Michael Perna Michael Perna is Vice President, Marketing and ...

Michael PernaMichael Perna is Vice President, Marketing and Business Development for ConEdison Solutions, a$1.5 billion energy services company. In this role, he is responsible for leading the growth strategyand business expansion initiatives for ConEdison Solutions including acquisitions, productdevelopment and tactical planning in support of the Retail Commodity, Solar and Energy Servicesbusinesses. In addition, he leads the marketing and communications functions including brandmanagement, advertising, lead generation and media relations for the company.Prior to joining ConEdison Solutions, Mr. Perna was a principal at Energized Strategies, LLC, amanagement consulting firm providing market strategy, product/service launch, and projectmanagement consulting for clients. Earlier in his career, Mr. Perna spent nearly 15 years at PublicService Enterprise Group (PSEG). There he held positions of increasing responsibility in a variety offunctional areas including electric distribution, sales, marketing, and customer operations, workingon initiatives for both the regulated utility and competitive energy businesses.In 1993, Michael was awarded an Industrial Program Fellowship in Customer Systems at the ElectricPower Research Institute (EPRI) in Washington, DC. Other professional recognition includes the PSEGCorporate Excellence Award, which he received in 1994 and 1997. His education includes a Bachelorof Engineering with Honors from Stevens Institute of Technology and an MBA from the SilbermanSchool of Business, Fairleigh Dickinson University.

• Solar generation projects, including negotiation of PPAs, financing documents,disposition of RECs and other environmental attributes• Lead counsel for respondent in Metromedia Energy, Inc. v. Enserch Energy Services,Inc., et al., 409 F.3d 574 (3d. Cir., 2005), cert. denied 126 S.Ct. 1021 (2006)• Outside counsel to retail energy marketers (ESCOs), including such projects as solardemonstration project; development of on-site generation projects; preparation of formcontracts for energy commodity sales to retail customers; litigation related to energycontract disputes, including procurement of fuel in wholesale markets and purchase ofretail marketing customer contracts; state regulatory proceedings; and counseling relatedto energy business strategy• Served as client’s representative to Independent System Operator committees, includingInterconnection, ICAP, Creditworthiness, Management, Business Issues, and DemandResponse.• Demand side management projects• Electric generation interconnection issues at ISOs and electric utilities• Energy and carbon/green trading• Negotiations for pharmaceuticals company and other large customer users of electricityand gas procurement contracts with ESCOs and related negotiations with utilities• Negotiation of contract for sale of electric generating plant site• Cogeneration and on-site generation projects, including negotiation of agreements andresolution of regulatory issues for hospital and university campuses• Development of form competitive electricity and gas procurement contracts and masteragreement for provision of energy service for hospitals• Negotiation for end users of shared savings contracts for electrical equipment• Representation of end users related to water bill and electricity bill errors andovercharges• General advice to retail gas and electric marketing companies, commercial customers,and industrial customers regarding the transition to competitive energy and telecom usage• Resolution of legal and regulatory issues related to coordination and installation ofenergy and telecom systems in large facilities and client campuses• Demand side metering projects• Discussions with NY State Dormitory Authority re: financing long term gas supplycontracting• Advice to large hospitals regarding energy sourcing for chilled water facilitiesUtility Law• Appearing on behalf of large commercial and industrial intervenors in numeroustelephone, gas and electricity deregulation (and post deregulation) proceedings• Appearing in numerous water utility rate cases before state and city regulatory bodiesaddressing ratemaking issues, including revenue requirements, rate of return, rate designand long-term plant and water supply issues• Lead counsel for appellant in In the Matter of Public Service Electric & Gas Company'sUnbundling, Stranded Costs and Restructuring Filings, 167 N.J. 377 (2001).• Represented industrial customers in electric and gas deregulation proceedings before stateutility commission seeking unbundled rates favorable to client interestsDM2\2125055.52

• Represented universities, hospitals and other commercial customers for electric and gasservice in electric and gas deregulation proceedings seeking unbundled rates favorable toclient interests and opposing imposition of hourly electricity rates• Representation of commercial office buildings in state utility regulatory proceedingsinvolving electric, gas and steam rates in order to reduce the share of increased ratesimposed on commercial office buildings• Representation of hospitals before the state utility regulatory agency in variouselectricity, telephone and water rates cases in order to reduce the share of increased ratesimposed on hospitals and nursing homes• Representation of large customers in disputes with Con Edison involving overchargesand individual tariff interpretation issuesProfessional Activities• American Bar Association- Section of Public Utility, Communications and Transportation Law- Section of Dispute Resolution- Section of Litigation-- Energy Litigation Committee• New York State Bar Association• New Jersey State Bar Association- Public Utility Law Section-- Chair, 2009 Section Administrative Law Conference-- Secretary, 2010-present• Association of the Bar of the City of New York- Energy CommitteeAdmissions• New York• New Jersey• U.S. District Court for the Southern and Eastern Districts of New York• U.S. District Court for the District of New Jersey• U.S. Court of Appeals for the Third CircuitEducation• New York University School of Law, J.D., 1972• University of Wisconsin, B.A., 1969Experience• Duane Morris LLP- Consulting Counsel, 2008-presentDM2\2125055.53

• Foreht, Last, Landau & Katz- Of Counsel, 2002-2008• Kudman, Trachten, Kessler, Newman & Rich- Partner, 1992-2001• Law Offices of Phyllis J. Kessler- Partner, 1984-1992• Seham, Klein & Zelman- Associate, 1980-1984• New Jersey Department of the Public Advocate, Division of Rate Counsel- Deputy Public Advocate, 1976-1980• Federal Energy Administration- Staff Counsel, 1975-1976• Mount Sinai Hospital- Associate General Counsel, 1974-1975• Pitney, Hardin & Kipp- Associate, 1972-1974Board Memberships• New York Association of Energy Engineers- Board of Directors (first woman elected to this position)Civic and Charitable Activities• Former member of Board of Directors of Harry (dance company)• Former member of Board of Directors of JCH of BensonhurstHonors and Awards• Listed in Best Lawyers in America, 2010 and 2011• AV® Preeminent Peer Review Rated by Martindale-HubbellAV® Preeminent and BV® Distinguished are certification marks of Reed ElsevierProperties Inc., used in accordance with the Martindale-Hubbell certification procedures,standards and policies.Selected Publications• “State, Municipal and School District Energy Contracting: Making the Promise ofEnergy Efficiency and Renewable Energy Supply Contracts a Reality; Does it Really?”To be published in the New Jersey Lawyer Magazine, June 2011• “The Windy State: New Jersey Approves Offshore Wind Legislation,” Duane MorrisAlert, September 2, 2010• Co-author, "Legal Perspectives: Drug Companies Need Reliable Power," MissionCritical, October 1, 2009DM2\2125055.54

Selected Speaking Engagements• “Cogeneration in Healthcare, Industrial and Other Facilities: Legal and PracticalConsiderations,” New Jersey State Bar Association, Corporate Council Institute, January26, 2011• “New Jersey's Offshore Wind Economic Development Act,” Law Seminars InternationalTelebriefing, October 26, 2010• “Legal Traps in Energy Contracts, Performance Contracting and NYC EnergyConservation Law of New York City,” Association of Energy Engineers Meeting,October 19, 2010• “Financial Incentives for Energy Projects,” Association of Energy Engineers Meeting,April 20, 2010• “Utility Rate Design—Law and Regulation in New Jersey,” New Jersey ICLE CLEProgram, sponsored by the New Jersey State Bar Association Public Utility Law Section,April 9, 2010• "Understanding Energy Contracts," 29th Annual Council of New York Cooperatives &Condominiums Annual Housing Conference, November 15, 2009• "Green/Clean Investing - The Trend is Up! Meet The Green/Clean Investors," NewJersey Entrepreneurial Network Conference, October 14, 2009• Chair, New Jersey State Bar Association Public Utility Law Section's Spring Conference,April 17, 2009• "Achieving Electric Savings through Submetering Using Smart Meters," the Associationof the Bar of the City of New York, April 24, 2007• "Energy Performance Contracts: Legal Perspectives," Association of Energy EngineersMeeting, October 2003• "Remaining Issues in Open Access in New York," Power Marketing Association RetailWheeling Conference '98, June 4, 1998• "Lowering Utility Bills in Municipalities," Union County, New Jersey, December 1, 1997DM2\2125055.55

STEPHEN B. GENZER, ESQ.(sgenzer@saul.com)In 2005, Steve joined the law firm of Saul Ewing, LLP and became the Managing Partner of itsNewark, NJ office. He has served as the Chair of the Energy & Utilities Practice Group at SaulEwing.From 1992-2005, Steve was a partner in the law firm of LeBoeuf, Lamb, Greene & MacRae,LLP (now Dewey & LeBoeuf), and Stryker, Tams, & Dill from 1986-1992. Prior to going intoprivate law practice, Steve served as the Managing Attorney for the Water, Wastewater, Landfill,Solid Waste, Resource Recovery and Transportation involvement for the New Jersey Departmentof the Public Advocate’s Division of Rate Counsel.Steve is also an Adjunct Professor of Public Administration at Kean University and has served asan Adjunct Professor of Law at Rutgers University School of Law.Steve has chaired the New Jersey State Bar Association’s Public Utility Law Section andcurrently serves as a member of that section’s Board of Consulters.In 2005, Steve was awarded the New Jersey Utilities Association’s Distinguished ServiceAward.Steve earned his A.B. from Lafayette College and his J.D. from New York University School ofLaw. He has been a faculty member of the NARUC Utility Rate Schools since 1980.

TRACEY THAYERDirector, Regulatory Affairs CounselTracey Thayer is Director, Regulatory Affairs Counsel for New Jersey Natural Gas(NJNG), the principal subsidiary of New Jersey Resources.Ms. Thayer joined NJNG in September 1999 and was appointed to her current position inJanuary 2001. Prior to her employment at NJNG, she held a number of legal positions,including serving as Deputy Attorney General for the Staff of the New Jersey Board ofPublic Utilities and Assistant Deputy Public Advocate/Designated Counsel in theDepartment of the Public Advocate, Division of Rate Counsel.Ms. Thayer received a bachelor’s degree in anthropology from Northwestern University,a master’s degree in social work from the University of Michigan and a law degree fromRutgers University School of Law (Newark). Following graduation from law school, sheserved as Judicial Law Clerk for the Honorable Frederick C. Kentz, Jr., Superior Court ofNew Jersey, Chancery Division.Ms. Thayer served as a member of the St. Peter’s Preparatory School Board of Trusteesbetween 2003 and 2009, chairing the Academic and Student Affairs Committee, servingon the Strategic Planning Committee and was previously a member of the ExecutiveCommittee of the Prep Parents Association. Currently, Ms. Thayer is a member of the St.Peter’s Prep Board of Regents, the Governance Committee of St. Peter’s Prep and theDrumthwacket Foundation Board of Trustees where she serves as secretary and Chair ofthe Audit Committee. She served for many years on the Nominating Committee for theYWCA of Central Jersey and was a member of the Board of Directors. Since 1990, Ms.Thayer has been a member of the Public Utility Law Section of the New Jersey BarAssociation and in 2004 was named to the Board of Consultors, a position she still holdsafter serving as Section Chair between 2007 and 2008.New Jersey Natural Gas (NJNG) is the principal subsidiary of New Jersey Resources(NYSE: NJR), a Fortune 1000 company. NJNG serves nearly 487,000 customers in NewJersey’s Monmouth, Ocean, Middlesex and Morris counties. This service area’sdemographics and quality of life contribute greatly to NJNG’s growth. NJNG’s progressis a tribute to the dedicated employees who have shared their expertise and focus onquality through more than 55 years of serving customers and the community to make thecompany a leader in the competitive energy marketplace. For more information, visitNJNG’s Web site at www.njng.com1415 Wyckoff Road P.O. Box 1464 Wall, NJ 07719 Phone: 732-938-1000 www.njliving.com

MATTHEW M. WEISSMANAssociate General Regulatory CounselMatthew M. Weissman is Associate General Regulatory Counsel with PSEG ServicesCorporation (“PSEG”), a subsidiary of Public Service Enterprise Group.Mr. Weissman joined PSEG in January 2011. Prior to his employment at PSEG, hepracticed public utility litigation, administrative law, energy and telecommunications law atWilentz, Goldman & Spitzer, P.A., which he joined in 1998 and where he became a shareholderin 2002. At Wilentz, Mr. Weissman represented privatey-held and municipal utility clients,including Public Service Electric and Gas Company, New Jersey Natural Gas Company, VerizonNew Jersey, Elizabethtown Water Company, Middlesex County Utilities Authority, and OldBridge Municipal Utilities Authority. Prior to joining Wilentz, he was an associate at Fried,Frank, Harris, Shriver & Jacobson in New York from 1991 to 1998, where he practiced in theareas of environmental law, antitrust, bankruptcy, trademark, and general commercial litigation.Mr. Weissman received bachelor’s degrees in energy studies and engineering fromBrown University, a master’s degree in energy management and policy from the University ofPennsylvania, and a law degree from Columbia University. From 1983 to 1986, he was aPlanning Analyst at the Gas Research Institute (“GRI”) in Chicago, where he was responsible forplanning and documenting for the Federal Energy Regulatory Commission and other audiences GRIsponsoredresearch and development.Mr. Weissman has published articles on New Jersey’s Electric Discount and Energy CompetitionAct in the New Jersey Lawyer and on the federal Telecommunications Act of 1996 in Public UtilitiesFortnightly. He has been a member of the Public Utility Law Section (“PULS”) of the New Jersey StateBar Association since 1998, a member of the PULS Board of Consultors Executive Committee since2007, and has served as Section Chair since May 2010.

BIOGRAPHY – JAY L. KOOPERJay L. Kooper is the Director of Regulatory Affairs of the Hess Corporation, where he isresponsible for representing and advocating on behalf of Hess’ competitive electricsupply business before 15 state public utility commissions and legislatures spanning theMid-Atlantic, New York, New England and Ohio Valley regions. Mr. Kooper is also thecurrent New Jersey and New York State Chairman and the immediate Past President ofthe Retail Energy Supply Association (RESA), a trade association comprised of 18 of thenation’s leading retail energy suppliers. Before joining Hess in 2004, Mr. Kooper was anAssociate with the Public Utilities Law Practice Group of Wilentz, Goldman & Spitzer,representing several incumbent New Jersey electric, gas, water and telephone utilitiesbefore the New Jersey Board of Public Utilities, New Jersey Office of AdministrativeLaw, and New Jersey state and federal courts. From 1998 through 2002, Mr. Kooperserved as an energy policy attorney for the City of New York. Mr. Kooper currentlyserves as a member of the New York City Energy Policy Task Force, and as a member ofRESA’s Board of Directors and Executive Committee. Mr. Kooper received his JurisDoctor from George Washington University Law School and his Bachelor of Arts fromEmory University. Mr. Kooper is a member of the bar in New Jersey, New York andConnecticut.

ROBERT L. GIBBSVICE PRESIDENT – GARDEN STATE OFFSHORE ENERGY, LLCMANAGER DEVELOPMENT – RENEWABLE ENERGYPSEG GLOBAL, LLC80 PARK PLAZA, T20NEWARK, NEW JERSEY 07102Rob Gibbs is Vice President for Garden State Offshore Energy (“GSOE”) and ManagerDevelopment – Renewable Energy for PSEG Global, LLC and responsible for the firm’sinterests in GSOE, a joint venture with Deepwater Wind, LLC which seeks to build thenation’s first offshore wind facility off the coast of southern New Jersey.Before his current position, Mr. Gibbs held several positions within PSEG, includingManager – Corporate Properties, Manager – State Governmental Affairs, and SeniorAttorney. His background brings a depth of expertise and insight into the legal,regulatory and political challenges facing the offshore wind industry.Mr. Gibbs has participated in several conferences and panel discussions on the offshorewind industry and Garden State’s project at the Offshore Wind Development Conference– Washington, D.C., the New Jersey Bar Association Public Utility Law Section’sAnnual Spring Conference, Rensselaer Polytechnic Institute’s Workshop on Next-Generation Wind Power, Law Seminar International’s Telebriefing on New Jersey'sOffshore Wind Economic Development Act, and most recently Offshore Wind PowerUSA’s 2 nd Annual Conference in Boston, Massachusetts.Mr. Gibbs earned his Juris Doctor from Widener University School of Law –Wilmington, Delaware and Bachelor of Arts degrees in Political Science and Historyfrom the University of Rhode Island. He is a member of the New Jersey andPennsylvania Bars.

Robert ChiltonExecutive Vice PresidentRobert Chilton is Executive Vice President of Gabel Associates, an energy consulting firm basedin Highland Park, New Jersey. He is the former Director of the Division of Energy, and prior tothat Director of the Electric Division, with the New Jersey Board of Public Utilities (“BPU”), andserved a total of seventeen years in public utility regulation with the BPU and the Departmentof the Ratepayer Advocate. While still serving as Director of the BPU’s Division of Energy, Mr.Chilton was instrumental in the development and implementation of the landmark ElectricDiscount and Energy Competition Act, which deregulated the electric and natural gas industriesin New Jersey.Mr. Chilton left the BPU and joined as a principal of Gabel Associates in February 2000. Heoversees the firm’s energy procurement activities, and has overseen electricity and natural gassupply procurements on behalf of numerous private and public sector clients, including theState of New Jersey. Mr. Chilton also oversees financial feasibility assessment and projectdevelopment activities for renewable energy and combined heat and power projects, as well asmerchant power plant projects, and oversees energy market analysis activities for the firm. Mr.Chilton provides regulatory strategy advice and ratemaking analysis for clients and hasprepared and submitted testimony in numerous utility ratemaking proceedings.He holds a B.S. in Environmental Science and a Master’s degree in Economics from RutgersUniversity.

Christopher White, Esq.Managing AttorneyTelecommunications/Cable TVChristopher White, Esq., has over 30 years of legal experience in corporate, regulatory, andseveral other areas of law. Chris joined the division of Rate Counsel in December 1997 and hasbeen Managing Attorney for the Telco/Cable sector since 2002.As a Deputy Rate Counsel, Chris advises and counsels on cable and telecommunications issuesrelating to state and federal laws.Chris has worked in the Federal Government, including legal positions with the Federal AviationAdministration and the Federal Communications Commission. In the Office of Chief Counsel atthe Federal Aviation Administration, Chris handled administrative law issues related togovernment contracts, procurement policy and advising agency personnel on legal and litigationissues. At the Federal Communications Commissions, Chris worked in the Commercial wirelessgroup. For over nine years, Chris worked for publicly traded companies in Washington, D.C.and in the New York area dealing with complex legal and businesses matters, including mergersand acquisitions, antitrust matters, regulatory, labor, patent and data rights, contracts, and generalcorporate issues. Chris was in private practice in New York for over seven years dealing withregulatory, litigation and corporate matters.He is a graduate of the University of Missouri-Kansas City, J.D. ,1975, (Urban Lawyer staff1973-75; President, Student Bar Association, 1974-75). In 1972, he received a B.A., in PoliticalScience (minors in Chemistry and Biology).His Bar admissions include: New York, Virginia, District of Columbia, Missouri, and NewJersey. He is also admitted to practice before various federal appellate and district courts.

Eve Moran128 S. Halsted StreetChicago. Illinois 60661312-720-5803eve.jean.moran@gmail.comProfessional ExperienceAdministrative Law Judge, Illinois Commerce Commission 1998 - 2010Responsible for managing complex utility regulatory matters filed before, or initiated by,the Illinois Commerce Commission. The process generally involves examining thesufficiency of the pleadings; ruling on motions, reviewing pre-filed testimony andpresiding over evidentiary hearings; analyzing oral and written arguments; researchingand construing federal and state law; preparing a recommended order; and providingfurther analysis of any additional issues raised in a party’s post-hearing brief or onapplication for rehearing of a final order. I have analyzed and ruled on many issues offirst impression in the statutory construction of Illinois regulatory law. Assistant Attorney General, Illinois Attorney General’s Office 1989 - 1998Public Utilities Bureau 1992 – 1998I represented the interests of the People of the State of Illinois, both before the IllinoisCommerce Commission and the Illinois Appellate Court, in matters of utility ratemakingand other regulatory subjects. Participation in the agency proceeding would involvereviewing the initial filing, framing the issues, engaging in discovery, overseeing thedevelopment of expert testimony, cross-examining expert witnesses at the hearing, andthe drafting of post-hearing briefs on the issues developed. Final Commission orderschallenged on petition for review would be fully briefed and argued before the IllinoisAppellate Court. I also represented my Office at workshops and other meetings leadingto the Electric Restructuring Act of 1997.Civil Appeals Division 1989 - 1992Prosecuted and defended appeals on behalf of various state agencies, officials, andemployees before both the Illinois Appellate Court (all districts) and the United StatesCourt of Appeals for the Seventh Circuit. I gained extensive experience in legalresearch, brief writing, oral argument, motions, petitions and settlement negotiations.Arbitrator: Cook County Mandatory Arbitration Center 1995 - 1997 Associate: Alan O. Amos & Associates, P.C. 1988 - 1989

General law practice: handled personal injury litigation, Social Security Insurancedisability hearings, international adoptions, city zoning petitions, administrative reviewactions and DUI defense. Assistant Director: Polish Welfare Association 1/1988 - 5/1988Drafted grant proposals; trained staff and volunteers and opened a Seniors Center;coordinated an ethnic elderly needs assessment project with the City of ChicagoDepartment on Aging and Disability; expanded social services programs to includeDomestic Violence Counseling and launched a bilingual community newsletter(“Laternia”).Assistant Public Defender: Cook County Public Defender’s Office 1983 - 1987Gained appellate work experience in the Criminal Appeals Division, and trial experiencein both the First Municipal District (misdemeanor cases), and Multiple DefendantsDivision (felony cases). Represented clients charged with aggravated battery, robbery,burglary, murder and other criminal offenses. Defense preparation involved sceneinvestigations, witness interviews and the filing of pre-sentencing briefs.Legal EducationThe John Marshall Law School J.D., 1982Institute of International and Comparative Law: Paris, 1980Continuing Legal Education:Legal Internship Program: Gray’s Inn, London, University of San Diego School of LawSummer 1986Trial Workshop; National Criminal Defense College; Macon, Georgia, (June 1985).Certificate: Law Program for Community Developers and Social Workers;The John Marshall Law School, Chicago, (Spring 1988).National Association of Regulatory Utility Commissioners (“NARUC”) Annual RegulatoryStudies Program: Lansing, Michigan (August 1993).Chicago Bar Association Continuing Legal Education Program, Dublin, Ireland (2007).

Numerous regulatory study conferences and legal seminars. (1997-2009). PublicationsCo-Author: “Alternatives to DUl Prosecution and Alcohol Safety Programs,” IllinoisInstitute for Continuing Legal Education Misdemeanors, Traffic Violations and D.U.I.handbook, 1981 revision, supplement and revision 1984, revision 1997, 1989.“Alcohol/Drug Evaluation Standards, Procedures and Programs,” Illinois Institute forContinuing Legal Education (‘IICLE’) Defending DUI and Related Cases handbook, 1991,supplements 1993, 1994, 1996, 1997,1998. Last re-write completed in 2003;supplement, 2006, 2008. Working on the supplement for 2011.Contributor: “The Perfect Storm: Regulatory Arena Faces Legal, Social, and PoliticalChallenges” featured in “A Profession Under Fire: How the Economy is Changing theLegal Landscape” The Chicago Bar Record, January 2009.PresentationsSpeaker: The Administrative Law Judge’s Function, NARUC Energy RegulatoryPartnership Program; The Energy Regulatory Office of Kosovo and the Illinois CommerceCommission Partnership Activity in Chicago, Illinois (June 9, 2009).Speaker: Practice Development Panel, The Energy Bar Association’s Mid-Year Meeting,Washington, D.C. (Nov. 2008)Speaker: Lessons Learned When Considering New Regulatory Mechanisms, 30 th annualNational Conference of Regulatory Attorneys, Charleston, South Carolina (June 2008).Speaker: US Experience on Applied Sanctions and Its Effectiveness and Court Practice,Energy Regulators Regional Association (ERRA) Legal Regulatory Working Group Meeting;Istanbul, Turkey (March 2007).Language Skills Fluent Polish.Law-Related ActivitiesChair: National Association of Regulatory Utility Commissioners (NARUC) StaffSubcommittee on Law (2007 to present). Member: (2002 to present). The major work ofthis Subcommittee is to produce, on an annual basis, The National Conference of

Regulatory Attorneys.Chair: Energy and Telecommunications Committee; Chicago Bar Association (2008 topresent); Co-Chair: (2007-2008). The Chair’s role is to identify and present speakerson relevant legal regulatory matters at each of the Committee’s monthly meetings.Coordinator: Developed an agenda and introduced speakers making presentations at theoffices of the Illinois Commerce Commission for visiting delegations from Armenia,China and Turkey (2007-2008).Producer: Wrote and directed skits for ethics programs presented at the NARUC AnnualConvention in November 2006 (Miami); November 2007 (Anaheim); November 2008(New Orleans); November 2009 (Chicago); and, November 2010 (Atlanta).President: 27 th annual National Conference of Regulatory Attorneys. (May 16-19, 2004).Planned and implemented a successful self-funding conference with the assistance frommembers of the Staff Subcommittee on Law and volunteers on staff at the IllinoisCommerce Commission. At this conference, I initiated a new style of programming forlegal ethics presentations that is still being followed.Chair: NARUC Subcommittee on Administrative Law Judges. (2003–2005).2001 to present.Member:Volunteer Judge: Student moot court competitions include the Dean Fred F. HerzogMoot Court Competitions at The John Marshall Law School (1990-2009); The Phillip C.Jessup Midwest Regional Competition (2008; 2009; 2011); The John Marshall Law SchoolInternational Moot Court Competition in Information Technology and Privacy Law ( 2006,2007; 2008; 2009); and The American Bar Association National Appellate AdvocacyCompetition (March 2007).Resource Aide: The Conference on the Constitution (an interactive program introducinghigh school students to the United States Constitution that was coordinated by the thenNational Conference of Christian and Jews and sponsored by the Office of the IllinoisAttorney General) (1993, 1994) Program Facilitator: (1996, 1997).Speaker: Student-on-Student Sexual Harassment; Diversity Conference, Denver,Colorado (1998).Committee member and mentor: The Illinois State Bar Association /Advocates Society’sTwinning Project (1992). This project served to unite local legal practitioners withvisiting attorneys from Poland for an exchange of educational ideas and social events.Professional Affiliations Chicago Bar AssociationAdvocates SocietyNational Association of Regulatory Utility CommissionersEnergy Bar AssociationOther Volunteer Activities

Participant: Home Hospitality-Fulbright Enrichment Seminar. Hosted a dinner at myhome for Fulbright Foreign Scholars from New Zealand, Japan, Poland and Germany(March 2009).Board member: Child’s Play Touring Theatre (1997 to 2007). Annual Benefit Chair:1998; Co-Chair: 1999. Board President: 2006-07. I received the “Victor” service awardfrom this organization in 2007.Commissioner: City of Chicago Special Service Area (SSA) #16 – Greektown (1999 topresent). As part of the SSA’s mission is to promote the Greektown business area, Icreated and implemented a street art project tiled “A Celebration of the Grecian Urn”that enhanced the cityscape of the neighborhood by showcasing the interpretive work ofvolunteer artists. (Summer 2006).Profiled “In Chambers” column by Patricia Manson; Chicago Daily Law Bulletin, August 4, 2004.Works in ProgressRegulatory Process Handbook – being developed for the NARUC Subcommittee onInternational Relations. This working document aims to outline the general processesfollowed at state utility commissions and to articulate the rationale leading to theestablishment of these procedures.White Paper: Drafting the Regulatory Order – being developed for the NARUCSubcommittee on International Relations. This working document aims to explain theevidentiary considerations along with the style and the format that is used by regulatorsin the United States when developing a written agency order.

