A5382 —

A5382 1R FISCAL ESTIMATE LEGISLATIVE FISCAL ESTIMATE [First Reprint] ASSEMBLY, No.

5382 STATE OF NEW JERSEY 219th LEGISLATURE   INTRODUCEDDATED: FEBRUARY 23, 2021     Sponsored by:

Assemblyman JANUARY DANIEL11, R.    SUMMARY   Synopsis:

BENSONRequires Districtrequest 14for (Mercerproposal andto Middlesex)establish Assemblyman demonstration ANDREWprogram ZWICKERto Districtdevelop 16distributed (Hunterdon,energy Mercer,resource Middlesexmicrogrids andfor Somerset)electric Assemblyman fleet RAJand MUKHERJIheavy-duty Districtvehicle 33use. (Hudson)   Co-Sponsored by:

AssemblymanType Karabinchak,of AssemblywomanImpact: Vainieri Huttle and Assemblyman Freiman         SYNOPSIS      Requires request for proposal to establish demonstration program to develop distributed energy resource microgrids for electric fleet and heavy-duty vehicle use.

 State CURRENTexpenditure VERSIONincrease.  OFPotential TEXTState      As reported by the Assembly Transportation and Independentlocal Authoritiesrevenue Committeeincreases. on January 3, 2022, with amendments.

  Agencies AnAffected: Act concerning the establishment of a demonstration program for the development of certain microgrids and supplementing Title 48 of the Revised Statutes.

 New     Jersey BeEconomic ItDevelopment EnactedAuthority; by the Senate and General Assembly of the State of New Jersey:

 Board      of 1.  Public AsUtilities; used in P.L.    , c.    (C.        ) (pending before the Legislature as this bill):

     Department “Authority” 1[shall have the same meaning as provided in section 3 of P.L.1974,Environmental c.80Protection. (C.34:1B-3)] means the New Jersey Economic Development Authority, established pursuant to section 4 of P.L.1974, c.80 (C.34:1B-4)1.

       “Board”  meansOffice of Legislative Services Estimate Fiscal Impact Magnitude   State Cost Increase Indeterminate   Potential State Revenue Increase Indeterminate   Potential Local Revenue Increase Indeterminate         ·         The Office of Legislative Services (OLS) finds that this bill will likely result in an indeterminate increase in State cost due to the Boardrequirement that the Economic Development Authority (EDA) establish and administer a demonstration program involving the development of Publicdistributed Utilitiesenergy orresource anymicrogrids successorfor agency.fleet and medium- and heavy-duty electric vehicle use.  State expenditures would also increase if approved program participants were to receive financial assistance under existing State incentive programs.

       “Demonstration·         program”The meansOLS thefinds demonstrationthat programthere authorizedmay inbe responsean toindeterminate aincrease requestin forState proposal developed and issuedlocal byrevenue the authority pursuant to sectionthe 2extent ofthat P.L.   the ,bill c.   will (C.      induce )additional (pendingtaxable beforeeconomic theactivity Legislaturethat aswould thisnot bill).occur otherwise.

       “Department”·         meansAbsent information on the Departmentnumber and attributes of Environmentalprojects Protection.that will participate in the demonstration program, the OLS cannot quantify the bill’s fiscal impacts.

    BILL DESCRIPTION         “DistributedThis energybill resource”requires meansthe anEDA, electricity-producingin resourceconsultation orwith controllablethe loadBoard thatof isPublic connectedUtilities and the Department of Environmental Protection, to anestablish and operate a demonstration program involving the development of distributed energy resource microgrids at six regionally diverse locations within the State for fleet and medium- and heavy-duty electric publicvehicle utility’suse.  distributionIn infrastructureapproving orapplications afor microgridthe connecteddemonstration program, the EDA is to agive utility’spreference distributionto infrastructure.applications:

     1) “Distributedlocated energy resource microgrid” or “microgrid” means a microgrid consisting of a group of interconnected loads and distributed energy resources within clearly defined electrical boundaries that act as a singlebrownfield; controllable entity with respect to a utility’s distribution infrastructure, which can connect and disconnect from a utility’s distribution infrastructure to enable it to operate both connected to, or independent of, a utility’s distribution infrastructure.

     2) “Electricproviding publican utility”environmental orjustice “utility”net means a public utility,benefit aswithin thata termlow-income, isurban, definedor inenvironmental R.S.48:2-13,justice thatcommunity; provides electric distribution service in this State.

     3) “Requestproviding forjob proposal”creation orand “proposal”job meanstraining thepotential request for proposaldisadvantaged developedpersons; and issued by the authority pursuant to P.L.    , c.    (C.        ) (pending before the Legislature as this bill).

 and      4) 2. resulting a.  The New Jersey Economic Development Authority, in consultationan withexpansion the Board of Public Utilities and the DepartmentState’s ofmanufacturing Environmentalbase Protection,for shall develop a requestclean fortransportation proposaleconomy, forand thedemonstrating purposea ofcollaboration determiningwith eligibility for the establishment of a demonstrationState-certified programeducational involvingtraining theentity. development of distributed energy resource microgrids at six regionally diverse locations within the State for fleet and medium and heavy-duty electric vehicle use.

 The     proposal shall require that there be at least one distributed energy resource microgrid located within the service territory of each electric public utility operating within this State.  The proposalEDA shallis describe,to inbi-annually detail,report theto provision of the establishmentdepartment of microgrids for fleet and mediumthe andboard heavy-dutyon electric vehicle charging 1[capable of supporting very high]1, 1mitigating increases in1 coincident peak vehicle electric load.  Within the proposal,progress themade authorityby shall provide a list and brief description of any State or local incentives and support programs available to an approved applicant.

