Bill Text: NJ S2052 | 2016-2017 | Regular Session | Introduced
Bill Title: Restores parity among public utilities with regard to formula used to calculate amount of refund given to developers for extension of public utility infrastructure.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2016-04-21 - Introduced in the Senate, Referred to Senate Economic Growth Committee [S2052 Detail]
Download: New_Jersey-2016-S2052-Introduced.html
Sponsored by:
Senator ROBERT W. SINGER
District 30 (Monmouth and Ocean)
SYNOPSIS
Restores parity among public utilities with regard to formula used to calculate amount of refund given to developers for extension of public utility infrastructure.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning the extension of public utility infrastructure and amending R.S.48:2-27.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. R.S.48:2-27 is amended to read as follows:
48:2-27. 1. a. The board may, after hearing, upon notice, by order in writing, require any public utility to establish, construct, maintain, and operate any reasonable extension of its existing facilities where, in the judgment of the board, the extension is reasonable and practicable; and the extension will furnish sufficient business to justify the construction and maintenance of the [same] extension; and when the financial condition of the public utility reasonably warrants the original expenditure required in making and operating the extension.
b. A public utility shall grant an annual refund to a developer of an extension, constructed pursuant to subsection a. of this section, for a period of ten years. The public utility shall grant the first annual refund one year after the public utility receives a deposit from the developer for the extension. Each annual refund shall be in an amount equal to 10 times the annual revenue derived by the public utility from the extension. Any costs incurred by a public utility pursuant to this subsection shall be recoverable in the public utility's base rate case.
(cf: R.S.48:2-27)
2. This act shall take effect immediately.
STATEMENT
This bill requires a public utility (utility) to grant an annual refund to a developer of an extension of public utility infrastructure for a period of ten years. The utility is to grant the first annual refund one year after the utility receives a deposit from the developer for the extension. Each annual refund is to be in an amount equal to 10 times the annual revenue derived by the utility from the extension. Any costs incurred by a utility pursuant to the bill's provisions are to be recoverable in the utility's rate case.
In 2005, the board promulgated regulations concerning extensions of utility infrastructure that contained different provisions for extensions built to serve designated smart growth areas and extensions built to serve areas not designated for growth. In 2009, the Appellate Division held that these regulations exceeded the board's regulatory authority. In re Centex Homes, LLC, 411 N.J. Super. 244 (App. Div. 2009). Following the Centex decision, the board promulgated new regulations that eliminated the provisions concerning smart growth areas. The regulations require electric, gas, and telecommunications utilities to refund developers in an amount equal to 10 times the annual revenue derived by the utility from the extension. However, the regulations only require water and waste water utilities to refund developers in an amount equal to two and one half times the annual revenue derived by the utility. The purpose of this bill is to restore parity among the utilities with regard to the amount of refund given to developers, thereby restoring the board's previous regulatory practice prior to the Centex decision and dating back to 2005.
