S2329

SENATE, No. 2329

STATE OF NEW JERSEY

INTRODUCED DECEMBER 11,1997

By Senator SINAGRA

An Act concerning contracts between municipalities and private firms for the aggregation of energy services, amending R.S.40:48-1 and P.L.1971, c.198 and supplementing Title 40 of the Revised Statutes.

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

1. (New section) Sections 1 through 10 of P.L. , c. (C. ) (now before the Legislature as this bill) shall be known and may be cited as the “New Jersey Municipal Energy Services Aggregation Act.”

2. (New section) The Legislature finds and declares that it is in the public interest of the State to foster, promote and encourage by all reasonable means the provision of affordable and reliable supplies of electricity and gas and related products and services to the general public; that lower energy costs and increased efficiency in the use of energy supplies is important in promoting the general welfare of the residents of each municipality; and that enabling consumers to voluntarily aggregate their purchases of electricity and gas, together with other related energy products and services, in order to lower the overall cost thereof should be strongly encouraged and facilitated.

The Legislature further finds and declares that aggregation has the potential of enabling consumers to take advantage of developments and innovations in emerging energy technology products and services that might not otherwise be as readily available without aggregation; that at some future date retail customers will be permitted to choose their electricity and gas suppliers; and that retail customers will only be able to maximize the benefits of expanded retail choice in energy services markets if the municipalities in which they reside or conduct business are authorized by law to act as agents on their behalf.

The Legislature therefore determines that it is in the public interest to establish a comprehensive procedure designed to authorize municipalities to enter into contracts with private firms to facilitate the voluntary aggregation by consumers for the purchase of electricity and gas, together with related energy products and services.

3. (New section) As used in sections 1 through 10 of P.L. , c. (C. ) (now before the Legislature as this bill):

“Contract” means a written agreement between a contracting unit and a private firm wherein the private firm agrees to provide energy services to energy consumers within the territorial jurisdiction of a contracting unit pursuant to an energy services aggregation program;

“Contracting unit” means a municipality or municipal corporation as defined pursuant to R.S.40:42-1, or a group of municipalities that enters into a contract pursuant to the "Interlocal Services Act," P.L.1973, c.208 (C.40:8A-1 et seq.), that acts as an agent in the procurement of energy services pursuant to a written contract;

"Energy consumer" means a business or residential energy consumer located within the territorial jurisdiction of a contracting unit;

“Energy services” means the retail supply of the commodity of electricity or gas, of other related energy products or services, or of any combination thereof, which are provided pursuant to P.L. , c. (C. ) (now before the Legislature as this bill), and which shall not include regulated distribution services;

“Energy services aggregation program” means a program and procedure pursuant to which a contracting unit may act as an agent for energy consumers located within its territorial jurisdiction in the procurement of energy services pursuant to a written contract;

“Private firm” means any public utility subject to the jurisdiction of the Board of Public Utilities, or any other privately or publicly held company qualified to do business and having an office in the State of New Jersey that is licensed or otherwise authorized by the Board of Public Utilities to engage in the retail sale of gas or electricity, as applicable, and that is financially, technically, and administratively capable of providing energy services to energy consumers under the terms of a contract entered into pursuant to P.L. , c. (C. ) (now before the Legislature as this bill); and

“Proposal document” means a document prepared by or on behalf of a contracting unit describing the energy services to be procured by a contracting unit from a private firm pursuant to a contract, and shall include specific minimum qualifications that a private firm shall meet, as well as the criteria that will be used by a contracting unit to evaluate a proposal submitted by a private firm.

4. (New section) Notwithstanding the provisions of any other law, rule or regulation to the contrary, a contracting unit may enter into a contract with a private firm for the provision of energy services

pursuant to P.L. c. (C. ) (now before the Legislature as this bill).

5. (New section) a. A contracting unit that wishes to establish an energy services aggregation program shall publish a request for proposals to enter into a contract pursuant to P.L. , c. (C. ) (now before the Legislature as this bill) in at least one newspaper of general circulation in the territorial jurisdiction of the contracting unit and one newspaper of broad regional circulation. A contracting unit that publishes a request for proposals to enter into a contract shall notify in writing the Board of Public Utilities, the Division of Local Government Services in the Department of Community Affairs, and the Division of the Ratepayer Advocate, or their successors. Such notification shall include one copy each of the request for proposals and the proposal document. A contracting unit may request technical assistance from the Division of the Ratepayer Advocate.

b. The request for proposals required under subsection a. of this section shall contain the following minimum information:

(1) The type of energy services desired;

(2) The name, address and phone number of a person who can provide a proposal document and any additional information upon request; and

(3) A deadline date for the submission of proposals by private firms to the contracting unit that shall be not less than 30 days from the date of the publication of the request for proposals.

c. The contracting unit may, prior to the submission deadline, revise the proposal document provided that the contracting unit meets all of the requirements set forth pursuant to subsections a. and b. of this section.

6. (New section) a. The contracting unit shall conduct a review of the proposals submitted by private firms to determine which proposals meet the minimum qualifications and standards outlined in the proposal document and as set forth in rules and regulations adopted by the Board of Public Utilities. The review shall be conducted in a manner that avoids disclosure of the contents of a proposal to any private firm submitting a competing proposal. The contracting unit may conduct discussions with a private firm submitting a qualified proposal for the purpose of clarifying the submitted information. The contracting unit may at any time revise the proposal document after the review of the submitted proposals if it notifies simultaneously and in writing each private firm that submitted a proposal of the revision and provides a time frame of not less than 20 days within which a private firm may submit a revised proposal.

