The Energy Cost Fairness Act aims to prohibit the Board of Public Utilities (BPU) from approving any rate increases for electric and gas public utilities that utilize inclining block rates for residential customers. Inclining block rates are a pricing structure where higher rates are charged once a customer's usage surpasses certain thresholds, which has been intended to promote energy conservation. However, a report from December 2024 indicates that these rates are outdated and do not accurately reflect the actual costs of energy generation. The bill seeks to eliminate this rate structure, thereby potentially lowering electricity costs for residential customers, particularly during the summer months.

The act defines key terms such as "Board," "Electric public utility," "Gas public utility," and "Inclining block rate," and mandates that the BPU shall not authorize any rate increases for utilities that impose these charges. Additionally, the BPU is required to adopt necessary rules and regulations to implement the provisions of the act. The bill is set to take effect immediately upon passage.