The "Emission Reduction Innovation Act" empowers gas public utilities in New Jersey to develop and implement "utility innovation plans" aimed at significantly reducing greenhouse gas emissions linked to natural gas usage. These plans may include innovative resources such as biogas, renewable natural gas, power-to-hydrogen, power-to-ammonia, and carbon capture and utilization. The act specifies that these plans must include components like expected lifecycle greenhouse gas emissions reductions, cost-effectiveness analyses, and potential economic impacts, including job creation. The Board of Public Utilities (BPU) is tasked with reviewing and approving these plans to ensure they align with the state's greenhouse gas emissions reduction goals as established in the "Global Warming Response Act."

The bill outlines specific requirements for the content of utility innovation plans, which must be submitted to the BPU for approval and are valid for five years. Utilities can recover reasonable costs associated with these plans through customer rates or other methods, with provisions allowing for budget adjustments between projects. Additionally, the Department of Environmental Protection (DEP) is required to collaborate with the BPU to review the methodology for calculating lifecycle greenhouse gas reductions, ensuring it aligns with state standards. The DEP has 180 days to complete this review, and the BPU must evaluate cost-benefit analyses in accordance with existing guidelines for utility investment programs.