b. A contracting unit may select one qualified proposal from among those submitted. The contracting unit may negotiate a proposed contract with the private firm that submitted the selected proposal. If the contracting unit is unable to negotiate a satisfactory proposed contract with the private firm first selected, it may select another qualified proposal from among those submitted and negotiate a proposed contract with the private firm that submitted the proposal. The contracting unit shall set forth in writing the reasons for the selection of the qualified proposal submitted by the private firm with which the contracting unit has negotiated a proposed contract and shall make this document and the proposed contract available to the public upon request and at the public hearing conducted pursuant to section 7 of P.L. , c. (C. ) (now before the Legislature as this bill). c. A contract entered into pursuant to P.L. , c. (C. ) (now before the Legislature as this bill) shall include the following provisions:

(1) The specific responsibilities of the contracting unit and the private firm in connection with the energy services aggregation program;

(2) The charges, rates, fees, or formulas to be used to determine the charges, rates, or fees, to be charged to the energy consumers electing to receive energy services pursuant to the energy services aggregation program;

(3) The methods and procedures to be followed by the private firm to solicit participation in the energy services aggregation program including, but not necessarily limited to, mechanisms to educate energy consumers concerning the provisions of the energy services aggregation program;

(4) The proposed terms and conditions of a standard contract between energy consumers and the private firm including, but not necessarily limited to:

(a) the allocation of the risks in connection with the provision of such services between the private firm and the energy consumers receiving such services;

(b) the term of the proposed contract;

(c) the allocation of the risks associated with circumstances or occurrences beyond the control of the parties to the contract; and

(d) default and remedies.

(5) The use of contracting unit resources, equipment, systems or employees in connection with such services;

(6) The proposed term of the contract with the contracting unit;

(7) A provision indemnifying and holding the contracting unit harmless from all liabilities, damages and costs associated with any contract between a resident of the contracting unit and the private firm;

(8) The requirements for the provision of a performance bond by the private firm, if so required by the contracting unit;

(9) Procedures to ensure that participation in the energy services aggregation program is the result of an affirmative choice by energy consumers and consistent with regulations adopted by the Board of Public Utilities;

(10) Terms and conditions applicable to consumer protection as provided in rules and regulations adopted by the Board of Public Utilities, in consultation with the Division of Consumer Affairs in the Department of Law and Public Safety;

(11) Such other terms and conditions as the contracting unit deems necessary; and

(12) Any other terms and conditions that are negotiated by the contracting unit and the private firm.

d. No concession fees or other direct monetary benefit shall be paid to any contracting unit by, or on behalf of, a private firm as a result of the contract; provided, however, that nothing in this subsection shall be deemed to prohibit the payment of compensation by a private firm to a contracting unit for in-kind services actually provided by the contracting unit to the private firm pursuant to such contract.

e. A private firm shall be subject to the prohibitions against political contributions in accordance with the provisions of R.S.19:34-45.

7. (New section) a. A contracting unit that intends to enter into a contract pursuant to P.L. , c. (C. ) (now before the Legislature as this bill) shall conduct a public hearing on the proposed contract negotiated pursuant to section 6 of P.L. , c. (C. ) (now before the Legislature as this bill). A contracting unit that has entered into a contract pursuant to P.L. , c. (C. ) (now before the Legislature as this bill) and that proposes to revise such contract shall conduct a public hearing on the proposed revision.

b. At least 14 days prior to a public hearing required pursuant to subsection a. of this section, the contracting unit shall publish notice of the public hearing in at least one newspaper of general circulation in the territorial jurisdiction of the contracting unit. The publication shall include notice of the date, time and place of the public hearing, notice of the place at which copies of the proposed contract or the proposed revisions to an existing contract, as applicable, will be available for public inspection, and the times during which such inspection will be permitted.

c. At the public hearing, the contracting unit shall explain the terms and conditions of the proposed contract or the proposed revisions to an existing contract, as applicable, and shall answer questions raised by prospective energy consumers and other interested parties. The contracting unit shall explain during the hearing the charges, rates or fees that will or may be charged, as well as the principal terms and conditions of related contracts with residents of the contracting unit, for the supply of energy services as a result of the proposed contract or the proposed revisions to an existing contract, as applicable, as well as such other matters as the contracting unit deems appropriate.

d. The official record of the public hearing shall be kept open for a period of seven days following the conclusion of the hearing, during which time interested parties may submit written statements to be included in the record. The contracting unit shall prepare a written transcript, which shall include a copy of the proposed contract or the proposed revisions to an existing contract, as applicable, a copy of the statement setting forth the contracting unit’s reasons for the selection of the proposal submitted by the private firm with which the contracting unit has negotiated a contract, or in the case of a proposed revision to an existing contract, a copy of the statement setting forth the contracting unit's reasons for revising the contract, the official record of the public hearing, and a statement prepared by the contracting unit summarizing the major issues raised at the public hearing and the contracting unit’s specific responses to those issues. The contracting unit shall provide public notice of the availability of the transcript by publication in at least one newspaper of general circulation in the territorial jurisdiction of the contracting unit. The contracting unit shall make copies of the transcript available to interested parties upon request at a cost not to exceed the actual cost of printing or copying the transcript.

e. The governing body of a contracting unit that has negotiated the proposed contract or the proposed revisions to an existing contract, as applicable, shall adopt an ordinance authorizing the same. The ordinance may be introduced at the first meeting of the governing body of the contracting unit held no less than 14 days after the transcript is made available to the public pursuant to subsection d. of this section.

8. (New section) A contract entered into pursuant to P.L. , c. (C. ) (now before the Legislature as this bill), shall only be effective upon the issuance of final orders of the Board of Public Utilities, or upon the enactment into law of legislation, providing for the deregulation of gas, electricity, or related energy services, or any combination thereof.

9. (New section) A contracting unit shall provide all energy consumers with the opportunity to participate in an energy services aggregation program on a voluntary basis and in a clear and consistent manner. Energy consumers who do not voluntarily and affirmatively choose to participate in an energy services aggregation program shall continue to be entitled to contract with and purchase energy services from any corporation or entity authorized by law to engage in the retail sale of such energy services.

