The "Emission Reduction Innovation Act" empowers gas public utilities in New Jersey to develop and implement "utility innovation plans" aimed at decreasing greenhouse gas emissions from 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 bill specifies that these plans must include expected lifecycle greenhouse gas emissions reductions, cost-effectiveness analyses, and potential local job impacts. Utilities are required to submit annual progress reports and can adjust their budgets within the approved plans, with certain limitations on budget shifts requiring prior notice or approval from the Board of Public Utilities (BPU).

The act establishes a review framework for the BPU to ensure that the utility innovation plans align with the state's greenhouse gas emissions reduction goals as outlined in the "Global Warming Response Act." The BPU will evaluate the plans based on cost-benefit analyses, environmental impacts, and economic benefits. Additionally, the Department of Environmental Protection (DEP) is tasked with reviewing the methodology for calculating lifecycle greenhouse gas reductions to ensure compliance with state standards. The DEP has 180 days to complete this review, and the BPU must evaluate cost-benefit analyses in accordance with its existing guidelines for utility investment programs.