Measure Projected to Save Municipalities Up to $68 Million
Legislation sponsored by Assembly Democrats John McKeon, Patrick Diegnan, Mila Jasey and Bob Andrzejczak to help cut costs for municipally-operated utilities gained approval from the full Assembly on Monday.
The bill (A-2385) would authorize three or more municipalities that currently operate electric utilities to establish a shared services energy authority that may purchase, sell, exchange or transmit electricity at wholesale. The bill also would authorize a rural electric cooperative already in existence to join the authority once it has been established.
Currently, the joint operation of such facilities in this manner is not permitted under the “Uniform Shared Services and Consolidation Act.”
“This measure would drive competition and help lower costs by enabling municipalities to enter into shared service contracts,” said McKeon (D-Essex/Morris). “Ultimately, the bill would make utilities more efficient and allow them to pass savings along to the hardworking middle class families in their towns.”
If all eligible entities were to participate in the shared services energy authority, they could realize an estimated total savings of up to $67.7 million, said McKeon. Individual households could see their energy bills decrease by up to $440 annually, he said.
“There’s a real advantage to having municipalities work together to deliver quality services at lower rates on behalf of their customers,” said Diegnan (D-Middlesex). “This legislation is about prioritizing affordable rates without compromising reliability.”
“Homeowners and business owners in municipalities all across the state depend on their local utilities, which have a reputation for providing the best service at the lowest rates,” said Jasey (D-Essex/Morris). “By allowing eligible municipalities to pool their resources and make themselves more competitive as a collective, this measure will ease the burden on ratepayers.”
“There’s no household or business that can run without electricity, so while we cannot eliminate this expense entirely, it’s always important to seek ways to lower it,” said Andrzejczak (D-Cape May/Atlantic/Cumberland). “The savings that result from this bill can mean more money for groceries or filling the gas tank for the average family.”
The measure authorizes the formation of power supply contracts for a term of up to 40 years.
The nine municipalities and one rural electric cooperative that would be eligible to participate in the authority under the bill are as follows: Butler, Lavallette, Madison, Milltown, Park Ridge, Pemberton, Seaside Heights, South River, Vineland and the Sussex Rural Electric Cooperative.
The bill, which passed unanimously in the Assembly, now awaits further Senate consideration.