10. (New section) The Board of Public Utilities, in consultation with the Division of Consumer Affairs in the Department of Law and Public Safety, shall adopt, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), any rules and regulations necessary to effectuate the purposes of this act.

11. R.S.40:48-1 (C.40:48-1) is amended to read as follows:

The governing body of every municipality may make, amend, repeal and enforce ordinances to:

Finances and property. 1. Manage, regulate and control the finances and property, real and personal, of the municipality;

Contracts and contractor's bonds. 2. Prescribe the form and manner of execution and approval of all contracts to be executed by the municipality and of all bonds to be given to it;

Officers and employees; duties, terms and salaries. 3. Prescribe and define, except as otherwise provided by law, the duties and terms of office or employment, of all officers and employees; and to provide for the employment and compensation of such officials and employees, in addition to those provided for by statute, as may be deemed necessary for the efficient conduct of the affairs of the municipality;

Fees. 4. Fix the fees of any officer or employee of the municipality for any service rendered in connection with his office or position, for which no specific fee or compensation is provided. In the case of salaried officers or employees, such fee shall be paid into the municipal treasury;

Salaries instead of fees; disposition of fees. 5. Provide that any officer or employee receiving compensation for his services, in whole or in part by fees, whether paid by the municipality or otherwise, shall be paid a salary to be fixed in the ordinance, and thereafter all fees received by such officer or employee shall be paid into the municipal treasury;

Maintain order. 6. Prevent vice, drunkenness and immorality; to preserve the public peace and order; to prevent and quell riots, disturbances and disorderly assemblages;

Punish beggars; prevention of loitering. 7. Restrain and punish drunkards, vagrants, mendicants and street beggars; to prevent loitering, lounging or sleeping in the streets, parks or public places;

Auctions and noises. 8. Regulate the ringing of bells and the crying of goods and other commodities for sale at auction or otherwise, and to prevent disturbing noises;

Swimming; bathing costume. 9. Regulate or prohibit swimming or bathing in the waters of, in, or bounding the municipality, and to regulate or prohibit persons from appearing upon the public streets, parks and places clad in bathing costumes or robes, or costumes of a similar character;

Prohibit annoyance of persons or animals. 10. Regulate or prohibit any practice tending to frighten animals, or to annoy or injure persons in the public streets;

Animals; pounds; establishment and regulation. 11. Establish and regulate one or more pounds, and to prohibit or regulate the running at large of horses, cattle, dogs, swine, goats and other animals, and to authorize their impounding and sale for the penalty incurred, and the costs of impounding, keeping and sale; to regulate or prohibit the keeping of cattle, goats or swine in any part of the municipality; to authorize the destruction of dogs running at large therein;

Hucksters. 12. Prescribe and regulate the place of vending or exposing for sale articles of merchandise from vehicles;

Building regulations; wooden structures. 13. Regulate and control the construction, erection, alteration and repair of buildings and structures of every kind within the municipality; and to prohibit, within certain limits, the construction, erection or alteration of buildings or structures of wood or other combustible material;

Inflammable materials; inspect docks and buildings. 14. Regulate the use, storage, sale and disposal of inflammable or combustible materials, and to provide for the protection of life and property from fire, explosions and other dangers; to provide for inspections of buildings, docks, wharves, warehouses and other places, and of goods and materials contained therein, to secure the proper enforcement of such ordinance;

Dangerous structures; removal or destruction; procedure. 15. Provide for the removal or destruction of any building, wall or structure which is or may become dangerous to life or health, or might tend to extend a conflagration; and to assess the cost thereof as a municipal lien against the premises;

Chimneys and boilers. 16. Regulate the construction and setting up of chimneys, furnaces, stoves, boilers, ovens and other contrivances in which fire is used;

Explosives. 17. Regulate, in conformity with the statutes of this State, the manufacture, storage, sale, keeping or conveying of gunpowder, nitroglycerine, dynamite and other explosives;

Firearms and fireworks. 18. Regulate and prohibit the sale and use of guns, pistols, firearms, and fireworks of all descriptions;

Soft coal. 19. Regulate the use of soft coal in locomotives, factories, power houses and other places;

Theatres, schools, churches and public places. 20. Regulate the use of theatres, cinema houses, public halls, schools, churches, and other places where numbers of people assemble, and the exits therefrom, so that escape therefrom may be easily and safely made in case of fire or panic; and to regulate any machinery, scenery, lights, wires and other apparatus, equipment or appliances used in all places of public amusement;

Excavations. 21. Regulate excavations below the established grade or curb line of any street, not greater than eight feet, which the owner of any land may make, in the erection of any building upon his own property; and to provide for the giving of notice, in writing, of such intended excavation to any adjoining owner or owners, and that they will be required to protect and care for their several foundation walls that may be endangered by such excavation; and to provide that in case of the neglect or refusal, for 10 days, of such adjoining owner or owners to take proper action to secure and protect the foundations of any adjacent building or other structure, that the party or parties giving such notice, or their agents, contractors or employees, may enter into and upon such adjoining property and do all necessary work to make such foundations secure, and may recover the cost of such work and labor in so protecting such adjacent property; and to make such further and other provisions in relation to the proper conduct and performance of said work as the governing body or board of the municipality may deem necessary and proper;

Sample medicines. 22. Regulate and prohibit the distribution, depositing or leaving on the public streets or highways, public places or private property, or at any private place or places within any such municipality, and medicine, medicinal preparation or preparations represented to cure ailments or diseases of the body or mind, or any samples thereof, or any advertisements or circulars relating thereto, but no ordinance shall prohibit a delivery of any such article to any person above the age of 12 years willing to receive the same;

