October 2022 – New Jersey Policy Update

BPA tracks the latest policy updates and legislative issues in many states across the nation. See the latest policy information for New Jersey as of October 2022.

Disclaimer: Inclusion of any bills/regulations in this state policy update does not equate to BPA’s endorsement.

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New Jersey Board of Public Utilities (NJBPU) announced in late September that an additional $63 million in funding is available for Heating, Ventilation and Air Conditioning (HVAC) projects in public schools under the School and Small Business Stimulus (SSBS) Program. These grants can cover repair, maintenance, upgrade, replacement, and installation of certain HVAC systems, as well as the installation of energy-efficient and water-conserving appliances. Funds are committed on a first-come, first-serve basis until funds are exhausted.

At the end of September, NJBPU announced the launch of the ‘Whole House’ pilot program designed to address health and safety issues and provide assistance with energy efficiency upgrades in low-income homes in Trenton, New Jersey. Once implemented, the pilot will be evaluated for expansion across the entire state. (more details below).

Meanwhile, the New Jersey legislature held a hearing in August to receive public input on next steps the State can take to address climate change and to consider newly introduced legislation that would require the state to generate 100 percent renewable energy by 2045 (see S2978 below).

Regulatory Monitor:

• On September 26, NJBPU announced that it has partnered with the Green and Healthy Homes Initiative (GHHI) to launch the ‘Whole House’ Pilot Program to help low-income residents receive energy efficiency improvements and health and safety hazard remediation in Trenton, New Jersey. Through the new program, GHHI will connect homeowners with opportunities to receive financial assistance for energy efficiency upgrades through New Jersey’s Comfort Partners Program (administered jointly by NJBPU and local utilities) including insulation upgrades, air sealing, duct sealing and repair, and heating/cooling equipment maintenance and to address health and safety barriers such as mold, asbestos, and lead through community-based organizations. According to the announcement from NJBPU, after implementation of the pilot program in Trenton, NJBPU “will evaluate the results of the pilot to determine whether these health and safety improvements should be made as part of an expanded statewide program in the future.”
• In September, NJBPU announced that it will require building owners and operators of commercial building owners over 25,000 square feet to benchmark energy and water use starting October 1, 2023. In the announcement, NJBPU specifically references the New Jersey Clean Energy Act (CEA) signed into law by Governor Murphy in 2018, which requires “the owner or operator of every commercial building over 25,000 square feet in the state to benchmark energy and water use using the U.S. Environmental Protection Agency’s Portfolio Manager tool” and the 2019 New Jersey Energy Master Plan, which notes that “benchmarking is a necessary first step in establishing appropriate building performance standards in existing buildings.” NJBPU will be hosting webinars to engage and train building owners and utilities to comply with the program. Ongoing updates regarding New Jersey CEA Benchmarking are available here.
• On August 17, NJBPU held a board meeting and voted to accept the finalized Ratepayer Impact Study to assess the potential impacts of policies laid out in the state’s Energy Master Plan (EMP) to achieve 100% decarbonization of the energy sector by 2050 and 50 percent greenhouse gas reductions statewide by 2030. The study concludes that “if customers reduce their energy consumption and invest in electrification of buildings and transportation, average bills in 2030 will fall below energy costs in 2020 by between 10-20 percent for most customers.” However, the report also demonstrates that cost savings and greenhouse gas reductions from the EMP may have a wide range of outcomes depending on if customers electrify and adopt energy efficiency measures, emphasizing that “an important part of customers transitioning to clean energy consumption will include incentives for customer participation and appropriate policymaking.” The report, which may be used by NJBPU and other state agencies to guide policy and program development, establishes that enhanced energy assistance programs will be necessary, in particular targeting low-income customers to address the costs of electrification and energy efficiency improvements and to mitigate their energy burden.
