Testimony In Support of S3992 to Modernize NJ’s Electric Grid

Doug O’Malley, Director

Senate Environment Committee

In Support of S3992 (Grid Modernization Bill)

November 20, 2023

Environment New Jersey is strongly in favor of S3992 so that we make the investments in the electric grid that the 21^st century and the transition to clean energy demand. These investments are sorely needed and if we defer these modernizations, we will end up in a scenario of pay me now, or pay me later.

Currently, three of the largest state utilities are seeking approval to allocate more than $1 billion in new filings submitted earlier this month to NJBPU. This would be in addition to the $300 million that this legislation would allocate to grid modernization from the General Fund. We often say that the state needs to save for a rainy day – but by failing to invest in the grid, we increase the likelihood when that rainy day comes (in the case of extreme weather), our grid won’t be prepared.

New Jersey rightfully has advanced goals regarding clean energy, including intentions for widespread adoption of renewable energy, EVs, heat pumps and other advanced solutions.  The grid, especially distribution, is the single most important asset in making that transition happen, and this legislation will be instrumental to ensuring success.

Load changes associated with renewable energy, EVs, and heat-pumps will profoundly change the load curve and will require reinforcement and optimization of substations and feeders.  Many of those upgrades will take up to a decade to plan and implement, and it is therefore critical that we begin planning and making investments now in support of our future needs.

Note, New Jersey will need to massively increase the speed, scale, and scope of electric vehicle (EV) charging infrastructure investments to meet the state’s climate, air quality, and equity goals. However, current barriers to the deployment of infrastructure – delays, inefficient rates, and inequitable distribution of infrastructure – are slowing down the ability to meet these goals. States and cities need to eliminate

these barriers to charging infrastructure and help close the investment gap, without delay, for multiple markets including passenger vehicles, vocational trucks, regional and long-haul trucks.

Battery storage is crucial when it comes to grid modernization and readiness, energy storage is exceptionally important and can significantly reduce the level of substation upgrade required to accommodate changing loads.  We strongly urge that the legislation recognize the need for storage as part of modernization and readiness, and it should codify that storage will need to be implemented at multiple levels in the system, on the utility and customer side of the meter.

The need for this legislation is clear and this legislation should supplement actions by the NJBPU and help leverage desperately needed federal funds to attract more public and private dollars to modernize what is essentially is our grandparent’s electric grid.

Note, we also support these amendments proposed by the Natural Resources Defense Council and the Environmental Defense Fund to provide solutions to ensure the timely and equitable buildout of the state’s charging infrastructure.

1. The provision of make-ready electrical infrastructure on the utility side of the meter reduces the cost of installing charging infrastructure by ~25% and provide more uniform and predictable utility support than existing utility rules.
2. Requires utilities to construct the utility-side infrastructure between the meter and grid necessary to charge EVs as part of the normal course of business. A logical extension of existing line-extension rules, make-ready infrastructure rules for EV charging provide a more predictable foundation upon which private and public investments can be made to install charging infrastructure that brings on load that can put downward pressure on rates to benefit of all customers.
3. Rates and vehicle grid integration reduces the costs of charging for consumers and businesses, lowering household fuel expenditures and attracting private capital, and ensure EVs become an asset to the grid, charging at times when there is spare capacity and abundant renewable generation.
4. Requires utilities to offer customers affordable, equitable, and sustainable rates for residential, commercial and public EV charging that mitigate the problem posed by existing demand charges that result in bills that are unjustifiably high. Also requires utility to implement EV grid integration programs that take advantage of the flexible nature of EV load to support the operation of the electric grid.
5. Fulfilling the obligation to serve in a timeframe that aligns with state policy prevents troubling backlogs in energizing charging stations that could undermine compliance with state and federal vehicle standards and requires utilities strategically plan to fulfil their obligation to serve.
6. Requires utilities to make grid investments necessary to meet relevant federal, state, regional, and local climate, air quality, and equity goals, laws, and regulations. Establishes reasonable average and minimum target energization timelines, holds utilities accountable to meet those timelines, including using load management and non-wires alternatives that can reduce costs and speed energization, requires utilities to hire and build the career pipeline necessary to build the grid we need to support the electrification of the transportation and building sector, and ensures cost recovery that aligns with state policy.