An Act establishing uniform Statewide reliability standards for ¹electric and gas¹ public utilities ¹[and electric power suppliers and amending P.L.1999, c.23 and],¹ supplementing Title 48 of the Revised Statutes ¹, and amending R.S.48:2-42¹.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. (New section) Sections 1 through ¹[6 and section]¹ 8 of P.L. , c. (C. ) (pending before the Legislature as this bill) shall be known and ¹may be¹ cited as the "Electric and Gas Utility Service Reliability Act."

2. (New section) The Legislature finds and declares that:

a. Reliable electricity and natural gas utility service is essential to the health, welfare, and safety of the American people and necessary to serve our economy;

b. State agencies require enough information to make appropriate regulatory decisions affecting the electric and gas public utility industry and consumers in New Jersey;

c. There is a need for more proactive discussions among appropriate State government agencies, regional entities, and electric and gas public utilities about how to work together in order to ensure electric and gas service reliability;

d. There is a need for increased certainty and greater flexibility to preserve electric and gas service reliability and to mitigate additional rate increases through the timely maintenance of the electric and gas utility network infrastructure; and

e. The adoption of uniform Statewide standards of acceptable performance, in the areas of service reliability and restoration of service, by electric and gas public utilities doing business in the State will help minimize health and safety problems occurring due to utility service hazards or disruptions.

3. (New section) As used in P.L. , c. (C. ) (pending before the Legislature as this bill):

"Board" means the Board of Public Utilities.

¹"Disruption of service" means the loss of service within the service territory of a public utility according to criteria to be established by the board. "Disruption of service" shall not include events that are planned, occur as a conservation or safety measure, or any other event that results from the routine and prudent operation of the public utility transmission or distribution system.¹

"Public utility" means a public utility, as that term is defined in R.S.48:2-13, that is under the jurisdiction of the Board of Public Utilities, is investor-owned, and transmits and distributes either electricity or natural gas to end users within this State.

4. (New section) a. Consistent with federal law, the board shall establish uniform Statewide standards of acceptable performance for service reliability and restoration of service for public utilities doing business in the State. These standards shall replicate national standards for service reliability and restoration concerning the transmission of electricity and natural gas, including but not limited to, as appropriate, any standards adopted by the North American Electric Reliability Corporation, the Federal Energy Regulatory Commission, and the Office of Pipeline Safety, Pipeline and Hazardous Materials Safety Administration, in the United States Department of Transportation, subject to adjustment, as appropriate, to electricity and natural gas distribution service and to accommodate any factors unique to the State. The standards shall address the following components of utility service:

(1) Electric power and natural gas supply resource and demand balancing, flow monitoring, and stabilization;

(2) Critical infrastructure protection and control;

(3) Communications coordination;

(4) Emergency preparedness and operations;

(5) Facilities design and operations maintenance;

(6) Personnel performance, training, and qualifications requirements;

(7) Electric power and natural gas system disturbance, contingency response, and system restoration; and

(8) Reliability operating limits coordination.

b. Following the promulgation of any rules and regulations, pursuant to the "Administrative Procedure Act" P.L.1968, c.410 (C.52:14B-1 et seq.), necessary to effectuate the provisions of subsection a. of this section, the board may open a full investigation of any alleged failure of a public utility to meet the standards established pursuant to subsection a. of this section. The investigation shall seek to determine whether a public utility has committed a violation of the board's standards of acceptable performance.

5. (New section) a. Each public utility conducting business in the State shall annually, on or before ¹[May 15] March 1 for electric public utilities, and on or before June 1 for gas public utilities¹, submit to the board a service reliability plan for the board's review and approval. The service reliability plan shall be designed for the provision of safe and reliable service and the reasonably prompt restoration of service in the event of a widespread ¹[outage] disruption of service¹ in the service area of the public utility due to storms or other causes beyond the control of the public utility, and the provisions of the plan shall reflect the standards established pursuant to subsection a. of section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill).