Hesser G. McBride, Jr., is a shareholder with Wilentz, Goldman & Spitzer, P.A. and chair of itsEnergy, Telecommunications and Public Utilities Law practice group. Mr. McBride’s practice isconcentrated primarily in the areas of solar energy, renewable energy, telecommunications law, cabletelevision law, public utility law, municipal law, administrative law and State tax matters. On behalf ofcorporations, municipal entities, public entities, and individuals, Mr. McBride appears before NewJersey administrative agencies in connection with regulatory approval, regulatory compliance andregulatory enforcement proceedings. Mr. McBride also devotes a portion of his practice to publicutility rights-of-way issues and litigation, including the siting of utility facilities and compliance with theNew Jersey Underground Fault Protection Act (“One Call”).He has practiced before the New Jersey Board of Public Utilities for two decades and has representedelectric utilities, telecommunications carriers, natural gas utilities, water companies, and industrialcustomers groups in some of the most significant telecommunications and energy utility proceedingsin New Jersey. He has extensive experience in cable television law, having represented both localgovernment and cable providers in cable television franchise proceedings. He regularly representsVerizon in State regulatory proceedings and related State and federal court litigation.Mr. McBride has lectured on matters affecting public utilities and has authored various regulatory –lawrelated articles. See e.g., “Full Competition Comes to the Telecommunications Market in NewJersey,” New Jersey Lawyer, The Magazine, June 1999. Mr. McBride has also lectured on behalf ofthe New Jersey Institute of Continuing Legal Education (NJICLE) on public rights-of-way issues. Seee.g. “Navigating Public Rights of Way and Access to Multiple Dwelling Units,” NJICLE, May 2003. Mr.McBride is a member of the American Bar Association’s Public Utility Law Section, the New JerseyState Bar Association’s Public Utility Law Section and has served as Program Chair, Moderator andPanelist at their Annual Conference. He is a member of the Association of the Bar of the City of NewYork, Telecommunications Law Committee, the Federal Communications Bar Association and theNew Jersey State Bar Association Federal Practice Committee. Mr. McBride has an “AV” Martindale-Hubbell Peer Review Rating, and for several years has been recognized Best Lawyers in America in“Energy Law” in and as a “Super Lawyer” in New Jersey Monthly magazine.Direct Telephone: (732) 855-6113Direct Fax: (732) 726-6664Email Address: hmcbride@wilentz.comNew Jersey New York PennsylvaniaMain Office:90 Woodbridge Center DriveSuite 900 Box 10Woodbridge, NJ 07095Phone: 732.636.8000Fax: 732.855.6117Meridian Center ITwo Industrial Way WestEatontown, NJ 07724Phone: 732.542.4500Fax: 732.493.8387110 William Street26 th FloorNew York, NY 10036Phone: 212.267.3091Fax: 212.267.3828Two Penn Center PlazaSuite 910Philadelphia, PA 19102Phone: 215.940.4000Fax: 215.636.3999

James H. LaskeyAttorney at LawNorris, McLaughlin & Marcus, P.A.721 Route 202-206, Suite 200Bridgewater, New Jersey 08807Tel. 908-722-0700Fax 908-722-0755Email: jlaskey@nmmlaw.comJim Laskey has practiced before the New Jersey Board of Public Utilities since 1982.Much of his work is on behalf of companies seeking to compete with incumbent utilities andutility customers seeking to exercise choice in selecting their service providers. Since 2004, hehas served as counsel to the Independent Energy Producers of New Jersey, a trade associationrepresenting non-utility electric power generators. In addition to his regulatory work before theNew Jersey BPU, Jim represents telecommunications and energy companies in governmentalpermit and licensing matters at the state, county and municipal level.Jim is a 1978 graduate of Yale Law School. He did his undergraduate work at theMassachusetts Institute of Technology, where he received degrees in economics andmathematics and was elected to Phi Beta Kappa. After law school, he clerked for New JerseySupreme Court Justice Sidney Schreiber and worked for three years at the Antitrust Division inWashington, D.C., where he participated in various antitrust litigation and administrativederegulation proceedings in the telecommunications and energy industries, including thelitigation that led to the Bell System divestiture. Jim is a past Chair of the Public Utility LawSection of the New Jersey State Bar Association, and has been listed in the publication The BestLawyers in America for more than ten years, most recently in both the communications andenergy sections.Jim served as Board Chair of the Somerset County Business Partnership in 2008, and alsoserved for five years as a Trustee of the New Jersey Lawyers’ Fund for Client Protection. He hasbeen a registered governmental affairs agent in New Jersey since 1992, and received aDistinguished Legislative Services Award from the New Jersey State Bar Association in 2005for his work related to amendments to New Jersey’s lobbying disclosure law.

James C. MeyerPartner -- Riker Danzig Scherer Hyland & Perretti LLPHeadquarters Plaza, One Speedwell Avenue, Morristown, NJ 0796250 West State Street, Suite 1010, Trenton, NJ 08608(973)451-8464, jmeyer@riker.comJim Meyer is a partner in Riker Danzig's Public Utilities Practice Group and itsmulti-disciplinary Energy Group. He concentrates in energy, telecommunications, andother regulatory matters. Mr. Meyer represents clients including Rockland ElectricCompany (a Con Edison subsidiary), Sprint and various competitive energy andtelecommunications companies. He has considerable experience in administrativelitigation, appellate litigation and legislative drafting.Mr. Meyer's energy work includes traditional rate and regulatory matters, energyefficiency and renewable energy (e.g., solar) programs and projects and transactionalmatters. His telecommunications work focuses on federal and state laws andproceedings that address market deregulation and competition and the relationshipsbetween competitive and incumbent providers. In addition, he assists various entities inobtaining regulatory approvals for operating authority, mergers and financialtransactions.Mr. Meyer has been counted among the top energy lawyers in New Jersey byBest Lawyers in America®, a peer review of US Lawyers.He is past Chair of the New Jersey Bar Association's Public Utility Law Section(2000-2001), and serves as its Legislative Coordinator. Mr. Meyer has organizedconferences and delivered presentations on public utility law, renewable energy andenergy efficiency issues and the administrative process.Mr. Meyer received his undergraduate degree from Rutgers University, RutgersCollege in 1985, and his law degree from Rutgers University School of Law – Newark in1988, where he was Production Editor for the Rutgers Law Review. Mr. Meyer isadmitted to practice in New Jersey and New York.

PROFESSIONAL EXPERIENCERESUME OF MARTIN C. ROTHFELDER585 Westfield Ave.Westfield, New Jersey 07090(908)456-2925 (cell)mcrothfelder@verizon.netROTHFELDER STERN, L.L.C., Westfield, NJ2002 – presentTHE ROTHFELDER LAW OFFICES, Westfield, NJ 1995 - 2001Managing Partner of law firm devoted to multi-state telecommunications, energy and publicutility practice. Work includes regulatory, litigation, legislative, and transactional matters,including rate cases and complex regulatory matters.MCMANIMON & SCOTLAND, Newark, NJ 1988 - 1995Partner (1991 - 1995) and Senior Associate (1988 - 1991). Lead person in developing thetelecommunications, energy and public utility practice. Responsibilities included representingcompetitive entities, utilities and governmental entities in regulatory, litigation, transactional andlegislative matters, and numerous rate cases.NEW HAMPSHIRE PUBLIC UTILITIES COMMISSION, Concord, NH 1986 - 1988General Counsel. Duties included representing the Commission and its Staff in matters andproceedings within the agency, presiding as a hearing examiner, and supervising others carryingout such activities, as well as representing the Commission in appeals and before the FERC andthe FCC. Litigated numerous rate cases and involved in bankruptcy of Public Service of NewHampshire.MISSOURI PUBLIC SERVICE COMMISSION, Jefferson City, MO 1981 - 1986Assistant General Counsel. Duties included representing the Commission Staff in proceedingsbefore the Commission, representing the Commission before the courts, the FCC and the FERC,and advising the Commission and Commission Staff. Responsible for coordinating Commissionlegislative work. Litigated numerous rate cases.U.S. SENATOR PAUL TSONGAS’ OFFICE, Washington, DC Jan. – May, 1981Legal Assistant. Duties included work on energy, environmental and tax legislation.U.S. ATTORNEY’S OFFICE, St. Louis, MO Summer of 1980Legal Intern. Duties consisted of research and writing on matters related to civil and criminallitigation.EDUCATION & OTHERWASHINGTON UNIVERSITY SCHOOL OF LAW, St. Louis, MissouriReceived J.D. in 1981. Senior Editor on the Urban Law Annual.UNIVERSITY OF WISCONSIN, Madison, WisconsinReceived B.A. with honors in 1978. Major in Economics. Received Senior ThesisAward. Received Inland-Ryerson Foundation Scholarship.

ADMITTED TO PRACTICE MO (81), NH (87), NJ (89), PA (00) and NY (03).PROFESSIONAL MEMBERSHIPS: ABA, FCBA, NY, NH & NJ Bar Associations. PastPresident of the Public Utility Law Section of the New Jersey State Bar Association.

Michael A. SgroVice President, General Counsel and SecretaryNew Jersey American Water CompanyMike is Vice President, General Counsel and Secretary of New Jersey AmericanWater and several affiliated companies. In this role, he is responsible for all legalmatters in which the companies are involved, including acquisitions and otherbusiness development opportunities, real estate and regulatory matters, variouscontract and commercial matters, and corporate governance. Mike joinedAmerican Water in 1993 as Corporate Counsel and Secretary of New JerseyAmerican. He is licensed to practice law in New Jersey and Pennsylvania.Prior to joining American Water, Mike was an Associate with Dechert on thefirm’s Business Team. Prior to graduating from law school and joining Dechert,Mike held various business positions with CertainTeed Corporation, a buildingmaterials manufacturer located in Valley Forge, Pennsylvania.Mike received his law degree from Temple University School of Law in 1989 anda Bachelor of Arts degree in International Relations from Saint Joseph Universityin 1980.Mike is a member of the Board of Trustees of the South Jersey Chamber ofCommerce and is Chairman of the New Jersey Chapter of the NationalAssociation of Water Companies.

BETHANY ROCQUE-ROMAINE, Esq.18 Prests Mill RoadOld Bridge, New Jersey 08857Home: (732) 679-3195 // Cell: (732) 735-1014E-mail: bethanyromaine@aol.comBar AdmissionsNew Jersey; New York; United States Supreme Court; Federal District CourtNew Jersey and New York Second DepartmentWork ExperienceNew Jersey Board of Public Utilities, Newark, NJ2004-PresentMain Extension Rule Advisor 2008-Present• Manage Main Extension Rule exemption petitions for installation of utility service to newcommercial and residential developments, petitions seeking cost deferment and undergroundinstallation consulting with DCA Office of Smart Growth, DEP, other agencies, local officials,utilities, developers and customers.• Write amendments to BPU rules and regulations regarding Main Extension Rules.• Develop regulations to expedite commercial and residential development.• Write recommendations for action and present to Commissioners regarding main extensionpetitions and policies.• Field constant stream of inquiries from public regarding main extension rules to provideassistance and resolution.• BPU Main Extension Rule liaison to NJ Department of Community Affairs, NJ DEP and NJHighlands Council, NJ Pinelands Commission, legislators field offices, counties,municipalities, utilities, and residential and commercial developers.Customer Assistance and Energy Division Legal Advisor 2008-Present• Evaluate billing service disputes between customers and utilities.• Write orders stating and justifying actions by Customer Assistance Division for billing andservices cases.• Review, analyze and respond to staff and utility customer inquiries regarding pole relocation,matters, tariff questions and other miscellaneous matters.Ethics Liaison Officer 2004-2008• Prepare ethics training materials and conduct ethics training for Board employees.• Review and approve all ethics filings required by the State Ethics Commission, including eventattendance forms and Secondary Employment/Outside Activity forms;• Brief Commissioners and senior staff regarding Board agenda ethics items;• Field Board and Staff ethics inquiries and prepare responsive memoranda;• Update and amend the BPU Code of Ethics to accommodate, unique functioning of Board,incorporate statutory and rule changes;• Liaison with the State Ethics Commission and attend all SEC ELO meetings;• Conduct initial intake training for Commissioners and staff on ethics rules, the Open PublicMeetings Act requirements, upon their employment with the Board and as Rules are amended;• Advise Board and Staff of all ethics rule changes, ethics Executive Orders and SECinterpretations

Bethany Rocque-Romaine Page 2Rutgers University, Cook College, New Brunswick, NJ 2003-2004Director of Development and Community RelationsDirector of Public and Alumni Relations• Director responsible for government relations, alumni relations, internal and external relationsand communications, marketing and media relations, external advisory board relations anddaily management of the Office of Public and Alumni Relations, with a severely restrictedresource base.• Developed, implemented and oversaw advocacy campaign on behalf of NJAES; developedcoordinated publications, e-mail messages and fact sheets targeted for specific legislators andlegislative districts; assisted stakeholders in budget hearing testimony; developed and cultivatedpolitical contacts throughout New Jersey on behalf of NJAES; presented message tostakeholders through various mediums to activate participation campaign.• Developed specific targeted programs for Cook College alumni; developed and edited theannual dean’s report; developed, coordinated and ran campus-wide events involving the collegeand experiment station communities; supervised and brainstormed topic development for pressreleases and news briefings with the Cook and NJAES media coordinator.• Drafted and edited speeches, talking points and event scripts for the executive dean andprogram deans.• Acted as liaison between Executive Dean’s office and Rutgers’ governing board members tomediate concerns and requests; acted as liaison between Cook College public relations officeand university relations and university alumni relations and university federal relations anduniversity state relations to assist collaborative advocacy and public relations efforts on behalfof Rutgers University, Cook College and the NJAES.• Supervised full time and part time employees.Law Offices of Bethany Rocque-Romaine 1999-2003Milltown, NJ and Staten Island, NY• Owned and operated a civil litigation law practice specializing in personal injury, landlord tenant,contract, municipal court and real estate law in New Jersey and New York.Heilbrunn Pape, L.L.C., Old Bridge, NJ Associate: 1996-1999Grae, Rybicki & Gaffney, Bayonne, NJ Partner: 1994 - 1995Grae, Rybicki & Partners, P.C., Staten Island, NY Associate: 1986 - 1994EducationNew England School of Law, Boston, MA, Juris Doctor 1986Rutgers University, Cook College, New Brunswick, N.J., Bachelor of Arts 1983Institute of Continuing Legal Education (ICLE) New Jersey- Mediation Training 2000

Bethany Rocque-Romaine Page 3Professional Affiliations/Community ServiceOld Bridge Planning Board Commissioner2008-presentOld Bridge Housing Authority Commissioner2005-presentNew Jersey Tidelands Resource Council- Commissioner2003-presentRutgers University Alumni Trustee 1996-2002Rutgers University Foundation- Women and Philanthropy, Founding Member2001-presentCook College Alumni Association, Pres. 1990-1992, Pres. 2007-2008, Member 1986-presentRutgers University Alumni Federation Termination Committee Chair2008-presentOld Bridge/Sayreville Rotary Club- President 2001-2002, Member1996- presentOld Bridge Education Foundation Board of Trustees1999-presentNew Jersey Bar Association Member1993-presentNJSBA Public Utility Law Section Member2005-presentMiddlesex County Bar Association 1993-2008

Christopher White, Esq.Managing AttorneyTelecommunications/Cable TVChristopher White, Esq., has over 30 years of legal experience in corporate, regulatory, andseveral other areas of law. Chris joined the division of Rate Counsel in December 1997 and hasbeen Managing Attorney for the Telco/Cable sector since 2002.As a Deputy Rate Counsel, Chris advises and counsels on cable and telecommunications issuesrelating to state and federal laws.Chris has worked in the Federal Government, including legal positions with the Federal AviationAdministration and the Federal Communications Commission. In the Office of Chief Counsel atthe Federal Aviation Administration, Chris handled administrative law issues related togovernment contracts, procurement policy and advising agency personnel on legal and litigationissues. At the Federal Communications Commissions, Chris worked in the Commercial wirelessgroup. For over nine years, Chris worked for publicly traded companies in Washington, D.C.and in the New York area dealing with complex legal and businesses matters, including mergersand acquisitions, antitrust matters, regulatory, labor, patent and data rights, contracts, and generalcorporate issues. Chris was in private practice in New York for over seven years dealing withregulatory, litigation and corporate matters.He is a graduate of the University of Missouri-Kansas City, J.D. ,1975, (Urban Lawyer staff1973-75; President, Student Bar Association, 1974-75). In 1972, he received a B.A., in PoliticalScience (minors in Chemistry and Biology).His Bar admissions include: New York, Virginia, District of Columbia, Missouri, and NewJersey. He is also admitted to practice before various federal appellate and district courts.

STEPHEN B. GENZER, ESQ.(sgenzer@saul.com)In 2005, Steve joined the law firm of Saul Ewing, LLP and became the Managing Partner of itsNewark, NJ office. He has served as the Chair of the Energy & Utilities Practice Group at SaulEwing.From 1992-2005, Steve was a partner in the law firm of LeBoeuf, Lamb, Greene & MacRae,LLP (now Dewey & LeBoeuf), and Stryker, Tams, & Dill from 1986-1992. Prior to going intoprivate law practice, Steve served as the Managing Attorney for the Water, Wastewater, Landfill,Solid Waste, Resource Recovery and Transportation involvement for the New Jersey Departmentof the Public Advocate’s Division of Rate Counsel.Steve is also an Adjunct Professor of Public Administration at Kean University and has served asan Adjunct Professor of Law at Rutgers University School of Law.Steve has chaired the New Jersey State Bar Association’s Public Utility Law Section andcurrently serves as a member of that section’s Board of Consulters.In 2005, Steve was awarded the New Jersey Utilities Association’s Distinguished ServiceAward.Steve earned his A.B. from Lafayette College and his J.D. from New York University School ofLaw. He has been a faculty member of the NARUC Utility Rate Schools since 1980.

Suzanne Patnaude is the Eastern Regional Director of Government Relations for Solyndra, Inc.Headquartered in Fremont, California, Solyndra designs and manufactures solar photovoltaic (PV)systems, comprised of panels and mounts, for the commercial rooftop market. Working withSolyndra’s Government Affairs Managing Director and Business Development Team, Suzanneguides the Company’s state government relationships and public policy initiatives in the EasternUnited States.Prior to joining Solyndra earlier this year, Suzanne was the Solar Alliance’s Director for the MiddleAtlantic Region. The Solar Alliance is a non-profit trade association, representing 30 of the nation’slargest manufacturers, developers, integrators, installers and financiers of solar projects. While inthat role, she spearheaded efforts to advance solar industry objectives in New Jersey, Maryland andPennsylvania, through legislative, regulatory and litigation initiatives.Suzanne previously served as the Deputy Chief Counsel of the New Jersey Board of Public Utilities,Deputy Attorney General representing the Utility section, Regulatory Officer of the BPU and LegalAssistant to the Director of the Office of Administrative Law. A member of the New Jersey State BarAssociation Public Utility Law Section since 1988, she has served as a consultor and is currentlyAssistant Secretary. She lives and works in Madison, New Jersey.

Current Challenges To Maintaining andExpanding Electric Choice in New JerseyMurray Bevan, Esq., Bevan, MoscaGiuditta and Zarillo, P.C.BACKGROUND• The promise of robust energy competition contained in EDECA has begun to occur inrecent years. An increasing amount of residential, commercial and industrial consumershave taken advantage of lower energy rates offered by Third Party Suppliers (TPSs).• However, retail energy markets are threatened by utilities’ increasingly competitiveprices which will reflect lower commodity rates secured in the BGS auctions in upcomingyears.• In order to keep energy competition healthy, Retail Suppliers have argued that the BPUneeds to foster competitive neutrality between utilities and TPSs, by focusing on thefollowing initiatives:• Price to Compare Program• Purchase of Receivables Program• Reconsideration of Elimination of Retail Margin Fund• Competitively Neutral Renewable ProgramsPRICE TO COMPARE (PTC) PROGRAM• BPU is currently sponsoring a Price to Compare/Purchase of Receivables Working Groupas it considers possible future amendments to the Board’s Energy Competition Rules,codified at N.J.A.C. 14:4-7.4 (a) 4 and (b) 2.{00014753.1 }

Current Challenges To Maintaining and Expanding Electric Choice in New Jersey – Murray Bevan, Esq.,Bevan, Mosca Giuditta and Zarillo, P.C.• A PTC Program provides consumers with an “apples to apples” comparison whenshopping for electric service by mandating that utilities post certain itemized charges ontheir bills, or maintain a website that provides itemized charges.• Retail Suppliers’ Position on PTC Program:o Should reflect all fully by-passable charges that an EDC applies, including BGSbase price for generation service, transmission service, administrative adders,reconciliation charges, applicable taxes, etc.o Each EDC should provide detailed information on its website that specifiesindividual components that make up the PTC and identifies time period for whichthe pricing is effective.o PTC should be customer-specific, not a class average, based on specific customerusage patterns for the given month.PURCHASE OF RECEIVABLES (POR) PROGRAM• Descriptiono When a customer fails to pay the electric utility, the customer’s electric service isshut off, the account is classified as “uncollectible” and the utility is made wholeby imposing an uncollectible charge on its other customer.o When a customer fails to pay a TPS, the TPS eventually returns the customer tothe utility, the customer continues to receive electric service and the TPS mayhave to initiate costly litigation to recover its uncollectibles.o POR program requires the utility to purchase the receivables of a TPS (in somejurisdictions at a 100% and in others at a discounted rate subject to the utilities’uncollectible rate).00014753.1 }2{

Current Challenges To Maintaining and Expanding Electric Choice in New Jersey – Murray Bevan, Esq.,Bevan, Mosca Giuditta and Zarillo, P.C.• Other Jurisdictionso Utilities in Indiana, New York, Pennsylvania, Ohio, Virginia, Maryland, Michiganand the Canadian provinces of Quebec, Ontario, Alberta and British Columbiaoffer POR programs.o Orange and Rockland, PSEG and New Jersey Natural Gas already offer PORprograms.• Policy/Rationale behind POR programo More efficient operation of the competitive market: avoids unnecessaryduplication of assets for which all customers have already paido Eliminates cost and inconvenience of duplicative credit checkso Promotes choice for all customerso Reduces charges to utilities’ other customers: without POR, utility’s bad debtexpense is higher as TPSs focus their efforts on signing up customers with strongcredit in order to minimize bad debt exposure.RETAIL MARGIN• In October, the Board abolished the Retail Margin Fund, effective June, 2011.• Retail Margin collected about $13 million/year from 848 commercial and industrialcustomers with peak loads of 750 kW and above.• Fee was introduced in 2002 to account for certain administrative and similar non-supplycosts of serving customers at retail (e.g. marketing, call center, risk and portfoliomanagement, working capital etc.) and to incent large energy users to shop for theirelectricity supply.00014753.1 }3{

Current Challenges To Maintaining and Expanding Electric Choice in New Jersey – Murray Bevan, Esq.,Bevan, Mosca Giuditta and Zarillo, P.C.• Retail Margin Fund promotes competitive neutrality between TPSs and utilities, byeliminating marketing and administrative costs that TPSs must incur to remaincompetitive in the State’s energy market, costs which the EDCs will never bear.• RESA filed a Petition for Reconsideration before the BPU in December, 2010, on thegrounds that the Board chose to eliminate the Retail Margin based on exactly the sameevidence, mere comments, it previously considered wholly insufficient to make anychanges to the Retail Margin, as well as a flawed interpretation of switching statistics.COMPETIVELY NEUTRAL RENEWABLE PROGRAMS• In order for the Retail Energy Market to offer consumers a viable alternative totraditional utility service, renewable programs should be structured in a competitivelyneutral fashion and applied to both TPSs and utilities.• REC obligations should be matched with customer using energy, which has not alwaysbeen the case with the Solar RPS.• Renewable Programs should be structured with some predictability for TPSs—RECobligations should not be a fixed amount, but a percentage.00014753.1 }4{

Agenda Date: 4/16/09Agenda Item: 2ASTATE OF NEW JERSEYBoard of Public UtilitiesTwo Gateway CenterNewark, NJ 07102www.nj.gov/bpu/ENERGYIN THE MATTER OF THE PROCEEDING ) DECISION AND ORDERFOR INFRASTRUCTURE INVESTMENT ) APPROVING STIPULATIONAND A COST RECOVERY MECHANISM )FOR ALL GAS AND ELECTRIC UTILITIES ) DOCKET NO. EO09010049IN THE MATTER OF THE PETITION )OF NEW JERSEY NATURAL GAS COMPANY )FOR APPROVAL OF AN ACCELERATED )ENERGY INFRASTRUCTURE INVESTMENT ) DOCKET NOS. GO09010052PROGRAM PURSUANT TO N.J.S.A. 48:2-23, ) GR07110889AND FOR APPROVAL OF NECESSARY )CHANGES TO GAS RATES AND CHANGES )IN THE COMPANY’S TARIFF FOR GAS )SERVICE PURSUANT TO N.J.S.A. 48:2-21 )(SERVICE LIST ATTACHED)BY THE BOARD:Background:On October 16, 2008 in response to the worldwide economic downturn and seeking to mitigateits effects on New Jersey, Governor Jon Corzine announced plans to provide immediateassistance for New Jersey residents and long term economic growth options through an“Economic Stimulus Plan.” Governor Corzine called on the New Jersey Board of Public Utilities(“BPU” or “Board”) and the State’s public utilities to aid in that plan by implementing the policychanges to be proposed in the State’s about to be released Energy Master Plan (“EMP”).

