The Public Utility Rate Stabilization Act allows gas and electric public utilities in New Jersey to implement alternative ratemaking mechanisms, which include performance-based rates, formula rates, multi-year rate plans, earnings-sharing mechanisms, and decoupling mechanisms. Utilities must submit a petition to the New Jersey Board of Public Utilities (board) for approval of an alternative ratemaking plan before utilizing these mechanisms. 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 utilize fully-projected future test years for determining rate bases, revenues, and expenses as part of their base rate cases and for petitioning the board 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approves a plan with modifications, the utility has 30 days to accept or reject the changes; if rejected, the plan is withdrawn, and previous rates remain in effect until modified by the board.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 regulatory oversight and public participation.