• NJ DEP has closed public comments on proposed regulations that would require “new and existing electric generating units” to comply with a CO2 output limit starting in January 2024 – prohibiting large fossil fuel heating systems, which service multifamily buildings, businesses, hospitals, etc starting in 2024. The rules would also ban installation of new, large commercial and industrial boilers. Since closing public comments in April, NJDEP has not announced final steps on implementing these proposed rules at the time of this writing.
• NJBPU held its first of two stakeholder meetings on August 16 to receive feedback on draft Minimum Filing Requirements for the electric utilities to include within their Data Access Plans. This is following the August 2021 release of a Straw Proposal on Advanced Metering Infrastructure (AMI) Data Access. The Straw Proposal launched a process to determine standardized Data Access Plans that each New Jersey public utility will be required to adopt to ensure AMI in New Jersey “meets the potential to be an integral part of New Jersey’s clean energy transition, enhance retail competition and efficiencies, and enable customers to better understand and control their own energy usage.” In response to the proposal, BPA submitted initial comments in 2021 emphasizing the importance of having data access requirements in place up front before AMI is approved to ensure that meter data can be used to its fullest potential. NJBPU is accepting written comment submissions through September 30 and will host a follow up stakeholder meeting on September 6.
• NJBPU closed public comments at the end of July on proposed updates to New Jersey Clean Energy Program’s New Construction Program for the residential, multi-family, commercial, and industrial markets. Ahead of the stakeholder feedback, NJCEP Staff proposed several changes to the NJCEP New Construction programs designed “to remove barriers to participation, streamline the application process, and better align the programs with the State’s Energy Master Plan goal of 100% clean energy by 2050.” . NJBPU will use this feedback to release an updated New Construction Program Design over the coming months followed by a public comment period before it is presented to NJBPU board for final approval.
• In June, NJBPU announced that it has approved over $800,000 in Community Energy Plan Grants (CEPGs) for 46 municipalities across New Jersey. These grants will be used by localities to formulate climate action plans at the local level to achieve a statewide transition to 100% clean energy by 2050 as set by New Jersey’s Clean Energy Master Plan with a specific focus on equitable access, energy resilience, renewable energy, and efficiency. NJBPU is currently accepting applications for CEPGs: all municipalities are eligible for $10,000 grants to create community energy plans and a larger award of $25,000, as well as enhanced support, including technical assistance, is available for overburdened municipalities.
• The NJBPU has approved Jersey Central Power & Light’s (JCP&L) plan to install over 1.1 million smart meters for homes and businesses beginning in 2023. Using ratepayer funds, JCP&L will install approximately one-third of the smart meters each year, with the majority of (if not all) customers receiving a smart meter by 2026. Customers will have the ability to opt out of receiving a smart meter by paying a monthly fee.
• New Jersey utilities are hosting ongoing calls with local contractors to provide program updates and secure feedback on their Home Performance with Energy Star (HPwES) and HVAC rebate programs. Interested contractors may reach out to their local utility to participate in the meetings and find out more information. *Please Note: These calls are not administered by the NJBPU. Interested contractors should contact their local utility companies.
• Following NJBPU approval, HVAC and heat pump systems at or above 12.5 Energy Efficiency Ratio became eligible for rebates through New Jersey utilities’ HVAC rebate program starting January 31.
• NJBPU-led Working Groups continue to meet to discuss updates and improvements for the state’s energy efficiency programs. The Workforce Development Working Group is developing a report for the NJBPU assessing existing training opportunities across the state and recommending expansion opportunities for job placement and career development in the clean energy industries. Additionally, the Evaluation Measurement & Verification (EM&V) Work Group is developing a 3-year evaluation plan to assess current energy efficiency programs and help design future program offerings. Meanwhile, the Equity Working Group has established minimum participation levels and tracking metrics for low- and middle-income (LMI) individuals that will be incorporated into a quarterly report released by the EM&V Group to track performance of energy efficiency programs.