      The b.  The authority shallis establishalso guidelinesto forreport, itsfive approval,years designation,after operation,the reporting,effective anddate re-designation of athe demonstrationbill, programto inthe aGovernor mannerand determined by the authority. Legislature Uponon developing a request for proposal, the authorityresults shallof issue the proposalprogram in a form and inpost a mannercopy determinedof by the authority.  The authority may approve more than one demonstration program application, provided that thereport totalon number of approved applications shall result in meeting the requirement,authority’s pursuantwebsite. to subsection a.

of     thisThe section,authority thatmay aseek microgridand shallaccept begifts, establisheddonations, atgrants, sixor locationsloans withinfrom private or public sources, including any federal funding, for the State.demonstration program.

       c.   TheFISCAL authority,ANALYSIS in  cooperationEXECUTIVE withBRANCH the  board      andNone thereceived. department, shall oversee, coordinate, and provide assistance to the demonstration program approved and established pursuant to P.L.    , c.    (C.        ) (pending before the Legislature as this bill).

  OFFICE OF LEGISLATIVE SERVICES         3. The AOLS requestfinds forthat proposalthis shallbill requirewill likely result in an applicantindeterminate intendingincrease in State cost due to the requirement that the EDA establish and administer a demonstration program involving the development of distributed energy resource microgrids for fleet and medium- and heavy-duty electric vehicle use.  State expenditures would also increase if approved program participants were to submitreceive financial assistance under existing State incentive programs.        In addition, the OLS finds that there may be an indeterminate increase in State and local revenue to the authorityextent that the followingbill information,will whichinduce shalladditional include,taxable buteconomic notactivity bethat limitedwould to:not occur otherwise.

      a.  Absent ainformation statementon of purpose for the proposednumber demonstrationand program,attributes whichof shallprojects include,that butwill notparticipate bein limited to, the developmentdemonstration ofprogram, microgridsthe toOLS createcannot infrastructurequantify for the 1[highbill’s coincidentfiscal load]1impacts. charging of fleet and medium and heavy-duty electric vehicles 1[without requiring a major electric public utility infrastructure upgrade or any interconnection delays]1;

       b.   aSection: validation of the key cost and time saving and resilience metrics provided by the applicant 1[as compared with the traditional electric public utility capital investment approach]1 for the establishment of microgrids for use by fleet and medium and heavy-duty electric vehicles;

     Authorities, c. Utilities, aTransportation description of one or more microgrids for each location and aCommunications clearAnalyst: explanation and map conveying a proposed microgrid’s physical boundaries;

     Tara d. Howley aLead provisionCounsel requiringApproved: the applicant to state that each microgrid to be established shall:

     Thomas (1) Koenig allowLegislative forBudget cleanand orFinance renewableOfficer energy-sourced  electric  powerThis generationlegislative andfiscal energyestimate storagehas providedbeen on-siteproduced orby onthe propertyOffice contiguousof Legislative Services due to the microgrid,failure inof additionthe toExecutive theBranch abilityto respond to chargeour electricrequest vehicles;for a fiscal note.

and       This (2) fiscal complyestimate withhas anybeen fleetprepared andpursuant medium and heavy-duty electric vehicle charging infrastructure plan established by the department where microgrid infrastructure is needed to getP.L.1980, thec.67 most(C.52:13B-6 benefitet forseq.). fleet and medium and heavy-duty electric vehicle charging;

and       e.  a statement that the applicant will enter into an agreement with an electric public utility where, upon receiving board approval, the utility will make any necessary upgrades to its transmission or distribution infrastructure 1[and provide energy storage]1 at locations proposed by the applicant to make the location ready for operation of a microgrid.

A utility making any board-authorized capital investments to upgrade its transmission or distribution infrastructure 1[shall allow the utility to] may1 include in its rate base these 1capital and1 operating costs for rate recovery.

1[A utility providing energy storage at a location for the operation of a microgrid shall be eligible to receive cost recovery directly from customers through any revenue-producing microgrid services provided by the utility, but the board shall not allow the utility to include in its rate base the any costs for providing energy storage.]1        4.    A request for proposal issued by the authority to establish a demonstration program shall give preference to applications:

     a.     located within a brownfield, as defined pursuant to section 3 of P.L.1999, c.23 (C.48:3-51);

     b.    providing an environmental justice net public benefit, as determined by the authority, within a “low-income, urban, or environmental justice community,” as defined pursuant to section 2 of P.L.2019, c.362 (C.48:25-2);

     c.     providing job creation and job training potential for disadvantaged persons, as determined by the authority;

and      d.    resulting in an expansion of the State’s manufacturing base for an emerging clean transportation economy, and demonstrating a collaboration with a State-certified educational training entity.

       5.    Upon the approval by the authority of an application to conduct a demonstration program, the authority shall require the approved applicant to enter into an agreement with the authority that shall contain, but not be limited to:

     a.     a signed statement of cooperation and a description of the roles and relationships of each entity involved in the demonstration program;

     b.    a clearly identified list of goals, performance standards, benchmarks, or milestones of the proposed demonstration program, with approximate dates as to when the goals, performance standards, benchmarks, or milestones will be achieved and how they will be evaluated, including a requirement that an approved applicant shall report to the authority on the status of the applicant’s achieving these goals, performance standards, benchmarks, or milestones;

     c.     a complete budget of the proposed demonstration program, including a description of secured funds with proof, pending funds, and potential future funding sources;