The EMP, issued on October 22, 2008, is the roadmap to guide the State toward a responsibleenergy future with adequate, reliable energy supplies that are both environmentally responsibleand competitively priced 1 . Under the EMP, major goals for New Jersey include maximizingenergy conservation and energy efficiency, and reducing energy consumption by at least 20%by 2020. The EMP also calls for upgrading energy infrastructure to ensure the continuedreliability of energy supply, support increased energy efficiency, renewable energy, andreductions in peak demand. 2 Public utility involvement, along with competition in the renewableenergy, conservation and energy efficiency industries are essential to meeting the goals of theEMP. The Governor, together with Board President Jeanne M. Fox, encouraged New Jersey’selectric and gas utilities to formulate plans for enhanced investments in infrastructureimprovements during 2009. Implementation of such plans would accelerate the currentschedule of the electric and gas utilities for planned capital improvements and investments,thereby creating jobs and stimulating the State’s economy.New Jersey’s gas and electric utilities responded by filing petitions outlining each utility’sproposed projects, and seeking the Board’s approval of accelerated investments in utilityinfrastructure. In reviewing the utilities’ petitions, the Board seeks to ensure not only that theproposals further the EMP, but also create jobs to strengthen the local economy.By Order dated January 29, 2009, the Board determined that these petitions should be retainedby the Board for review and hearing, and, as authorized by N.J.S.A. 48:2-32, designatedPresident Fox as the presiding officer. 3Procedural History:On January 20, 2009, New Jersey Natural Gas Company (“NJNG” or the “Company”) filed apetition requesting that the Board approve an Accelerated Energy Infrastructure InvestmentProgram (“AIP”) pursuant to N.J.S.A. 48:2-23, and that the Board simultaneously approve therecovery of costs for projects included within the AIP through a change in the NJNG base rates,pursuant to N.J.S.A. 48:2-21 and 48:2-21.1.In its petition, the Company stated that, as part of its ordinary capital spending planning cycle,NJNG continuously plans for the replacement, reinforcement and expansion of its infrastructure,including its property, plant, facilities and equipment to maintain the reliability of its distributionand transmission system, and to ensure the continuation of safe, adequate, and proper serviceas well as the conservation and preservation of the environment. The Company further statedthat it had recently determined that it is both reasonable and prudent to accelerate its capitalspending at this time, to facilitate its operations and to support economic development and jobgrowth in New Jersey. Accordingly, the Company has proposed to invest approximately $70.8million in accelerated infrastructure projects that already had been included in the Company’slonger term budgeting process.The Company further maintains that its proposal is consistent with and meets the goals of thecomprehensive Economic Stimulus Package for New Jersey proposed by the Governor.1 For the full text of the EMP, see www.nj.gov/emp.2 EMP at 75.3 In anticipation of the filings by the utilities, the Board assigned a generic docket number to facilitate theindividual utility proceedings, i.e. BPU Docket No. EO09010049, as noted above.2BPU Docket Nos. EO09010049, GO09010052 &GR07110889

According to NJNG, the infrastructure investment projects proposed in its petition will serve toenhance service and reliability, meet energy efficiency goals by making natural gas servicemore readily available, and will provide for the creation of approximately 75 to 100 additionaljobs. In its petition, the Company proposed fourteen projects for inclusion in the AIP (the“Associated Projects” or “AIP Projects”), in order to offer the greatest benefit to customers andto ensure an effective implementation process. The Company also proposed seeking base ratetreatment for those projects initiated within a period of approximately two years from the date offinal Board approval of the AIP, or as of the date the Associated Projects that have commencedconstruction as of December 31, 2010, are completed. According to the Company, the proposedprojects shall be completed no later than August 31, 2011. To expedite the Board’s review ofthe proposals, NJNG requested that the Board consider this matter in conjunction with NJNG’srecently finalized base rate case in Docket No. GR07110889, and that the Board re-open thatcase for the sole purpose of considering the AIP proposal and cost recovery approach includedtherein. 4 The Company also requested that the Board retain the AIP filing for review on anexpedited schedule in order to timely meet the State and Federal goals for infrastructuredevelopment and job creation.Six public hearings on the AIP filing were held at three locations in the NJNG service territory:two hearings on February 24, 2009 in Rockaway Township, New Jersey; two hearings onFebruary 26, 2009 in Freehold Borough, New Jersey; and two hearings on March2, 2009 inToms River Township. One member of the public appeared at one of the Freehold Boroughpublic hearings, but made no statement for the record on the AIP petition.Discovery requests in this matter were propounded by Board Staff and Rate Counsel, all ofwhich were responded to by NJNG. No motions to intervene were filed.Subsequent to the completion and review of discovery and the six public hearings, and afterengaging in settlement negotiations, representatives of NJNG, Board Staff, and Rate Counsel(collectively the “Parties”), the only parties to this proceeding, met to discuss the issues in thiscase and executed a Stipulation and Agreement (the “Stipulation”) which resolves the issues inthis proceeding, as described more fully below.On April 3, 2009, NJNG notified representatives from Amerada Hess, Intelligent Energy andPublic Service Electric & Gas about the settlement reached in this matter. The three companieswere granted intervenor status in NJNG’s base rate case (BPU Docket No. GR07110889) whichthe Company has asked the Board to reopen for the purposes of considering review and ratebase recovery of the AIP. PSE&G stated that it had no objection to the Stipulation, whileAmerada Hess stated that it neither objects nor supports the Stipulation. Intelligent Energyspecifically objects to the treatment of capacity and storage costs and any changes that “lock in”base rates, including the additional costs that would be added under the Stipulation. No othercomments were received.In this Order, the Board considers the proposed Stipulation, with key provisions describedbelow.4 On October 3, 2008, the BPU issued its Decision and Order in Docket No. GR07110889 (“October 3Order”), adopting the terms of the Stipulation entered into by NJNG, Board Staff, and the Department ofthe Public Advocate, Division of Rate Counsel (“Rate Counsel”), the only active parties participating in thesettlement of the NJNG base rate case.3BPU Docket Nos. EO09010049, GO09010052 &GR07110889

The Proposed Stipulation 5AIP Projects:The Company represents that the fourteen projects identified in Appendix A of the attachedStipulation (“Qualifying Projects”) will assist the Company in providing safe, adequate and properservice to its customers, are incremental in nature, and will create jobs in support of GovernorCorzine’s Economic Stimulus Plan. Accordingly, the Parties agree that the costs associated withthe Qualifying Projects will be recovered through NJNG’s base rates, subject to review, asdescribed below.Appendix A of the Stipulation contains a description of each Qualifying Project, the projected costfor each Qualifying Project, and the projected timeline and completion date for each QualifyingProject. The Company anticipates that the design and construction work associated with theQualifying Projects will generate between 75 and 100 incremental jobs in its service territory. TheCompany agrees that it will try to employ contractors and engineering firms located in NewJersey. The Company’s estimate of the workforce necessary for the Qualifying Projects does notinclude any ancillary job impacts that will increase the overall benefits generated from theQualifying Projects.According to the Stipulation, the work associated with the Qualifying Projects will commence uponreceipt of a final Board Order in this proceeding coordinated with the estimated construction startand completion dates set forth in Appendix A. Based on current cost levels and availableestimates, the Company estimates that the overall construction costs, prior to any capitalization ofan Allowance for Funds Used During Construction (“AFUDC”) related to the Qualifying Projects,will be approximately $70.8 million.NJNG’s current capital budgets contemplate the following levels of capital expenditures for non-Qualifying projects: $64,563,000 in fiscal year 2009, $51,985,000 in fiscal year 2010 and$51,951,000 in fiscal year 2011. NJNG represents that the expenditures related to the QualifyingProjects will be incremental to such planned levels of expenditures for 2009, 2010 and 2011. TheParties stipulate that NJNG should recover the costs of the fourteen Qualifying Projects listed inAppendix A, through the Company’s base rates, subject to a prudency review and Board Order.If it is necessary for the Company to eliminate or substitute another project for any of theQualifying Projects during the term of its AIP, notice of any such changes and an opportunity forreview and comment shall be provided to the Parties, and any substitutions shall only be madewith Board approval. Before seeking such approval, the Company will consult with the Parties tothe Stipulation, and will seek consent to the modifications from the Parties for filings with theBoard.5 Although described in this Order at some length, should there be any conflict between this summary andthe Stipulation, the terms of the Stipulation control, subject to the findings and conclusions in this Order.4BPU Docket Nos. EO09010049, GO09010052 &GR07110889

Cost Recovery Mechanism:Under the terms of the Stipulation, NJNG’s recently finalized base rate case in Docket No.GR07110889 will be re-opened for the sole purpose of considering NJNG’s request for base rateincreases associated with the Qualifying Projects. In June of 2010 and 2011, coincident with butseparate from its annual Basic Gas Supply Service (“BGSS”) filings, the Company will submit itsannual AIP filing (the “Annual Filing”) with the Board and provide public notice with copies to RateCounsel.The Annual Filing will include a request for recovery in base rates of the prudently incurred costs(“Capital Investment Costs”), associated with the Qualifying Projects. The Annual Filing willrequest that associated changes in base rates be effective the October following the AnnualFiling, coincident with the annual BGSS rate changes. Capital Investment Costs will consist of allprudently incurred capital expenditures associated with the Qualifying Projects, including actualcosts of engineering, design and construction, cost of removal (net of salvage) and propertyacquisition, including actual labor, materials, overheads and capitalized AFUDC (as described inparagraph 21 of the Stipulation) associated with each of the Qualifying Projects. CapitalInvestment Costs will be recorded, during construction, in an associated Construction Work inProgress Account (“CWIP”) or in a Plant In Service Account upon the respective project beingdeemed used and useful. Additionally, if NJNG files a base rate case with the BPU prior toOctober 1, 2011, the request for rate relief associated with the Qualifying Projects sought in theNJNG June 2011 Annual AIP Filing will be withdrawn.The Company’s annual AIP base rate adjustment proposed in the Annual Filing will include arevenue requirement that reflects a rate of return calculated as follows: the Company’s currentCWIP balance associated with the Qualifying Projects as of August that year, including anypreviously capitalized AFUDC, and the Company’s Qualifying Project plant-in-service investmentbalance as of August, multiplied by a Weighted Average Cost of Capital (“WACC”) of 11.44percent, as adjusted for income taxes. NJNG agrees that the request for recovery of higherincremental debt costs in the development of the WACC originally included in the petition iswithdrawn and agrees that the WACC for this purpose is based on the Board’s approved rate ofreturn in the October 3 Order. The June 2011 filing will be limited to the Company’s QualifyingProject plant-in-service investment balance as of August 31, 2011. The AIP base rate adjustmentwill also include depreciation expense for Qualifying Projects placed into service in the 12-monthperiod ending August 31 of each year based on a composite depreciation rate of 2.34%,commencing with the AIP Order. NJNG agrees that it will not include incremental operation andmaintenance expenses in future AIP Annual FilingsThe Qualifying Projects, and any Board-approved substituted projects, and associated investmentcosts included in each Annual Filing will be subject to review by Board Staff and Rate Counselprior to the issuance of a Board Order establishing that the Company’s proposed annual base rateadjustment is just and reasonable. Such review will be conducted as a contested case inaccordance with the New Jersey Administrative Procedure Act, N.J.S.A. 52:14B-1 et seq. At theconclusion of proceedings to review the June 2011 Annual Filing, the reopened base rateproceedings in Docket No. GR07110899 will close.Accounting Methodology for AIP:The Company will separately track Capital Investment Costs, as defined in Paragraph 17 of theStipulation, for each of the Qualifying Projects by work order in a CWIP account and will record amonthly accrual of AFUDC which will be capitalized or included in the CWIP balance as follows:5BPU Docket Nos. EO09010049, GO09010052 &GR07110889

(a) when NJNG’s total CWIP balance, including CWIP associated with Qualifying Projects,is less than NJNG’s outstanding short-term debt (“S/T debt”) balance, the applicableAFUDC rate will be equal to NJNG’s monthly cost of S/T debt; or when NJNG’s totalCWIP balance, including CWIP associated with Qualifying Projects, is greater thanNJNG’s outstanding S/T debt, the applicable AFUDC rate will be equal to NJNG’soverall WACC--7.76% per annum; or(b) when a Qualifying Project is placed into service, but not yet reflected in customer rates,the AFUDC rate will be equal to NJNG’s WACC--7.76% per annum.(c) be equal to NJNG’s overall WACC--7.76% per annum; or(d) when a Qualifying Project is placed into service, but not yet reflected in customer rates,the AFUDC rate will be equal to NJNG’s WACC--7.76% per annum.In determining the CWIP base upon which to apply the monthly AFUDC rate, a deduction will bemade for any CWIP amount currently approved by the BPU and included in NJNG’s base rates.Rate Design:NJNG will recover the costs approved in each of its AIP Annual Filings by adjusting, on avolumetric basis, the then-current base rate for all customer classes, allocated in the mannerprescribed in the October 3 Order. Accordingly, the effect of the AIP base rate adjustments,consistent with the October 3 Order, will reflect an across-the-board adjustment to customerclasses that will have an impact on natural gas revenues for each class by the same percentage.No change will be requested in any of the AIP filings for the current customer charges approvedby the Board in the October 3 Order. The volumes used to determine base volumetric revenuesfor each customer class and for the AIP-related base rate changes to be coincident with theannual BGSS rate changes, will be based on the weather-normalized forecast for the upcomingannual BGSS period of October through September.Rate Impact:The Company estimates that the total rate increase resulting from the AIP will be approximately 1to 1.25 percent in the aggregate to the bills of an average residential heating customer based onthe Company’s current rates and anticipated sales volumes.Minimum Filing Requirements (“MFRs”):The Company will provide the information set forth in the list of MFRs attached to the Stipulationas Appendix B with each Annual Filing. The Company will also provide in each filing a detaileddescription, along with corresponding plant accounts, of the expenditures that are reflected ineach blanket project in Appendix A, if any, together with measurable parameters, such as line-feetor number of installations, associated with each blanket project, if any.Quarterly Reporting:Under the terms of the Stipulation, the Company will provide the Board and Rate Counsel with aquarterly report (“Quarterly Report”), reflecting capital expenditures and the job growth resultingfrom the implementation of each Qualifying Project on a quarterly basis, in the format attachedhereto as Appendix C and made a part of the Stipulation. The Quarterly Report should alsoinclude a Gantt chart showing the status of the projects, tasks completed, percentage of projectscompleted, the actual money spent to date, etc. Additionally, the Company will include in theQuarterly Report planned/budgeted capital expenditures by budget type for non-Qualifying6BPU Docket Nos. EO09010049, GO09010052 &GR07110889

Projects, other than new business, for comparison to the actual costs incurred for the non-Qualifying Projects. This reporting will begin 30 (thirty) days after the end of the first calendarquarter following the issuance of a Final Board Order in this proceeding. The Company agrees totrack the number of incremental contractor or other positions associated with the QualifyingProjects and will include that information with each Quarterly Report and Annual Filing submittedto the Board Staff and Rate Counsel, in the format set forth in Appendix C of the Stipulation.Calculation of Jobs Created:The Parties agree that job creation is an integral part of the Economic Stimulus Plan underlyingthe Qualified Projects. For purposes of reporting jobs associated with the Qualifying Projects, theCompany will define a Full-Time Equivalent (“FTE”) job as 1,820 hours per year.Government Funding:On February 17, 2009, the Federal American Recovery and Reinvestment Act of 2009 (“ARRA”)(Pub. L. No. 111-5) was signed into law by President Barack Obama. Subject to any restrictionsset forth in the ARRA and other applicable law, if the Company receives federal funds or creditsthrough the ARRA, the Company agrees to utilize that money to offset the Qualifying Project’scosts. If funding or credits from the ARRA or any subsequent state or federal action becomesavailable to the Company through the State of New Jersey, a County or a Municipality projectreimbursement, the Company agrees that any such funds or credits directly applicable to workrelated to the Qualifying Projects will be used to benefit customers by offsetting the costs forwhich recovery will be sought to the extent permitted by law.Discussion and FindingsThe Board recognizes that the acceleration of utility infrastructure projects and the treatment ofcapital expenses on an expedited schedule outside the purview of a rate case is not part of thenormal course of utility regulation. However, these are not ordinary times.In his address to the Legislature on October 16, 2008, the Governor called upon the Board tohelp facilitate job growth and assist in New Jersey’s economic stimulus program. The Board, inturn, called upon the State’s public utilities to formulate plans for enhanced investments ininfrastructure that would both increase reliability and promote employment.The Board takes notice of the fact that the financial markets remain volatile, affecting theutilities’ ability to fund incremental infrastructure projects within the usual framework whichrequires that capital expenditures be recovered through a rate case only after projects arecompleted. N.J.S.A. 48:2-21. It is within a rate case that the property that is used and useful inthe utility’s provision of service is evaluated, and the expenses that can become components ofjust and reasonable rates are determined. In re Investigation of Tele. Cos., 66 N.J. 476 (1975).These difficult economic times require creative responses that respect the law but adapt toextraordinary circumstances. In the past, the Board has found that it has the power to act tomeet such challenges. N.J.S.A. 48:2-13; In re Implementation of the Two Bridges/RamapoWater Diversion Project, BPU Docket No. 8011-870 (March 17, 1981). The Board continues tohave that power.7BPU Docket Nos. EO09010049, GO09010052 &GR07110889

Looking generally at all of the infrastructure settlements before the Board, and at PublicService’s in particular, the Board FINDS that the infrastructure programs reviewed today, ifsuccessfully executed, will both increase employment in the State and reliability of the utilities’distribution systems. Only capital projects which enhance the reliability, safety and security ofeach utility’s distribution system are eligible under these programs as Qualifying Projects.These are projects originally scheduled for future years which can be brought forward into the2009-2010 time period because they have already been researched and planned by thecompanies. In the absence of this program, most of the projects would be completed, but onlyin future years.In identifying projects to be included in their infrastructure programs, projects using New Jerseybasedemployees were strongly favored; in contrast, projects not expected to affect employmentin New Jersey, such as replacement of vehicles or computers, were eliminated from utilityproposals. Projects without an obvious benefit to justify their costs were excluded as well.Staff engineers reviewed the projects proposed by the utilities to establish that the projectswould make the distribution systems more reliable, safer, or more secure, or would provide acombination of these benefits. Rate Counsel also conducted its own review, with substantialinput from contracted professional consultants. Based on its review of the information provided,the Board is satisfied that the projects will positively contribute to the reliability, safety andsecurity of utility service.In addition to providing positive benefits to the provision of safe, adequate, and proper service,the proposed Qualifying Projects are designed to create direct jobs. Evidence presented to theBoard during the overall proceedings indicate that the full impact of the overall acceleratedinfrastructure programs will create approximately 1,302 direct jobs in the private sector – withoutthe use of additional government funding. The Qualifying Projects associated with thisparticular Order are expected to generate 75-100 direct jobs over the next two years, primarilyin the construction industry. These are actual incremental private sector jobs which would notbe created in the absence of these programs. The companies have provided an initial estimateof the incremental jobs to be created by these projects, and as part of the mandatory reportingrequirements, will report the actual jobs created on a quarterly basis. Furthermore, thecompanies will provide reports on capital spending other than for the Qualifying Projects in orderto identify any possible shifting of spending and assure that these are actually new jobs whichwould not have been created without these programs. Without question, the Board FINDS thatthe accelerated infrastructure programs will have a significant and real benefit on employment inthe State.The estimate of jobs to be created includes only the direct impact of the proposed projects onemployment – the employees working on the utility projects themselves. It does not include theindirect impacts with respect to jobs created in other sectors of the state economy for labor,materials, and services needed for the utility projects. Neither does it include what is known asthe “induced” impacts resulting from spending by the added employees for local goods andservices. These “ripple” effects are difficult to quantify, but they clearly exist. Rate Counsel’sconsultants estimated that an additional 14,100 direct, indirect and induced jobs will be createdby the accelerated infrastructure program. The multiplier calculation is based on the RIMS IIRegional Input-Output Model, produced by the Bureau of Economic Affairs, US Department ofCommerce, and has not been contradicted by any of the evidence provided during theseproceedings. The Board therefore FINDS that the overall estimate of 1,302 direct jobs createdis a relatively small fraction of the total jobs to be created as a result of the programs that theBoard is approving today.8BPU Docket Nos. EO09010049, GO09010052 &GR07110889

The Board also notes that current economic conditions have reduced commodity and otherinput costs, making this a propitious time to pursue capital investment on cost-effective terms.For example, the federal Bureau of Labor Statistics stated that the producer price index (“PPI”)for the primary products of iron and steel mills dropped nearly 20% from March 2008 to March2009; the PPI of iron and steel pipe and tube made from purchased iron and steel droppednearly 7% over the same period; and the PPI for communication and energy wire and cablemanufacturing dropped more than 19%. 6 The price of iron and steel scrap dropped by nearlyhalf over the same period. 7 In addition, the prudency of the projects and reasonableness of theamounts actually spent on the projects will be subject to a base rate review – either within acurrent reopened or to be filed rate case. This review assures that the projects included in thisprogram will receive the same level of scrutiny as any project undertaken by a New Jersey utilitywhere the resulting costs become part of the rate base used to calculate rates.Likewise, the Stipulations require that each company use the Weighted Average Cost of Capital(“WACC”) determined in its last rate case, which provides significant financial advantages toratepayers because the cost of debt and common equity have risen substantially in recentmonths. The companies originally proposed two much less attractive approaches fordetermining the WACC for use with the stimulus program: (1) the embedded cost of debtcurrently on the utility’s books plus the cost of equity which the Board awarded to New JerseyNatural Gas Company in its recently completed rate case, i.e., 10.30 percent; or (2) theexpected future cost of debt to finance the projects and the expected cost of equity if the Boardwere making that decision today, possibly as high as 10.50 percent. In rejecting that, andinstead negotiating a WACC from each utility’s last base rate proceedings, the Board hasensured a significant saving that further solidifies the foundation of approving these acceleratedinfrastructure programs.On a net present value basis, the Board FINDS that the cost of these accelerated infrastructureprograms to ratepayers is essentially the same as it would be through conventional ratemaking.In the short term, the cost may be less than under conventional ratemaking because the cost ofcapital used in the clauses, as discussed above, is somewhat below the current market rate.Therefore, the Board FINDS that these additions to rate base are being financed betweenprogram inception and the next base rate case at a more attractive cost from a ratepayerperspective.The federal stimulus package, enacted as the American Recovery and Reinvestment Act of2009 (“ARRA 2009”), included funding to enhance energy independence and modernizeinfrastructure. It does not currently appear that the ARRA 2009 includes funding for the types ofprojects included in the accelerated infrastructure development programs. Should such fundsbecome available under the ARRA 2009, the Stipulations provide that ARRA 2009 fundingwould be used to reduce the cost of the accelerated infrastructure development programs toratepayers. The Board notes that the accelerated infrastructure programs eliminate the lagassociated with waiting for ARRA 2009 funding in implementing these projects while stillpreserving for ratepayers any benefits from ARRA 2009 should benefits become available later.6 Bureau of Labor Statistics, “Table 5 - Producer price indexes for the net output of selected industriesand their products,” http://www.bls.gov/ppi/ppitable05.pdf.7 Bureau of Labor Statistics, “Table 2 - Producer price indexes and percent changes for selectedcommodity groupings by stage of processing,” http://www.bls.gov/news.release/ppi.t02.htm.9BPU Docket Nos. EO09010049, GO09010052 &GR07110889

