S 4411 — "Advanced Grid Technologies Act"; requires State oversight of supplemental projects and establishes expedited review for projects utilizing advanced transmission technologies. *

S4411 1R2R [First[Second Reprint] SENATE, No.

requires State oversight of supplemental transmission projects and establishes expedited review for projects utilizing advanced transmission or distribution technologies.

  CURRENT VERSION OF TEXT      As reported by the Senate EconomicBudget Growthand Appropriations Committee on June 8,28, 2026, with amendments.

     c.     Advanced transmission technologies, including grid-enhancing technologies and high-performance conductors, have 2in certain instances2 demonstrated significant consumer savings, reliability improvements, and capacity gains in deployments within the United States and internationally, often with benefit-to-cost ratios substantially exceeding those of traditional transmission alternatives;

     d.    Advanced2[Advanced distribution technologies, including distribution automation, advanced inverters, distributed energy resource management systems, and grid-services-capable storage, are essential to integrating distributed energy resources, electrifying buildings and transportation, and maintaining reliable distribution service despite evolving load patterns;

     e.     ]2 Electric public utilities undertake transmission projects to supplement2[supplement projectsprojects] address local transmission upgrades outside the regional transmission planning process reviewed and2 approved by PJM Interconnection, L.L.C.

(PJM) for regional reliability, operational performance, or economic purposes.  These projects are commonly referred to as supplemental projects in PJM’s Attachment M-3 process and have historically received limited 2to no2 oversight from PJM and state2[state] State2 regulatory authorities, even though costs for these supplemental projects are passed through to utility customers;

     f.    2[f.] e.2      Often, cost-of-service2[cost-of-service ratemaking, as traditionally applied,applied,] the use of formula rates at FERC2 fails to effectively incentivize electric public utilities to adopt advanced transmission technologies and2[and advanced distribution technologies. technologies]2.  However, regulatory mechanisms that align utility financial interests with consumer savings could successfully incentivize such adoption;

     g.   2[g.] f.2     For more than a century, state regulatory authorities have exercised authority over the construction of electric transmission facilities through certificates of public convenience and necessity.  Moreover, FERC has acknowledged 1[that authorizing supplemental projects undertaken pursuant to] the consultative role of state regulatory authorities in1 PJM’s Attachment M-3 process 1[is a function of state regulatory authorities]1;

and      h.   2[h.] g.2     It is therefore in the public interest for New Jersey to establish a process for issuing certificates of public convenience and necessity for supplemental transmission2[transmission]2 projects undertaken by electric public utilities in the State, which process shall require meaningful consideration of 2cost-effective2 advanced transmission technologies and2[and advanced distribution technologiestechnologies]2 and provide for expedited review where such technologies are deployed 2in a cost-effective manner in order2 to meet applicable grid performance benchmarks.

     “Advanced2[“Advanced distribution technologies” or “ADTs” means:  (1) software or hardware technologies that increase the capacity, efficiency, reliability, visibility, or safety of an existing or new electric distribution system, including distribution automation, advanced inverters, distributed energy resource management systems, distribution-sited energy storage deployed for grid-services purposes, including behind-the-meter energy storage systems and front-of-the-meter energy storage systems, and substation upgrades that facilitate aggregated power export, including virtual power plant integration and reverse power flow protection;

and (2) other technologies designed to support the integration of distributed energy resources or to increase the capacity, efficiency, reliability, visibility, or safety of an existing or new electric distribution system.system.]2      “Advanced power flow control technology” means 1[any software or hardware technology used to push or pull electric power in a manner that balances overloaded lines and underutilized corridors within the electric distribution system or electric transmission system] power electronic-based devices that:  (1) actively change how power flows through the transmission system without changing generator dispatch or network topology;

     “Advanced power flow control technology” means 1[any software or hardware technology used to push or pull electric power in a manner that balances overloaded lines and underutilized corridors within the electric distribution system or electric transmission system] power electronic-based devices that:  (1) actively change how power flows through the transmission system without changing generator dispatch or network topology;

     “Cost-effective” or “cost-effectiveness” means that a supplemental transmission2[transmission]2 project or component thereof produces benefits that justify its costs when evaluated on a life-cycle basis over the useful life of the investment, which benefits include, but are not limited to, reductions of both central and distributed generation interconnection, reduced line losses, reduced curtailment, 1[and]1 reduced transmission congestion 1, reductions in energy or capacity prices, and reliability and resilience improvements1.  However, “cost-effectiveness” shall not be determined solely based on nominal capital costs.

