The Public Utility Rate Stabilization Act allows gas and electric public utilities in New Jersey to utilize alternative ratemaking mechanisms, such as performance-based rates, formula rates, multi-year rate plans, earnings-sharing mechanisms, and decoupling mechanisms. To implement these mechanisms, utilities must submit a petition to the New Jersey Board of Public Utilities (the board) for approval of an alternative ratemaking plan. The board is required to adopt rules and regulations within 180 days of the bill's enactment to facilitate this process, including establishing evaluation criteria for assessing the plans. The board must make a determination on the submitted plans within nine months and hold public hearings for community input.

Additionally, the bill permits utilities to use fully-projected future test years for various purposes, including determining rate bases and expenses as part of a base rate case and petitioning for alternative ratemaking plans. If the board approves a plan with modifications, the utility has 30 days to accept or reject the changes. If rejected, the plan is withdrawn, and previous rates remain in effect until modified by the board. This legislation aims to provide utilities with more flexible and efficient rate-setting options while ensuring public oversight and participation.