Excess utility profits would be returned directly to the consumer

TRENTON – Aiming to address rising utility costs, Senator Troy Singleton has introduced legislation known as the “Public Utility Fair Profit Act” that would require consumers to receive direct dividends of excess utility profits.

“With rising inflation and soaring utility costs, hardworking families and businesses are struggling to heat their homes, keep their lights on, and frankly pay their bills,” said Senator Singleton (D-Burlington). “That is why it is more important than ever to ensure consumers are not being unfairly taken advantage of. The Public Utility Fair Profit Act ensures that excessive profits are directly returned to customers, instead of corporate shareholders and executives.”

The bill would require that, no later than three months from the completion of a public utility’s 12-month reporting period, a public utility perform an annual review of the actual revenues collected during the period and compare it to the total revenue requirement approved by the BPU for that period. Revenues in excess of that total revenue requirement would be required to be redistributed back to the customers, in a proportional manner, through a refund mechanism that is reviewed and approved by the BPU. This refund would be required to take place within 45 days of the BPU’s determination of excess revenues. The refund mechanism would be permitted to include bill credits applied to future utility bills, direct payments to customers with unpaid balances, or direct payments to customers who are enrolled in a utility assistance program.

The “total revenue requirement” of a public utility would be the total amount of revenue a utility is approved to recover through utility rates for a reporting period as determined by the BPU in the most recent base rate case, including the additional amounts of revenue the BPU has approved the public utility to recover through alternative rate recovery mechanisms. These alternative rate recovery mechanisms would include, but not be limited to, charges approved pursuant to infrastructure investments. With this definition, the legislation would allow for reasonable reserves and emergency funds, while not infringing upon a utility’s ability to make necessary infrastructure improvements nor continue the transition to clean energy.

If a public utility fails to redistribute excess profits or knowingly misrepresents information contained in their financial reports submitted to the BPU, they would be subject to a fine determined by the BPU. The fine would not be permitted to exceed five percent of the utility’s total revenue requirement or 105 percent of the excess profits for the reporting period. Any fines collected pursuant to this penalty would be required to be allocated to support existing funding for utility assistance programs administered by the BPU.