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A 3980

Requires electric public utilities to develop and implement grid modernization plans.

2026-2027 Regular Session Introduced by Kevin Egan

New Jersey utilities must create and implement Grid Modernization Plans to upgrade the electric grid, with funded ratepayer relief and a dedicated grant fund.

Reported as an Assembly Committee Substitute and Referred to Assembly Science, Innovation and Technology Committee
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Bill Summary · A 3980

Overview

A-3980 (NJ, Session 222) would require every electric public utility in New Jersey to develop and implement a Grid Modernization Plan for its distribution system. The plan must be submitted to the Board of Public Utilities (BPU) within one year of enactment, approved within 240 days of submission, and implemented within a timeframe set by the plan. The bill also creates a grant program and a dedicated fund to support ratepayer relief and to finance modernization efforts.

Main purpose and intent

  • Modernize New Jersey’s electric distribution system to improve reliability, resilience, and the integration of new technologies and clean energy resources.
  • Align grid upgrades with state greenhouse gas reduction goals and climate resilience needs.
  • Provide financial mechanisms to mitigate rate increases to customers resulting from grid modernization.

Key provisions

  • Definitions (new sections):
    • Grid Modernization Plan: plan prepared by each electric public utility and implemented under the act.
    • Distributed energy resource, grid modernization plan, board, etc.
  • Plan requirements (Section 2):
    • Each electric public utility must prepare and submit a Grid Modernization Plan within one year.
    • Plans may include: energy storage integration, increased interconnection capacity for distributed energy resources, resilience to weather and climate hazards, and other measures to ensure uninterrupted power supply.
    • Each plan must include project-specific cost estimates and an implementation timeline.
    • BPU shall approve, conditionally approve, or disapprove within 240 days of receipt. If no decision is issued, the plan is deemed approved.
    • Approved plans must be implemented within 90 days of notice or within a board-agreed timeframe; conditional approvals must meet specified conditions; disapproved plans must be revised and resubmitted within 30 days and re-evaluated.
  • Implementation and cost recovery (Section 3):
    • Utilities must commence implementing approved plans within 90 days after approval and fully implement within the plan’s timeline.
    • Utilities are entitled to full and timely cost recovery for plan implementation, subject to board oversight.
  • Ratepayer relief program (Section 4):
    • BPU must create a grant program to provide financial relief to ratepayers for rate increases caused by plan implementation.
    • Priority criteria favor projects funded by federal programs (Infrastructure Investment and Jobs Act, Inflation Reduction Act).
    • Establishment of the Grid Modernization Ratepayer Relief Fund (nonlapsing) to administer grants. Fund sources include legislative appropriations, societal benefits charge (SBC) proceeds, Regional Greenhouse Gas Initiative (RGGI) funds, and investment returns.
  • SBC and funding amendments (Section 5):
    • Amends SBC uses to permit recovery of costs associated with social programs, nuclear decommissioning, demand-side management, and related components, in the context of a broader resource analysis and funding for modernization and related programs.
    • Establishes the Universal Service Fund (broad framework for how funds are allocated among state programs, with oversight on programs such as Lifeline, Low Income assistance, etc.).
  • Administrative provisions (Section 6):
    • Reallocates and clarifies fund administration for programs under related energy laws, with oversight and audits by the State Comptroller.
  • Effective date:
    • This act takes effect immediately upon enactment.

Who would be affected

  • Electric public utilities operating in New Jersey (distribution utilities) must develop and implement Grid Modernization Plans.
  • Ratepayers would be eligible for potential relief through the new grant program funded by SBC/RGGI proceeds and state funds.
  • State agencies (BPU, Department of Environmental Protection, NJ Economic Development Authority) and local governments may participate in funding allocations and program administration.
  • Manufacturers and developers of grid modernization technologies (energy storage, interconnection equipment, DER integration) may participate in funded projects.

Procedural and timeline notes

  • Plan deadline: within one year of enactment.
  • Plan approval: within 240 days of submission; deemed approved if no written determination.
  • Implementation: to commence within 90 days after approval; fully implemented per plan timeline.
  • Grants and relief fund: to be established within one year of enactment; grant criteria prioritize federal funding synergies.

Overall, the bill formalizes a state-wide grid modernization mandate for utilities, with a dedicated funding mechanism to shield ratepayers from related increases and to accelerate modernization projects.

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

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