New Jersey § 48:3-57

§ 48:3-57.

a. (1) Simultaneously with the starting date for the implementation of retail choice as

determined by the board pursuant to subsection a. of section 5 of P.L.1999, c. 23 ( C.48:3-53 ) , until the board specifically finds it to be no longer necessary and in the public

interest, each electric public utility shall provide basic generation service. Power procured for basic generation service by an electric public utility shall

be purchased, at prices consistent with market conditions. The charges assessed to customers for basic generation service shall be regulated

by the board and shall be based on the reasonable and prudent cost to the utility

of providing such service, including the cost of power purchased at prices consistent

with market conditions by the electric public utility in the competitive wholesale

marketplace and related ancillary and administrative costs, as determined by the board. The charges assessed to customers for basic generation service pursuant to this subsection

may include a retail margin, as determined by the board. The board shall approve unbundled rates to assure that aggregate rate reductions

established pursuant to section 4 of P.L.1999, c. 23 ( C.48:3-52 ) are sustained notwithstanding changes in basic generation charges approved pursuant

to this section. (2) Each electric public utility shall remit to the State Treasurer all monies collected

by the utility as a retail margin authorized pursuant to paragraph (1) of this subsection. A Retail Margin Fund shall be established as a non-lapsing, revolving fund in the

General Fund for the deposit of all retail margin monies received from the electric

public utilities and remitted to the State Treasurer. (3) The board may use monies paid in connection with the retail margin, from any portion

of the amount appropriated pursuant to section 3 of P.L.2009, c. 34 that has not been allocated pursuant to subsection d. of section 3 of P.L.2009, c. 34, and any other monies in the Retail Margin Fund in excess of the amount appropriated,

for the purpose of funding grants by the board only to CIEP class customers to implement

alternative programs and measures that are consistent with, and will further the goals

of the energy master plan adopted pursuant to section 12 of P.L.1977, c. 146 ( C.52:27F-14 ), to maximize energy conservation and energy efficiency, reduce peak energy demand,

and increase renewable energy sources. The grants may also fund supportive measures, such as energy audits, education and

outreach programs, and technical assistance, that are deemed necessary to the proper

implementation of the alternative programs and measures. The board shall establish the types of measures to receive such financial assistance,

the eligibility criteria for such financial assistance, the procedures and criteria

for awarding such financial assistance, and the conditions of such financial assistance,

by order or orders issued after notice and an opportunity for public comment, notwithstanding

any provisions of the “Administrative Procedure Act,” P.L.1968, c. 410 ( C.52:14B-1 et seq. ) to the contrary. The board may change programs and program designs as technologies, markets and customer

needs change. (4) Nothing in this section shall be construed to authorize the board to use the retail

margin for any use that does not provide a direct benefit to CIEP class customers,

except as the board may determine is necessary pursuant to section 13 of P.L.2007, c. 340 ( C.48:3-98.1 ) and section 4 of P.L.2005, c. 215 ( C.48:2-95 ). (5) The board shall, not later than December 1 of each year, transmit to the Joint

Budget Oversight Committee, or its successor, a report detailing the amount of monies

deposited in and allocated from the Retail Margin Fund during the preceding State

fiscal year. The report shall include, but not be limited to, the number and description of each

combined heat and power facility project funded from the Retail Margin Fund and the

amount allocated to each project, and the number and description of any grants allocated

for the alternative programs and measures provided for in paragraph (3) of this subsection. In addition to the report, the board shall also provide to the joint committee a

copy of all board orders concerning the establishment or use of, or change in the

amount of, the retail margin. b. The board may allow an electric public utility to purchase power for basic generation

service through a bilateral contract from a related competitive business segment of

its public utility holding company only if: (1) The related competitive business segment is not a related competitive business

segment of the electric public utility; and (2) The board determines that the procurement of power from the related competitive

business segment of the public utility holding company is necessary in order to ensure

the reliability of service to basic generation service customers or to address other

extraordinary circumstances, and that the purchase price does not exceed the market

price for such power or the power was procured through a competitive bid process subject

to board review and approval. The board shall require that all net revenues derived from such sales, when the

source of power is assets or contracts which costs are included in stranded costs

recovery charges assessed pursuant to sections 13 and 14 of P.L.1999, c. 23 ( C.48:3-61 and C.48:3-62 ) , shall be applied: (a) To offset any market transition charge or equivalent rate mechanism assessed to

customers pursuant to section 13 of P.L.1999, c. 23 ( C.48:3-61 ) ; or (b) If the electric public utility is not assessing a market transition charge, to

offset the rates charged to customers for distribution service, except that such offset

shall cease to be required after the term of the transition bond charge has expired

as provided in paragraph (1) of subsection d. of section 14 of P.L.1999, c. 23 ( C.48:3-62 ) . (3) The board may devise an alternative accounting or cost recovery process that permits

an electric public utility to purchase power from a related competitive business segment

of its public utility holding company, or otherwise, to provide basic generation service

to its customers during the period that the electric public utility is providing for

sustainable rate reductions pursuant to subsection j. of section 4 of P.L. 1999, c. 23 ( C.48:3-52 ) and subsection a. of this section, if the board determines that such process is necessary

to mitigate the impacts of market price fluctuations and to sustain such rate reductions. c. After the starting date of retail competition as provided in subsection a. of section 5

of P.L.1999, c. 23 ( C.48:3-53 ) , the board shall issue a decision as to whether to make available on a competitive

basis the opportunity to provide basic generation service to any electric power supplier,

any electric public utility, or both. d. Power procured for basic generation service by an electric power supplier shall

be purchased at prices consistent with market conditions. The charges assessed to customers for basic generation service shall be regulated

by the board and shall be based on the reasonable and prudent cost to the supplier

of providing such service, including the cost of power purchased at prices consistent

with market conditions, by the supplier in the competitive wholesale marketplace and

related ancillary and administrative costs, as determined by the board or shall be

based upon the result of a competitive bid. e. Each electric public utility or electric power supplier that provides basic generation

service pursuant to subsection a., c. or d. of this section shall be permitted to

recover in its basic generation charges on a full and timely basis all reasonable

and prudently incurred costs incurred in the provision of basic generation services

consistent with the provisions of this section, except to the extent that certain

costs related to the provision of basic generation service are already being recovered

in other elements of an electric public utility's charges. The board may approve ratemaking and other pricing mechanisms that provide incentives,

including financial risks and rewards, for the utility or electric power supplier

to procure a portfolio of electric power supply that provides maximum benefit to basic

generation service customers. f. Each electric public utility shall submit a quarterly report to the board of generation contracts between the public utility and any related competitive business

segment. A utility that submits a report pursuant to this subsection may petition the board

for confidential treatment as trade secrets of any or all of the information provided. g. Nothing in this section shall apply to any existing board approved bilateral power

purchase contract by an electric public utility as of the effective date of P.L.1999, c. 23 ( C.48:3-49 et al.) .