Boating. 23. Regulate the use of motor and other boats upon waters within or bounding the municipality;

Fire escapes. 24. Provide for the erection of fire escapes on buildings in the municipality, and to provide rules and regulations concerning the construction and maintenance of the same, and for the prevention of any obstruction thereof or thereon;

Care of injured employees. 25. Provide for the payment of compensation and for medical attendance to any officer or employee of the municipality injured in the performance of his duty;

Bulkheads and other structures. 26. Fix and determine the lines of bulkheads or other works or structures to be erected, constructed or maintained by the owners of lands facing upon any navigable water in front of their lands, and in front of or along any highway or public lands of said municipality, and to designate the materials to be used, and the type, height and dimensions thereof;

Lifeguard. 27. Establish, maintain, regulate and control a lifeguard upon any beach within or bordering on the municipality;

Appropriation for life-saving apparatus. 28. Appropriate moneys to safeguard people from drowning within its borders, by location of apparatus or conduct of educational work in harmony with the plans of the United States volunteer life-saving corps in this State;

Fences. 29. Regulate the size, height and dimensions of any fences between the lands of adjoining owners, whether built or erected as division or partition fences between such lands, and whether the same exist or be erected entirely or only party upon the lands of any such adjoining owners, or along or immediately adjacent to any division or partition line of such lands. To provide, in such ordinance, the manner of securing, fastening or shoring such fences. In the case of fences thereafter erected contrary to the provisions thereof, the governing body may provide for a penalty for the violation of such ordinance, and in the case of such fence or fences erected or existing at the time of the passage of any such ordinance, may provide therein for the removal, change or alteration thereof, so as to make such fence or fences comply with the provisions of any such ordinance;

Advertise municipality. 30. Appropriate funds for advertising the advantages of the municipality.

Energy Services Aggregation Programs. 31. Establish programs and procedures pursuant to which the municipality may act as an agent for its energy consumers in the procurement of either electricity or gas supplies or other related products and services or any combination thereof pursuant to a written contract entered into pursuant to P.L. , c. (C. ) (now before the Legislature as this bill).

Notwithstanding the provisions of any other law, rule or regulation to the contrary, a municipality providing energy aggregation services pursuant to P.L. , c. (C. ) (now before the Legislature as this bill) shall not be deemed to be a public utility pursuant to R.S.40:62-24 or R.S.48:1-1 et seq. or be deemed to be operating any form of public utility service pursuant to R.S.40:62-1 et seq., to the extent such municipality is solely engaged in the provision of such aggregation service and not otherwise owning or operating any plant or facility for the production or distribution of gas, electricity, steam or other product as provided in R.S.40:62-12.

(cf: P.L.1979, c.43, s.1)

12. Section 5 of P.L.1971, c.198 (C.40A:11-5) is amended to read as follows:

5. Exceptions. Any purchase, contract or agreement of the character described in section 4 of P.L.1971, c.198 (C.40A:11-4) may be made, negotiated or awarded by the governing body without public advertising for bids and bidding therefor if:

(1) The subject matter thereof consists of:

(a) (i) Professional services. The governing body shall in each instance state supporting reasons for its action in the resolution awarding each contract and shall forthwith cause to be printed once, in a newspaper authorized by law to publish its legal advertisements, a brief notice stating the nature, duration, service and amount of the contract, and that the resolution and contract are on file and available for public inspection in the office of the clerk of the county or municipality, or, in the case of a contracting unit created by more than one county or municipality, of the counties or municipalities creating such contracting unit; or (ii) Extraordinary unspecifiable services. The application of this exception shall be construed narrowly in favor of open competitive bidding, where possible, and the Division of Local Government Services is authorized to adopt and promulgate rules and regulations limiting the use of this exception in accordance with the intention herein expressed. The governing body shall in each instance state supporting reasons for its action in the resolution awarding each contract and shall forthwith cause to be printed, in the manner set forth in subsection (1) (a) (i) of this section, a brief notice of the award of such contract;

(b) The doing of any work by employees of the contracting unit;

(c) The printing of legal briefs, records and appendices to be used in any legal proceeding in which the contracting party may be a party;

(d) The furnishing of a tax map or maps for the contracting party;

(e) The purchase of perishable foods as a subsistence supply;

(f) The supplying of any product or the rendering of any service by a public utility, which is subject to the jurisdiction of the Board of Public Utilities or the Federal Energy Regulatory Commission or its successor, in accordance with tariffs and schedules of charges made, charged or exacted, filed with the board or commission;

(g) The acquisition, subject to prior approval of the Attorney General, of special equipment for confidential investigation;

(h) The printing of bonds and documents necessary to the issuance and sale thereof by a contracting unit;

(i) Equipment repair service if in the nature of an extraordinary unspecifiable service and necessary parts furnished in connection with such service, which exception shall be in accordance with the requirements for extraordinary unspecifiable services;

(j) The publishing of legal notices in newspapers as required by law;

(k) The acquisition of artifacts or other items of unique intrinsic, artistic or historical character;

(l) Election expenses;

(m) Insurance, including the purchase of insurance coverage and consultant services, which exception shall be in accordance with the requirements for extraordinary unspecifiable services;

(n) The doing of any work by handicapped persons employed by a sheltered workshop;

(o) The provision of any service or the furnishing of materials including those of a commercial nature, attendant upon the operation of a restaurant by any nonprofit, duly incorporated, historical society at or on any historical preservation site;

(p) Homemaker--home health services performed by voluntary, nonprofit agencies;

(q) The purchase of materials and services for a law library established pursuant to R.S.40:33-14, including books, periodicals, newspapers, documents, pamphlets, photographs, reproductions, microforms, pictorial or graphic works, copyright and patent materials, maps, charts, globes, sound recordings, slides, films, filmscripts, video and magnetic tapes, and other audiovisual, printed, or published material of a similar nature; necessary binding or rebinding of law library materials; and specialized library services;