b. After review of a public utility's service reliability plan, the board may request that the public utility amend the plan. If the board finds a material deficiency in the plan, the board may order the public utility to make ¹[such] any¹ modifications as it deems reasonably necessary to remedy the deficiency.

c. The board shall also have the authority to open an investigation to review the performance of any public utility in restoring service during a widespread ¹[outage] disruption of service¹ in the ¹public¹ utility's service area. If, after evidentiary hearings or other investigatory proceedings, the board finds that, as a result of the failure of the public utility to implement its service reliability plan ¹submitted by the public utility pursuant to subsection a. of this section and approved by the board¹ , the length of the ¹[outages] disruptions of service¹ were materially longer than they would have been but for the public utility's failure, the board may impose a ¹[fine commensurate with the length and severity of the damage caused by that failure] civil administrative penalty pursuant to section 9of P.L. , c. (C. ) (pending before the Legislature as this bill). The board shall not impose a penalty related to a service reliability plan that has not been formally approved by the board¹.

6. (New section) The Board of Public Utilities shall undertake a detailed study of electric and gas utility service reliability and its impact on electricity and natural gas prices, economic activity, the number of jobs created to maintain service reliability, and the reliability of electric and natural gas service in this State. Within three years after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), the board shall prepare a report of its study and shall provide a copy thereof to the Governor and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), to the Legislature.

¹[7. Section 29 of P.L.1999, c.23 (C.48:3-78) is amended to read as follows:

29. a. A person shall not offer to provide or provide electric generation service to retail customers in this State unless that person has applied for and obtained from the board, pursuant to standards adopted by the board, an electric power supplier license. Persons providing such services on the effective date of [this act] P.L.1999, c.23 (C.48:3-49 et al.) shall have 120 days to apply for and receive the requisite license.

b. The board shall issue a license to an electric power supplier that is in compliance with the licensing standards adopted pursuant to subsection c. of this section. A license shall expire one year from the date of issuance unless the holder thereof pays to the board, within 30 days before the expiration date, a renewal fee accompanied by a renewal application on a form prescribed by the board. If a licensee has made, in accordance with this section and any applicable board rules or regulations, timely and sufficient application for renewal, the license shall not expire until the application has been reviewed and acted upon by the board. Nothing in this section shall limit the authority of the board to deny, suspend or revoke a license at any time, consistent with the provisions of [this act] P.L.1999, c.23 (C.48:3-49 et al.).

c. Notwithstanding any provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) to the contrary, the board shall initiate a proceeding and shall adopt, in consultation with the Division of Consumer Affairs in the Department of Law and Public Safety, after notice, provision of the opportunity for comment, and public hearing, interim electric power supplier licensing standards within 90 days of the effective date of [this act] P.L.1999, c.23 (C.48:3-49 et al.). Such standards shall be effective as regulations immediately upon filing with the Office of Administrative Law and shall be effective for a period not to exceed 18 months, and may, thereafter, be amended, adopted or readopted by the board in accordance with the provisions of the "Administrative Procedure Act." The standards shall include, but need not be limited to, the following requirements that an electric power supplier:

(1) Register with the board, which shall include the filing of basic information pertaining to the supplier, such as name, address, telephone number, and company background and profile, and a list of the services or products offered by the supplier. A supplier shall provide annual updates of this information to the board. The registration shall also include:

(a) Evidence of financial integrity;

(b) Information on any disciplinary proceedings or actions by law enforcement authorities in which the electric power supplier, its subsidiaries, affiliates or parent has been involved in this State or any other states;

(c) The ownership interests of the supplier including the interests owned by the supplier and the interests owning the supplier;

(d) The name and address of the in-State agent of the supplier that is authorized to receive service of process;

(e) The name and address of the in-State customer service agent for the supplier; and

(f) The quantity of retail electric sales made in this State during the 12 months preceding the application.