In summary, the Boards FINDS that the overall infrastructure improvement program, and theprojects proposed by the utilities under it, are reasonable and in the public interest because ofthe positive impact they are expected to have on the reliability, safety and security of utilityservice. These infrastructure investment programs are timely given the drop in commodityprices, the attractive cost of capital, and the impact on both direct employment and the positiveripple effect on the New Jersey economy. All of these factors make this an appropriate time toproceed with these programs, which enhance and support Governor Corzine’s EconomicStimulus Program.Turning to the NJNG Stipulation that is under review, the Board FINDS that it meets the testsarticulated above. The Company will invest an estimated $70.8 million over the next two yearscreating an estimated 75 to 100 direct jobs over that period. The projects, totaling 14 in all, willinclude the replacement of eight miles of 8-inch steel main, vintage 1960’s with a 12-inch mainand replacement of approximately four miles of 8-inch main with 12-inch steel main. Bothprojects will improve reliability and enhance the safe operation of NJNG’s system.Accordingly, the Board will, in this case and in light of the extreme contraction of the creditmarkets, allow NJNG to begin recovery of capital expenses for these QPs based upon thereview within the reopened rate case. This authorization in no way sets a new framework forfuture actions; instead, it reflects the realities of today’s economic situation.The Stipulation requests that the Board reopen the Company’s recently completed base ratecase to allow a prudency review of the proposed Qualifying Projects and their cost recovery. Indoing so, the Board HEREBY FINDS that within the reopened rate case it has the power togrant the requested increases pursuant to N.J.S.A. 48:2-21 and 48:2-21.1 after thecontemplated reviews. See, In re Intrastate Industrial Sand Rates. 66 N.J. 12 (1974). However,the Board’s approval of the Stipulation should not be taken to represent either a common, new,or precedent-setting treatment of rate regulation, but appropriate relief during trying financialconditions.Therefore, the Board, having reviewed the complete record in this proceeding including theattached Stipulation, HEREBY FINDS the Stipulation to be reasonable, in the public interest,and in accordance with law., and HEREBY APPROVES the attached Stipulation in its entiretyand HEREBY INCORPORATES its terms and conditions as though fully set forth herein.The Board notes the objection to the Stipulation posed by Intelligent Energy and HEREBYFINDS that the changes to policy related to the treatment of capacity and storage inherent inthat objection are beyond the scope of this proceeding, in light of the pressing economicsituation which is the impetus for this Order. As such, the objection does not provide a basis forrejection of the Stipulation.Furthermore, the Board HEREBY DIRECTS the Company to commence the design andconstruction of the fourteen AIP projects identified in Appendix A of the attached StipulationThe Board HEREBY REOPENS recently completed BPU Docket No. GR07110889 for thepurposes of reviewing the prudency of the Qualifying Projects as constructed and of the AIPbase rate adjustments which will be requested in the annual AIP cost recovery filings; andFURTHER DIRECTS NJNG to file its first annual AIP cost recovery filing in June of 2010,coincident with the Company’s annual BGSS filing, as described in the Stipulation.10BPU Docket Nos. EO09010049, GO09010052 &GR07110889

The Company's base rates will remain subject to audit by the Board. This Decision and Ordershall not preclude the Board from taking any actions deemed to be appropriate as a result ofany Board audit.11BPU Docket Nos. EO09010049,GR07110889GO09010052 &

DISSENT OF COMMISSIONERELIZABETH RANDALLThese five (5) requests were filed by the utilities in response to Governor Corzine's October 16,2008 proposal to help revive the State's economy through the acceleration of capital spendingprojects. In his speech to the New Jersey Legislature on October 16, 2008, the Governor said:"First and most practically, I have instructed all Commissioners, most particularlythe Commissioners and Directors of the Department of Transportation, NewJersey Transit, the Toll Authorities, the Schools Development Authority, theBoard of Public Utilities and the Department of Environmental Protection, toaccelerate where feasible all currently funded spending projects."Although not "currently funded," the utilities are asking the Board to fund these improvementswith rate increases which will take effect no later than May 1, 2009. It is my opinion that theprojected economic stimulus from these petitions is not sufficient to justify the cost to NewJersey customers.As discussed below, my decision is based upon two factors: (1) the unprecedented infusion tothe State of New Jersey of an anticipated $17.5 billion in federal stimulus monies pursuant tothe American Reinvestment Recovery Act (ARRA) , and (2) the comparatively small number ofnew jobs which would be created under these proposals relative to the total cost to New Jerseyutility customers.8On February 17, 2009, President Obama signed the ARRA which will inject $787 billion into theU.S. economy. New Jersey is expected to receive $17.5 billion.9 An additional $240 billion willbe available in tax benefits and competitive grants, of which New Jersey hopes to receive $7.2billion, bringing New Jersey's total of anticipated federal stimulus dollars to $24.7 billion.Based on estimates from the White House, these dollars will create or save 100,000 NewJersey jobs over the next two years.108 The five (5) stipulations ind icate the following costs and projected new jobs:!:!!lli!Y.NJNG Co.PSE&G Co.SJG Co.Elizabethtown Gas Co.Atlantic City Electric Co.Projected Cost$70.8 Million$694.0 Million$103.0 Million$60.4 Million$27.6 MillionProjected Jobs75-1009331276592Customers485,0002.1M Elec./1.7M Gas335,000274,000544,000TOTALS $955.8 Million 1292-1317 5,438,0009 See httQ://www.recover~.ni.gov10 See http://www.recove~.ni.aov12 BPU Docket Nos. EO09010049, GO09010052 &GRO7110889

Some four months before President Obama signed the federal stimulus bill, Governor Corzineaddressed the New Jersey Legislature and proposed a New Jersev Economic Assistance andRecovery Plan.The five matters before the Board are a direct result of the call to identify job-creation proposals.Specifically, the Executive branch sought company-specific program proposals with associatedcost recovery and rate mechanisms, broken down into the following categories:1 Infrastructure programs that will effectively spur an increase in constructionemployment, while increasing the reliability of the electric and gas distributionsystem.2. Infrastructure programs that will improve energy efficiency of the electric orgas distribution system.3. Statewide energy efficiency programs scaled down from the menu ofprograms submitted by the energy utilities.Collectively, these five utilities seek permission to spend $955.8 Million (See Footnote 8), all ofwhich will be recovered from customers through increases in utility rates.11 The language usedto describe the method of cost-recovery varies from utility to utility, with one company proposingan "Economic Stimulus Surcharge," and another calling it an "Infrastructure InvestmentSurcharge."Terminology aside, while it is true that customers will benefit from these infrastructureinvestments, it is equally true that these improvements do not need to be completed within thenext 24 months. None of the filings indicates that the delivery of safe and adequate service willbe at risk if these requests are denied. Indeed, the petitions are replete with references toongoing capital projects which are already planned and which will be funded by ratepayers.12The number of new jobs to be created through approval of the accelerated projects is estimatedat 1292-1317. Given the cost which customers will bear, I am persuaded that the cost of thisjob creation is too high. While it is true that the average bill will not go up by more than 1 %, thisamount will remain as part of the customer's bill for as long as it takes to repay the funds beingborrowed by the utilities, which is approximately forty years.Moreover, while some New Jerseyans would be put to work, there is no guarantee that theconstruction and engineering jobs created by these projects would go to companies based inNew Jersey.13 Regardless, the jobs created will be temporary in nature, and do not reflectpermanent job creation with the utility companies.11 Also recoverable from customers is a profit for each company. In these cases, the utilities will make aprofit of approximately 10%.12 Illustrative of this point is paragraph 14 of the Stipulation with New Jersey Natural Gas Company(NJNG) which refers to ongoing infrastructure costs unrelated to this matter and states: "14. NJNG'scurrent capital budgets contemplate the following levels of capital expenditures for non-qualifyingprojects: $64,563,000 in fiscal year 2009, $51,985,000 in fiscal year 2010 and $51,951,000 in fiscal year2011. NJNG represents that the expenditures related to the qualifying projects will be incremental tosuch planned levels of expenditures for 2009, 2010 and 2011."13 Each of the stipulations simply states that the utilities will "endeavor to employ contractors andengineering firms located in New Jersey,"13 BPU Docket Nos. EO09010049, (,009010052 &GR07110889

Contrast the efficiency of the BPU's job-creation effort with one recently announced by theGovernor and the New Jersey Department of Transportation.For a cost of $67 million and a promise of 500 jobs, a bridge upgrade will be done on Route 46in Bergen County. Moreover, federal funds from the American Recovery and Reinvestment Actwill pay for $47.6 million of this project, leaving New Jersey taxpayers paying only $19.4 millionfor 500 jobs.In sum, the promise and benefits of the federal stimulus program are extraordinary. Were it notfor the federal money, we would need to rely on New Jersey taxpayers and ratepayers toshoulder the burden of job creation through increased taxes and rates. Fortunately, this burdenneed not be increased at this time.

April 9, 2009VIA ELECTRONIC AND REGULAR MAILKristi Izzo, SecretaryN.J. Board of Public UtilitiesTwo Gateway CenterNewark, NJ 07102Re:NEW JERSEY NATURAL GAS COMPANYFOR APPROVAL OF AN ACCELERATEDENERGY INFRASTRUCTURE INVESTMENTPROGRAM, AND FOR APPROVAL OF NECESSARYCHANGES TO GAS RATES AND CHANGES INTHE COMPANY’S TARIFF FOR GAS SERVICEBPU DOCKET NOS. GR07110889, ER09010049 andGR09010052Dear Ms. Izzo:Enclosed with this letter is a fully executed Stipulation in the above captionedmatter with separate and original signature pages for each signatory.Please do not hesitate to contact me at (732) 919-8025 if you need any additionalinformation.Very truly yours,C: Service List (electronically only)Tracey Thayer, Esq.Director, Regulatory Affairs Counsel

IN THE MATTER OF THE PETITION OF NEW JERSEY NATURAL GAS COMPANYFOR APPROVAL OF AN ACCELERATEDENERGY INFRASTRUCTURE INVESTMENT PROGRAMPURSUANT TO N.J.S.A. 48:2-23, AND FOR APPROVAL OF NECESSARYCHANGES TO GAS RATES AND CHANGES IN THECOMPANY’S TARIFF FOR GAS SERVICEPURSUANT TO N.J.S.A 48:2-21NJ BPU DOCKET NO.GO 09010052SERVICE LISTNJNGMark R. SperdutoNew Jersey Natural Gas Company1415 Wyckoff RoadP.O. Box 1464Wall, NJ 07719Craig LynchNew Jersey Natural Gas Company1415 Wyckoff RoadP.O. Box 1464Wall, NJ 07719Tracey ThayerNew Jersey Natural Gas Company1415 Wyckoff RoadP.O. Box 1464Wall, NJ 07719Tina SinksNew Jersey Natural Gas Company1415 Wyckoff RoadP.O. Box 1464Wall, NJ 07719Michael MoscufoNew Jersey Natural Gas Company1415 Wyckoff RoadP.O. Box 1464Wall, NJ 07719* France KarrasNew Jersey Natural Gas Company1415 Wyckoff RoadP.O. Box 1464Wall, NJ 07719NJ BOARD OF PUBLIC UTILITIESAlice BatorN.J. Board of Public UtilitiesTwo Gateway CenterNewark, NJ 07102Victor FortkiewiczN.J. Board of Public UtilitiesTwo Gateway CenterNewark, NJ 07102Christine LinN.J. Board of Public UtilitiesTwo Gateway CenterNewark, NJ 07102Dr. Son Lin LaiOffice of the EconomistN.J. Board of Public UtilitiesTwo Gateway CenterNewark, NJ 07102Robert WojciakN.J. Board of Public UtilitiesTwo Gateway CenterNewark, NJ 07102James GiulianoN.J. Board of Public UtilitiesTwo Gateway CenterNewark, NJ 07102* Mark Beyer, Chief EconomistN.J. Board of Public UtilitiesTwo Gateway CenterNewark, NJ 07102* Individual designated to receive hard copy of documents.

IN THE MATTER OF THE PETITION OF NEW JERSEY NATURAL GAS COMPANYFOR APPROVAL OF AN ACCELERATEDENERGY INFRASTRUCTURE INVESTMENT PROGRAMPURSUANT TO N.J.S.A. 48:2-23, AND FOR APPROVAL OF NECESSARYCHANGES TO GAS RATES AND CHANGES IN THECOMPANY’S TARIFF FOR GAS SERVICEPURSUANT TO N.J.S.A 48:2-21NJ BPU DOCKET NO.GO 09010052SERVICE LISTJerome MayN.J. Board of Public UtilitiesTwo Gateway CenterNewark, NJ 07102Nanik AswaniN.J. Board of Public UtilitiesTwo Gateway CenterNewark, NJ 07102Michael StonackN.J. Board of Public UtilitiesTwo Gateway CenterNewark, NJ 07102Jackie O’GradyN.J. Board of Public UtilitiesTwo Gateway CenterNewark, NJ 07102Donna LuhnN.J. Board of Public UtilitiesTwo Gateway CenterNewark, NJ 07102Rene DemuynckN.J. Board of Public UtilitiesTwo Gateway CenterNewark, NJ 07102Sheila IannacconeN.J. Board of Public UtilitiesTwo Gateway CenterNewark, NJ 07102Suzanne PatnaudeN.J. Board of Public UtilitiesTwo Gateway CenterNewark, NJ 07102DIVISION OF RATE COUNSELSarah SteindelDepartment of Public AdvocateDivision of Rate Counsel31 Clinton Street – 11 th FloorP.O. Box 46005Newark, NJ 07101* Stefanie A. BrandDepartment of Public AdvocateDivision of Rate Counsel31 Clinton Street – 11 th FloorP.O. Box 46005Newark, NJ 07101Paul FlanaganDepartment of Public AdvocateDivision of Rate Counsel31 Clinton Street – 11 th FloorP.O. Box 46005Newark, NJ 07101Felicia Thomas-FrielDepartment of Public AdvocateDivision of Rate Counsel31 Clinton Street – 11 th FloorP.O. Box 46005Newark, NJ 07101Ricky JohnN.J. Board of Public UtilitiesTwo Gateway CenterNewark, NJ 07102* Individual designated to receive hard copy of documents.

IN THE MATTER OF THE PETITION OF NEW JERSEY NATURAL GAS COMPANYFOR APPROVAL OF AN ACCELERATEDENERGY INFRASTRUCTURE INVESTMENT PROGRAMPURSUANT TO N.J.S.A. 48:2-23, AND FOR APPROVAL OF NECESSARYCHANGES TO GAS RATES AND CHANGES IN THECOMPANY’S TARIFF FOR GAS SERVICEPURSUANT TO N.J.S.A 48:2-21NJ BPU DOCKET NO.GO 09010052SERVICE LISTAmi MoritaDepartment of Public AdvocateDivision of Rate Counsel31 Clinton Street – 11 th FloorP.O. Box 46005Newark, NJ 07101Shelly MasseyDepartment of Public AdvocateDivision of Rate Counsel31 Clinton Street – 11 th FloorP.O. Box 46005Newark, NJ 07101DEPT. OF LAW & PUBLIC SAFETY –DIVISON OF LAW* Caroline VachierDeputy Attorney GeneralDept. of Law & Public Safety – Div of Law124 Halsey StreetP.O. Box 45029Newark, NJ 07101Alex MoreauDeputy Attorney GeneralDept. of Law & Public Safety – Div of Law124 Halsey StreetP.O. Box 45029Newark, NJ 07101Anne M. ShattoDeputy Attorney GeneralDept. of Law & Public Safety – Div of Law124 Halsey StreetP.O. Box 45029Newark, NJ 07101Jessica CampbellDeputy Attorney GeneralDept. of Law & Public Safety – Div of Law124 Halsey StreetP.O. Box 45029Newark, NJ 07101Kerri KirschbaumDeputy Attorney GeneralDept. of Law & Public Safety – Div of Law124 Halsey Street – 5 th FloorP.O. Box 45029Newark, NJ 07101Jenique JonesParalegalDept. of Law & Public Safety – Div of Law124 Halsey StreetP.O. Box 45029Newark, NJ 07101Elise GoldblatAdvising Deputy Attorney GeneralDept. of Law & Public Safety – Div of Law124 Halsey StreetP.O. Box 45029Newark, NJ 07101Babette TenzerAdvising Deputy Attorney GeneralDept. of Law & Public Safety – Div of Law124 Halsey StreetP.O. Box 45029Newark, NJ 07101* Individual designated to receive hard copy of documents.

IN THE MATTER OF THE PETITION OF NEW JERSEY NATURAL GAS COMPANYFOR APPROVAL OF AN ACCELERATEDENERGY INFRASTRUCTURE INVESTMENT PROGRAMPURSUANT TO N.J.S.A. 48:2-23, AND FOR APPROVAL OF NECESSARYCHANGES TO GAS RATES AND CHANGES IN THECOMPANY’S TARIFF FOR GAS SERVICEPURSUANT TO N.J.S.A 48:2-21NJ BPU DOCKET NO.GO 09010052SERVICE LISTMike McFaddenPete MiddentsJohn PetersChuck BeckerMike MajorosMargaret KenneyEugene BedellJames GoldsteinJohn StutzDave PetersonPat KeefeElizabeth WadeDeborah FrancoKen MaloneyAndrew DembiaFrances SundheimIra MegdalJohn StanziolaSam PignatelliMike FilipponeSally CheongMarc Laskymmcfadden@mcfaddenconsulting.comaemiddents@msn.comjn.peters@comcast.netchuck50mco@ao1.commmajoros@ snavely-king.commkenney@snavely-king.comebedell@ snavely-king.comjgold@tellus.orgjstutz@tellus.orgdavep@chesapeake.netpkeefe@aglresources.comewade@aglresources.comdfranco@culldyk.comkmaloney@cullenanddykman.comAndrew.dembia@pseg.comFrances.sundheim@pseg.comIMegdal@cozen.comjstanziola@sjindustries.comspignatelli@sjindustries.commfilippone@firstenergycorp.comscheong@firstenergycorp.commlasky@morganlewis.com* Individual designated to receive hard copy of documents.

STATE OF NEW JERSEYBOARD OF PUBLIC UTILITIESIN THE MATTER OF THE PROCEEDINGFOR INFRASTRUCTURE INVESTMENTAND A COST RECOVERY MECHANISMFOR ALL GAS AND ELECTRIC UTILITIES BPU DOCKET NO. EO09010049IN THE MATTER OF THE PETITION OFNEW JERSEY NATURAL GAS COMPANYFOR APPROVAL OF AN ACCELERATEDENERGY INFRASTRUCTUREINVESTMENT PROGRAM AND FORAPPROVAL OF NECESSARY CHANGESTO GAS RATES AND CHANGES IN THECOMPANY’S TARIFF FOR GAS SERVICEANDBPU DOCKET NO. GO09010052BPU DOCKET NO. GR07110889STIPULATIONAPPEARANCES:Tracey Thayer, Esq., New Jersey Natural Gas Company for the Petitioner, New JerseyNatural Gas CompanyFelicia Thomas-Friel, Esq., Deputy Public Advocate, and Sarah H. Steindel, Esq.,Assistant Deputy Public Advocate, Department of the Public Advocate, Division of RateCounsel (Ronald K. Chen, Esq., Public Advocate, Stefanie A. Brand, Esq., Director)Caroline Vachier, Jessica L. Campbell, Kerri Kirschbaum, Alex Moreau and AnneMarie Shatto, Deputy Attorneys General, for the Staff of the New Jersey Board of PublicUtilities (Anne Milgram, Attorney General of New Jersey)TO: THE NEW JERSEY BOARD OF PUBLIC UTILITIESBACKGROUND1. New Jersey Natural Gas Company (“NJNG” or the “Company”) filed a petitionin Docket No. GO09010052 on January 20, 2009, requesting that the New Jersey Board of

Public Utilities (“BPU” or the “Board”) approve an Accelerated Energy InfrastructureInvestment Program (“AIP”) pursuant to N.J.S.A. 48:2-23 and simultaneously approve therecovery of costs for projects included within the AIP through a change in NJNG base rates,pursuant to N.J.S.A. 48:2-21 and 48:2-21.1.2. As part of its ordinary capital spending planning cycle, NJNG continuously plansfor the replacement, reinforcement and expansion of its infrastructure, including its property,plant, facilities and equipment, to maintain the reliability of its system and to ensure thecontinuation of safe, adequate, proper service and the conservation and preservation of theenvironment. NJNG has recently determined, however, to increase its planned infrastructurecapital spending at this time, to enhance the reliability of its system and to support economicdevelopment and job growth in New Jersey.3. NJNG proposed fourteen projects for inclusion in the AIP, seeking base ratetreatment for those projects that have commenced construction no later than December 31, 2010,and are expected to be completed no later August 31, 2011.4. NJNG further requested that the Board consider this matter in conjunction withNJNG’s recently finalized base rate case in Docket No. GR07110889 and re-open that case forthe sole purpose of considering the AIP proposal and cost recovery approach included herein andconducting the appropriate reviews of the rate increase requested to be implemented under theproposal. On October 3, 2008, the BPU issued its Decision and Order in Docket No.GR07110889, adopting the terms of the Stipulations entered into by NJNG, Board Staff and theDepartment of the Public Advocate, Division of Rate Counsel (“Rate Counsel”).2

5. On January 29, 2009 the Board issued an Order retaining this matter forconsideration and designated BPU President Jeanne M. Fox as the presiding officer. On February2, 2009, the Board issued an Order setting forth a procedural schedule for this matter. 16. Public notice was provided and six public hearings on the AIP filing were held onthe following dates at three locations in the NJNG service territory: two hearings on February 24,2009, in Rockaway Township, New Jersey; two hearings on February 26, 2009, in FreeholdBorough, New Jersey; and two hearings on March 2, 2009, in Toms River Township. Onemember of the public appeared at one of the Freehold Borough public hearings but made nostatement for the record on the NJNG petition.7. Discovery questions in this matter were propounded by Board Staff and RateCounsel, and the Company responded thereto.8. Subsequent to the completion and review of discovery and the six public hearings,representatives of NJNG, Board Staff and Rate Counsel (the “Parties”), the only Parties to thisproceeding, met to discuss the issues in this case and agreed that the AIP proposal and associatedcost recovery mechanism, as amended by the Parties and set forth herein, are reasonable and inthe public interest.9. NJNG represents that the Company’s proposal, as amended below, is consistentwith and meets the goals of the comprehensive Economic Stimulus Plan for New Jerseyproposed by Governor Jon Corzine to create new jobs and stimulate the New Jersey economy.The infrastructure investment projects set forth herein will enhance service, reliability, and1 In anticipation of the filings by the utilities, the Board assigned a generic docket number,EO09100049, to facilitate the issuance of procedural orders.3

energy efficiency and provide for the creation of approximately 75 to 100 incremental jobs.Specifically, the Parties hereby STIPULATE AND AGREE to the following.STIPULATED MATTERSProjects10. The Company represents that the fourteen projects identified in Appendix A(“Qualifying Projects”) will assist the Company in providing safe, adequate and proper service toits customers, are incremental in nature, and will create jobs in support of Governor Corzine’sEconomic Stimulus Plan. Accordingly, the Parties agree that the costs associated with theQualifying Projects will be recovered through NJNG’s base rates, subject to review, as set forthbelow.11. Appendix A contains a description of each Qualifying Project, the projected cost foreach Qualifying Project, the estimated number of jobs created as a result of each QualifyingProject, and the projected timeline and completion date for each Qualifying Project.12. The Company anticipates that the design and construction work associated with theQualifying Projects will generate between 75 and 100 incremental jobs in its service territory. TheCompany agrees that it will endeavor to employ contractors and engineering firms located in NewJersey. The Company’s estimate of the workforce necessary for the Qualifying Projects does notinclude any ancillary job impacts that will increase the overall benefits generated from theQualifying Projects.13. The work associated with the Qualifying Projects will commence upon receipt of aFinal Board Order in this proceeding in conjunction with the estimated construction start andcompletion dates set forth in Appendix A. Based on current cost levels and available estimates, the4

Company estimates that the overall construction costs, prior to any capitalization of an Allowancefor Funds Used During Construction (“AFUDC”), related to the Qualifying Projects will beapproximately $70.8 million.14. NJNG’s current capital budgets contemplate the following levels of capitalexpenditures for non-Qualifying projects: $64,563,000 in fiscal 2009, $51,985,000 in fiscal year2010 and $51,951,000 in fiscal year 2011. NJNG represents that the expenditures related to theQualifying Projects will be incremental to such planned levels of expenditures for 2009, 2010 and2011.15. The Parties stipulate that NJNG should recover the costs of the fourteen QualifyingProjects listed in Appendix A, through the Company’s base rates, subject to a prudency review andBoard Order, as provided below.Substitution of Projects16. If it is necessary for the Company to eliminate or substitute another project for anyof the Qualifying Projects during the term of its AIP, notice of any such changes and anopportunity for review and comment shall be provided to the Parties, and any substitutions shallonly be made with Board approval. Before seeking such approval, the Company will consult withthe Parties to this Stipulation, and consent to the modifications may be manifested in filings withthe Board.Cost Recovery Mechanism17. NJNG’s recently finalized base rate case in Docket No. GR07110889 will be reopenedfor the sole purpose of considering NJNG’s request for base rate increases associated withthe Qualifying Projects. In June of 2010 and 2011, coincident with but separate from its annualBasic Gas Supply Service (“BGSS”) filings, the Company will submit its annual AIP filing (the5

