NJ Races to Pass Landmark EV Legislation to Kick Off 2020

Figure 1: New Jersey 2019 Draft Energy Master Plan, NJ Board of Public Utilities

Following two key near unanimous votes today in the New Jersey Assembly’s Environment and Solid Waste and Appropriations Committees, the NJ legislature is poised to pass landmark electric vehicle legislation that would transform the Garden State’s transportation sector, ensure the state is well on its way to meet its 2050 climate and clean energy goals, and elevate New Jersey’s status as a regional leader in greenhouse gas reductions. All that remains is securing passage of the bill before New Jersey begins its new legislative session in the middle of January.

Rapidly decreasing emissions is critical for New Jersey to meet its ambitious 100% clean energy goal, and 80% emissions reduction goals by 2050. The transportation sector currently accounts for more than 47% of the state’s greenhouse gas emissions, more than double the emissions of the next largest source, electricity generation.

New Jersey is no stranger to fighting the climate fight. In 2018, the legislature passed the Clean Energy Act of 2018, which will rapidly increase the deployment of wind, solar, and energy efficiency in the state. This legislation was bolstered this summer when the state rejoined the Regional Greenhouse Gas Initiative (“RGGI”).  Despite the state’s success over the past two years, there is still one more pollution source the state must address—Transportation.  New Jersey has already taken several important steps to tackle vehicle emissions by becoming a signatory of the Multi-State Zero-Emission Vehicles (“ZEV”) Task Force’s memorandum of understanding and participating in the development of a regional market-based transportation policy as part of the Transportation and Climate Initiative (“TCI”). Additionally, Governor Murphy recently signed S606, which encourages local townships to “consider, encourage and promote the development of public electric vehicle charging infrastructure in their master plans.”

However, New Jersey must take even more ambitious action if it is going to reduce greenhouse gas emissions in the transportation sector and meet its goals. Electric vehicles (EV) can help the state achieve these goals since they emit zero tailpipe emissions, which not only cleans up the air we breathe but also improves the health of New Jersey’s communities. New Jersey has a goal to increase the number of electric vehicles on the road from the 25,000 that exist today to its target of more than 330,000 by 2025. Luckily, this is where S2252 comes in.

S2252, Introduced by Senators Bob Smith and Linda Greenstein in October of 2018, would address two of the largest barriers for electric vehicle adoption in the Garden State—cost and lack of adequate charging infrastructure. 

Reducing the Costs of EVs

To address the traditionally higher upfront cost of an electric vehicle compared to gasoline vehicle, S2252 would establish two rebate programs. First, it would permit the Board of Public Utilities (“BPU”) to create an incentive program of up to $500 for individuals who install in-home EV equipment. Next, the legislation directs the BPU to establish a special non-lapsing fund to provide incentives of up to $5,000 for the purchase or lease of an eligible electric vehicle. This program would last for 10 years, or until $300 million of rebates are dispersed, providing approximately $30 million a year in customer rebates. The programs may be funded by a variety of sources including RGGI or proceeds from the Transportation and Climate Initiative’s regional policy, or even general appropriations. This rebate program would be one of the most robust in the United States and help stimulate the EV market in New Jersey.

Saying Goodbye to Range Anxiety

Next, the legislation would help alleviate a phenomenon EV drivers call “range anxiety,” or the fear of running out of charge before reaching your destination. S2252 does so by setting numerous goals for EV adoption and charging infrastructure. This includes at least 1,000 level two chargers made available for public use by 2025, and percentage targets for overnight charging infrastructure at multi-family buildings, hotels, and state-owned vehicles. While this is a good first step, more needs to be done to support the anticipated 330,000 electric vehicles on the road by 2025.  To support that number of electric vehicles, New Jersey will need at least 9,600 public charging stations. The state currently has 1,031 stations at 363 locations. Utilities can help fill in these gaps by providing incentives for public charging stations or installing stations in traditionally underserved areas.  Though the legislation is light on details, it permits the BPU to adopt any necessary policies and programs to accomplish these goals.

The Role of NJ Utilities Remains Unclear

While S2252 establishes a clear course of action for vehicle rebates and charging infrastructure goals, it has little to say about the role of the state’s electric distribution companies (EDCs). Earlier versions of S2252 contained language directing the state’s EDCs to file EV charging infrastructure plans with the BPU. As discussed in a recent blog, utility involvement in the electric vehicle market is key for state to achieve their climate goals, and that their involvement provides several benefits to society.

Unfortunately, the amended version of S2252 provides little guidance to the BPU and utilities, despite two pending EV infrastructure plans filed in the past 18 months by Atlantic City Electric (ACE) and Public Service Electric & Gas (PSE&G) that are currently in limbo at the BPU. These filings take a holistic approach to the electric vehicle market by not only developing programs that shift EV charging to off-peak times to maintain the reliability of the electric distribution system, but they also would fill in some of the charging station infrastructure gaps by providing rebates for or installing charging stations throughout their service territories.

Unlike utility energy efficiency filings, the BPU currently lacks the guidelines to evaluate utility EV filings known as minimum filing requirements (MFRs). MFRs set the timeline and the rules of the road for utility filings, including a time limit by which the BPU must make a decision on whether to approve or disapprove of a utility plan.

Fortunately, S2252 provides the BPU with two broad grants of authority to evaluate EV infrastructure plans filed by EDCs. First, the bill allows the BPU to adopt rules and regulations necessary for the implementation of S2252.  Next, the bill amends New Jersey’s Electric Discount and Energy Competition Act of 1999 to include EVs and EV charging infrastructure.  This is the same statute that permits utility to file energy efficiency plans with the BPU.  Therefore, the BPU should be able to hear the pending filings by ACE and PSE&G, and also pave the way for utility filings by the rest of the state’s EDCs.

The legislation also removes an artificial barrier for electric vehicle deployment and exempts charging station owners and operators from being deemed public utilities, merely for owning or operating a charging station.

Although the legislation does not contain all of the answers for New Jersey’s EV goals, it is a gigantic step in the right direction. The bill has one more Committee hurdle to clear before a full vote by the assembly and house. However, the actions today suggest that the EV bill will make it to Governor Murphy’s desk before the end of the month and help make New Jersey an EV leader in the region.