(2) Agree to meet all reliability standards established by the Mid-Atlantic Area Council of the North American Electric Reliability Council or its successor, the PJM Interconnection, L.L.C. independent system operator or its successor, the Federal Energy Regulatory Commission, the board, or any other state, regional, federal or industry body with authority to establish reliability standards. The board may establish specific standards applicable to electric power suppliers to ensure the adequacy of electric power capacity, if it determines that standards established by any other state, regional, federal or industry bodies are not sufficient to assure the provision of safe, adequate, proper and reliable electric generation service to retail customers in this State. Such reliability standards shall ensure bulk power system operations and security, and shall ensure the adequacy of electric power capacity necessary to meet retail loads;

(3) Maintain an office within this State for the purposes of accepting service of process, maintaining such records as the board requires and ensuring accessibility to the board, consumers and electric public utilities;

(4) Maintain a surety bond under terms and conditions as determined by the board;

(5) Provide a description of the products and services to be rendered;

(6) Comply with such specific standards of conduct for electric power suppliers as the board shall adopt; and

(7) Provide through legal certification by an officer of the electric power supplier such information as the board or its staff shall require to assist the board in making any determination concerning revocation, suspension, issuance or renewal of the supplier's license pursuant to section 32 of [this act] P.L.1999, c.23 (C.48:3-81).

d. An electric public utility shall:

(1) Incorporate by reference the board's licensing requirements in its tariffs for transmission and distribution service;

(2) Apply the licensing requirements and other conditions for access to the transmission and distribution system uniformly to all electric power suppliers; and

(3) Report alleged violations of the board's licensing requirements of which it becomes aware to the board.

e. The board shall establish an alternative dispute resolution program to resolve any licensure or access dispute between an electric power supplier and an electric public utility. The board may establish reasonable fees, not to exceed actual costs, for the provision of alternate dispute resolution services. If informal resolution of the dispute is unsuccessful, the board shall adjudicate the dispute as a contested case pursuant to the "Administrative Procedure Act."

f. The board shall monitor the retail supply market in this State, and shall consider information available from the PJM Interconnection, L.L.C. independent system operator or its successor with respect to the conduct of electric power suppliers. The board shall monitor proposed acquisitions of electric generating facilities by electric power suppliers as it deems necessary, in order to ascertain whether an electric power supplier has or is proposed to have control over electric generating facilities of sufficient number or strategic location to charge non-competitive prices to retail customers in this State. The board shall have the authority to deny, suspend or revoke an electric power supplier's license, after hearing, if it determines that an electric power supplier has or may acquire such control, or if the electric power supplier's violations of the rules, regulations or procedures of the PJM Interconnection, L.L.C. independent system operator or its successor may adversely affect the reliability of service to retail customers in this State or may result in retail customers being charged non-competitive prices.

g. The board [may] shall establish uniform reliability, safety, and service quality standards for electric power suppliers, and nothing in [this act] P.L.1999, c.23 (C.48:3-49 et al.) shall limit the authority of the board to promulgate such uniform reliability, safety, or service quality standards or to resolve complaints regarding the quality of electric generation service.

h. The board may establish, by written order pursuant to subsection c. of this section or by rule, a licensure fee to cover the costs of licensing electric power suppliers. The fee shall include a reasonable surcharge to fund a consumer education program in this State established pursuant to section 36 of [this act] P.L.1999, c.23 (C.48:3-85).

i. Any provision of [this act] P.L.1999, c.23 (C.48:3-49 et al.) to the contrary notwithstanding, any person acting as an energy agent shall be required to register with the board. This registration shall include, but need not be limited to, the name, address, telephone number, and business affiliation or profile of the energy agent, evidence of financial integrity as determined by the board, and evidence of knowledge of the energy industry. This registration shall be updated annually. Nothing in this subsection shall be construed to limit or exempt an energy agent from liability under any other law pertaining to any activity which an energy agent may engage in.

