Bill Text: NJ A3374 | 2024-2025 | Regular Session | Introduced
Bill Title: Establishes clean heat standard for natural gas utilities and other heating fuel suppliers.
Spectrum: Partisan Bill (Democrat 3-0)
Status: (Introduced) 2024-02-01 - Introduced, Referred to Assembly Telecommunications and Utilities Committee [A3374 Detail]
Download: New_Jersey-2024-A3374-Introduced.html
Sponsored by:
Assemblyman STERLEY S. STANLEY
District 18 (Middlesex)
Assemblywoman ANNETTE QUIJANO
District 20 (Union)
SYNOPSIS
Establishes clean heat standard for natural gas utilities and other heating fuel suppliers.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning greenhouse gas emissions associated with heating systems, supplementing Title 48 of the Revised Statutes, and amending P.L.2007, c.340.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. (New section) As used in P.L. , c. (C. ) (pending before the Legislature as this bill):
"Board" means the Board of Public Utilities.
"Clean heat credit" means a tradeable, nontangible commodity that represents the amount of annual greenhouse gas emissions reductions attributable to a clean heat measure.
"Clean heat measure" means fuel delivered to, or technologies installed in, a residential, commercial, or industrial structure in New Jersey, which reduce the greenhouse gas emissions associated with heating the building.
"Gas public utility" means a public utility, as that term is defined in R.S.48:2-13, that distributes gas to end users within this State.
"Heating fuel" means fossil-based heating fuel, including oil, propane, natural gas, coal, and kerosene.
"Heating fuel supplier" means (1) a gas public utility, or (2) an entity that supplies heating fuel to end-use customers within the State.
2. (New section) a. Commencing two years after the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill), a heating fuel supplier shall not operate in the State unless it annually purchases and retires clean heat credits, or makes a corresponding alternative compliance payment pursuant to section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill), according to the following schedule:
(1) during the first year after the board adopts rules and regulations to implement the provisions of P.L. , c. (C. ) (pending before the Legislature as this bill), clean heat credits to account for five percent of the greenhouse gas emissions associated with the heating fuel supplied by the supplier;
(2) by 2030, clean heat credits to account for 20 percent of the greenhouse gas emissions associated with the heating fuel supplied by the supplier;
(3) by 2040, clean heat credits to account for 50 percent of the greenhouse gas emissions associated with the heating fuel supplied by the supplier; and
(4) by 2050, clean heat credits to account for 80 percent of the greenhouse gas emissions associated with the heating fuel supplied by the supplier.
b. The board may, through a rulemaking process in accordance with the provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), adopt intermediate clean heat credit retirement requirements to supplement the schedule provided in subsection a. of this section.
c. No later than one year after the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill), each heating fuel supplier that supplies heating fuel to an end-use customer in the State shall register with the board. The board shall develop a registration system that shall require, at a minimum, heating fuel suppliers to provide information sufficient to allow the board to determine the heating fuel supplier's clean heat credit purchase obligation.
3. (New section) a. No later than one year after the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill), the board shall implement a process for the creation, distribution, and retirement of clean heat credits. A clean heat credit shall be earned through the installation or delivery of a clean heat measure, and shall be measured in terms of tons of carbon dioxide equivalent (CO2e) of avoided annual greenhouse gas emissions.
b. Eligible clean heat measures delivered to, or installed in, residential, commercial, and industrial buildings in the State shall include, but not be limited to:
(1) thermal energy efficiency improvements and weatherization;
(2) cold-climate-air, ground-source, and other heat pumps, including district, network, grid, microgrid, and building geothermal systems;
(3) heat pump water heaters;
(4) utility-controlled electric water heaters;
(5) solar hot water systems;
(6) electric appliances providing thermal end uses;
(7) advanced wood heating systems;
(8) renewable energy-based district heating services;
(9) the provision of sustainably sourced biofuels;
(10) the provision of sustainably generated hydrogen; and
(11) the replacement of a manufactured home with a high efficiency manufactured home.