“Annual Filing”) with the Board and provide public notice thereof, with copies to Rate Counsel.The Annual Filing will include a request for recovery in base rates of the prudently incurred costs(“Capital Investment Costs”), associated with the Qualifying Projects. The Annual Filing willrequest that associated changes in base rates be effective the October following the Annual Filing,coincident with the annual BGSS rate changes. Capital Investment Costs will consist of allprudently incurred capital expenditures associated with the Qualifying Projects, including actualcosts of engineering, design and construction, cost of removal (net of salvage) and propertyacquisition, including actual labor, materials, overheads and capitalized AFUDC (as describedbelow in paragraph 21) associated with each of the Qualifying Projects. Capital Investment Costswill be recorded, during construction, in an associated Construction Work in Progress Account(“CWIP”) or in a Plant In Service Account upon the respective project being deemed used anduseful. Additionally, if NJNG submits a base rate case filing with the BPU prior to October 1,2011, the request for rate relief associated with the Qualifying Projects that had been sought in theNJNG June 2011 Annual AIP Filing will be withdrawn.18. The Company’s annual AIP base rate adjustment proposed in the Annual Filing willinclude a revenue requirement that reflects a rate of return calculated as follows: the Company’scurrent CWIP balance associated with the Qualifying Projects as of August that year, including anypreviously capitalized AFUDC, and the Company’s Qualifying Project plant-in-service investmentbalance as of August, multiplied by a Weighted Average Cost of Capital (“WACC”) of 11.44percent, as adjusted for income taxes. NJNG agrees that the request for recovery of higherincremental debt costs in the development of the WACC originally included in the Petition iswithdrawn and agrees that the WACC for this purpose is based on the Board’s approved rate of6

eturn in the October 3 Order. The June 2011 filing will be limited to the Company’s QualifyingProject plant-in-service investment balance as of August 31, 2011.19. The AIP base rate adjustment will also include depreciation expense for QualifyingProjects placed into service in the12-month period ending August 31 of each year based on acomposite depreciation rate of 2.34%, commencing with the AIP Order. NJNG agrees that it willnot include incremental operation and maintenance expenses in future AIP Annual Filings.20. The Qualifying Projects, and any Board-approved substituted projects, andassociated investment costs included in each Annual Filing will be subject to review by BoardStaff and Rate Counsel prior to the issuance of a Board Order establishing that the Company’sproposed annual base rate adjustment is just and reasonable. Such review will be conducted as acontested case in accordance with the New Jersey Administrative Procedure Act N.J.S.A. 52:14B-1 et seq. At the conclusion of proceedings to review the June 2011 Annual Filing, the reopenedbase rate proceedings in Docket No. GR07110899 will close.Accounting Methodology for AIP21. The Company will separately track Capital Investment Costs, as defined inParagraph 17 herein, for each of the Qualifying Projects by work order in a CWIP account and willrecord a monthly accrual of AFUDC which will be capitalized or included in the CWIP balance asfollows:(a) when NJNG’s total CWIP balance, including CWIP associated with QualifyingProjects, is less than NJNG’s outstanding short-term debt (“S/T debt”) balance, theapplicable AFUDC rate will be equal to NJNG’s monthly cost of S/T debt; or7

(b) when NJNG’s total CWIP balance, including CWIP associated with QualifyingProjects, is greater than NJNG’s outstanding S/T debt, the applicable AFUDC rate willbe equal to NJNG’s overall WACC--7.76% per annum; or(c) when a Qualifying Project is placed into service, but not yet reflected in customer rates,the AFUDC rate will be equal to NJNG’s WACC--7.76% per annum.22. In determining the CWIP base upon which to apply the monthly AFUDC rate, adeduction will be made for any CWIP amount currently approved by the BPU and included inNJNG’s base rates.Rate Design23. NJNG will recover the costs approved in each of its AIP Annual Filings byadjusting, on a volumetric basis, the then-current base rate for all customer classes, allocated in themanner prescribed in the October 3 Order. Accordingly, the effect of the AIP base rateadjustments, consistent with the October 3 Order, will reflect an across-the-board adjustment tocustomer classes that will impact natural gas revenues for each class by the same percentage. Nochange will be requested in any of the AIP filings for the current customer charges approved by theBoard in the October 3 Order.24. The volumes used to determine base volumetric revenues for each customer classand for the AIP-related base rate changes to be coincident with the annual BGSS rate changes, willbe based on the weather-normalized forecast for the upcoming annual BGSS period of Octoberthrough September.8

Rate Impact25. The Company estimates that the total rate increase resulting from the AIP will beapproximately 1 to 1.25 percent in the aggregate to the bills of an average residential heatingcustomer based on the Company’s current rates and anticipated sales volumes.Minimum Filing Requirements (“MFR”)26. The Company will provide the information set forth in the list of MFRs attachedhereto as Appendix B and made a part of this Stipulation in each Annual Filing. The Companywill also provide in each filing a detailed description, along with corresponding plant accounts, ofthe expenditures that are reflected in each blanket project in Appendix A, if any, together withmeasurable parameters, such as line-feet or number of installations, associated with each blanketproject, if any.Quarterly Reporting27. The Parties stipulate that the Company will provide the Board and Rate Counselwith a quarterly report (“Quarterly Report”), reflecting capital expenditures and the job growthresulting from the implementation of each Qualifying Project on a quarterly basis, in the formatattached hereto as Appendix C and made a part of this Stipulation.The Quarterly Report shouldalso include a Gantt Chart showing the status of the projects, tasks completed, percentage ofprojects completed, the actual money spent to date, etc. Additionally, the Company will include inthe Quarterly Report planned/budgeted and actual capital expenditures by budget type for non-Qualifying Projects, other than new business. This reporting will begin 30 (thirty) days after theend of the first calendar quarter following the issuance of a Final Board Order in this proceeding.28. The Company agrees to track the number of incremental contractor or otherpositions associated with the Qualifying Projects and will include that information with each9

Quarterly Report and Annual Filing submitted to the Board Staff and Rate Counsel, in the formatset forth in Appendix C.Calculation of Jobs Created29. The Parties agree that job creation is an integral part of the Economic Stimulus Planunderlying the Qualified Projects. For purposes of reporting jobs associated with the QualifyingProjects, the Company will define a Full-Time Equivalent (“FTE”) job as 1,820 hours per year.Government Funding30. On February 17, 2009, the Federal American Recovery and Reinvestment Act of2009 (“ARRA”)(Pub. L. No. 111-5.) was signed into law by President Barack Obama. Subjectto any restrictions set forth in the ARRA and other applicable law, if the Company gets federalfunds or credits through the ARRA, the Company agrees to utilize that money to offset theQualifying Projects’ costs. If funding or credits from the ARRA or any subsequent state orfederal action become available to the Company through the State of New Jersey, a County orMunicipality project reimbursement, the Company agrees that any such funds or credits directlyapplicable to work related to the Qualifying Projects will be used to benefit customers byoffsetting the costs for which recovery will be sought to the extent permitted by law.Further Provisions31. This Stipulation represents a mutual balancing of interests, contains interdependentprovisions and, therefore, is intended to be accepted and approved in its entirety. In the event anyparticular aspect of this Stipulation is not accepted and approved in its entirety by the Board, anyParty aggrieved thereby shall not be bound to proceed with this Stipulation and shall have the rightto litigate all issues addressed herein to a conclusion. More particularly, in the event thisStipulation is not adopted in its entirety by the Board in any applicable Order(s), then any Party10

hereto is free to pursue its then available legal remedies with respect to all issues addressed in thisStipulation as though this Stipulation had not been signed.32. It is the intent of the Parties that the provisions hereof be approved by the Boardas being in the public interest. The Parties further agree that they consider the Stipulation to bebinding on them for all purposes herein.33. It is specifically understood and agreed that this Stipulation represents anegotiated agreement and has been made exclusively for the purpose of these proceedings.Except as expressly provided herein, neither NJNG, the Board, its Staff, nor Rate Counsel shallbe deemed to have approved, agreed to, or consented to any principle or methodology underlyingor supposed to underlie any agreement provided herein and, in total or by specific item. ThisStipulation is in no way binding upon them in any other proceeding, except to enforce the termsof this Stipulation..11

Appendix APage 1 of 4NJNG Qualifying Projects 1Morris CountyProject: Hanover Line ReplacementEstimated Cost: $21.0 millionDescription: Replacement of existing 8 miles of 8” steel transmission main, vintage 1960’s,with 12” steel main. The line delivers gas from a Texas Eastern (TE) Gate Station, and is amajor supply to our Northern Division in Morris County. Capacity improvement will beobtained by installing a 12” main operating at higher pressures. The main runs through veryrough terrain from the TE Gate Station at Columbia Turnpike & Route 24 in Hanover Township,northwest along Park Avenue, Cedar Knolls Road, Boulevard Road, Malapardis Road to Route10, then continues along Route 10 terminating at Park Avenue - Denville Station.Estimated Start Date: Construction Mid-2010 (Design Mid-2009)Estimated Complete Date: Mid-2011Estimated FTE Impact = 17Project: Thatcher Line ReplacementEstimated Cost: $5.7 millionDescription: Replacement of approximately 4 miles of 8” steel main with 12” steel main. Thismain is a primary system of the Northern Division distribution system in Morris County. Themain begins at the Rockaway / Dover Township border and continues west along Route 46,including various roads through Dover. The main continues northwest into Wharton Borough,running along a railroad right-of-way ending at Main Street in Wharton.Estimated Start Date: Construction Late-2010 (Design Late-2009)Estimated Complete Date: Mid-2011Estimated FTE Impact = 8.5Project: Flanders System ReinforcementEstimated Cost: $1.3 millionDescription: Installation of approximately 2 miles of 8” plastic distribution main for systemreliability in Mount Olive Township, Morris County. This distribution system is located in themost western portion of the Northern Division Morris County. The proposed route begins atFlanders Road, east of Marilyn Terrace and continues west along Flanders Road to Mt. OliveRoad. The main then continues north along Route 46 ending at Netcong Road, Mount OliveTownship.Estimated Start Date: Construction Mid-2010Estimated Complete Date: Late-2010Estimated FTE Impact = 41 The FTEs shown here were calculated by dividing the estimated hours for each project by 1820 and rounding.

Appendix APage 2 of 4Monmouth CountyProject: Franklin Trunk Line ReplacementEstimated Cost: $6.5 millionDescription: Replacement of 10” steel main, vintage 1940’s, with 16” steel main. The mainruns along various roads and right-of-way from Eatontown to Long Branch, Monmouth County,and is approximately 3.5 miles in length.Estimated Start Date: Construction early-2010, pending easement acquisitions.Estimated Complete Date: Mid-2011Estimated FTE Impact = 6Project: Route 36 Pump System ReinforcementEstimated Cost: $1.3 millionDescription: Replacement of approximately 1 mile of 8” bare steel distribution main, vintage1930’s, with a 12” steel main. The system is the primary backbone of the Bayshore distributionsystem in Monmouth County. This main runs along Route 36, from Laurel Avenue in HazletTownship, east to Main Street in Middletown.Estimated Start Date: Construction Late-2010 (Design Early-2010)Estimated Complete Date: Early-2011Estimated FTE Impact = 2Project: Western Freehold Regulator StationEstimated Cost: $1.2 millionDescription: Installation of a new regulator station for supply and reliability to the distributionsystem of western Freehold Township, Monmouth County, due to continued growth in the area.The Station is being planned in the vicinity of Route 527 & Route 537, pending land andeasement acquisition.Estimated Start Date: Construction Late-2009 (Design Mid-2009)Estimated Complete Date: Mid-2010Estimated FTE Impact = 2Project: Northern Howell System Reinforcement (Adelphia-Farmingdale)Estimated Cost: $1.0 millionDescription: Replacement of approximately 2.8 miles of 3” bare steel distribution main, vintage1930’s, with a 6” plastic main. The main is a primary feed of the northern Howell distributionsystem. The Project route runs, in segments, along Route 547 (Adelphia-Farmingdale Road)from Halls Mills Road, Freehold Township, and east to Colts Neck Road, Farmingdale.Estimated Start Date: Construction Late-2009 (Design Mid-2009)Estimated Complete Date: Early-2010Estimated FTE Impact = 3

Appendix APage 3 of 4Ocean CountyProject: Toms River LoopEstimated Cost: $16.1 millionDescription: Installation of approximately 6.5 miles of 24” steel transmission main inManchester & Toms River Townships, Ocean County. This main will provide a secondary feedfor system reliability to southern Ocean County that is currently reliant on a single 12” steelmain. The route runs along Route 70, starting at Route 527 continuing southwest to a right-ofwayrunning parallel to Route 37 and ending at the Toms River Station.Estimated Start Date: Construction Mid-2010 (Design Mid-2009)Estimated Complete Date: Mid-2011Estimated FTE Impact = 16.5Project: Ocean County - Backbone System ExpansionEstimated Cost: $6.5 millionWhiting/Manchester Township Project Description: Installation of approximately 3.5 milesof 12” steel main and 2.25 miles of 8” plastic distribution main in the Whiting area ofManchester Township, Ocean County. The first main segment runs along Route 530 fromSchoolhouse Road to Township Line Road. The next segment continues along Route 614 (LaceyRoad) from route 530 to Schoolhouse Road. The final segment then continues along Lake Roadfrom Route 530 and loops the Roosevelt City Development along Coolidge Avenue to Route539, and back to Route 530.Egg Harbor Township Project Description: Installation of approximately 3 miles of 8” plasticdistribution main. This main will provide reliable gas service to the southern most portions ofOcean County. The main will run along Route 9, from Mathistown Road, Little Egg HarborTownship, Ocean County, south to Bass River Township, Burlington CountyStafford Township Project Description: Installation of approximately 4,500 feet of 8” plasticdistribution main in Stafford Township. The main will run parallel along Route 72 providing gasservice to portions of Stafford Township west of the Garden State Parkway.Estimated Start Date: Construction Mid - 2009Estimated Complete Date: Late-2009 to Mid-2010Estimated FTE Impact = 12Project: Route 35, Bay Head ReplacementEstimated Cost: $3.0 millionDescription: Replacement of approximately 3.5 miles of 8” bare steel distribution main, vintage1930’s, with a 12” steel main. The main is the primary system of the Point Pleasant - Seasidedistribution system, and is being replaced prior to the repaving / reconstruction of Route 35 bythe NJDOT. The main runs along Route 35 from Johnson Street, Bay Head and continues Southto Bay Lane, South Mantoloking Beach (Brick Twp), Ocean County.Estimated Start Date: Construction Late-2009 (Design Mid-2009)Estimated Complete Date: Mid-2010Estimated FTE Impact = 5

Appendix APage 4 of 4Project: Lakehurst System ReinforcementEstimated Cost: $2.3 millionDescription: Installation of approximately 1.25 miles of 16” steel main to reinforce theLakehurst-Whiting distribution system and improve system reliability in the area. The main runsalong Route 70 from Route 547 west to the Lakehurst Circle, Lakehurst, Ocean County.Estimated Start Date: Construction Late-2010 (Design Early-2010)Estimated Complete Date: Early 2011Estimated FTE Impact = 2Project: Jackson Regulator StationEstimated Cost: $1.8 millionDescription: Installation of a new regulator station for supply and reliability to the distributionsystem of Jackson Township, Ocean County as a result of continued growth in the westernportion of Monmouth County. The Station is being planned in the vicinity of Route 526 & Route527, pending land and easement acquisition.Estimated Start Date: Construction Early-2010 (Design Late-2009)Estimated Complete Date: Mid-2010Estimated FTE Impact = 2Project: Long Beach Island System ReinforcementEstimated Cost: $1.7 millionDescription: Installation of approximately 2.2 miles of 12” steel main to reinforce systemreliability of Long Beach Island. Existing inlet pressure to the single feed regulator stationserving this area requires pressure improvement. The main route runs along Hilliard Boulevardfrom Route 9 to Route 180, Stafford Township, Ocean County.Estimated Start Date: Construction Late-2009 (Design Mid-2009)Estimated Complete Date: Mid-2010Estimated FTE Impact = 3Project: Lakewood Regulator Station ReplacementEstimated Cost: $1.5 millionDescription: Replacement of the existing Regulator Station located in a residential area ofLakewood Township, Ocean County to insure system integrity and reliability. The Station isbeing planned in the vicinity of Hope Chapel Road or Clearstream Road, pending land andeasement acquisition.Estimated Start Date: Construction Late-2010 (Design Late-2009)Estimated Complete Date: Mid-2011Estimated FTE Impact = 2Total Estimated FTE Impact = 85

APPENDIX BMINIMUM FILING REQUIREMENTS1. The Company’s income statement for the most recent 12 month period, as filedwith the New Jersey Board of Public Utilities (“BPU”).2. The Company’s balance sheet for the most recent 12 month period, as filed withthe BPU.3. The Company’s overall capital budget broken down by major categories,including distribution and incremental capital expenditures for the QualifyingProjects, both budgeted and actual amounts.4. For each Qualifying Project or proposed new project:a. The original project summary for each Qualifying Project;b. Capital expenditures incurred to date;5. Anticipated project timeline with updates and expected changes.6. A spending schedule detailing the Qualifying Projects and Non-QualifyingProjects to date as compared to the Company’s original approved capital spendingplans.7. A summary of expenditures for each of the Qualifying Projects that identify eachexpenditure from project inception through the end of the current quarter.8. A calculation of the proposed rate adjustment based on details related toQualifying Projects included in Plant in Service.a. A calculation of the associated depreciation expense, based on thoseprojects closed to Plant in Service during the period.9. A list of FTE equivalent jobs created and their duration associated with eachQualifying Project.10. A list of any and all funds or credits received from the United States government,the State of New Jersey, a county or a municipality, for work related to any of theQualifying Projects, such as relocation, reimbursement or stimulus money.a. An explanation of the financial treatment associated with the receipt of thegovernment funds or credits.11. A revenue requirement calculation showing the actual capital expenditures for theperiod ending August 31 for the year in which the filing is made, as well as supportingcalculations.12. Actual revenues, by month, collected from ratepayers pursuant to the tariff(s).

New Jersey Natural GasAPPENDIX CQuarterly Report on Capital Expenditures and Job Creation Related to Qualifying ProjectsTraditional BudgetBudgeted Actual Budgeted ActualTasks Quantity Percent of Total Percent of Project Total Jobs Jobs Spending Spending Spending SpendingEstimated Completed Completed Quantity/Tasks Estimated Actual Cost Cost Completion To Be Created For The For The For The For TheProposed Infrastructure Project Project Type Quantity Major Tasks To Date To Date Completed To Date Cost To Date To Date Date Created To Date Budget Year Budget Year Quarter Quarter(a) (b) (c)* (d)* (e) (f) (g) (h) (i) (j) (k) (l) (m) (n)* (o)* (p)* (q)*Notes: 1. For column c & d-If the project cannot be quantified with numbers then it should be broken down into major tasks to be completed.e.g. desgn phase, material procurement, permit gathering, phases of construction etc.2. For column N & O the amounts includes only normal spending for the budget year and do not include any spending associated with the qualitified projects inExhibit A.3. See Attached Gantt Charts (or equivalent) for each project

The Evolution and Emergence ofElectric Choice in New JerseyNew Jersey State Bar AssociationPublic Utility Law SectionContinuing Legal Education ProgramApril 26, 2011Jay L. Kooper, Esq.Director of Regulatory AffairsHess CorporationNew Jersey State Bar Association, Public Utility Law Section CLE, April 26, 20111

History of Electric Restructuring in New Jersey• “The Regulated Monopoly” (Early 1900s To 1990s)• Electric Industry in New Jersey comprised of vertically-integrated electricpublic utility companies regulated by the New Jersey Board of PublicUtilities (“BPU”).○ Each company produced and delivered power through ownership of: (1)generation; (2) transmission and distribution; and (3) customer servicefacilities (e.g., billing and metering).○ Each company operated as a regulated monopoly over a geographicallydefinedservice territory.○ Rates each company could charge for their bundled services were set by theBPU and billed to customers at a single price.■ Rates were required to reflect a just and reasonable return on a public utilitycompany’s prudently invested capital in providing the bundled electric service(FPC v. Hope Natural Gas, 320 U.S. 591 (1944)).■ Rates were recoverable from each company’s ratepayers, known collectively asthe company’s “rate base”.New Jersey State Bar Association, Public Utility Law Section CLE, April 26, 20112

History of Electric Restructuring in New Jersey• The Shift To The Competitive Model (1990s)• Starting in the 1970s, electric rates increased dramatically.○ Power production costs were high due to high-cost public utility company investments.■ Expensive new electric generation (e.g., nuclear).■ Expensive power purchase agreements with Non-Utility Generators (“NUGs”) under thePublic Utility Regulatory Policies Act of 1978 (16 U.S.C.A. §§ 2601-2645) (“PURPA”).• In 1992, Congress enacts the Energy Policy Act (42 U.S.C.A. §§ 13201-556),which supported competition and choice in the electric industry.■ Paved the way for the Federal Energy Regulatory Commission (“FERC”) to establish rules in1995 establishing competitive wholesale power markets.• 1995 - 1998 New Jersey takes first steps towards establishing electric choice.○ BPU orders NJ’s four electric utilities to file (1) restructuring plans; (2) rate unbundlingplans; and (3) stranded cost calculation plans, all required to effect transition to retailelectric choice.■ BPU reviews restructuring plans and transfers consideration of rate unbundling and strandedcost recovery plans to the Office of Administrative Law (“OAL”).• 1998 – Emergence of a new bill in the New Jersey Legislature to restructure thestate’s electric industry.New Jersey State Bar Association, Public Utility Law Section CLE, April 26, 20113

The Electric Discount and Energy Competition Act• The Electric Discount and Energy Competition Act of 1999 (“EDECA”)○ Enacted on February 9, 1999 as P.L. 1999, c. 23 (N.J.S.A. 48:3-49 to -98).• Legislative Findings and Declarations (N.J.S.A. 48:3-50(a))○ Lower the cost of energy and improve the quality and choices of service.○ Place greater reliance on competitive markets to deliver energy to consumers ingreater variety and lower cost than traditional bundled electric service.○ Maintain traditional regulatory authority over non-competitive aspects of the electricindustry (i.e., delivery of electricity over distribution system).○ Ensure that rates from non-competitive electric utility services do not subsidize theprovision of competitive services by electric utilities.○ Provide for a smooth transition from a regulated to a competitive power supplymarketplace.• Legislative Determinations (N.J.S.A. 48:3-50(c))○ Authorize the BPU to permit competition in the electric generation marketplace.○ Provide for regulation of new market entrants in areas of safe, adequate and properservice and consumer protection.○ Relieve electric utilities from rate regulation in provision of competitive services.New Jersey State Bar Association, Public Utility Law Section CLE, April 26, 20114

The Electric Discount and Energy Competition Act• Provision of Retail Electric Choice of Electric Power Suppliers (N.J.S.A. 48:3-53)○ Electric utilities must implement retail choice of electric power suppliers for itscustomers in 100% of their franchise areas.○ BPU has the authority to require each electric utility to submit a restructuring plan toimplement retail choice.• BPU Shall Not Regulate Pricing of Competitive Services (N.J.S.A. 48:3-56)○ BPU shall not regulate, fix or prescribe the rates, tolls, charges, rate structures, ratebase or cost of service of competitive services.• Electric Utilities To Provide Basic Generation Service (N.J.S.A. 48:3-57)○ Requires each public utility to provide Basic Generation Service (“BGS”) for customerswho have not chosen a competitive electric power supplier.■ BGS = Default Service/Service of Last Resort.■ BGS must be procured at prices consistent with market conditions.■ BPU has option to determine it is no longer necessary for the electric utilities to provide BGS.○ Charges assessed by the electric utilities to their BGS customers shall be:■ Regulated by the BPU.■ Based on the reasonable and prudent cost to the utilities in providing the BGS service.New Jersey State Bar Association, Public Utility Law Section CLE, April 26, 20115

The Electric Discount and Energy Competition Act• Electric Power Supplier Licensing (N.J.S.A. 48:3-78)○ Competitive electric suppliers must obtain a license from the BPU to provide retailelectric service to customers in New Jersey.○ In order to qualify for an electric license, an applicant must:■ Demonstrate financial integrity and technical and operational capabilities.■ Post a surety bond and maintain an in-state office.■ Adhere to standards of conduct in marketing to and serving customers.○ Licenses are renewed annually.• BPU Powers – Consumer Protection, Enforcement, and Disclosures○ BPU has investigative powers over competitive electric suppliers (N.J.S.A. 48:3-80).○ BPU can revoke, suspend or refuse to renew an electric supplier license or imposeadditional remedies or penalties (N.J.S.A. 48:3-81 to -83).○ BPU has power to establish consumer protection standards covering contracts,marketing, advertising, billing, collection and credit requirements (N.J.S.A. 48:3-85).○ BPU has power to prohibit and penalize competitive suppliers for “slamming” (N.J.S.A.48:3-86).○ BPU has power to require competitive electric suppliers to disclose the environmentalcharacteristics of the electricity purchased by their customers. (N.J.S.A. 48:3-87).New Jersey State Bar Association, Public Utility Law Section CLE, April 26, 20116

