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Bill

A 3132

Directs BPU to establish virtual power plant program to reduce peak demand for electric energy.

2026-2027 Regular Session Introduced by Carol Murphy and 3 co-sponsors

Establish a statewide virtual power plant program to optimize demand and cut peak load by 500 MW by 2030 using DERs, storage, and managed EV charging.

Introduced, Referred to Assembly Telecommunications and Utilities Committee
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Bill Summary · A 3132

Overview

A 3132 (NJ, Session 222) directs the Board of Public Utilities (BPU) to establish a virtual power plant (VPP) program aimed at reducing peak electric energy demand in New Jersey. The program would leverage distributed energy resources (DERs) such as home energy storage, solar-plus-storage, and managed electric vehicle (EV) charging, coordinated by DER aggregators and/or utilities. The goal is to improve grid reliability, defer costly infrastructure, and lower ratepayer costs while advancing clean energy and equity objectives.

Primary purpose and intent

  • Create a statewide VPP program to optimize demand, reduce system peak load, and support grid reliability.
  • Align with broader public policy goals: integrate renewable energy, increase resource adequacy, defer grid upgrades, and reduce greenhouse gas emissions.
  • Target a measurable peak reduction of 500 megawatts by 2030.

Key provisions and requirements

  • Definitions:

    • Virtual power plant (VPP): aggregation of DERs operated in coordination to provide grid services.
    • DER: resources such as electricity generation, energy storage, bidirectional or controllable EV chargers, or controllable loads connected to a utility grid.
    • DER aggregator: a third-party entity authorized to enroll, operate, and compensate DERs participating in PJM markets under FERC Order 2222.

  • program establishment and governance:

    • The BPU must establish, by board order, a demand optimization program in collaboration with electric public utilities and DER aggregators.
    • The program should optimize demand, reduce peak, improve capacity resilience, and support grid reliability through VPPs.
    • A cap/target: 500 MW peak demand reduction by 2030.

  • minimum filing requirements (within 12 months of enactment):

    • Allocate the national/state peak demand reduction target to each electric utility.
    • Define grid flexibility services: include system-wide peak reduction, potential local peak reduction, transmission/distribution deferral, voltage support, and other ancillary services.
    • Enable customers to combine load modification with storage and EV technologies to participate.
    • Specify eligible DER types for inclusion (e.g., battery storage, managed/bi-directional EV charging, smart thermostats, grid-friendly water heaters, commercial/industrial demand response).
    • Establish data/tech infrastructure: DER registry, DER management system, interoperability standards, and open data standards for grid-edge orchestration under market development.
    • Set utility technology standards compatible with third-party aggregations under FERC Order 2222.
    • Outline procurement standards for developers/vendors (prefer competitive processes where feasible).
    • Define performance terms: measurement/verification, compensation, non-performance penalties.
    • Ensure inclusion of low- and moderate-income customers and those in overburdened communities.
    • Identify categories of costs recoverable from ratepayers and prohibit direct utility control of customer DERs; third-party DER aggregators must control such systems.

  • utility plan submission and oversight:

    • Each utility must file an implementation and reporting plan; the BPU will review for cost effectiveness, conformity with requirements and grid modernization plans, and may require changes.
    • The BPU will determine spending levels and authorized return on equity (ROE), potentially below base-case ROE.
    • Decisions must consider bill impacts, potential capacity market savings, avoided costs, peak reduction, and anticipated system integration.

  • reporting and compliance:

    • Utilities must file annual compliance reports detailing performance against metrics (peak reduction, enrollment, avoided costs).
    • The BPU can disallow recovery of costs if performance targets are not met, subject to exceptions for factors beyond utility control.

  • regulatory framework:

    • The act requires administrative rulemaking under the Administrative Procedure Act.

  • effective date:

    • The act takes effect immediately.

Who is affected

  • Electric public utilities in New Jersey (responsible for implementing the program and submitting plans).
  • DER aggregators and other third-party technology providers (to enroll and operate DERs, and to coordinate via the VPP).
  • Utility customers, including low- and moderate-income residents and communities disproportionately affected by pollution (protected interests and potential benefit via participation and cost savings).

Timeline and milestones

  • Within 12 months: BPU to establish minimum filing requirements for the program.
  • By 2030: target peak demand reduction of 500 MW achieved.
  • Ongoing: annual utility reporting; cost recovery determinations; and ongoing rulemaking as needed.

Compiled from official sources — confirm details with the bill’s official record.

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