This bill mandates the New Jersey Board of Public Utilities (BPU) to collaborate with neighboring states to research and recommend actions regarding electric capacity and transmission. Specifically, the BPU is tasked with ensuring that electric load serving entities in New Jersey demonstrate they have contracted for at least 80% of the capacity needed to serve their load on a bilateral basis for a minimum of five years. Additionally, the BPU is directed to consider withdrawing from the PJM Interconnection's reliability pricing model and to explore the development of a multi-state compact for securing electric capacity through alternative means, including contracts with private entities or competitive capacity auctions. The BPU may also consider withdrawing from the PJM-operated high-voltage electric transmission grid to either establish an independent grid or join an existing one in another state.

The bill highlights significant concerns regarding the current PJM capacity market, which has been criticized for delays in energy generation and rising costs for consumers. The capacity auction prices have surged dramatically, leading to a projected increase in costs from $2.2 billion to $14.7 billion for the upcoming delivery year, marking the highest prices in the history of PJM's capacity auctions. The Legislature emphasizes the need for a more responsive and affordable energy framework that aligns with state energy policies, thus justifying the exploration of alternative options to ensure grid reliability and affordability for New Jersey residents.