(r) On-site inspections undertaken by private agencies pursuant to the "State Uniform Construction Code Act," P.L.1975, c.217 (C.52:27D-119 et seq.) and the regulations adopted pursuant thereto;

(s) The marketing of recyclable materials recovered through a recycling program, or the marketing of any product intentionally produced or derived from solid waste received at a resource recovery facility or recovered through a resource recovery program, including, but not limited to, refuse-derived fuel, compost materials, methane gas, and other similar products;

(t) Emergency medical services provided by a hospital to the residents of a municipality or county, provided that: (a) such exception be allowed only after the governing body determines that the emergency services are available only from one provider; and (b) if the contract is awarded without advertising for bids or bidding the governing body shall in each instance state supporting reasons for its action in a resolution awarding the contract and cause to be printed once in a newspaper authorized by law to publish its legal advertisements a brief notice stating the nature, duration, service, and amount of the contract; and (c) the contract shall be kept on file for public inspection in the office of the clerk of the municipality;

(u) Contracting unit towing and storage contracts, provided that all such contracts shall be pursuant to reasonable non-exclusionary and non-discriminatory terms and conditions, which may include the provision of such services on a rotating basis, at the rates and charges set by the municipality pursuant to section 1 of P.L.1979, c.101 (C.40:48-2.49). All contracting unit towing and storage contracts for services to be provided at rates and charges other than those established pursuant to the terms of this paragraph shall only be awarded to the lowest responsible bidder in accordance with the provisions of the "Local Public Contracts Law" and without regard for the value of the contract therefor. Each of the aforementioned means of contracting shall be subject to any regulations adopted by the Commissioner of Insurance pursuant to section 60 of P.L.1990, c.8 (C.17:33B-47);

(v) The purchase of steam or electricity from, or the rendering of services directly related to the purchase of such steam or electricity from a qualifying small power production facility or a qualifying cogeneration facility as defined pursuant to 16 U.S.C.796;

(w) The purchase of electricity or administrative or dispatching services directly related to the transmission of such purchased electricity by a contracting unit engaged in the generation of electricity;

(x) The printing of municipal ordinances or other services necessarily incurred in connection with the revision and codification of municipal ordinances;

(y) An agreement for the purchase of an equitable interest in a water supply facility or for the provision of water supply services entered into pursuant to section 2 of P.L.1993, c.381 (C.58:28-2), or an agreement entered into pursuant to P.L.1989, c.109 (N.J.S.40A:31-1 et al.), so long as such agreement is entered into no later than six months after the effective date of P.L.1993, c.381;

(z) A contract for the provision of water supply services entered into pursuant to P.L.1995, c.101 (C.58:26-19 et al.);

(aa) The cooperative marketing of recyclable materials recovered through a recycling program; [or]

(bb) A contract for the provision of wastewater treatment services entered into pursuant to P.L.1995, c.216 (C.58:27-19 et al.)[.]; or

(cc) The purchase, pursuant to an energy services aggregation program established pursuant to P.L. , c. (C. ) (now before the Legislature as this bill), of either the commodity of electricity or gas, of other related energy products or services, or of any combination thereof, from any public utility subject to the jurisdiction of the Board of Public Utilities or any other publicly or privately held company that is licensed or otherwise authorized by the Board of Public Utilities to engage in the retail sale of electricity or gas or other related energy products or services, as applicable.

(2) It is to be made or entered into with the United States of America, the State of New Jersey, county or municipality or any board, body, officer, agency or authority thereof and any other state or subdivision thereof.

(3) The contracting agent has advertised for bids pursuant to section 4 of P.L.1971, c.198 (C.40A:11-4) on two occasions and (a) has received no bids on both occasions in response to its advertisement, or (b) the governing body has rejected such bids on two occasions because the contracting agent has determined that they are not reasonable as to price, on the basis of cost estimates prepared for or by the contracting agent prior to the advertising therefor, or have not been independently arrived at in open competition, or (c) on one occasion no bids were received pursuant to (a) and on one occasion all bids were rejected pursuant to (b), in whatever sequence; any such contract or agreement may then be negotiated and may be awarded upon adoption of a resolution by a two-thirds affirmative vote of the authorized membership of the governing body authorizing such contract or agreement; provided, however, that:

(i) A reasonable effort is first made by the contracting agent to determine that the same or equivalent materials or supplies, at a cost which is lower than the negotiated price, are not available from an agency or authority of the United States, the State of New Jersey or of the county in which the contracting unit is located, or any municipality in close proximity to the contracting unit;

(ii) The terms, conditions, restrictions and specifications set forth in the negotiated contract or agreement are not substantially different from those which were the subject of competitive bidding pursuant to section 4 of P.L.1971, c.198 (C.40A:11-4); and

(iii) Any minor amendment or modification of any of the terms, conditions, restrictions and specifications, which were the subject of competitive bidding pursuant to section 4 of P.L.1971, c.198 (C.40A:11-4), shall be stated in the resolution awarding such contract or agreement; provided further, however, that if on the second occasion the bids received are rejected as unreasonable as to price, the contracting agent shall notify each responsible bidder submitting bids on the second occasion of its intention to negotiate, and afford each bidder a reasonable opportunity to negotiate, but the governing body shall not award such contract or agreement unless the negotiated price is lower than the lowest rejected bid price submitted on the second occasion by a responsible bidder, is the lowest negotiated price offered by any responsible supplier, and is a reasonable price for such work, materials, supplies or services.

