ASSEMBLY, No. 2105

STATE OF NEW JERSEY

INTRODUCED JUNE 3, 1996

By Assemblymen COHEN and WISNIEWSKI

An Act concerning nuclear electric generating facilities, and supplementing Title 48 of the Revised Statutes.

    Be It Enacted by the Senate and General Assembly of the State of New Jersey:

    1. a. The Board of Public Utilities shall adopt rules and regulations establishing a program of financial incentives to be used by the board in fixing just and reasonable rates, pursuant to Title 48 of the Revised Statutes, for service provided by nuclear electric generating facilities. The program shall incorporate an annual review of all actions taken and reports issued by the Nuclear Regulatory Commission concerning the safety and operation of each nuclear electric generating facility subject to the board's jurisdiction. The program shall provide a mechanism to reward a facility that achieves savings through improved safety and operation over the period since the last rate application for or including that facility.

    b. The board shall calculate the savings attributed to improved safety and operation by considering the savings achieved by fewer outages, the reduced purchases of replacement power and other avoided costs associated with improvements in safety and operation.

    c. In determining an appropriate rate-making procedure for granting financial incentives, the board shall allow a facility to retain a percentage of the savings or avoided costs achieved through improved safety and operation at the facility in the form of credits for the amount of avoided costs, an increased rate of return for the utility owning the facility, accelerated depreciation, or any combination thereof.

    2. Within 90 days of the adoption of rules and regulations required by section 1 of this act, the board shall submit a report to the Governor and the Legislature outlining the provisions of the regulations.

    3. Notwithstanding any law, rule, regulation or administrative order to the contrary, the board may incorporate the rules and regulations adopted pursuant to section 1 of this act into the process of fixing just and reasonable rates for nuclear electric generating facilities.

    4. This act shall take effect immediately.

STATEMENT

    This bill requires the Board of Public Utilities to adopt rules and regulations to establish a program of financial incentives for use in fixing the rates to be charged for electricity services provided by nuclear electric generating facilities subject to the board's jurisdiction.

    The program to be developed by the board shall provide a mechanism for rewarding nuclear electric generating facilities that achieve savings through improved safety and operations. In calculating the savings achieved by facilities subject to its jurisdiction, the board shall consider the amount of savings achieved through fewer outages, reduced purchase of replacement power and other avoided costs resulting from safety and operational improvements.

    In establishing incentives to reward improved safety and operation, the bill requires the board to permit facilities to retain a percentage of the savings achieved in the form of credits to the facilities, accelerated depreciation, higher rates of return or any combination thereof.

    The bill requires the board to adopt rules and regulations to incorporate annual reviews of the Nuclear Regulatory Commission actions and reports into the program of financial incentives.

    The bill also requires the board to submit a report to the Governor and the Legislature within 90 days of the adoption of rules and regulations outlining the provisions of the regulations.

Requires the BPU to establish a program of financial incentives for nuclear facilities.