or cooling

purposes, and which is designated by the Federal Energy Regulatory Commission, or

its successor, as a “qualifying facility” pursuant to the provisions of the “Public

Utility Regulatory Policies Act of 1978,” Pub.L.95-617. 1 1

For classification of the “Public Utility Regulatory Policies Act of 1978,” see “Short

Title” note under 16 U.S.C.A. § 2601.