Whenever a contracting unit shall determine that a bid was not arrived at independently in open competition pursuant to subsection (3) of this section it shall thereupon notify the county prosecutor of the county in which the contracting unit is located and the Attorney General of the facts upon which its determination is based, and when appropriate, it may institute appropriate proceedings in any State or federal court of competent jurisdiction for a violation of any State or federal antitrust law or laws relating to the unlawful restraint of trade.

(cf: P.L.1995, c.216, s.11)

13. Section 15 of P.L.1971, c.198 (C.40A:11-15) is amended to read as follows:

15. All purchases, contracts or agreements for the performing of work or the furnishing of materials, supplies or services shall be made for a period not to exceed 24 consecutive months, except that contracts for professional services pursuant to subparagraph (i) of paragraph (a) of subsection (1) of section 5 of P.L.1971, c.198 (C.40A:11-5) shall be made for a period not to exceed 12 consecutive months. Contracts or agreements may be entered into for longer periods of time as follows:

(1) Supplying of:

(a) (Deleted by amendment, P.L.1996, c.113.)

(b) (Deleted by amendment, P.L.1996, c.113.)

(c) Thermal energy produced by a cogeneration facility, for use for heating or air conditioning or both, for any term not exceeding 40 years, when the contract is approved by the Board of Public Utilities. For the purposes of this paragraph, "cogeneration" means the simultaneous production in one facility of electric power and other forms of useful energy such as heating or process steam;

(2) (Deleted by amendment, P.L.1977, c.53.)

(3) The collection and disposal of municipal solid waste, the collection and disposition of recyclable material, or the disposal of sewage sludge, for any term not exceeding in the aggregate, five years;

(4) The collection and recycling of methane gas from a sanitary landfill facility, for any term not exceeding 25 years, when such contract is in conformance with a district solid waste management plan approved pursuant to P.L.1970, c.39 (C.13:1E-1 et seq.), and with the approval of the Division of Local Government Services in the Department of Community Affairs and the Department of Environmental Protection. The contracting unit shall award the contract to the highest responsible bidder, notwithstanding that the contract price may be in excess of the amount of any necessarily related administrative expenses; except that if the contract requires the contracting unit to expend funds only, the contracting unit shall award the contract to the lowest responsible bidder. The approval by the Division of Local Government Services of public bidding requirements shall not be required for those contracts exempted therefrom pursuant to section 5 of P.L.1971, c.198 (C.40A:11-5);

(5) Data processing service, for any term of not more than three years;

(6) Insurance, for any term of not more than three years;

(7) Leasing or servicing of automobiles, motor vehicles, machinery and equipment of every nature and kind, for a period not to exceed three years; provided, however, such contracts shall be entered into only subject to and in accordance with the rules and regulations promulgated by the Director of the Division of Local Government Services of the Department of Community Affairs;

(8) The supplying of any product or the rendering of any service by a telephone company which is subject to the jurisdiction of the Board of Public Utilities for a term not exceeding five years;

(9) Any single project for the construction, reconstruction or rehabilitation of any public building, structure or facility, or any public works project, including the retention of the services of any architect or engineer in connection therewith, for the length of time authorized and necessary for the completion of the actual construction;

(10) The providing of food services for any term not exceeding three years;

(11) On-site inspections undertaken by private agencies pursuant to the "State Uniform Construction Code Act," P.L.1975, c.217 (C.52:27D-119 et seq.) for any term of not more than three years;

(12) The performance of work or services or the furnishing of materials or supplies for the purpose of conserving energy in buildings owned by, or operations conducted by, the contracting unit, the entire price of which to be established as a percentage of the resultant savings in energy costs, for a term not to exceed 10 years; provided, however, that such contracts shall be entered into only subject to and in accordance with rules and regulations promulgated by the Department of Environmental Protection establishing a methodology for computing energy cost savings;

(13) The performance of work or services or the furnishing of materials or supplies for the purpose of elevator maintenance for any term not exceeding three years;

(14) Leasing or servicing of electronic communications equipment for a period not to exceed five years; provided, however, such contract shall be entered into only subject to and in accordance with the rules and regulations promulgated by the Director of the Division of Local Government Services of the Department of Community Affairs;

(15) Leasing of motor vehicles, machinery and other equipment primarily used to fight fires, for a term not to exceed seven years, when the contract includes an option to purchase, subject to and in accordance with rules and regulations promulgated by the Director of the Division of Local Government Services of the Department of Community Affairs;

(16) The provision of water supply services or the designing, financing, construction, operation, or maintenance, or any combination thereof, of a water supply facility, or any component part or parts thereof, including a water filtration system, for a period not to exceed 40 years, when the contract for these services is approved by the Division of Local Government Services in the Department of Community Affairs, the Board of Public Utilities, and the Department of Environmental Protection pursuant to P.L.1985, c.37 (C.58:26-1 et al.), except for those contracts otherwise exempted pursuant to subsection (30), (31), (34) or (35) of this section. For the purposes of this subsection, "water supply services" means any service provided by a water supply facility; "water filtration system" means any equipment, plants, structures, machinery, apparatus, or land, or any combination thereof, acquired, used, constructed, rehabilitated, or operated for the collection, impoundment, storage, improvement, filtration, or other treatment of drinking water for the purposes of purifying and enhancing water quality and insuring its potability prior to the distribution of the drinking water to the general public for human consumption, including plants and works, and other personal property and appurtenances necessary for their use or operation; and "water supply facility" means and refers to the real property and the plants, structures, interconnections between existing water supply facilities, machinery and equipment and other property, real, personal and mixed, acquired, constructed or operated, or to be acquired, constructed or operated, in whole or in part by or on behalf of a political subdivision of the State or any agency thereof, for the purpose of augmenting the natural water resources of the State and making available an increased supply of water for all uses, or of conserving existing water resources, and any and all appurtenances necessary, useful or convenient for the collecting, impounding, storing, improving, treating, filtering, conserving or transmitting of water and for the preservation and protection of these resources and facilities and providing for the conservation and development of future water supply resources;