I/M/O Public Serv. Elec. & Gas Co.’s Rate Unbundling• BPU and OAL proceedings on electric public utility restructuring, rateunbundling, stranded cost plans continued even with the passage ofEDECA.○ Resulted in a settlement between PSE&G and stakeholders approved by theBPU in a decision issued in August 1999.○ Some non-settling parties challenged this BPU decision and a separatedecision authorizing PSE&G’s recovery of stranded costs incurred from thetransition to a competitive market structure.• I/M/O Public Serv. Elec. & Gas Co.’s Rate Unbundling, 330 N.J. Super.65 (App. Div. 2000), aff’d 167 N.J. 377 (2001).○ Appellate Division and Supreme Court of New Jersey hold that the BPU’srestructuring, rate unbundling and stranded cost decisions are constitutional:■ Do not violate the Contracts Clauses of the U.S. Constitution (art. I, §10) and NewJersey Constitution (art. IV, §7, 3).■ Do not violate Procedural Due Process protections of the U.S. Constitution(amend. 14) and New Jersey Constitution (art. I, 1).New Jersey State Bar Association, Public Utility Law Section CLE, April 26, 20117

BPU Implementation of Retail Electric Choice:1999-2011• Key Implementation Challenge = Maintaining a Level Playing Field○ In a competitive retail market, competitive electric suppliers bear the risk of:■ Tailoring a product that is specific to the customer’s needs (e.g., price, risktolerance, environmental attributes).■ Ensuring that the product is both innovative and value-added (e.g., renewableenergy-based, demand response, carbon-reduction, affinity-based offerings likeairline miles, etc.).■ Procuring electric power to service their customers for a fixed term whilenavigating the uncertainty as to the future direction of power prices. Compare: Electric utilities pass through costs to procure electricity for providing BGS toratepayers, and therefore do not bear the same risks as competitors when procuringpower.○ The keys to maintaining a level playing field between the electric utilities andcompetitive electric suppliers in providing commodity electric service:■ Competitive Service (Competitive Electric Suppliers) vs. BGS (electric utilities).■ Market-Reflective BGS Pricing.■ Leveling Mechanisms For Cost Recovery Disparities Between Electric Utilitiesand Competitive Suppliers (Retail Margin, Unbundling, Purchase of Receivables).New Jersey State Bar Association, Public Utility Law Section CLE, April 26, 20118

BPU Implementation of Retail Electric Choice:1999-2011• The Structure of Basic Generation Service Procurement○ The BPU first established the BGS procurement framework in 2001.○ BPU selected a “descending-clock auction” format for the four electric publicutilities’ procurement of power for their BGS customers.■ Ensures power procured by the utilities is the product of a competitive processamong companies vying to supply power to the utilities for their BGS service.○ Since 2001, the BPU has established an annual BGS proceeding to reviewstructure and make adjustments. Perennial questions include:■ Should customers who remain on BGS receive market-reflective (i.e., hourly)pricing?■ For customers on BGS who are not subject to market-reflective pricing, whatshould the BGS price be based on?■ What Leveling Mechanisms are necessary to maintain viability of the competitivemarket and ensure robust choice? Which mechanisms are obsolete? Which onesneed adjustment?New Jersey State Bar Association, Public Utility Law Section CLE, April 26, 20119

BPU Implementation of Retail Electric Choice:1999-2011• BGS – Separation of the BGS Procurement Classes○ In 2002, the BPU maintained the basic descending-clock auction design ofthe BGS structure while initiating separate auctions based on customer size:■ BGS – Commercial & Industrial Energy Pricing (“CIEP”): BGS is procured by theutilities as a market-reflective hourly-priced default service.■ BGS – Fixed Price (“FP”): BGS is procured by the utilities as a blend of 3-yearfixed-price (i.e., non-market reflective) contracts with BGS suppliers. Under BGS-FP, each year the utilities procure one-third of their service requirementsthrough fixed-price contracts for a three-year term. BGS-FP price at any given time is a portfolio of rolling 3-year contracts (i.e., a blend ofone-year, two-year, and three-year fixed-price contracts).• BGS – Size of the BGS-CIEP Customer Class○ 2002 – Customers with peak demands of 1,500 kW and higher.○ 2004 – CIEP Threshold lowered to peak demand of 1,250 kW and higher.○ 2007 – CIEP Threshold lowered to peak demand of 1,000 kW and higher.○ 2010 – CIEP Threshold lowered to peak demand of 750 kW and higher.○ Compare: Neighboring States have more aggressively lowered their CIEPthresholds to a range between 100 and 500 kW (NY, PA, OH, IL).New Jersey State Bar Association, Public Utility Law Section CLE, April 26, 201110

BPU Implementation of Retail Electric Choice:1999-2011• BGS – Composition of BGS-FP Portfolio○ Since 2002, the BPU has kept the composition of the BGS-FP portfolio at therolling 3-year year contract structure.○ Compare: Neighboring States have installed more market-reflective fixedpriceportfolios for customers below their CIEP thresholds to portfolios of 6-month to 2-year fixed price contracts (NY, PA, DE, MD, DC, CT, MA, OH andIL).• BGS – Retail Margin○ Established by the BPU in 2002 as a market leveling mechanism.■ Proxy to reflect the additional costs competitive electric suppliers incur inproviding competitive products (marketing costs, supply risks, administrative andIT costs) that electric utilities recover from their rate base in providing BGS.■ Set at 5 mils/kWh applicable to customers with peak demands of 750 kW andhigher.○ 2010 – BPU eliminates the Retail Margin.■ Labels the Retail Margin as akin to a tax and unnecessary given more robustcustomer switching to competitive suppliers.New Jersey State Bar Association, Public Utility Law Section CLE, April 26, 201111

Implementation of Retail Electric Choice:The Challenges Ahead• The Structure Underlying The Retail Market Matters○ BGS Pricing that reflects the market price sends correct signals to customers andenables competitive suppliers to innovate and tailor their products to customer needs.○ BGS Pricing that obscures the market price signal creates a less efficient structureprone to “boom-bust” cycles for competitive suppliers:■ Where BGS-FP price is lower than the market price, competitive suppliers are not able toenter a market and viably compete.■ Where BGS-FP price is higher than the market price, competitive suppliers can enter andcompete until the structure flips again.■ 2011 – BGS-FP price is higher than the market price, robust offers from competitive suppliers,but how long will this last?○ BPU must weigh the equities of moving to accurate market-reflective pricing andexpanding structure that enables electric choice vs. protecting smaller customers (e.g.,residential) from volatility where market not yet mature.• Role of the BPU is Critical Going Forward○ Expanding BGS-CIEP or keeping it in place.○ Accounting for cost recovery discrepancies between electric utilities and competitors inthe absence of the Retail Margin. BPU could go in a number of different directions:■ Establishing viable Purchase of Receivables (“POR”) programs.■ Providing Customer Education of Electric Choice and Support For Customers Who Switch.■ Unbundling to completely level the playing field between electric utilities and competitors.■ Consider exit of the electric utility from the BGS provider function (The “Texas Model”).New Jersey State Bar Association, Public Utility Law Section CLE, April 26, 201112

Conclusion – Lessons Learned• The transition of New Jersey’s electric industry from the century-old“regulated monopoly” structure to the competitive market designproviding for choice has been a complex legislative and regulatoryundertaking spanning 16 years with much more left ahead.• In managing this transition, the BPU has sought to balance the need toshift to a market design that enables robust choice, a liquid andsustainable market, and ratepayers’ best opportunity for lower energyprices.• In constructing and maintaining a robust and liquid retail electric market inwhich customers have ample choice, the structure of BGS as a defaultservice matters because it can ensure optimal reflection or obstruction ofmarket price signals.• For practitioners representing competitive electric suppliers, utilities, orbusinesses being served by competitive suppliers, a working knowledgeof this history is essential for effective representation.New Jersey State Bar Association, Public Utility Law Section CLE, April 26, 201113

PULS SPRING CLE PROGRAM – APRIL 26, 2011 AT THE LAW CENTERElectric Capacity “Stimulus” – The Long-term Capacity Agreement Pilot ProgramStatute -- Robert Chilton, Gabel Associates1. The LCAPP StatuteLegislative findings; new definitions; brief operative section; expressauthorization for suspension; restriction on SBC charges2. The LCAPP Proceeding3. The Issues________________________________________________________________________1. The LCAPP Statute (P.L. 2011, c. 9)Amends and supplements the Electric Discount and Energy Competition Act(“EDECA”), and establishing a long-term capacity agreement pilot program(“LCAPP”) to promote the construction of qualified electric generation facilities.1.1. Section 1, Legislative Findings-- In 2007, PJM implemented the reliability pricing model forprocuring capacity in the wholesale electricity market. [BPUestimate that RPM costs ratepayers an additional $1 billion/yearremoved from final version of statute.]-- The RPM “has resulted in significant capacity additions (i.e., newdemand response resources, energy efficiency resources, reversalsof generation unit retirements, upgrades of existing units, andcertain new peaking facilities), but has not resulted in “largeadditions of peaking facilities or any additions of intermediate orbase load resources . . . .”-- RPM could be appropriately improved through structural changes,but FERC has denied similar changes, and future implementationof change is uncertain at this time (more on this later).-- There is a “lack of incentives” for new capacity under RPM.-- Lack of generation/capacity has resulted in increased reliance oncoal, and may result in job loss, upgrade of transmission west ofNJ to import out-of-state power. By encouraging combined cyclegeneration, LCAPP will result in environmental benefits.

-- Substantial risk of retirement of coal units in PJM, and of NJ instategeneration fleet is aging.-- Incenting new generation (not necessarily in-state) willreduce/stabilize power prices, support economic development,create jobs.1.2. Section 2. Adds the following definitions to EDECA:-- Base load electric power generation facility. Facility intended tooperate at greater than 50 percent capacity factor, including but notlimited to combined cycle and CHP.-- Base residual auction. Conducted by PJM as part of the RPM, tosecure electrical capacity three years prior to the start of thedelivery year.-- Combined cycle power facility. High efficiency generation facilitythat combines two or more thermodynamic cycles (electricity fromfuel combustion; use of waste heat to generate steam that producesadditional electric power).-- Delivery year. 12-month period from June 1 through May 31-- Eligible generator. Developer of a base load or mid-meritgeneration facility, including but not limited to on-site generation,that qualifies as a capacity resource under PJM criteria and thatcommences construction after effective date of the bill. Does nothave to be any particular size, does not have to be located in NJ;contra earlier version of the bill, it can be a combustion turbinedirectly interconnected with the utilities’ T&D system.-- FERC. Federal Energy Regulatory Commission.-- Incremental auction. Conducted by PJM as part of the RPM priorto the start of the Delivery Year, to secure electrical capacity asnecessary to satisfy capacity requirements for that delivery year,that is not otherwise provided for in the base residual auction.-- Locational deliverability area (“LDA”). Zones in the PJM regionused to evaluate transmission constraints, reliability issues.-- Long-term capacity agreement pilot program (“LCAPP”). BPUestablishedpilot program, with participation by eligible generatorsto seek offers for financially settled standard offer capacityagreements (“SOCAs”). Contra prior versions of the bill the2

LCAPP is not required to extend 15 years, plants do not have to bein-state, gas-fired, combined cycle plants of at least 100 MW.-- Mid-merit electric power generation facility. Generation facilitythat operates at a capacity factor between base load (>50%) andpeaker (not defined).-- PJM. The FERC-approved Regional Transmission Organizationthat manages the high-voltage grid serving the 13-state PJMregion, operates the regional competitive wholesale market, andmanages the regional transmission planning process.-- RPM. PJM’s capacity-market model that secures capacity onbehalf of electric load serving entities (“LSEs”) to satisfy loadobligations not satisfied by LSEs’ generation or bilateral contracts.-- Resource clearing price (“RCP”). Clearing price established by thebase residual auction or incremental auction conducted by PJM.-- Standard offer capacity agreement (“SOCA”). Approved by Boardorder, providing for eligible generators to receive payments fromelectric public utilities for a defined amount of electric capacity forup to 15 years, such payments “to be a fully non-bypassablecharge” and the order of approval to be irrevocable.-- Standard offer capacity price (“SOCP”). Price fixed for the termof the SOCA, to be received by the eligible generator.1.3. Section 3. “Operative” Section of the Statute-- Establishes a schedule for the Board to conduct a proceeding toestablish the LCAPP-- Proceeding to be completed within 60 days after theeffective date of January 28, 2011-- Resulting SOCAs should be awarded and executed no laterthan 30 days after approval of the form of the SOCA.-- LCAPP shall require the selected eligible generators toparticipate and be accepted as capacity resources in thePJM base residual auction.-- Electric utilities are required to retain an agent to administer theLCAPP; the agent is responsible for:3

-- pre-qualifying eligible generators through showing ofenvironmental, economic, and community benefits andcertainty of completion;-- recommending winning eligible generators based on,among other things, net benefits to ratepayers.-- The Board Order establishing the program (LCAPP) must providefor the following:-- 2,000 MWs of SOCAs, no single generator providing morethan 700 MW;-- participating eligible generators must offer MWs, at a priceper MW-day and a term not to exceed 15 years;-- selected eligible generators “shall participate in and clearthe annual base residual auction conducted by PJM as partof its [RPM] for each delivery year of the entire term of theagreement.”“Guaranteed Price Mechanism” >>-- participating eligible generators get paid by theutilities for the difference between the contractprice and the market clearing price in the eventthe contract price is above the market clearingprice, and-- participating eligible generators pay the utilities“refunds” of the price difference if the bid priceis below the market clearing price;-- establish a method for evaluating/comparing generators’offers, weighting the timing of each offer-- Full recovery of all costs associated with the SOCAs and the costof the agent to be recovered by New Jersey electric utilitiesthrough a non-bypassable, irrevocable charge.-- Each Board-approved SOCA shall be irrevocable, no governmentalentity shall have the authority to rescind, alter, or repeal theamount of LCAPP costs1.4. Section 4. Authorization to Suspend4

-- Upon legal challenge, Board may suspend applicability ofchallenged provision(s) and attempt to implement remainingprovisions.1.5. Section 5. SBC Exemption-- Gas public utilities shall not impose the SBC or similar charge onnatural gas delivery service or commodity that is used to generateelectricity sold for resale.2. The LCAPP Proceeding3. Issues-- Summarized in Board Order dated March 29, 2011 (I/M/O the Long-TermCapacity Agreement Pilot Program, Dkt. No. EO11010026)-- Aggressive Schedule – February 10, 2011 through March 30, 2011.-- The LCAPP Agent was selected and established a form SOCA towhich bidders were required to conform.-- Information, answers to bidders’ questions provided through aBPU-related website.-- By March 15, 2011, the Agent had selected its recommendedbidders -- Newark Energy Center (Hess Newark, LLC); OldBridge Clean Energy Center (New Jersey Power DevelopmentLLC); Woodbridge Energy Center (CPV Shore LLC).-- What happens if the winning bidder does not clear in the base residualauction (the SOCA continues)? Does the form of the final proposedSOCA satisfy the LCAPP statute (in the event the qualified generationdoes not clear)? The Board/LCAPP Agent Final Proposed Form SOCA(dated March 1, 2011) is available on the Board’s website.-- What about the “new generation” requirement? Note widespreaddisqualification of bidders tied to existing generation (does qualifiedgeneration have to be new, stand-alone, generation?).-- What are the benefits of the LCAPP – lower capacity prices? employmentbenefits? environmental benefits (new plants on brownfield sites)?-- How sensitive are the benefits determined by the Agent toprojections/assumptions about market prices? Will ratepayers benefit by,or pay for, for the new generation?5

-- Was the Agent’s selection process/evaluation of benefits sufficientlytransparent (due process issues)?-- Are the selected bidders too close to each other geographically?-- EDC cost recovery issues.-- Long term vs. short term – does the LCAPP reduce/eliminate investorincentive to build “unsubsidized” capacity, encourage the prematureretirement of existing plants and higher prices in the long run?-- Does the LCAPP statute/process cause an impermissible intrusion ofotherwise uneconomic generation into the wholesale competitive market?-- Impact on clean energy programs (elimination of the SBC from gas-toelectricsales)?-- Two significant Federal Actions that might undermine the LCAPPstatute/process-- FERC Proceedings Seeking To Modify Aspects Of The RPMPJM Power Providers Group v. PJM Interconnection, L.L.C.,FERC Dkt. No. EL11-20-000; PJM Interconnection, L.L.C., FERCDkt. No. ER11-2875-000In these related proceedings, PJM Power Providers Group (“P3”),and PJM itself, have argued that there are fatal flaws in the “buyermarket-powermitigation provisions” of PJM’s Open AccessTransmission Tariff, permitting the type of uncompetitively lowoffers encouraged by the LCAPP.Notwithstanding what P3 claims is the existence of a surplus ofgeneration in New Jersey and evidence of decreasing demand,initiatives like the LCAPP, supported by the existing PJM tariff,will artificially suppress capacity clearing prices for many yearsinto the future.According to P3, “[i]f prices are suppressed below what wouldoccur in a workably competitive market, society will have thewrong level of investment, coupled with the wrong retirement andconsumption decisions.”Technical issues:• screening for uncompetitive offers (“conduct” screen)• should there be an “impact screen”?6

• re-pricing uncompetitive offers• for how long should an uncompetitively low offer besubject to mitigation?-- Federal District Court Suit – Is The LCAPP Constitutional?PPL Energyplus, LLC, et al. v. Solomon, et al., Civ. Action No.2:11-cv-00745-PGS-ES, District Court of New JerseyGroup of electricity generators and utilities seek declaratory andinjunctive relief barring implementation of the LCAPP statute,claiming that by “provid[ing] certain New Jersey-selected electricgeneration facilities a special guaranteed price for wholesaleelectricity transactions in a market governed by a FERC-approvedtariff,” the law “seeks to impose regulatory policies that NewJersey has not been able to persuade FERC to adopt and that favorin-state generation over out-of-state generation.”Complaint based on Supremacy Clause and the Commerce Clauseof the United States Constitution.Motion to dismiss filed, March 16, 2011.7

PULS SPRING CLE PROGRAM – APRIL 26, 2011 AT THE LAW CENTERApproved Energy Utility Infrastructure Investment and Energy Efficiency ProgramsTracey Thayer, Esq., New Jersey Natural Gas CompanyBackground• Traditional utility ratemakingo Delay in recovering capital investments• Use of CWIP and AFUDCo Prudency reviewso Used and useful standard• Changes in 2009o Deteriorating economic conditionso Declines in employmento Emphasis increasing on energy efficiency, infrastructure reliability andconservationo Legislative and policy developments that changed the focus in NJ and creatednew opportunities• 2007 – Global Warming Response Act N.J.S.A. 26:2C-45 and N.J.S.A.48:3-98.1• Energy Master Plan – early versiono Governor Corzine’s Economic Stimulus Plan of January 13, 2008• Job creation• Enhance business climate and economic prospects• Utilities Response - EE and accelerated infrastructure filings in 2009o Linked to RGGI• Expedited proceedings• Retained at the BPU• Negotiations early on concerning elements in filings• CBA• MFRs• Testimony

o Nexus to base rate case• In re Redi-Flo Corporation, 76 N.J. 21 (1978)• Rate case linkages established in different ways• Re-opening recently concluded cases• Linking to an ongoing proceeding• Including language in settlement that a case would be filedEnergy Efficiency Programs• Types of projectso Linked to NJCEP – complementary, not replacing or duplicatingo Residential and commercialo Statewide similarity soughto Whole-house/business approacho Financing opportunities• Investment levels• Rider Type Recovery methodologiesInfrastructure Programs• Types of projectso Incremental to planned capital budgetso System reliability and infrastructure reinforcement• Looping of distribution systems• Regulator stations• Valve upgrades• Pressure upgrades• Substation Upgradeso Non-revenue producing investmentso Details provided in filing• Discovery propounded and responded• Recovery methodologieso Rider mechanismo Base rate treatment2

• Investment levels• Limited time frames – 12 to 18 months• Follow-up filings for extensions made - pending or approvedo NJNG, SJG, E-Town and PSE&G3

[Fourth Reprint]SENATE, No. 2381STATE OF NEW JERSEY214th LEGISLATUREINTRODUCED OCTOBER 18, 2010Sponsored by:Senator BOB SMITHDistrict 17 (Middlesex and Somerset)Senator CHRISTOPHER "KIP" BATEMANDistrict 16 (Morris and Somerset)Assemblyman UPENDRA J. CHIVUKULADistrict 17 (Middlesex and Somerset)Assemblyman JOHN F. MCKEONDistrict 27 (Essex)Assemblyman JON M. BRAMNICKDistrict 21 (Essex, Morris, Somerset and Union)Assemblyman LOUIS D. GREENWALDDistrict 6 (Camden)Co-Sponsored by:Assemblymen Giblin, Amodeo, Wisniewski, Conners and AssemblywomanRodriguezSYNOPSISEstablishes a long-term capacity agreement pilot program to promoteconstruction of qualified electric generation facilities.CURRENT VERSION OF TEXTAs amended by the General Assembly on January 10, 2011.(Sponsorship Updated As Of: 1/11/2011)

S2381 [4R] B. SMITH, BATEMAN22 2[in-State]131capacity] 1State] [in] 2[in] 2 1 generation] [were] 21 AN ACT establishing a long-term capacity agreement pilot program2 to promote construction of qualifiedelectric3 generation facilities, amending and supplementing P.L.1999,4 c.23.56 BE IT ENACTED by the Senate and General Assembly of the State7 of New Jersey:89 1. The Legislature finds and declares:10 a. In 2007, PJM Interconnection, L.L.C., the firm that manages11 the regional electric power grid, changed the method of procuring12 capacity in the wholesale electricity market with theimplementation of the reliability pricing model [which, as14 estimated by the Board of Public Utilities, costs New Jersey15 ratepayers an additional $1 billion per year for ;16 b. The PJM reliability pricing model [created additional17 barriers to entry for new, efficient generators, by imposing a one to18 three year term requirement for contracts entered into by new19 entrants. The maximum three-year term is insufficient to support20 the project financing necessary to develop new, efficient generation21 within the sought to create enhancements to the previously22 ineffective capacity procurement mechanism which had resulted in23 projected capacity deficiencies in New Jersey and other areas of the24 regional power grid. While the reliability pricing model has25 resulted in significant capacity additions in the form of new demand26 response resources, new energy efficiency resources, reversals of27 generation unit retirements, upgrades of existing generating units2829and certain new peaking facilities available to the region andthe State, the reliability pricing model has not resulted in large30 additions of peaking facilities or any additions of intermediate or31 base load resources available to the region and the State ;32 c. The PJM reliability pricing model [continues to undergo33 structural changes that make it unreliable as an indicator of the true34 cost of capacity and therefore unreliable as an incentive for35 developing new could, through structural changes,36 provide necessary incentives, such as the expansion of the “New37 Entry Price Adjustment” mechanism for the construction of new38 capacity, including new intermediate and base load plants, by39 allowing new resources to qualify and receive a guaranteed capacity40 price for a longer period of time. However, the implementation of41 similar structural changes was previously denied by42 FERC and any future implementation is uncertain at this time ;EXPLANATION – Matter enclosed in bold-faced brackets [thus] in the above bill isnot enacted and is intended to be omitted in the law.Matter underlined thus is new matter.Matter enclosed in superscript numerals has been adopted as follows:1 Senate SEN committee amendments adopted November 15, 2010.2 Assembly ATU committee amendments adopted December 13, 2010.3 Assembly floor amendments adopted January 6, 2011.4 Assembly floor amendments adopted January 10, 2011.