c. The owner of the property to which the clean heat measure is delivered or installed shall be the clean heat credit generator, and shall obtain all rights of ownership thereof.
d. The board shall develop an administrative system to register, sell, transfer, and trade clean heat credits. The board may hire a third-party consultant to evaluate, develop, implement, maintain, and support a database or other means for tracking clean heat credits and compliance with the annual requirements of heating fuel suppliers pursuant to P.L. , c. (C. ) (pending before the Legislature as this bill). Any administrative fee charged for the use of the system shall be charged only to purchasers of clean heat credits. The administrative system shall require clean heat credit generators to submit, at a minimum, the following information:
(1) the location to which the clean heat measure was delivered or installed,
(2) the type of property to which the clean heat measure was delivered or installed; and
(3) the type of clean heat measure generated.
e. Customer income and other personal data collected by the board, a clean heat credit generator, or a heating fuel supplier pursuant to P.L. , c. (C. ) (pending before the Legislature as this bill) shall be kept confidential.
f. A clean heat credit shall expire, and shall not be eligible for use in complying with the provisions of P.L. , c. (C. ) (pending before the Legislature as this bill), three years after the date in which it was generated.
4. (New section) a. The board shall develop an alternative compliance payment that heating fuel suppliers may make in lieu of purchasing and retiring a clean heat credit for the purposes of compliance with the provisions of section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill). When establishing the level of the payment, the board shall weigh the environmental benefits of the clean heat credits against the potential costs to ratepayers. The board may, through a rulemaking process in accordance with the provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), establish a new level for the alternative compliance payment, provided that it does so no more frequently than once every two years.
b. Each annual compliance payment shall be collected by the board, or a third-party administrator contracted with by the board, and deposited in the "Global Warming Solutions Fund" established pursuant to section 6 of P.L.2007, c.340 (C.26:2C-50).
5. Section 6 of P.L.2007, c.340 (C.26:2C-50) is amended to read as follows:
6. There is established in the Department of the Treasury a special, nonlapsing fund to be known as the "Global Warming Solutions Fund." The fund shall be administered by the State Treasurer and shall be credited with:
a. moneys received as a result of any sale, exchange, or other conveyance of allowances through a greenhouse gas emissions allowance trading program;
b. such moneys as are appropriated by the Legislature; [and]
c. any return on investment of moneys deposited in the fund ; and
d. moneys received though alternative compliance payments made by heating fuel suppliers pursuant to P.L. , c. (C. ) (pending before the Legislature as this bill).
(cf: P.L.2007, c.340, s.6)
6. The Board of Public Utilities shall, in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.). adopt rules and regulations as necessary to implement this act.
7. This act shall take effect immediately.
STATEMENT
This bill would require heating fuel suppliers, including natural gas public utilities, to purchase a certain number of clean heat credits each year.
Specifically, the bill would require heating fuel suppliers to purchase clean heat credits representing five percent of the greenhouse gas emissions associated with the heating fuel that they supply during the first year the program is active. The bill would require this percentage to increase to 20 percent by 2030, 50 percent by 2040, and 80 percent by 2050. The bill would require the Board of Public Utilities (BPU) to establish a system for the creation and sale of clean heat credits.
Under the bill, residential, commercial, or industrial building owners would generate clean heat credits by taking steps to reduce the greenhouse gas emissions associated with heating their buildings. These steps - called "clean heat measures" in the bill - could include installing a heat pump, improving the thermal efficiency of the building, or switching to sustainably sourced biofuel or hydrogen instead of a fossil fuel, as well as other measures listed in subsection b. of section 3 of the bill. Each ton of annual avoided greenhouse gas emissions would generate a clean heat credit for the building owner, which could then be sold to heating fuel suppliers to meet their annual purchase obligations.
Finally, the bill would direct the BPU to establish an alternative compliance payment system. Heating fuel suppliers could make an alternative compliance payment in lieu of purchasing and retiring a clean heat credit. The alternative compliance payments would be deposited in the "Global Warming Solutions Fund" established pursuant to the "Global Warming Response Act," P.L.2007, c.340 (C.26:2C-45 et seq.).