(cf: P.L.1999, c.23, s.29)]¹

¹7.(New section) a. Each public utility conducting business in the State shall annually, on or before March 1 for electric public utilities, and on or before June 1 for gas public utilities, submit an emergency communications strategic plan for review and approval by the board. The strategic plan shall be reviewed in consultation with the State Office of Emergency Management in the Division of State Police in the Department of Law and Public Safety. The strategic plan shall include, but not be limited to, providing an explanation of the public utility's system for communicating with customers during and after an emergency that extends beyond normal business hours and the designation of public utility staff to communicate with local officials and relevant regulatory agencies.

b. After review of a public utility's emergency communications strategic plan, the board may request that the public utility amend the plan. If the board finds a material deficiency in the plan, the board may order the public utility to make any modifications as it deems reasonably necessary to remedy the deficiency.

c. The board shall have the authority to open an investigation to review the communications of any public utility during a disruption of service in the public utility's service area. If, after evidentiary hearings or other investigatory proceedings, the board finds that, as a result of the failure of the public utility to implement the emergency communications strategic plan submitted by the public utility pursuant to subsection a. of this section and approved by the board, the public utility's communications were materially less effective than they would have been but for the public utility's failure, the board may impose a civil administrative penalty pursuant to section 9of P.L. , c. (C. ) (pending before the Legislature as this bill). The board shall not impose a penalty related to an emergency communications strategic plan that has not been formally approved by the board.¹

8. (New section) The board shall promulgate any rules and regulations pursuant to the "Administrative Procedure Act" P.L.1968, c.410 (C.52:14B-1 et seq.) necessary to effectuate the provisions of this act.

¹9. R.S.48:2-42 is amended to read as follows:

48:2-42. [Any] a. Notwithstanding the provisions of any law, rule, regulation, or board order to the contrary, any person [or], public utility, or other person or entity subject to the jurisdiction of the board that shall fail to comply with [an] any law, rule, regulation, or order of the board [, except an order to resume service which has been discontinued,] shall be [subject to a penalty of one hundred dollars for every day during which the default continues. Any person or public utility that shall fail to comply with any order of the board directing the public utility to resume service which has been discontinued shall be subject to a penalty of two hundred and fifty dollars for every day during which such default continues. Such penalties shall be recovered in an action at law in the name of the state] liable for a civil administrative penalty not to exceed $25,000 for each violation, except that any maximum civil penalty may not exceed $2,000,000 for any related series of events. Each day during which the violation continues shall constitute an additional, separate, and distinct violation.

b. Any civil administrative penalty may be compromised by the board in an amount and with conditions the board deems appropriate. In determining the amount of the penalty, or the amount agreed upon in compromise, the board shall consider: the nature, circumstances, and gravity of the violation; the degree of the violator's culpability; any history of prior violations; any good faith effort on the part of the violator in attempting to achieve compliance; and any other factors the board determines to be appropriate.

c. Pursuit of any remedy specified in this section shall not preclude the pursuit of any other remedy provided by any other law except, if the penalty amount set forth in any other law, rule, regulation, or board order is less than the amount set forth in P.L. , c. (C. ) (pending before the Legislature as this bill), then the amounts set forth in P.L. , c. (C. ) (pending before the Legislature as this bill) shall control.

d. Civil administrative penalties may be recovered, if necessary, in a summary proceeding pursuant to the "Penalty Enforcement Law of 1999," P.L.1999, c.274 (C.2A:58-10 et seq.). The Superior Court shall have jurisdiction to enforce the provisions of the "Penalty Enforcement Law of 1999" in connection with P.L. , c. (C. ) (pending before the Legislature as this bill).

e. Notwithstanding any law to the contrary, there is hereby established in the board a nonlapsing, special revenue fund called the "Board of Public Utilities Civil Penalty Fund" into which all penalties imposed or obtained pursuant to P.L. , c. (C. ) (pending before the Legislature as this bill) shall be deposited. The moneys in the Board of Public Utilities Civil Penalty Fund shall be used for the improvement of public utility service quality and reliability.

f. Consistent with section 1 of P.L.1988, c.100 (C. 48:2-21.14), any civil administrative penalty imposed under this section shall not be recoverable from ratepayers.¹

(cf: R.S.48:2-42)

¹[9.] 10.¹ This act shall take effect immediately, but subsection b. of section 4 and subsection c. of section 5 shall remain inoperative for 180 days following the date of enactment.