12345678910111213141516171819202122S2381 [4R] B. SMITH, BATEMAN3d. To [alleviate the cost burden and barriers to new entrycreated 1 by the address the lack of incentives under PJM] thereliability pricing model, the construction of new, efficient 1[,in-2generation must be fostered by State policy [to avoidState]higher electricity prices, higher congestion, and reliability21that that] [assures ensures sufficient generation isconcerns] 2 22 [constructed] available to the region, and thus the users in theState in a timely and 2 orderly manner ;e. Due to PJM’s lack of authority to order new generation 1 as ameans to mitigate local electrical system reliability concerns andsolve other issues related to the lack of local generation, and sinceonly PJM has the authority to order transmission system upgradesand expansions to mitigate electrical system reliability concernscaused by transmission system overloads or the lack of localgeneration being developed, [New Jersey send] continues to New12 [Jersey's] Jersey is experiencing an electric power capacity2deficit and high power prices that may result in the loss of jobs1and investment 2 [out-of-state 2 due to the necessity for the 1to] 1upgrade of the transmission system to the west of New Jersey toensure a reliable supply of electricity and capacity from generators1 1located outside of New Jersey;f. As a result of a lack of new, efficient in-State] [, electric2 22 2 [generating] [out-of-state] 2 291 i.]23generation facilities, New Jersey has become more24 reliant on coal-fired power plants;25 g. The PJM State of the Market Report for 2009 by the PJM26 Independent Market Monitor states that there are over 11,00027 megawatts (“MW”) of coal-fired units at risk of retirement due to28 their inability to cover their avoided costs;h. [Many of New Jersey’s in-State generating facilities, as a30 result of new emission reduction requirements, will need to have31 installed new emissions control technology or retire them by April32 30, 2015. In one instance, the rule will have a significant impact on33 New Jersey’s in-State fleet of electric generation facilities, as the34 rule imposes nitrogen oxide (“NOx”) emission limits that will likely35 require the retirement of up to 102 combustion turbines,36 representing approximately 2,800 MW, and five older New Jersey37 steam electric generating units, representing approximately 80038 MW, by April 30, 2015;39 New Jersey’s in-State fleet of electric generation facilities404142434445461 [are] is aging, with over 50 percent of these facilities being morethan 30 years old and over 70 percent being more than 20 1 years old;and1 [j.] i. Fostering and incentivizing the development of alimited program 1 for 1 [in-State] new electric generation facilities2 2 12 1 [ , while potential enhancements to the reliability pricing modeland other PJM mechanisms are under ] consideration, will help2 2 1

S2381 [4R] B. SMITH, BATEMAN4123456789101112131415161718192021222324252627282930313233343536373839404142434445464748ensure sufficient capacity to stabilize power prices to assist theState’s economic development22 [by creating] and create21 1 [numerous] opportunities for employment in the energy sectorwhile helping to reduce the cost and volatility of electricity prices inNew Jersey.2. Section 3 of P.L.1999, c.23 (C.48:3-51) is amended to readas follows:3. As used in P.L.1999, c.23 (C.48:3-49 et al.):"Assignee" means a person to which an electric public utility oranother assignee assigns, sells or transfers, other than as security,all or a portion of its right to or interest in bondable transitionproperty. Except as specifically provided in P.L.1999, c.23(C.48:3-49 et al.), an assignee shall not be subject to the publicutility requirements of Title 48 or any rules or regulations adoptedpursuant thereto;“Base load electric power generation facility” means an electricpower generation facility intended to be operated at a greater than250 percent capacity factor including, but not limited to, a combinedcycle power facility and a combined heat and power facility;“Base residual auction” means the auction conducted by PJM, as2part of PJM’s reliability pricing model, three years prior to the start ofthe delivery year to secure electrical capacity as necessary to satisfythe capacity requirements for that delivery year;"Basic gas supply service" means gas supply service that isprovided to any customer that has not chosen an alternative gassupplier, whether or not the customer has received offers as tocompetitive supply options, including, but not limited to, anycustomer that cannot obtain such service for any reason, includingnon-payment for services. Basic gas supply service is not acompetitive service and shall be fully regulated by the board;"Basic generation service" or "BGS" means electric generationservice that is provided, to any customer that has not chosen analternative electric power supplier, whether or not the customer hasreceived offers for competitive supply options, including, but notlimited to, any customer that cannot obtain such service from anelectric power supplier for any reason, including non-payment forservices. Basic generation service is not a competitive service andshall be fully regulated by the board;"Basic generation service provider" or "provider" means aprovider of basic generation service;"Basic generation service transition costs" means the amount bywhich the payments by an electric public utility for the procurementof power for basic generation service and related ancillary andadministrative costs exceeds the net revenues from the basicgeneration service charge established by the board pursuant tosection 9 of P.L.1999, c.23 (C.48:3-57) during the transition period,together with interest on the balance at the board-approved rate, that

S2381 [4R] B. SMITH, BATEMAN5123456789101112131415161718192021222324252627282930313233343536373839404142434445464748is reflected in a deferred balance account approved by the board inan order addressing the electric public utility's unbundled rates,stranded costs, and restructuring filings pursuant to P.L.1999, c.23(C.48:3-49 et al.). Basic generation service transition costs shallinclude, but are not limited to, costs of purchases from the spotmarket, bilateral contracts, contracts with non-utility generators,parting contracts with the purchaser of the electric public utility'sdivested generation assets, short-term advance purchases, andfinancial instruments such as hedging, forward contracts, andoptions. Basic generation service transition costs shall also includethe payments by an electric public utility pursuant to a competitiveprocurement process for basic generation service supply during thetransition period, and costs of any such process used to procure thebasic generation service supply;"Board" means the New Jersey Board of Public Utilities or anysuccessor agency;"Bondable stranded costs" means any stranded costs or basicgeneration service transition costs of an electric public utilityapproved by the board for recovery pursuant to the provisions ofP.L.1999, c.23 (C.48:3-49 et al.), together with, as approved by theboard: (1) the cost of retiring existing debt or equity capital of theelectric public utility, including accrued interest, premium and otherfees, costs and charges relating thereto, with the proceeds of thefinancing of bondable transition property; (2) if requested by anelectric public utility in its application for a bondable stranded costsrate order, federal, State and local tax liabilities associated withstranded costs recovery or basic generation service transition costrecovery or the transfer or financing of such property or both,including taxes, whose recovery period is modified by the effect ofa stranded costs recovery order, a bondable stranded costs rate orderor both; and (3) the costs incurred to issue, service or refinancetransition bonds, including interest, acquisition or redemptionpremium, and other financing costs, whether paid upon issuance orover the life of the transition bonds, including, but not limited to,credit enhancements, service charges, overcollateralization, interestrate cap, swap or collar, yield maintenance, maturity guarantee orother hedging agreements, equity investments, operating costs andother related fees, costs and charges, or to assign, sell or otherwisetransfer bondable transition property;"Bondable stranded costs rate order" means one or moreirrevocable written orders issued by the board pursuant to P.L.1999,c.23 (C.48:3-49 et al.) which determines the amount of bondablestranded costs and the initial amount of transition bond chargesauthorized to be imposed to recover such bondable stranded costs,including the costs to be financed from the proceeds of thetransition bonds, as well as on-going costs associated with servicingand credit enhancing the transition bonds, and provides the electricpublic utility specific authority to issue or cause to be issued,

S2381 [4R] B. SMITH, BATEMAN61234567891011121314151617181920212223242526272829303132333435363738394041424344454647directly or indirectly, transition bonds through a financing entityand related matters as provided in P.L.1999, c.23, which order shallbecome effective immediately upon the written consent of therelated electric public utility to such order as provided in P.L.1999,c.23;"Bondable transition property" means the property consisting ofthe irrevocable right to charge, collect and receive, and be paidfrom collections of, transition bond charges in the amount necessaryto provide for the full recovery of bondable stranded costs whichare determined to be recoverable in a bondable stranded costs rateorder, all rights of the related electric public utility under suchbondable stranded costs rate order including, without limitation, allrights to obtain periodic adjustments of the related transition bondcharges pursuant to subsection b. of section 15 of P.L.1999, c.23(C.48:3-64), and all revenues, collections, payments, money andproceeds arising under, or with respect to, all of the foregoing;"British thermal unit" or "Btu" means the amount of heatrequired to increase the temperature of one pound of water by onedegree Fahrenheit;"Broker" means a duly licensed electric power supplier thatassumes the contractual and legal responsibility for the sale ofelectric generation service, transmission or other services to end-useretail customers, but does not take title to any of the power sold, ora duly licensed gas supplier that assumes the contractual and legalobligation to provide gas supply service to end-use retail customers,but does not take title to the gas;"Buydown" means an arrangement or arrangements involving thebuyer and seller in a given power purchase contract and, in somecases third parties, for consideration to be given by the buyer inorder to effectuate a reduction in the pricing, or the restructuring ofother terms to reduce the overall cost of the power contract, for theremaining succeeding period of the purchased power arrangementor arrangements;"Buyout" means an arrangement or arrangements involving thebuyer and seller in a given power purchase contract and, in somecases third parties, for consideration to be given by the buyer inorder to effectuate a termination of such power purchase contract;"Class I renewable energy" means electric energy produced fromsolar technologies, photovoltaic technologies, wind energy, fuelcells, geothermal technologies, wave or tidal action, and methanegas from landfills or a biomass facility, provided that the biomass iscultivated and harvested in a sustainable manner;"Class II renewable energy" means electric energy produced at aresource recovery facility or hydropower facility, provided thatsuch facility is located where retail competition is permitted andprovided further that the Commissioner of EnvironmentalProtection has determined that such facility meets the highest

S2381 [4R] B. SMITH, BATEMAN7123456789101112131415161718192021222324252627282930313233343536373839404142434445464748environmental standards and minimizes any impacts to theenvironment and local communities;"Co-generation" means the sequential production of electricityand steam or other forms of useful energy used for industrial orcommercial heating and cooling purposes;"Combined cycle power facility" means a generation facilitythat combines two or more thermodynamic cycles, by 2 producingelectric power via the combustion of fuel and then routing theresulting waste heat by-product to a conventional boiler or to a heatrecovery steam generator for use by a steam turbine to produceelectric power, thereby increasing the overall efficiency of thegenerating facility;"Combined heat and power facility" or "co-generation 2facility"means a generation facility which produces electric energy, steam,or other forms of useful energy such as heat, which are used forindustrial or commercial heating or cooling purposes. A combinedheat and power facility or co-generation facility shall not beconsidered a public utility;"Competitive service" means any service offered by an electricpublic utility or a gas public utility that the board determines to becompetitive pursuant to section 8 or section 10 of P.L.1999, c.23(C.48:3-56 or C.48:3-58) or that is not regulated by the board;"Commercial and industrial energy pricing class customer" or"CIEP class customer" means that group of non-residentialcustomers with high peak demand, as determined by periodic boardorder, which either is eligible or which would be eligible, asdetermined by periodic board order, to receive funds from the RetailMargin Fund established pursuant to section 9 of P.L.1999, c.23(C.48:3-57) and for which basic generation service is hourly-priced;"Comprehensive resource analysis" means an analysis including,but not limited to, an assessment of existing market barriers to theimplementation of energy efficiency and renewable technologiesthat are not or cannot be delivered to customers through acompetitive marketplace;"Customer" means any person that is an end user and isconnected to any part of the transmission and distribution systemwithin an electric public utility's service territory or a gas publicutility's service territory within this State;"Customer account service" means metering, billing, or suchother administrative activity associated with maintaining a customeraccount;"Delivery year" or "DY" means the 12-month period from June1st through May 31st [and be] shall , numbered according to thecalendar year in which it ends;2 2"Demand side management" means the management of customerdemand for energy service through the implementation of costeffectiveenergy efficiency technologies, including, but not limitedto, installed conservation, load management and energy efficiency

S2381 [4R] B. SMITH, BATEMAN81234567891011121314151617181920212223242526272829303132333435363738394041424344454647measures on and in the residential, commercial, industrial,institutional and governmental premises and facilities in this State;"Electric generation service" means the provision of retailelectric energy and capacity which is generated off-site from thelocation at which the consumption of such electric energy andcapacity is metered for retail billing purposes, including agreementsand arrangements related thereto;"Electric power generator" means an entity that proposes toconstruct, own, lease or operate, or currently owns, leases oroperates, an electric power production facility that will sell or doessell at least 90 percent of its output, either directly or through amarketer, to a customer or customers located at sites that are not onor contiguous to the site on which the facility will be located or islocated. The designation of an entity as an electric power generatorfor the purposes of P.L.1999, c.23 (C.48:3-49 et al.) shall not, inand of itself, affect the entity's status as an exempt wholesalegenerator under the Public Utility Holding Company Act of 1935,15 U.S.C. s.79 et seq.;"Electric power supplier" means a person or entity that is dulylicensed pursuant to the provisions of P.L.1999, c.23 (C.48:3-49 etal.) to offer and to assume the contractual and legal responsibility toprovide electric generation service to retail customers, and includesload serving entities, marketers and brokers that offer or provideelectric generation service to retail customers. The term excludes anelectric public utility that provides electric generation service onlyas a basic generation service pursuant to section 9 of P.L.1999, c.23(C.48:3-57);"Electric public utility" means a public utility, as that term isdefined in R.S.48:2-13, that transmits and distributes electricity toend users within this State;"Electric related service" means a service that is directly relatedto the consumption of electricity by an end user, including, but notlimited to, the installation of demand side management measures atthe end user's premises, the maintenance, repair or replacement ofappliances, lighting, motors or other energy-consuming devices atthe end user's premises, and the provision of energy consumptionmeasurement and billing services;"Electronic signature" means an electronic sound, symbol orprocess, attached to, or logically associated with, a contract or otherrecord, and executed or adopted by a person with the intent to signthe record;“Eligible generator” means a developer of a [new, natural gasfired, base load or mid-merit 2 electric power4 combined-cycle] 2 42 [generating] generation facility [with a net summer outputrating of 100 megawatts or larger, that is physically located 2 2 withinthe Jersey,] State of New including, but not limited to, an on-sitegeneration facility that qualifies as a capacity resource under PJM

S2381 [4R] B. SMITH, BATEMAN9123456789101112131415161718192021222324252627282930313233343536373839404142434445464748criteria [but exclusive of a combustion turbine generation facilitythat is directly interconnected 4 with the electric public utilities’transmission or distribution system, and that commences]construction of new 2 4generation after the effective date of[ ]P.L. , c. (C. ) (pending before the Legislature as 4 this 2 2 bill);4"Energy agent" means a person that is duly registered pursuant tothe provisions of P.L.1999, c.23 (C.48:3-49 et al.), that arranges thesale of retail electricity or electric related services or retail gassupply or gas related services between government aggregators orprivate aggregators and electric power suppliers or gas suppliers,but does not take title to the electric or gas sold;"Energy consumer" means a business or residential consumer ofelectric generation service or gas supply service located within theterritorial jurisdiction of a government aggregator;"Energy efficiency portfolio standard" means a requirement toprocure a specified amount of energy efficiency or demand sidemanagement resources as a means of managing and reducing energyusage and demand by customers;"Energy year" or "EY" means the 12-month period from June 1stbe] through May 31st [and shall , numbered according to thecalendar year 2 2in which it ends;"Federal Energy Regulatory Commission" or "FERC" means thefederal agency established pursuant to 42 U.S.C. s.7171 et seq. toregulate the interstate transmission of electricity, natural gas, andoil;"Financing entity" means an electric public utility, a specialpurpose entity, or any other assignee of bondable transitionproperty, which issues transition bonds. Except as specificallyprovided in P.L.1999, c.23 (C.48:3-49 et al.), a financing entitywhich is not itself an electric public utility shall not be subject tothe public utility requirements of Title 48 or any rules or regulationsadopted pursuant thereto;"Gas public utility" means a public utility, as that term is definedin R.S.48:2-13, that distributes gas to end users within this State;"Gas related service" means a service that is directly related tothe consumption of gas by an end user, including, but not limited to,the installation of demand side management measures at the enduser's premises, the maintenance, repair or replacement ofappliances or other energy-consuming devices at the end user'spremises, and the provision of energy consumption measurementand billing services;"Gas supplier" means a person that is duly licensed pursuant tothe provisions of P.L.1999, c.23 (C.48:3-49 et al.) to offer andassume the contractual and legal obligation to provide gas supplyservice to retail customers, and includes, but is not limited to,marketers and brokers. A non-public utility affiliate of a publicutility holding company may be a gas supplier, but a gas publicutility or any subsidiary of a gas utility is not a gas supplier. In the

S2381 [4R] B. SMITH, BATEMAN10123456789101112131415161718192021222324252627282930313233343536373839404142434445464748event that a gas public utility is not part of a holding company legalstructure, a related competitive business segment of that gas publicutility may be a gas supplier, provided that related competitivebusiness segment is structurally separated from the gas publicutility, and provided that the interactions between the gas publicutility and the related competitive business segment are subject tothe affiliate relations standards adopted by the board pursuant tosubsection k. of section 10 of P.L.1999, c.23 (C.48:3-58);"Gas supply service" means the provision to customers of theretail commodity of gas, but does not include any regulateddistribution service;"Government aggregator" means any government entity subjectto the requirements of the "Local Public Contracts Law," P.L.1971,c.198 (C.40A:11-1 et seq.), the "Public School Contracts Law,"N.J.S.18A:18A-1 et seq., or the "County College Contracts Law,"P.L.1982, c.189 (C.18A:64A-25.1 et seq.), that enters into a writtencontract with a licensed electric power supplier or a licensed gassupplier for: (1) the provision of electric generation service, electricrelated service, gas supply service, or gas related service for its ownuse or the use of other government aggregators; or (2) if amunicipal or county government, the provision of electricgeneration service or gas supply service on behalf of business orresidential customers within its territorial jurisdiction;"Government energy aggregation program" means a program andprocedure pursuant to which a government aggregator enters into awritten contract for the provision of electric generation service orgas supply service on behalf of business or residential customerswithin its territorial jurisdiction;"Governmental entity" means any federal, state, municipal, localor other governmental department, commission, board, agency,court, authority or instrumentality having competent jurisdiction;"Greenhouse gas emissions portfolio standard" means arequirement that addresses or limits the amount of carbon dioxideemissions indirectly resulting from the use of electricity as appliedto any electric power suppliers and basic generation serviceproviders of electricity;“Incremental auction” means an auction conducted by PJM, aspart of PJM’s reliability pricing model, prior to the start of the2delivery year to secure electric capacity as necessary to satisfy thecapacity requirements for that delivery year, that is not otherwiseprovided for in the base residual auction;"Leakage" means an increase in greenhouse gas emissions2related to generation sources located outside of the State that are notsubject to a state, interstate or regional greenhouse gas emissionscap or standard that applies to generation sources located within theState;"Locational deliverability area" or "LDA" means one or more ofthe zones within the PJM region which are used to evaluate area2

S2381 [4R] B. SMITH, BATEMAN111234567891011121314151617181920212223242526272829303132333435363738394041424344454647transmission constraints and reliability issues including electricpublic utility company zones, sub-zones, and combinations ofzones.“Long-term capacity agreement pilot program” or 2“LCAPP”means [one-time] a pilot program established by the board that2 24 [is limited to] includes participation by eligible generators, toseek 4 offers [no later than February 2011,] 4, for financiallysettledstandard offer capacity agreements 2 [that extend for a term2of not less than 15 years, to quickly and safely construct 2 new,natural gas fired, combined-cycle electric power generatingfacilities with a net summer output rating of 100 megawatts orlarger State] within the with eligible generators pursuant to theprovisions of P.L. , c. (C. ) (pending before the Legislature asthis bill) ;"Market transition charge" means a charge imposed pursuant 2 tosection 13 of P.L.1999, c.23 (C.48:3-61) by an electric publicutility, at a level determined by the board, on the electric publicutility customers for a limited duration transition period to recoverstranded costs created as a result of the introduction of electricpower supply competition pursuant to the provisions of P.L.1999,c.23 (C.48:3-49 et al.);"Marketer" means a duly licensed electric power supplier thattakes title to electric energy and capacity, transmission and otherservices from electric power generators and other wholesalesuppliers and then assumes the contractual and legal obligation toprovide electric generation service, and may include transmissionand other services, to an end-use retail customer or customers, or aduly licensed gas supplier that takes title to gas and then assumesthe contractual and legal obligation to provide gas supply service toan end-use customer or customers;"Mid-merit electric power generation facility" means ageneration facility that operates at a capacity factor 4 betweenbaseload generation facilities and peaker generation facilities;"Net proceeds" means proceeds less transaction and other 4relatedcosts as determined by the board;"Net revenues" means revenues less related expenses, includingapplicable taxes, as determined by the board;"Offshore wind energy" means electric energy produced by aqualified offshore wind project;"Offshore wind renewable energy certificate" or "OREC" meansa certificate, issued by the board or its designee, representing theenvironmental attributes of one megawatt hour of electricgeneration from a qualified offshore wind project;"Off-site end use thermal energy services customer" means anend use customer that purchases thermal energy services from anon-site generation facility, combined heat and power facility, or cogenerationfacility, and that is located on property that is separated

S2381 [4R] B. SMITH, BATEMAN12123456789101112131415161718192021222324252627282930313233343536373839404142434445464748from the property on which the on-site generation facility,combined heat and power facility, or co-generation facility islocated by more than one easement, public thoroughfare, ortransportation or utility-owned right-of-way;"On-site generation facility" means a generation facility, andequipment and services appurtenant to electric sales by such facilityto the end use customer located on the property or on propertycontiguous to the property on which the end user is located. An onsitegeneration facility shall not be considered a public utility. Theproperty of the end use customer and the property on which the onsitegeneration facility is located shall be considered contiguous ifthey are geographically located next to each other, but may beotherwise separated by an easement, public thoroughfare,transportation or utility-owned right-of-way, or if the end usecustomer is purchasing thermal energy services produced by the onsitegeneration facility, for use for heating or cooling, or both,regardless of whether the customer is located on property that isseparated from the property on which the on-site generation facilityis located by more than one easement, public thoroughfare, ortransportation or utility-owned right-of-way;"Person" means an individual, partnership, corporation,association, trust, limited liability company, governmental entity orother legal entity;“PJM Interconnection, L.L.C.” or “PJM” means the privatelyheld,limited liability corporation that is a FERC-approved RegionalTransmission Organization , or its successor, that manages theregional, high-voltage electricity grid serving all or parts of 132 2states including New Jersey and the District of Columbia, operatesthe regional competitive wholesale electric market, manages theregional transmission planning process, and establishes systems andrules to ensure that the regional and in-State energy markets operatefairly and efficiently;"Private aggregator" means a non-government aggregator that isa duly-organized business or non-profit organization authorized todo business in this State that enters into a contract with a dulylicensed electric power supplier for the purchase of electric energyand capacity, or with a duly licensed gas supplier for the purchaseof gas supply service, on behalf of multiple end-use customers bycombining the loads of those customers;"Public utility holding company" means: (1) any company that,directly or indirectly, owns, controls, or holds with power to vote,ten percent or more of the outstanding voting securities of anelectric public utility or a gas public utility or of a company whichis a public utility holding company by virtue of this definition,unless the Securities and Exchange Commission, or its successor,by order declares such company not to be a public utility holdingcompany under the Public Utility Holding Company Act of 1935,15 U.S.C. s.79 et seq., or its successor; or (2) any person that the

S2381 [4R] B. SMITH, BATEMAN13123456789101112131415161718192021222324252627282930313233343536373839404142434445464748Securities and Exchange Commission, or its successor, determines,after notice and opportunity for hearing, directly or indirectly, toexercise, either alone or pursuant to an arrangement orunderstanding with one or more other persons, such a controllinginfluence over the management or policies of an electric publicutility or a gas public utility or public utility holding company as tomake it necessary or appropriate in the public interest or for theprotection of investors or consumers that such person be subject tothe obligations, duties, and liabilities imposed in the Public UtilityHolding Company Act of 1935 or its successor;"Qualified offshore wind project" means a wind turbineelectricity generation facility in the Atlantic Ocean and connectedto the electric transmission system in this State, and includes theassociated transmission-related interconnection facilities andequipment, and approved by the board pursuant to section 3 ofP.L.2010, c.57 (C.48:3-87.1);"Regulatory asset" means an asset recorded on the books of anelectric public utility or gas public utility pursuant to the Statementof Financial Accounting Standards, No. 71, entitled "Accounting forthe Effects of Certain Types of Regulation," or any successorstandard and as deemed recoverable by the board;"Related competitive business segment of an electric publicutility or gas public utility" means any business venture of anelectric public utility or gas public utility including, but not limitedto, functionally separate business units, joint ventures, andpartnerships, that offers to provide or provides competitive services;"Related competitive business segment of a public utility holdingcompany" means any business venture of a public utility holdingcompany, including, but not limited to, functionally separatebusiness units, joint ventures, and partnerships and subsidiaries, thatoffers to provide or provides competitive services, but does notinclude any related competitive business segments of an electricpublic utility or gas public utility;“Reliability pricing model” or “RPM” means PJM’s capacitymarketmodel, and its successors, that secures capacity on behalf ofelectric load serving entities to satisfy load obligations not satisfiedthrough the output of electric generation facilities owned by thoseentities , or otherwise secured by those entities through bilateralcontracts 2 ;2 1"Renewable energy certificate" or "REC" means 1 a certificaterepresenting the environmental benefits or attributes of onemegawatt-hour of generation from a generating facility thatproduces Class I or Class II renewable energy, but shall not includea solar renewable energy certificate or an offshore wind renewableenergy certificate;"Resource clearing price" or “RCP” means the clearing priceestablished for the applicable locational deliverability area by thebase residual auction or incremental auction , as determined by2 1 1

S2381 [4R] B. SMITH, BATEMAN14123456789101112131415161718192021222324252627282930313233343536373839404142434445464748the optimization algorithm for each auction, conducted by PJM aspart of PJM’s reliability pricing model;2"Resource recovery facility" means a solid waste facilityconstructed and operated for the incineration of solid waste forenergy production and the recovery of metals and other materialsfor reuse;"Restructuring related costs" means reasonably incurred costsdirectly related to the restructuring of the electric power industry,including the closure, sale, functional separation and divestiture ofgeneration and other competitive utility assets by a public utility, orthe provision of competitive services as such costs are determinedby the board, and which are not stranded costs as defined inP.L.1999, c.23 (C.48:3-49 et al.) but may include, but not be limitedto, investments in management information systems, and whichshall include expenses related to employees affected byrestructuring which result in efficiencies and which result inbenefits to ratepayers, such as training or retraining at the levelequivalent to one year's training at a vocational or technical schoolor county community college, the provision of severance pay of twoweeks of base pay for each year of full-time employment, and amaximum of 24 months' continued health care coverage. Except asto expenses related to employees affected by restructuring,"restructuring related costs" shall not include going forward costs;"Retail choice" means the ability of retail customers to shop forelectric generation or gas supply service from electric power or gassuppliers, or opt to receive basic generation service or basic gasservice, and the ability of an electric power or gas supplier to offerelectric generation service or gas supply service to retail customers,consistent with the provisions of P.L.1999, c.23 (C.48:3-49 et al.);"Retail margin" means an amount, reflecting differences inprices that electric power suppliers and electric public utilities maycharge in providing electric generation service and basic generationservice, respectively, to retail customers, excluding residentialcustomers, which the board may authorize to be charged tocategories of basic generation service customers of electric publicutilities in this State, other than residential customers, under theboard's continuing regulation of basic generation service pursuant tosections 3 and 9 of P.L.1999, c.23 (C.48:3-51 and 48:3-57), for thepurpose of promoting a competitive retail market for the supply ofelectricity;"Shopping credit" means an amount deducted from the bill of anelectric public utility customer to reflect the fact that such customerhas switched to an electric power supplier and no longer takes basicgeneration service from the electric public utility;"Social program" means a program implemented with boardapproval to provide assistance to a group of disadvantagedcustomers, to provide protection to consumers, or to accomplish aparticular societal goal, and includes, but is not limited to, the