Legislative Monitor:

2022 Regular Session Dates: January 11 until December 31, 2022. **Note: Legislature meets throughout the year.

Bills currently under consideration:

• S1890 / A2138 (Senator Johnson, Assemblymen Moriarty, Mukherji, McKnight) establishes the New Jersey State Board of Home Improvement and Home Elevation Contractors. The board is required to license, on a biennial basis, home improvement and home elevation contractors, establish a code of ethics and standards of conduct for contractors, and promulgate rules and regulations as guidance for contractors. Requirements for licensure as either a home improvement or home elevation contractor include demonstrating completion of an apprenticeship program or two years of experience performing home improvement services under the direct supervision of a home improvement contractor or a licensed home elevation contractor. Contractors must also pass an exam to test knowledge of home improvement, and home elevation, if applicable. “Home improvement” means the remodeling, altering, renovating, repairing, restoring, modernizing, moving, demolishing, installing in, or otherwise improving or modifying of the whole or any part of any residential property, including insulation installation and the conversion of existing commercial structures into residential property. Home improvement does not include the construction of a new residential property. A2138 was introduced in February in the House Consumer Affairs Committee and passed unanimously through the House Consumer Affairs Committee on September 15 with technical amendments including to clarify that new construction is not included in “home improvement.” A2138 has been referred to the Assembly Commerce and Economic Development Committee for further consideration. The senate bill has not advanced since its introduction to the Senate Commerce Committee in March.
• A1775 An Act Concerning the Administration of the Low-Income Energy Assistance Benefits Program (LIHEAP) requires the Department of Community Affairs to offer training sessions on quarterly basis for local agencies and contractors to administer LIHEAP. The bill also establishes an online and phone resource to educate New Jersey low-income residents on the benefits of LIHEAP. After an amendment approved on the house floor, the bill also requires DCA to establish an open and competitive process utilizing an annual request for proposal to award grants to nonprofit organizations to administer the Low-Income Home Energy Assistance Program applications. A1775 received an amendment on the Assembly Floor on May 26 as detailed above and then passed through the Assembly chamber with a vote of 76-1 on June 20. It has been referred to the Senate Economic Growth Committee where a hearing or not has not yet been scheduled. In addition, counterpart legislation in the senate was introduced on June 20 and also referred to the Senate Economic Growth Committee.
• A4131 / S419 An Act concerning renewable energy and energy efficiency in State, local, and school district buildings establishes the Renewable and Efficient Energy Financing (REEF) Program to provide loans and other forms of financial assistance to finance energy efficiency improvements in buildings owned or operated by the State and local entities or school districts. Eligible energy efficiency improvements would include “insulation; storm windows or doors; caulking, weather-stripping, or other window and door system modifications or improvements that reduce energy consumption; automated or computerized energy control systems; energy efficient heating, ventilation, or air conditioning systems; energy efficient lighting systems; on-site solar energy systems or other renewable energy systems; energy recovery systems; cogeneration or combined heat and power systems.” The bill authorizes BPU to transfer up to $20 million annually in societal benefits charge revenues to the New Jersey Infrastructure Bank to administer the REEF program. A4131 was introduced to the Assembly Environment and Solid Waste Committee on June 2 while counterpart legislation in the Senate advanced through the Senate Environment and Energy Committee earlier this year and has been referred to the Budget and Appropriations Committee.
• S2045 / A1738 An Act concerning financing high performance green buildings would establish a program through the NJ Economic Development Authority (NJEDA) to administer low-interest loans for the development of new, or renovation of existing, high performance green buildings. “High performance green buildings” are defined as commercial, industrial, or mixed-use buildings over 15,000 square feet that achieve at least a LEED silver rating, silver National Green Buildings Standards rating, a two-globe rating with the Green Globes Program, and any other comparable program approved by Commissioner of Environmental Protection and the BPU. S2045 was introduced in the Senate Economic Growth Committee on March 3. A1738 was introduced in the Assembly Commerce and Economic Development Committee on January 11.
• A576 An Act establishing the Climate Change Mitigation and Resilience Financing Program through the New Jersey Infrastructure Bank to provide low-interest loans and other financial assistance to State entities, local government units, and private entities for climate change mitigation and resilience projects including energy efficiency improvements. Eligible projects include building insulation, weatherization measures, automated energy control systems, energy efficient heating, ventilation or air conditioning systems, and energy efficient lighting systems. The bill imposes a $0.0003 per-kilowatt hour charge on electric public utility customers to fund the Climate Change Mitigation and Resilience Financing Program. The charge would scale down over time as the State moves closer to 100% renewable energy and would phase out entirely upon certification by the BPU that 100% of the kilowatt hours sold in the State are from renewable energy sources. A576 was introduced in the Assembly and referred to the Environment and Solid Waste Committee on January 11.
• S1983 / S1985 / A3191 An Act Providing Tax Credits for Meeting Green Building Standards establishes a “Green Building Tax Credit” for up to 6% of the costs to retrofit or construct buildings to meet “green building” criteria. The bill directs the Department of Community Affairs, with the Department of Environmental Protection, to establish green building standards for owners and developers to qualify for the credit. The bill requires that single-family homes comply with the New Jersey Energy Star Homes program and energy use in all other buildings does not exceed 65% of the energy use permitted by the relevant New Jersey energy code. Equipment and appliances, for which Energy Star standards exist, must meet Energy Star standards and no less than 40% of high-use lighting fixtures must meet Energy Star standards. The tax credit would be available for seven years and is capped at $20 million in the first year, up to $50 million for the subsequent six years. On May 16, S1983 was combined with S1985 (the two bills were initially separate legislation providing an identical tax credit for new construction and retrofits) and voted unanimously through the Senate Environment and Energy Committee. The legislation has been passed onto the Senate Budget and Appropriations Committee where a hearing is not yet posted. On June 20, a companion bill in the House was introduced to the Assembly Environment and Solid Waste Committee to match the combined Senate bills. (Note: the original companion bill in the Assembly (A3191) created a tax credit only for newly constructed green buildings. This bill has not seen any action since its introduction in March.)
