WeVote
Log In

Bill

Bill

S 4304

Enacts the "paid sick leave act"

2025 Regular Session Introduced by Kevin Parker

Requires NJ BPU to determine and consider the lowest reasonable ROE for electric, gas, and water rate requests, using multiple analytic models and APA rulemaking.

REFERRED TO LABOR
0
WeVote Research Nonpartisan
Bill Summary · S 4304

Summary — S-4304 (2025)

Note: although the bill header provided an alternate title ("paid sick leave act"), the text of S-4304 as filed and reported concerns utility ratemaking. This summary describes the bill text and committee amendments related to public-utility return-on-equity (ROE) determinations.

Main purpose

Require the New Jersey Board of Public Utilities (BPU) to determine and explicitly consider the "lowest reasonable" return on equity (ROE) when evaluating rate increase requests from electric, gas, and water public utilities, and to adopt analytic model(s) to determine that ROE consistent with State, federal, and industry standards.

Key provisions

  • Definitions: clarifies terms used — “Board” (BPU), “electric public utility,” “gas public utility,” “water public utility,” and “return on equity” (the return on the equity portion of the rate base).
  • ROE requirement: when deciding whether a proposed increase/change to existing rates is “just and reasonable” under R.S.48:2-21, R.S.48:2-21.1, or C.48:2-21.2, the BPU must determine and consider the lowest reasonable ROE as a factor in that determination.
  • Analytic models: the BPU must develop or adopt and apply analytic model(s) that, at minimum, reflect State, federal, and industry standards for determining an authorized ROE for electric, gas, and water utilities. Committee amendment requires more than one model (plural).
  • Rulemaking: BPU must adopt implementing rules pursuant to the Administrative Procedure Act (APA).
  • Effective date and applicability: the act takes effect on the first day of the sixth month after enactment and applies to petitions submitted to the BPU on or after that date. The BPU may take anticipatory administrative actions in advance.

Who is affected

  • Utilities: investor-owned electric, gas, and water utilities operating in New Jersey — their authorized ROE determinations in base rate cases could be reduced or more narrowly defined.
  • Ratepayers: potential to benefit from lower authorized ROE (which tends to reduce rates), depending on BPU decisions and other rate-case components (rate base, expenses).
  • Regulators and stakeholders: BPU staff, intervenors, consumer advocates, and utility investors — will need to develop, evaluate, or litigate the chosen analytic models and ROE determinations.

Procedural status & sponsors

  • Introduced: May 12, 2025 (Senate) by Sen. Kevin S. Parker (primary).
  • Committee action: Reported favorably with committee amendments by the Senate Economic Growth Committee (6/12/2025); noted as 2nd reading.
  • Other actions listed: referrals to Labor (records show 2025-02-04 entries); see legislative history for confirmation.
  • Companion bill: A-5436. Related prior-session bills listed (e.g., S-2626, S-1490, etc.).

Potential impact and considerations

  • If BPU adopts lower ROE figures, utility revenues and investor returns could decline, while consumer rates could be lower than under higher ROE authorizations.
  • Determination of “lowest reasonable” ROE depends heavily on the chosen analytic models and inputs (market data, risk premiums, capital structure). The requirement to adopt multiple models may increase analytic rigor but also litigation/technical disputes.
  • Implementation will require BPU rulemaking under the APA and development/adoption of models and methodologies before the effective date.

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

Sign in to ask a question.