(17) The provision of resource recovery services by a qualified vendor, the disposal of the solid waste delivered for disposal which cannot be processed by a resource recovery facility or the residual ash generated at a resource recovery facility, including hazardous waste and recovered metals and other materials for reuse, or the design, financing, construction, operation or maintenance of a resource recovery facility for a period not to exceed 40 years when the contract is approved by the Division of Local Government Services in the Department of Community Affairs, and the Department of Environmental Protection pursuant to P.L.1985, c.38 (C.13:1E-136 et al.); and when the resource recovery facility is in conformance with a district solid waste management plan approved pursuant to P.L.1970, c.39 (C.13:1E-1 et seq.). For the purposes of this subsection, "resource recovery facility" means a solid waste facility constructed and operated for the incineration of solid waste for energy production and the recovery of metals and other materials for reuse; or a mechanized composting facility, or any other facility constructed or operated for the collection, separation, recycling, and recovery of metals, glass, paper, and other materials for reuse or for energy production; and "residual ash" means the bottom ash, fly ash, or any combination thereof, resulting from the combustion of solid waste at a resource recovery facility;

(18) The sale of electricity or thermal energy, or both, produced by a resource recovery facility for a period not to exceed 40 years when the contract is approved by the Board of Public Utilities, and when the resource recovery facility is in conformance with a district solid waste management plan approved pursuant to P.L.1970, c.39 (C.13:1E-1 et seq.). For the purposes of this subsection, "resource recovery facility" means a solid waste facility constructed and operated for the incineration of solid waste for energy production and the recovery of metals and other materials for reuse; or a mechanized composting facility, or any other facility constructed or operated for the collection, separation, recycling, and recovery of metals, glass, paper, and other materials for reuse or for energy production;

(19) The provision of wastewater treatment services or the designing, financing, construction, operation, or maintenance, or any combination thereof, of a wastewater treatment system, or any component part or parts thereof, for a period not to exceed 40 years, when the contract for these services is approved by the Division of Local Government Services in the Department of Community Affairs and the Department of Environmental Protection pursuant to P.L.1985, c.72 (C.58:27-1 et al.), except for those contracts otherwise exempted pursuant to subsection (36) of this section. For the purposes of this subsection, "wastewater treatment services" means any services provided by a wastewater treatment system, and "wastewater treatment system" means equipment, plants, structures, machinery, apparatus, or land, or any combination thereof, acquired, used, constructed, or operated for the storage, collection, reduction, recycling, reclamation, disposal, separation, or other treatment of wastewater or sewage sludge, or for the final disposal of residues resulting from the treatment of wastewater, including, but not limited to, pumping and ventilating stations, facilities, plants and works, connections, outfall sewers, interceptors, trunk lines, and other personal property and appurtenances necessary for their operation;

(20) The supplying of materials or services for the purpose of lighting public streets, for a term not to exceed five years, provided that the rates, fares, tariffs or charges for the supplying of electricity for that purpose are approved by the Board of Public Utilities;

(21) In the case of a contracting unit which is a county or municipality, the provision of emergency medical services by a hospital to residents of a municipality or county as appropriate for a term not to exceed five years;

(22) Towing and storage contracts, awarded pursuant to paragraph u. of subsection (1) of section 5 of P.L.1971, c.198 (C.40A:11-5) for any term not exceeding three years;

(23) Fuel for the purpose of generating electricity for a term not to exceed eight years;

(24) The purchase of electricity or administrative or dispatching services related to the transmission of such electricity, from a public utility company subject to the jurisdiction of the Board of Public Utilities, a similar regulatory body of another state, or a federal regulatory agency, or from a qualifying small power producing facility or qualifying cogeneration facility, as defined by 16 U.S.C.s.796, by a contracting unit engaged in the generation of electricity for retail sale, as of May 24,1991, for a term not to exceed 40 years;

(25) Basic life support services, for a period not to exceed five years. For the purposes of this subsection, "basic life support" means a basic level of prehospital care, which includes but need not be limited to patient stabilization, airway clearance, cardiopulmonary resuscitation, hemorrhage control, initial wound care and fracture stabilization;

(26) Claims administration services, for any term not to exceed three years;

(27) The provision of transportation services to elderly, disabled or indigent persons for any term of not more than three years. For the purposes of this subsection, "elderly persons" means persons who are 60 years of age or older. "Disabled persons" means persons of any age who, by reason of illness, injury, age, congenital malfunction, or other permanent or temporary incapacity or disability, are unable, without special facilities or special planning or design to utilize mass transportation facilities and services as effectively as persons who are not so affected. "Indigent persons" means persons of any age whose income does not exceed 100 percent of the poverty level, adjusted for family size, established and adjusted under section 673(2) of subtitle B, the "Community Services Block Grant Act," Pub.L.97-35 (42 U.S.C.s.9902 (2));

(28) The supplying of liquid oxygen or other chemicals, for a term not to exceed five years, when the contract includes the installation of tanks or other storage facilities by the supplier, on or near the premises of the contracting unit;

(29) The performance of patient care services by contracted medical staff at county hospitals, correction facilities and long term care facilities, for any term of not more than three years;

(30) The acquisition of an equitable interest in a water supply facility pursuant to section 2 of P.L.1993, c.381 (C.58:28-2), or an agreement entered into pursuant to the "County and Municipal Water Supply Act," N.J.S.40A:31-1 et seq., if the agreement is entered into no later than January 7, 1995, for any term of not more than forty years;

(31) The provision of water supply services or the financing, construction, operation or maintenance or any combination thereof, of a water supply facility or any component part or parts thereof, by a partnership or copartnership established pursuant to a contract authorized under section 2 of P.L.1993, c.381 (C.58:28-2), for a period not to exceed 40 years;

