LEGISLATIVE FISCAL ESTIMATE
[First Reprint]
SENATE, No. 1392
STATE OF NEW JERSEY
221st LEGISLATURE
DATED: JUNE 5, 2024
SUMMARY
Synopsis: Establishes Office of Clean Energy Equity in BPU; directs
establishment of certain clean energy, energy efficiency, and energy
storage programs for overburdened communities; makes change to
community solar program.
Type of Impact: Annual State expenditure increase. Potential local expenditure
increase.
Agencies Affected: Board of Public Utilities, Department of Community Affairs,
Department of Labor and Workforce Development, Economic
Development Authority, County Colleges, Vocational Technical High
Schools.
Office of Legislative Services Estimate
Fiscal Impact Annual
State Expenditure Increase At Least $50 million
Potential Local Expenditure Increase Indeterminate
 The Office of Legislative Services (OLS) projects that the bill would result in an indeterminate
annual State cost increase, equal to the higher of $50 million or 10 percent of the Board of
Public Utilities’ clean energy budget, for the newly established Office of Clean Energy Equity.
There would be additional costs associated with clean energy job training and workforce
development grants provided under the bill.
 The OLS notes that unless sufficient clean energy fund surplus balances exist, the increase in
expenditure of clean energy fund monies could result in a decrease in other State expenditures
tied to the clean energy fund, or result in an increase in the utility rate surcharges that comprise
the societal benefits charge, of which the clean energy fund is a part.
 To the extent that existing funding from the societal benefits charge is unable to support these
programs, the spending is likely to be supported by increasing surcharges applied to the utility
bills of all ratepayers. Given that all State and local government entities consume and pay for
Office of Legislative Services Legislative Budget and Finance Office
State House Annex Phone (609) 847-3105
P.O. Box 068 Fax (609) 777-2442
Trenton, New Jersey 08625 www.njleg.state.nj.us
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energy, indirect State and local costs will increase based on the increase in their utility bills
which will be spread across the entire rate base paid by all energy consumers.
 Certain provisions of the bill may contribute to public purposes such as increasing the
generation of solar and renewable energy and job and skills training in overburdened
communities, and reducing energy costs for low-income households. These measures may
have an indirect fiscal benefit to the state in the form of higher State tax revenues and lower
State and local expenditures on publicly provided health care, jobless benefits, and other social
safety net programs, if the expenditures are able to improve air quality and individual health
outcomes and improve resident employment and job skills in targeted areas. The extent to
which these indirect benefits would be realized, and may alleviate the direct costs of the
program, cannot be known at this time.
BILL DESCRIPTION
This bill would establish the Office of Clean Energy Equity in the Board of Public Utilities.
The office would be charged with promoting, guiding, and overseeing the equitable deployment
of clean energy, energy efficiency, and energy storage programs and technologies in overburdened
communities, and the equitable provision of the tangible benefits of clean energy, increased energy
efficiency, and energy storage at the household and community level, including clean energy asset
ownership, energy cost savings, and employment and economic opportunities, to overburdened
communities.
The board, in cooperation with the office, would be required to provide outreach and
recruitment campaign grants to community-based organizations to increase participation in clean
energy and energy efficiency programs, among numerous other responsibilities pursuant to the
bill.
The bill would require the board to direct no less than 10 percent of its annual total clean energy
budget, or at least $50 million annually, whichever is greater, to the office for the purposes of the
bill. Up to five percent of the board’s annual allocation to the office could be used for program
administration costs. The board would be authorized to allocate additional funding, staff, and
resources to the office as it determines appropriate.
In addition, the bill would require the office, in collaboration with the Department of Labor
and Workforce Development, the Economic Development Authority, the New Jersey Commission
on Science, Innovation and Technology, and the Office of the Secretary of Higher Education, to
develop program guidelines for clean energy job training and workforce development grants,
which grants would be issued by the authority, the Department of Education, and the Department
of Labor and Workforce Development. These grants would be provided to community-based,
diversity-focused nonprofit organizations, community colleges, vocational-technical schools, and
other qualified training partners. The purpose of the grants would be to develop energy efficiency
or clean energy paid workforce training programs that provide training to at least 2,500 individuals
from overburdened communities by 2025. The grant issuer is to require, as a condition of a grant
award, that the programs be updated every two years to ensure that they prepare participants
adequately for the current job market in the energy efficiency or clean energy industry.
Under the bill, the Department of Community Affairs, in consultation with the Office of Clean
Energy Equity, would require all new construction located in an overburdened community to be
solar ready, subject to any specific exemptions that the department and the board deem reasonable
and necessary and that the department adopts as rules and regulations.
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FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
The OLS projects that the bill would result in an indeterminate annual State cost increase, equal
to the higher of $50 million or 10 percent of the Board of Public Utilities’ clean energy budget, for
the newly established Office of Clean Energy Equity. There would be additional costs associated
with clean energy job training and workforce development grants provided under the bill. Unless
sufficient clean energy fund surplus balances exist, the increase in expenditure of clean energy
fund monies could result in a decrease in other State expenditures tied to the clean energy fund, or
result in an increase in the utility rate surcharges that comprise the societal benefits charge, of
which the clean energy fund is a part.
State and local government units will realize an increase in indirect costs if there is an increase
in the societal benefits charge, since each government unit is also a utility ratepayer. The societal
benefits charge is a charge that is applied across the entire utility rate base, so all ratepayers would
be impacted. State and local government energy consumption is a relatively small portion of the
overall rate base, so the cost burden government units would face due to the rate increase is much
smaller than the actual cost of funding the programs. Other residential, industrial, and commercial
utility customers who make up the majority of the rate base would proportionately be charged the
remaining indeterminate amount that could need to be raised through the societal benefits charge.
The bill also requires the office and the Department of Community Affairs to require
construction in overburdened communities to be solar ready. It is unclear how such an increase in
regulatory building standards would impact the cost of construction in these areas or alter
economic development activity in these areas. These changes would ensure that more of the built
environment in these areas is ready for solar installations; however, by increasing construction
costs, it may also have negative indirect economic impacts on development which could reduce
income, sales, and business tax revenues if it results in less economic activity.
Finally, certain provisions of the bill may contribute to public purposes such as increasing the
generation of solar and renewable energy and job and skills training in overburdened communities,
and reducing energy costs for low-income households. These measures may have an indirect fiscal
benefit to the state in the form of higher State tax revenues and lower State and local expenditures
on publicly provided health care, jobless benefits, and other social safety net programs, if the
expenditures are able to improve air quality and individual health outcomes and improve resident
employment and job skills in targeted areas. The extent to which these indirect benefits would be
realized, and may alleviate the direct costs of the program, cannot be known at this time.
Section: Authorities, Utilities, Transportation and Communications
Analyst: Michael D. Walker
Assistant Fiscal Analyst
Approved: Thomas Koenig
Legislative Budget and Finance Officer
This legislative fiscal estimate has been produced by the Office of Legislative Services due to the
failure of the Executive Branch to respond to our request for a fiscal note.
This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).


Statutes affected:
Introduced: 48:3-87.11