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A 5438

Establishes reporting requirements for out of state entities provide reimbursement of health care costs

2025 Regular Session Introduced by Andrew Hevesi and 4 co-sponsors

Requires electric and gas utilities to identify and refund excess profits to customers or aid programs, with penalties for noncompliance.

REFERRED TO INSURANCE
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Bill Summary · A 5438

Bill summary — A-5438: “Public Utility Fair Profit Act”

Status: Introduced March 10, 2025; reported favorably with committee amendments (Assembly Appropriations) May 15, 2025 (1R). Referred previously to Telecommunications & Utilities and to Insurance. Companion: S-4260. Primary sponsor: David Weprin; cosponsors: MaryJane Shimsky, Andrew Hevesi, Demond Meeks, Karines Reyes.

Purpose

To require regulated electric and gas public utilities to identify and return any “excess profits” collected from customers, increase financial reporting and transparency to the Board of Public Utilities (BPU), and impose civil penalties for noncompliance or misrepresentation.

Key provisions

  • Definitions:
    • “Excess profit” = actual revenues collected during a reporting period that exceed the utility’s total revenue requirement approved by the BPU for that period.
    • “Total revenue requirement” = revenue the utility is approved to recover through rates in its most recent base rate case plus amounts approved via alternative recovery mechanisms (e.g., infrastructure charges).
  • Scope (as amended): Applies to electric and gas public utilities (water utilities were removed by committee amendment).
  • Annual review and refund:
    • Within 3 months after the end of its BPU-prescribed 12-month reporting period, a utility must compare actual revenues to the approved total revenue requirement to determine excess profits.
    • If excess profits exist, the utility must redistribute them to customers proportionally via a BPU-approved refund mechanism, including: (1) bill credits to future bills, (2) direct payments for customers with unpaid balances, or (3) direct payments to customers enrolled in utility assistance programs.
    • Utilities have 45 days to comply with a BPU order to redistribute excess profits.
    • Redistributed excess profits are not recoverable from ratepayers.
  • Reporting and penalties:
    • Within 5 months after the reporting period, utilities must file an annual financial report with the BPU documenting actual revenues, total revenue requirement, and any refunds/payments made.
    • Failure to redistribute within 45 days of a BPU order, or knowingly misrepresenting report information, subjects a utility to a civil fine up to the lesser of 5% of its total revenue requirement or 105% of the excess profits. Penalties are recovered administratively and allocated to supplement utility assistance program funding; penalties cannot be passed on to ratepayers.
  • Implementation: BPU must adopt rules under the Administrative Procedure Act. Sections requiring reviews and reports stay inoperative until the BPU adopts implementing rules.

Who is affected

  • Primary: Regulated electric and gas utilities operating in New Jersey and their corporate owners.
  • Secondary: Utility customers (residential and other classes), the BPU, and state utility assistance programs (potentially receiving penalty funds).

Procedural/timing notes

  • Reporting deadlines: 3 months (review), 5 months (file report) after the prescribed 12-month reporting period.
  • 45-day compliance window after BPU redistribution order.
  • Effective immediately, but operative redistribution/reporting provisions await BPU rulemaking.

Potential impacts

  • Increased transparency of utility revenues vs. approved rates.
  • Direct return of excess revenues to customers or assistance programs rather than retention by utilities or shareholders.
  • Financial exposure for utilities through potential fines; penalties earmarked to help low-income or otherwise vulnerable utility customers.

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

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