(32) Laundry service and the rental, supply and cleaning of uniforms for any term of not more than three years;

(33) The supplying of any product or the rendering of any service, including consulting services, by a cemetery management company for the maintenance and preservation of a municipal cemetery operating pursuant to the "New Jersey Cemetery Act," N.J.S.8A:1-1 et seq., for a term not exceeding 15 years;

(34) A contract between a public entity and a private firm pursuant to P.L.1995, c.101 (C.58:26-19 et al.) for the provision of water supply services may be entered into for any term which, when all optional extension periods are added, may not exceed 40 years;

(35) An agreement for the purchase of a supply of water from a public utility company subject to the jurisdiction of the Board of Public Utilities in accordance with tariffs and schedules of charges made, charged or exacted or contracts filed with the Board of Public Utilities, for any term of not more than 40 years;

(36) A contract between a public entity and a private firm or public authority pursuant to P.L.1995, c.216 (C.58:27-19 et al.) for the provision of wastewater treatment services may be entered into for any term of not more than 40 years, including all optional extension periods; and

(37) The operation and management of a facility under a license issued or permit approved by the Department of Environmental Protection, including a wastewater treatment system or a water supply or distribution facility, as the case may be, for any term of not more than seven years. For the purposes of this subsection, "wastewater treatment system" refers to facilities operated or maintained for the storage, collection, reduction, disposal, or other treatment of wastewater or sewage sludge, remediation of groundwater contamination, stormwater runoff, or the final disposal of residues resulting from the treatment of wastewater; and "water supply or distribution facility" refers to facilities operated or maintained for augmenting the natural water resources of the State, increasing the supply of water, conserving existing water resources, or distributing water to users.

All multiyear leases and contracts entered into pursuant to this section, except contracts for the leasing or servicing of equipment supplied by a telephone company which is subject to the jurisdiction of the Board of Public Utilities, contracts involving the supplying of electricity for the purpose of lighting public streets and contracts for thermal energy authorized pursuant to subsection (1) above, construction contracts authorized pursuant to subsection (9) above, contracts and agreements for the provision of work or the supplying of equipment to promote energy conservation authorized pursuant to subsection (12) above, contracts for water supply services or for a water supply facility, or any component part or parts thereof authorized pursuant to subsection (16), (30), (31), (34), (35) or (37) above, contracts for resource recovery services or a resource recovery facility authorized pursuant to subsection (17) above, contracts for the sale of energy produced by a resource recovery facility authorized pursuant to subsection (18) above, contracts for wastewater treatment services or for a wastewater treatment system or any component part or parts thereof authorized pursuant to subsection (19), (36) or (37) above, and contracts for the purchase of electricity or administrative or dispatching services related to the transmission of such electricity authorized pursuant to subsection (24) above, shall contain a clause making them subject to the availability and appropriation annually of sufficient funds as may be required to meet the extended obligation, or contain an annual cancellation clause.

The Division of Local Government Services shall adopt and promulgate rules and regulations concerning the methods of accounting for all contracts that do not coincide with the fiscal year.

(38) A contract for a term not exceeding 5 years, which contract may contain an option to extend such contract for an additional 5 years, when such contract is adopted pursuant to the provisions of P.L. c. (C. ) (now before the Legislature as this bill) and R.S. 40:48-1, and filed with the Division of Local Government Services in the Department of Community Affairs.

(cf: P.L.1996, c.113, s.19)

14. This act shall become effective immediately, except that no contract shall be entered into pursuant to P.L. , c. (C. ) (now before the Legislature as this bill) prior to the adoption of rules and regulations required pursuant to section 10 of P.L. , c. (C. ) (now before the Legislature as this bill).

STATEMENT

This bill establishes the procedure by which a municipality can enter into a contractual agreement with a private firm to supply electricity, gas or energy related services, or any combination thereof to business and residential energy consumers within its boundaries. Under the bill, a private firm is defined as a public utility or a provider of energy or related services that is authorized to conduct business in New Jersey. This bill does not authorize contractual agreements between a municipality and the local utility for distribution services. This process, known as municipal aggregation, allows municipalities to negotiate more economical energy purchases by offering a private firm the opportunity to meet the energy needs of all or a portion of its residents and businesses in one contract. This will allow business and residential energy consumers to enjoy the same opportunities for savings as large users of energy, such as industrial and large commercial consumers.

While the bill authorizes the municipality to negotiate and enter into an aggregation agreement on behalf of residents and businesses within its boundaries, participation is completely voluntary. The municipality is authorized to give a private firm the opportunity to solicit participation in the aggregation program. However, actual participation is still at the discretion of the individual energy consumer.

The bill requires a municipality to issue a request for proposals to provide all energy purveyors with an opportunity to submit proposals to the municipality. Once proposals are submitted, the municipality is authorized to negotiate the specifics of a contract with the preferred energy purveyor. Prior to entering into the final aggregation agreement, the municipality is required to hold a public hearing to allow for public input and to address any questions that the public may have.

The bill requires the Board of Public Utilities (BPU) to adopt rules and regulations to implement the bill's provisions, including: (1) the establishment of minimum qualifications and standards to be met by private firms, (2) procedures to ensure that participation in an energy services aggregation program is the result of an affirmative choice by the energy consumer, and (3) in consultation with the Division of Consumer Affairs, the terms and conditions applicable to consumer protection. The bill also provides that no contract be effective until the deregulation of electricity or gas is provided by law or BPU order, and until the rules and regulations required by this bill are adopted.

The bill also amends current law to exempt local governments from public contract bidding requirements when entering into contractual agreements for the purchase of energy services pursuant to the provisions of this bill.

Provides for municipal aggregation of energy services.