Fine Print: A-3122 Takes ‘Use-It-or-Lose-It’ Approach to Tariffs on Utility Bills

Bill would return collected funds to customers if they're not put to intended use within a year

What it is: The bill is a response to ongoing criticism that the state raises too much money from utility customers — mainly to support New Jersey’s clean energy programs and efforts to help low-income households pay their energy bills. The result is that tens of millions of dollars, in some cases hundreds of millions, paid by residents and businesses remain unspent at the end of each fiscal year.

Why it matters: The huge pot of money is often tapped by both the Legislature and the Christie administration to plug recurring holes in the state budget. More than $1 billion in clean-energy funds yet to have been allocated have been diverted to help balance fiscal budgets for the state in the past several years, a tactic often decried by clean energy advocates.

What it does: The bill requires funds collected from ratepayers under the so-called societal benefits charge (SBC), which are not allocated or spent for at least one year, to be returned to gas and electric customers via a credit on their electric bills. The Christie administration has repeatedly proposed to reduce the reliance on SBC charges to fund these programs, but its efforts have yet to yield results, although the most recent funding proposal urges that SBCs remain flat for the next fiscal year.

Who supports it: The biggest advocate probably will be the business community, largely because their members use the most energy and the charges are based on the amount electricity consumed. Three years ago, the cost to ratepayers ran $792 million, according to an analysis by the Office of Legislative Services.

The cost: Good news for utility customers. If credits are given to ratepayers, customers may see a drop in energy bills. Typically, average residential customers pay between $45 and $68 annually on their gas bill and $63 to $83 on their yearly gas bills. The cost to larger commercial and industrial customers is much larger, sometimes rising to more than $1 million a year.

Quote: “This should be a lesson,’’ said Assemblyman John Burzichelli (D-Gloucester), the sponsor of the bill during a legislative hearing in 2012. “If you don’t use it, the treasurer is going to take it.’’

What happens next: The bill is up for consideration in the Assembly Telecommunications and Utilities Committee tomorrow. Given Burzichelli’s leadership role in the Assembly, it should move forward in the legislative process, although its fate with the Republican administration remains uncertain.