     “Grid performance benchmarks” means grid performance standards, benchmarks, and planning criteria identified by the board 2after a public proceeding2 pursuant to section 1[8] 71 of P.L.    , c.    (C.        ) (pending before the Legislature as this bill).

     1“NERC” means the North American Electric Reliability Corporation.1      “PJM Interconnection, L.L.C.” or “PJM” means the same as the term is defined in section 3 of P.L.1999, c.23 (C.48:3-51).(C.48:3-51) 2or any successor entity2.

     “Supplemental transmission2[transmission]2 project” or “project” means a project undertaken2[undertaken by an electric public utility 1, pursuant to PJM’s Attachment M-3 process,1process,1] planned by a transmission owner through the PJM local transmission owner planning process under Attachment M-3 of PJM’s Open Access Transmission Tariff or any successor tariff provision2 to:  (1) construct a new transmission line of a design capacity of 100 kilovolts or more, whether overhead or underground, including submarine cable, and a length of one mile or more, including associated equipment 1included2[1included in or directly associated with the M-3 presentation to PJM1PJM1] ;such as substations2;

or (2) 2expand, enhance, rebuild, replace, or2 modify an existing transmission line of a design capacity of 100 kilovolts or more, whether overhead or underground, including submarine cable. cable 2and associated equipment such as substations2.  “Supplemental transmission2[transmission]2 project” does not include 1:

 (1)1 a 1regional12[1regional1]2 project, or discrete component of a project, that has been deemed necessary and approved by the PJM Board of Managers to comply with PJM system reliability, operational performance, or2[or economic criteriacriteria] market efficiency, or public policy needs2 1;

       4.    a.  Prior to constructing a supplemental transmission2[transmission]2 project in this State, an electric public utility shall apply to the Board of Public Utilities for a certificate of public convenience and necessity.  The utility shall include in its application for a certificate to the board:       (1)   any information the board deems necessary to review the application;

     (2)   an explanation of whether the supplemental transmission2[transmission]2 project will deploy advanced transmission technologies, either in addition to or in lieu of traditional transmission investments, 2the cost effectiveness of the deployment of such technologies,2 and the benefits thereof, including a demonstration that the project will meet the applicable grid performance benchmarks established by the board pursuant to section 1[8] 71 of P.L.    , c.    (C.        ) (pending before the Legislature as this bill);

     (3)   if an electric public utility decides not to deploy ATTs in the project in a material manner, as determined by the board, a justification for that decision and a third-party analysis of the cost-effectiveness of the project. project 2[.] as compared to the deployment of ATTs2 1[However, an electric public utility shall not recover through any component of the rates charged to its customers any costs related to the third-party analysis]1;

and      (5)   for applications processed under section 625 or2 of P.L.    , c.    (C.        ) (pending before the Legislature as this bill), an application fee 1, which fee shall be recoverable through rates,1 in an amount to be determined by the board to cover the cost of the board’s review.

of this section be confidential and not be made publicly available. available The2[.  The] , and the2 request shall be subject to approval by the board.board.  2However, the Division of Rate Counsel and the PJM Independent Market Monitor shall have access to any material deemed confidential, as approved by the board pursuant to this subsection, provided the division and the market monitor are subject to a non-disclosure agreement.2      d.    2[1[An] To the extent applicable, an1 electric public utility may deploy ATTs at a location outside the State, undertaken by the utility or a neighboring electric public utility, pursuant to a reciprocity or other appropriate agreement, in addition to or in lieu of traditional transmission investments for the purpose of satisfying the requirements of subsection a.

     d.    1[An] To the extent applicable, an1 electric public utility may deploy ATTs at a location outside the State, undertaken by the utility or a neighboring electric public utility, pursuant to a reciprocity or other appropriate agreement, in addition to or in lieu of traditional transmission investments for the purpose of satisfying the requirements of subsection a.

     f.    f.]2  An electric public utility shall not apply for a certificate pursuant to this section until PJM has completed its review of the project under Attachment M-3 of the PJM Open Access Transmission Tariff.  An application under this section shall include, as an exhibit, the complete record of the PJM Attachment M-3 process.