• S2089 / A3745 An Act Concerning Energy Audits for Small Businesses would establish a program through the New Jersey Economic Development Authority to offer financial assistance including up to 100% reimbursement to small businesses for energy audits and for the purchase and installation of energy efficiency and conservation equipment. S2089 was introduced to the Senate and referred to the Environment and Energy Committee on March 3. A3745 was introduced and referred to the Assembly Commerce and Economic Development Committee on May 2.
• S336 / A1479 An Act concerning clean energy, energy efficiency, and energy storage programs for overburdened communities establishes an Office of Clean Energy Equity within the Board of Public Utilities to oversee the equitable deployment of clean energy, energy efficiency, and energy storage programs. The bill directs at least 10% from the BPU budget or $50 million annually to the Office of Clean Energy Equity to, among other provisions, provide grants to nonprofit organizations, community colleges, and vocational-technical schools for workforce development training in all clean energy programs including through energy efficiency. The bill specifies that funding through the new office will be supplemental to, and not replace, any funds allocated to energy efficiency services for low-income households. A1479 was introduced and referred to the Assembly Telecommunications and Utilities Committee on January 11 where it has not seen a hearing or vote yet.
• S1170 / A1440 An Act Concerning Zero Energy Construction requires all commercial and residential new construction to be “zero-energy ready” starting January 1, 2025. To achieve this target, the bill directs the NJBPU to adopt energy efficiency building codes that ensure that buildings only consume as much energy as they produce onsite and to offer necessary rebates and incentives to building owners and developers to comply with such a code. S1170 was introduced in the Senate and referred to the Community and Urban Affairs Committee on January 31. A1440 was introduced in the Assembly Housing Committee on January 11.
• S277 / A1781 An Act Establishing a Green Infrastructure Financing Program would create a low-cost financing program through NJEDA to make “green infrastructure installations”. Green infrastructure installation includes any commercially available technology that enables the State to meet its energy efficiency or conservation goals including through demand response technology or reductions in energy use. Both Senate and House bills were reintroduced this year and referred to the Senate Energy & Environment Committee and Assembly Science, Innovation, and Technology Committee on January 11.
• A3079 An Act concerning Carbon Emissions from Electric Power Generation requires all electric power sold in New Jersey to be from zero-carbon sources by 2050. Electric power suppliers must develop multi-year schedules to gradually meet this target.
• S1759 An Act concerning Customer Energy Usage Data Privacy directs BPU to establish statewide standards for each electric public utility on the use of customer energy usage data collected through advanced metering infrastructure (AMI). The bill establishes that a customer has full ownership of their energy data with authority to share with third parties and requires BPU to develop “Standardized Privacy Requirements” within 90 days. Then, within 90 days after the issuance of those requirements, utilities will be required to file “Data Access Plans,” which must be reviewed, modified, or approved by BPU 30 days after submission. The plans must ensure customers are provided with fair, near real-time access to ongoing and historical data, with sufficient information to share data with third parties, and that customer data is used to help achieve New Jersey’s clean energy goals including by improving energy efficiency, rate design, and billing accuracy. S1759 was introduced in the Senate and referred to the Senate Environment and Energy Committee on February 28.
• A2937 An Act Concerning Certain Electric Heating and Water Heating Systems would prohibit the adoption of rules or regulations that mandate the use of an electric heating system as the sole or primary means of heating buildings until after a report is issued by the Department of Community Affairs, in consultation with the Department of Environmental Protection and the Board of Public Utilities within 30 months of enactment. To develop the report, the Department would be required to hold a minimum of six public hearings to solicit input on costs, ratepayer and low-income impacts, and greenhouse gas emissions reduction goal impacts. Last session, this bill passed in the Senate. It was reintroduced and referred to the Assembly Environment and Solid Waste Committee on February 28.
• S1386 / A2879 An Act to Codify Certain Energy Goals related to the 2019 Energy Master Plan would formalize goals set by the New Jersey Energy Master Plan, including 35% reductions in greenhouse gasses by 2025 and 50% renewable electricity by 2030. After passing the Senate with a vote along party lines in 2021, the legislation did not receive a vote in the Assembly. However, the bill was reintroduced in February through the Assembly Environment & Solid Waste and Science and Senate Environment and Energy Committees. At the time of this writing, neither chamber has a hearing or vote scheduled.
• S430 An Act to Require the Division of Rate Counsel to Consider Environmental Impacts would require consideration of climate and environmental impacts in regulatory proceedings. The Division of Rate Counsel would prioritize cases that have the most potential to impact the ability of the State to timely fulfill its de-carbonization goals and the extent of environmental or health stressors that are present in an overburdened community. This bill was reintroduced in January and referred to the Senate Energy & Environment Committee.
• S2671 / A3935 An Act concerning certain electric heating and water heating systems would prohibit the adoption of rules or regulations that mandate the use of an electric heating system as the sole or primary means of heating buildings until after a report is issued by the Department of Community Affairs, in consultation with the Department of Environmental Protection and the Board of Public Utilities within 30 months of enactment. To develop the report, the Department would be required to hold a minimum of six public hearings to solicit input on costs, ratepayer and low-income impacts, and greenhouse gas emissions reduction goal impacts. The Senate bill was introduced on May 16 and referred to the Community and Urban Affairs Committee. Its counterpart bill in the Assembly was introduced on May 12 and referred to the Community Development and Affairs Committee.