       5.    a.  The Board of Public Utilities shall approve an application for a certificate of public convenience and necessity submitted by an electric public utility pursuant to section 4 of P.L.    , c.    (C.        ) (pending before the Legislature as this bill) if the board finds that:       (1)   the supplemental transmission2[transmission]2 project meets the applicable grid performance benchmarks established by the board pursuant to section 1[8] 71 of P.L.    , c.    (C.        ) (pending before the Legislature as this bill) through the proposed deployment of advanced transmission technologies;

or2[or the utility is concurrently deploying advanced distribution technologies of a scope and at a scale reasonably commensurate with the project that meets the grid performance benchmarks applicable to ADTs and that the ADTs address an identified distribution-system reliability constraint, distributed energy resource integration limitation, or load management need within the service area affected by 1any distribution component of1 the project, as supported by 1[substantial] the preponderance of the1 evidence in the utility’s application;application;]2      (2)   the utility can efficiently manage and supervise the construction process and has taken sufficient action to ensure adequate and efficient construction and supervision of the construction;

and      (2)  (3)   the utility can efficientlyfinance managethe andproposed superviseconstruction without significant adverse financial consequences for the constructionutility processor andits hascustomers taken2[1and, sufficientwith actionrespect to ensuredistribution adequatecapital andspending, efficientthe constructionfinancing andis supervisionaligned ofwith the construction;most recent approved distribution capital structure1]2.

and      (3)  b.    the2[An] utilityAs canpart financeof thethe2 proposedapplication constructionsatisfying without significant adverse financial consequences for the utilityrequirements orin itsparagraph customers(1) 1and,of withsubsection respecta. to distribution capital spending, the financing is aligned with the most recent approved distribution capital structure1.

    of b.   this Ansection application2, satisfyingthe utility2 shall 2[be presumed to constitute a reasonable and cost-effective means of meeting the requirements inof paragraphP.L.    , (1)c.    (C.        ) (pending before the Legislature as this bill),] present a cost-effectiveness analysis, which shall be2 subject to rebuttal by a party to the proceeding 2[upon a showing of subsectionclear a.and convincing evidence] .  As part of the approval process for a certificate under this section, the board shall make a finding as to any disputed cost-effectiveness analysis2.  The board may condition its approval of a certificate under this section on changes to the utility’s application that the board deems to be in the public interest.

of this section shall be presumed to constitute a reasonable and cost-effective means of meeting the requirements of P.L.    , c.    (C.        ) (pending before the Legislature as this bill), subject to rebuttal by a party to the proceeding upon a showing of clear and convincing evidence.  The board may condition its approval of a certificate under this section on changes to the utility’s application that the board deems to be in the public interest.

     1d.   Nothing in this section shall authorize the board to conduct a siting review of the supplemental transmission2[transmission]2 project.  The board shall not consider the environmental impacts of the project in the board’s determination under this section.1        6.    a.  The Board of Public Utilities shall, after notice and hearing, approve an electric public utility’s application for a certificate of public convenience and necessity submitted pursuant to section 4 of P.L.    , c.    (C.        ) (pending before the Legislature as this bill) that has not been approved pursuant to section 5 of P.L.    , c.    (C.         (pending before the Legislature as this bill) if the board finds that:       (1)   the supplemental transmission2[transmission]2 project is necessary to provide safe, adequate, and reliable service to the utility’s customers and is a reasonable and cost-effective means of satisfying those service needs;

or2[or that the project is a reasonable and cost-effective means of promoting the development of a competitive electricity market that operates efficiently and is equitable to all customers;customers;]2      (2)   the utility can efficiently manage and supervise the construction process and has taken sufficient action to ensure adequate and efficient construction and supervision of the construction;

and      (2)  (3)   the utility can efficientlyfinance managethe andproposed superviseconstruction without significant adverse financial consequences for the constructionutility processor andits hascustomers taken2[1and, sufficientwith actionrespect to ensuredistribution adequatecapital andspending, efficientthe constructionfinancing andis supervisionaligned ofwith the construction;most recent approved distribution capital structure1]2.

and      (3)   the utility can finance the proposed construction without significant adverse financial consequences for the utility or its customers 1and, with respect to distribution capital spending, the financing is aligned with the most recent approved distribution capital structure1.

     1d.   The board shall confine its review of a supplemental transmission2[transmission]2 project under this section to the enumerated criteria in subsections a.

2While establishing the grid performance benchmarks, the board shall conduct stakeholder meetings and provide an opportunity to submit written comments in response to the formation of such benchmarks and to any related straw proposals from the board.2      The grid performance benchmarks established by this section shall include, at a minimum, criteria addressing:  compliance with applicable reliability standards of 1[the North American Electric Reliability Corporation] NERC1 or the applicable distribution-system reliability standards adopted by the board;

demonstrated cost-effectiveness over2[over a defined planning horizon;horizon] when evaluated on a life-cycle basis over the useful life of the investment2;

     The2[The board shall identify which grid performance benchmarks apply to advanced transmission technologies and which apply to advanced distribution technologies.technologies.]2      1Nothing in this section shall conflict with federally-established grid performance benchmarks, including NERC Reliability Standards.