S2381 [4R] B. SMITH, BATEMAN1512345678910111213141516171819202122232425262728293031323334353637383940414243444546winter moratorium program, utility practices concerning "bad debt"customers, low income assistance, deferred payment plans,weatherization programs, and late payment and deposit policies, butdoes not include any demand side management program or anyenvironmental requirements or controls;"Societal benefits charge" means a charge imposed by an electricpublic utility, at a level determined by the board, pursuant to, and inaccordance with, section 12 of P.L.1999, c.23 (C.48:3-60);"Solar alternative compliance payment" or "SACP" means apayment of a certain dollar amount per megawatt hour (MWh)which an electric power supplier or provider may submit to theboard in order to comply with the solar electric generationrequirements under section 38 of P.L.1999, c.23 (C.48:3-87);"Solar renewable energy certificate" or "SREC" means acertificate issued by the board or its designee, representing onemegawatt hour (MWh) of solar energy that is generated by a facilityconnected to the distribution system in this State and has valuebased upon, and driven by, the energy market;“Standard offer capacity agreement” or “SOCA” means afinancially-settled transaction agreement, approved by board order,that provides for [generator] eligible generators [: (1) 1 ] 2[an]to 1 receive 1 [a payments from 1 [one 2 more] or the payment]electric public 2 utilities [, in the event the SOCP is greater than the2 2 2base 2 residual auction RCP for any applicable delivery year, and 1that 1 [provides such 1 payment 1be] [to is equal to thefor]difference between the SOCP and 1 the base residual auction RCP1 1 1multiplied by 1 the contract 1 capacity [, that ; provides] and (2) toremit a payment to one or more electric 1 public utilities for thebenefit of ratepayers, in the event the base residual auction RCP isgreater than $290 per megawatt day for any applicable deliveryyear, and that such payment is equal to the result of the differencebetween the base residual auction RCP and $290 per megawatt dayfor the applicable delivery year multiplied by the contract capacity.] The SOCA shall provide for a defined amount of electriccapacity for [the term of the transaction of 2not less a 1 term tothan]be determined by the board but not 4 to exceed 15 years, [15[seven years or not more than 10 4 2 years, and [that1 years,] ] 4for 2 4[such such payments [made pursuant2 2 provides] payment]to paragraph 1 (1) to 1 be a fully non-bypassable charge, with 2 such]an order, once 1 issued, 2 being irrevocable;"Standard offer capacity price" or “SOCP” means the capacityprice that is fixed for the term of the SOCA and which is the222 2 [minimum] price [an] to be received [generator]by eligiblegenerators under a board-approved 1 1 SOCA;1"Stranded cost" means the amount by which the 1 net cost of anelectric public utility's electric generating assets or electric power

S2381 [4R] B. SMITH, BATEMAN1612345678910111213141516171819202122232425262728293031323334353637383940414243444546purchase commitments, as determined by the board consistent withthe provisions of P.L.1999, c.23 (C.48:3-49 et al.), exceeds themarket value of those assets or contractual commitments in acompetitive supply marketplace and the costs of buydowns orbuyouts of power purchase contracts;"Stranded costs recovery order" means each order issued by theboard in accordance with subsection c. of section 13 of P.L.1999,c.23 (C.48:3-61) which sets forth the amount of stranded costs, ifany, the board has determined an electric public utility is eligible torecover and collect in accordance with the standards set forth insection 13 of P.L.1999, c.23 (C.48:3-61) and the recoverymechanisms therefor;"Thermal efficiency" means the useful electric energy output of afacility, plus the useful thermal energy output of the facility,expressed as a percentage of the total energy input to the facility;"Transition bond charge" means a charge, expressed as anamount per kilowatt hour, that is authorized by and imposed onelectric public utility ratepayers pursuant to a bondable strandedcosts rate order, as modified at any time pursuant to the provisionsof P.L.1999, c.23 (C.48:3-49 et al.);"Transition bonds" means bonds, notes, certificates ofparticipation or beneficial interest or other evidences ofindebtedness or ownership issued pursuant to an indenture, contractor other agreement of an electric public utility or a financing entity,the proceeds of which are used, directly or indirectly, to recover,finance or refinance bondable stranded costs and which are, directlyor indirectly, secured by or payable from bondable transitionproperty. References in P.L.1999, c.23 (C.48:3-49 et al.) toprincipal, interest, and acquisition or redemption premium withrespect to transition bonds which are issued in the form ofcertificates of participation or beneficial interest or other evidencesof ownership shall refer to the comparable payments on suchsecurities;"Transition period" means the period from August 1, 1999through July 31, 2003;"Transmission and distribution system" means, with respect to anelectric public utility, any facility or equipment that is used for thetransmission, distribution or delivery of electricity to the customersof the electric public utility including, but not limited to, the land,structures, meters, lines, switches and all other appurtenancesthereof and thereto, owned or controlled by the electric publicutility within this State; and"Universal service" means any service approved by the boardwith the purpose of assisting low-income residential customers inobtaining or retaining electric generation or delivery service.(cf: P.L.2010, c.57, s.1)

S2381 [4R] B. SMITH, BATEMAN172bill),] 2 2 2 2 [on] completed] 2LCAPP]12 2 2 [1500] 13111 3. (New section) Notwithstanding any provisions of the2 “Administrative Procedure Act,” P. L. 1968, c.410 (C.52:14B-1 et3 seq.) to the contrary, the board shall [, within 10 days of the4 effective date of P.L. , c. (C. ) (pending before the Legislature5 as this initiate and complete a proceeding in6 accordance with the schedule set forth in this section [allowing7 such proceeding to be to support the commencement8 of the LCAPP [no later than January 31, 2011, and shall adopt,9 after notice, the opportunity for comment, and public hearing on the10 schedule set forth in this section, the following requirements for the11:[a. the establishment of the LCAPP that allows for offering13 financially-settled SOCAs for the purpose of facilitating the14 development of eligible generators;15 b. the establishment of the LCAAP on the following schedule:16 (1) the board shall complete the process to develop the SOCA no17 later than January 1, 2011; and18 (2) SOCAs resulting from this process shall be awarded,19 executed and approved by the board with a written board order no20 later than February 25, 2011;21 c. the participation of selected eligible generators with board22 approved, executed SOCAs in and clearing of the base residual23 auction conducted by PJM and scheduled to commence on May 2,24 2011, as part of PJM’s reliability pricing model for the delivery25 year 2015;26 d. that it be limited to eligible generators in order to maximize27 economic benefits and job creation in the State;28 e. that electric public utilities shall procure at least 50029 megawatts and not more than 1,000 megawatts of30 financially-settled SOCAs from the eligible generators;f. [that no single eligible generator or its affiliate may enter32 into more than 900 megawatts of financially-settled standard offer33 capacity agreements;343536373839404142434445461 ] g.]a. The board shall initiate [the proceeding within 30 days ofthe effective date of P.L. , c. (C. ) (pending before the4Legislature as bill),] this and allow such proceeding to becompleted no later than 4[March 1, 2011] 60 days after theeffective date of P.L , c. (C. ) (pending before the Legislature4as this bill) to allow for the commencement of the LCAPP. TheSOCA or SOCAs resulting from that proceeding shall be awarded44 [,] and executed [and approved by the board with a written4board 4 no later than [April 15, 2011] 30 days after theorder]approval of the form of the SOCA or SOCAs . The LCAPP shall44require selected eligible generators with board 4 approved andexecuted SOCAs to participate and be accepted as a capacity

S2381 [4R] B. SMITH, BATEMAN1842016] 4 bill)] 42011] 4244eligible] 4 have] 4 subsection] 4 [1,000] 3year] 4maximum] 2 2 1 resource in the base residual auction conducted by PJM [and2 scheduled to commence either on May 2, 2011, as part of PJM’s3 reliability pricing model for the delivery year 2015, or May 2012,4 as part of PJM’s reliability pricing model for the delivery year5 ;6 b. The board shall require [, within 10 days of the effective7 date of P.L. , c. (C. )(pending before the Legislation as this8 that the electric public utilities within the State retain an9 agent , with the approval of the board, to administer the LCAPP.10 The agent retained in accordance with this section shall , on behalf11 of the board, be responsible for:12 (1) assisting the board with the establishment of the LCAPP that13 allows for offering financially-settled SOCAs for the purpose of14 facilitating the development of eligible generators;15 (2) prequalifying eligible generators for participation in the16 LCAPP through a showing of environmental, economic, and17 community benefits, and through demonstration of reasonable18 certainty of completion of development, construction and permitting19 activities necessary to meet the desired in-service date [. Eligible20 generators must prequalify by April 1, 2011 and seek a SOCA by21 submitting an offer price and term by April 1, ; and22 (3) recommending to the board the selection of winning eligible23 generators based on the net benefit to ratepayers of eachprequalified eligible generator’s offer price and term. [Eligible25 generators that are located in an “area in need of redevelopment” in26 accordance with the “Local Redevelopment and Housing Law,”27 P.L.1992, c.79 (C.40A:12A-1 et seq.) or a brownfield development28 area in accordance with the “Brownfield and Contaminated Site29 Remediation Act,” P.L.2005, c.223 (C.58:10B-1 et seq.), and30Eligible generators that can enter commercial operation31 for delivery year 2015 [, shall are to be provided with a32 weighted preference in addition to the net benefit [to ratepayers33 ranking provided for in this ratepayer test . Eligible34 generators shall also indicate the amount of capacity they are35 offering in the LCAPP.36 c. In the proceeding initiated by the board pursuant to this37 section, the board shall adopt, after notice, the opportunity for38 comment, and public hearing, an order addressing the following39 requirements for the LCAPP:4041(1) that electric public utilities shall procure 2,000megawatts of financially-settled SOCAs from eligible generators,42 which shall include new generation capacity [for the 2015 or 201643 delivery ;44 (2) that eligible generators participating in the LCAPP shall be45 required to offer [the a quantity, in megawatts, offer46 a price per megawatt-day, and a term of the SOCA [at the

123456789S2381 [4R] B. SMITH, BATEMAN19standard offer capacity price of $232.75 per megawatt per day,which represents a discount to the most recent clearing price1 1established by the base residual auction conducted by the PJM inMay, 2010 as part of the PJM’s model] reliability pricing to beevaluated by the agent and approved by the board ;22 1 [h.] [g.1 ] (3) that , taking into consideration the agent’s2 2recommendation, the board 2 [select] approve the selected 2 1 [an] 1eligible2 1 [generator] generators1from among the qualified 2eligible generators participating in the LCAPP for the award of21022 2 [a] board-approved long-term financially-settled [SOCA]SOCAs for a term [of not than] 11less to be determined by the4 21213141516171819202122232425262728293031323334353637383940414243444546board but not to exceed 15 years years] [15 [seven years ormore than 10 years at the offer price and term of each selected4 2 4] eligible generator ; [.] 1 1 4 2(4) that the board establish a method and the contract terms forproviding for selected eligible generators to 2 receive payments fromthe electric public utilities for the difference between the SOCP andthe RCP multiplied by the SOCA capacity in the event the SOCP isgreater than the RCP for any applicable delivery year and forproviding for electric public utilities to receive refunds from theselected eligible generators for the difference between the SOCPand the RCP multiplied by the SOCA capacity in the event the RCPis greater than the SOCP for any applicable delivery year;(5) that no single eligible generator or its affiliate may enter intomore than 700 megawatts of financially-settled standard offercapacity agreements;(6) that the board establish criteria associated with theprequalification of eligible generators for participation in theLCAPP through a showing of environmental, economic, andcommunity benefits, and through demonstration of reasonablecertainty of completion of development, construction and permittingactivities necessary to meet the desired in-service date;(7) that the board establish a method for evaluating and[present] comparing the net value to ratepayers of each eligiblegenerator’s offer price and term;4 4 4 4(8) that the board establish a method for providing [for aweighted preference for eligible generators in an “area 4 in need ofredevelopment” in accordance with the “Local Redevelopment andHousing Law,” P.L.1992, c.79 (C.40A:12A-1 et seq.) or abrownfield development area in accordance with the “Brownfieldand Contaminated Site Remediation Act,” P.L.2005, c.223(C.58:10B-1 et seq.), a weighted preference for eligibleand]generators that can enter commercial operation 4for delivery year2015; 21 2 [ [i.] h. that the selection of winning eligible generators givepreference to those eligible generators located in “areas in need of1

S2381 [4R] B. SMITH, BATEMAN201234567891011121314151617181920212223242526272829303132333435363738394041424344redevelopment” in accordance with the “Local Redevelopment andHousing Law,” P.L.1992, c.79 (C.40A:12A-1 et seq.), that based onthe board’s determination, can provide the greatest environmental,economic, and community benefits, and can demonstrate certaintyof completion of development and permitting activities necessary tomeet the desired in-service date;1 [j.] i.1 ] (9) that eligible 1 [generator] generators 12 1 1 [an]2 [selected] approved by the board, enter into a SOCA with each ofthe State’s four electric public utilities provided 2 that each electricpublic utility shall pay or receive refunds pursuant [a] to anannually 2 calculated load-ratio share 2 of the capacity of 1 the SOCA2 2 12 2 [price] based upon each electric public utility’s annual forecastedpeak demand as determined by PJM;2 1 [k.] [j.1 ] (10) that the resulting SOCA shall bind the electricpublic utilities to the board 2 [a] approved SOCAs with selected1eligible generators for [not less than 1 15 years] the[generator]term of the 1 SOCA ;1 2 22 1 [l.] [k.1 ] (11) that the selected eligible generators withexecuted SOCAs shall offer the capacity, 2 electricity, and ancillaryservices into the PJM wholesale markets as required by the PJMmarket rules; and 2 22 1 [m.] [l.1 ] (12) that selected eligible generators with executedSOCAs shall participate in and clear the 2 annual base residualauction conducted by the PJM [PJM’s] as part of its reliabilitypricing model for each delivery year of the entire term 2 2 of theagreement . 2 [;] 22 1 [n.] [m. that d. The board shall order the full the] recoveryof all costs associated with the electric public 1 2 utilities’ resultingSOCAs , and the costs of the agent retained pursuant to subsectionb. 2 of this section, from ratepayers through a non-bypassable,irrevocable charge;22 [(1) notwithstanding] e. Notwithstanding any other provision2of law, each [LCAPP agreement] standard offer capacity SOCAshall become irrevocable upon the issuance of 2 2such orderapproving a SOCA ; and2 22 [(2) neither] f. Neither the board or any other governmentalentity shall have the authority, directly or 2 indirectly, legally orequitably, to rescind, alter, repeal, modify or amend a SOCA oran LCAPP cost rate order, to 2 revalue, re-evaluate 2, or revise theamount of LCAPP costs, or to determine that the LCAPP 2 2 charges orthe revenues to recover the LCAPP charges for such SOCAs areunjust or unreasonable [; and21 [o.] n.1that the board shall have complete discretion toapprove any and all LCAPP] SOCAs resulting from the .2

S2381 [4R] B. SMITH, BATEMAN211234567891011121314151617181920214. (New section) If one or more provisions in P.L. ,c. (C. )(pending before the Legislation as this bill) are challenged2in an administrative or judicial proceeding, the board may suspendthe applicability of the challenged provision or provisions duringthe pendency of those proceedings until final resolution of thechallenge and any appeals, and shall issue such orders and take suchother actions as it deems appropriate to ensure that the provisionsthat are not challenged are implemented expeditiously to achievethe public purposes of P.L. , c. (C. )(pending before theLegislature as this bill). 25. (New section) Notwithstanding the provisions of any otherlaw, rule, regulation, or order to the contrary, gas public utilities2shall not impose a societal benefits charge pursuant to section 12 ofP.L.1999, c.23 (C.48:3-60), or any other charge designed to recoverthe costs for social, energy efficiency, conservation, environmentalor renewable energy programs, on natural gas delivery service orcommodity that is used to generate electricity that is sold forresale. 22 [4.] 6.2This act shall take effect immediately.

Board / LCAPP Agent Final Proposed Form SOCAMarch 1, 2011STANDARD OFFER CAPACITY AGREEMENT

STANDARD OFFER CAPACITY AGREEMENTBoard / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011This STANDARD OFFER CAPACITY AGREEMENT (“Agreement”), dated as of [ ](“Effective Date”), is entered into by and between [ UTILITY ], a corporation organized underthe law of the state of New Jersey (“Utility”) and [ CAPACITY SELLER ], a corporationorganized under the law of [ ] (“Generator”).WHEREAS, the State of New Jersey has established the Long-Term Capacity AgreementPilot Program (“LCAPP”) to promote construction of qualified electric generation facilitiespursuant to P.L. 2011 c. 9 (the “Act”);WHEREAS, the Act requires that each Electric Public Utility enter into a standard offercapacity agreement as described in the Act and in a form approved by the New Jersey Board ofPublic Utilities (“Board”) with eligible generators approved by the Board;WHEREAS, under the Act, this Agreement shall be irrevocable once the Board issues anorder approving this Agreement;WHEREAS, under the Act, neither the Board nor any other governmental agency of NewJersey shall have the authority (i) to rescind, alter, modify, or repeal this Agreement or an orderapproving rate recovery of LCAPP costs, (ii) to revalue, re-evaluate, or revise the amount of theLCAPP costs, or (iii) to determine that the LCAPP costs or the revenues to recover the LCAPPcosts are unjust or unreasonable;WHEREAS, Generator has not commenced, and intends to commence, construction of an[ ] megawatt (“MW”) electric generation facility, as described in Attachment A, after January28, 2011 (the “Capacity Facility”);WHEREAS, Generator is willing to commit to offer and clear Unforced Capacity of theCapacity Facility into each Base Residual Auction conducted by the PJM Interconnection, L.L.C.(“PJM”) for all Delivery Years through the Conclusion Date;WHEREAS, Generator is willing to commit to offer all the electric energy output andancillary services of the Capacity Facility into the PJM markets during the Delivery Term;WHEREAS, Generator’s eligibility and selection to participate in the LCAPP have beenapproved by the Board;WHEREAS, this Agreement is in the form approved by the Board;WHEREAS, Utility is an Electric Public Utility; andWHEREAS, Generator has caused Construction Period Security to be provided to Utility,dated as of the date hereof , in support of Generator’s obligations under this Agreement.-2-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011NOW, THEREFORE, in consideration of the foregoing and mutual terms and conditionsset forth herein, and for further good and valuable consideration, the receipt and sufficiency ofwhich are hereby acknowledged, the parties hereby agree as follows:SECTION 1DEFINITIONS; RULES OF INTERPRETATION1.1. Defined Terms. Unless otherwise required by the context in which any termappears, initially capitalized terms used herein have the following meanings:“Act” means the New Jersey P.L. 2011 c. 9 that establishes the LCAPP.“Affiliate” means, with respect to any Person, each Person that directly or indirectlycontrols, is controlled by, or is under common control with such designated Person. Forpurposes of this definition, “control” (including, with correlative meanings, the terms “controlledby” and “under common control with”), as used with respect to any Person, shall mean (a) thedirect or indirect right to cast at least fifty percent (50%) of the votes exercisable at an annualgeneral meeting (or its equivalent) of such Person or, if there are no such rights, ownership of atleast fifty percent (50%) of the equity or other ownership interest in such Person, or (b) the rightto direct the policies or operations of such Person.“Agreement” means this Standard Offer Capacity Agreement dated as of [ ], 2011 byand between Utility and Generator..“Annual Forecasted Peak Demand” means in the case of Utility, its forecasted peakdemand and, in the case of another Electric Public Utility, the forecasted peak demand of suchother Electric Public Utility, for a given Delivery Year as determined by PJM and published inthe most recent PJM Load Forecast Report issued before the start of the Delivery Year.“Applicable Law” means all legally binding constitutions, treaties, statutes, laws,ordinances, rules, regulations, orders, interpretations, permits, judgments, decrees, injunctions,writs and orders of any Governmental Authority or arbitrator that apply to the LCAPP or any oneor both of the parties to this Agreement or the terms hereof.“Associated Ancillary Services” means the quantity of ancillary services, generally usedby PJM to support the reliable operation of its transmission system, associated with the AvailableCapacity Amount.“Associated Energy” means the quantity of electrical energy, generally used by PJM tosatisfy its load requirements, associated with the Available Capacity Amount“Automated Clearing House” or “ACH” means an electronic network for financialtransactions administered by NACHA-The Electronic Payments Association.-3-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011“Available Capacity Amount” means the lesser of: (i) the quantity of Unforced Capacityfrom the Capacity Facility that is offered by Generator and cleared by PJM in the relevant BaseResidual Auction, and (ii) the Awarded Capacity Amount.“Awarded Capacity Amount” means [ ] MW, the amount of Unforced Capacity forwhich the Board has approved Generator to enter into standard offer capacity agreements withthe Electric Public Utilities pursuant to the Act.“Awarded Commencement Date” means the first day of the first Delivery Year for whichthe Board has approved Generator to receive or make payments under standard offer capacityagreements with the Electric Public Utilities pursuant to the Act, which date is June 1, [ ].“Base Residual Auction” means the primary auction conducted by PJM as part of PJM’sReliability Pricing Model to secure electrical capacity as necessary to satisfy the capacityrequirements imposed under the PJM Reliability Assurance Agreement for the Delivery Year.“Board” means the New Jersey Board of Public Utilities or any successor agency.“Business Day” means any day except a Saturday, Sunday, or a Federal Reserve Bankholiday.“Calculation Dispute” is defined in Section 12.2.1.“Capacity Facility” means the [ ] MW electric generation facility to be constructed byGenerator as further defined in Attachment A.“Cash” means cash in United States Dollars and any investment of such cash held inescrow.“Cash Escrow Agreement” means an agreement providing for the receipt, holding (in theUnited States), investment and disbursement of Cash held in escrow by a Qualified Bank, toprovide either Construction Period Security or Delivery Term Security.“Commencement Date” means the last to occur of: (i) the Awarded CommencementDate; and (ii) the date the Capacity Facility first provides Unforced Capacity to PJM by havingpreviously cleared in a Base Residual Auction.“Conclusion Date” means May 31, [ ], which date shall not be altered by any delay orchange in the Commencement Date or other provision under this Agreement.“Construction Period” means the period commencing on the Effective Date andconcluding on the date the Generator first provides Unforced Capacity to PJM by havingpreviously cleared in a Base Residual Auction.“Construction Period Security” means (i) a Letter of Credit, substantially in the form ofAttachment B, to be provided to the Utility or (ii) Cash held in escrow for the Utility under aCash Escrow Agreement, substantially in the form of Attachment C to be mutually agreed-4-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011between the Utility and Generator, in support of the Generator’s obligations during theConstruction Period in an amount defined in section 2.3.3.“Defaulting Party” is defined in Section 9.1.1.“Delivery Year” means each 12-month period from June 1 st through May 31 st numberedaccording to the calendar year in which it ends beginning on the Commencement Date andconcluding on the Conclusion Date.“Delivery Term” means the period commencing with the Commencement Date andconcluding on the Conclusion Date.“Delivery Term Security” means (i) a Letter of Credit, substantially in the form ofAttachment D, to be provided to the Utility or (ii) Cash held in escrow for the Utility under aCash Escrow Agreement, substantially in the form of Attachment E to be mutually agreedbetween the Utility and Generator, in support of the Generator’s obligations during the DeliveryTerm in an amount defined in Section 2.3.3.“Dispute” is defined in Section 12.1.“Early Termination Date” means the date determined in accordance with Section 9.1.“Effective Date” is defined in the Preamble hereof.“EFORd” means a measure calculated by PJM of the probability that an electric powergenerating unit will not be available due to a forced outage or forced derating when there is ademand on the unit to generate.“Electric Public Utility” means the four (4) electric public utilities under the jurisdictionof the Board, specifically Public Service Electric and Gas Company, Atlantic City ElectricCompany, Jersey Central Power & Light Company, and Rockland Electric Company.“Event of Default” is defined in Section 7.1.“Facility Lender” means (i) any lender providing construction, interim, long-term, orrefinancing debt or equity funds to Generator for the Capacity Facility, (ii) any trustee or agentacting on their behalf, and (iii) any Person providing interest rate protection agreements to hedgeany of the foregoing obligations.“Force Majeure” means an event or circumstance, such as natural catastrophes, terrorism,war, riots, or acts of God, that (i) prevents one party from performing its obligations under thisAgreement; (ii) is not within the reasonable control of, or the result of the negligence of, theclaiming party; and, (iii) by the exercise of due diligence, the claiming party is unable toovercome or avoid, or cause to be avoided; provided, however, notwithstanding the foregoing,none of the following events or circumstances will constitute Force Majeure: (a) the loss orfailure of Generator’s fuel supply, except when caused by Force Majeure; (b) the breakdown of-5-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011Generator’s plant and/or equipment, except when caused by Force Majeure; and (c) anoccurrence or an event that causes an economic hardship to a party.“Generator” means a developer of an electric power generating facility that the Board hasdetermined to qualify as eligible pursuant to the Act and is named in the Preamble hereof.“Governmental Authority” means any international, national, federal, provincial, state,municipal, county, regional or local government, administrative, judicial or regulatory entitywith jurisdiction over any party hereto, this Agreement, the LCAPP, or PJM, and includes anydepartment, commission, bureau, board, administrative agency or regulatory body of anygovernment.“Interest Rate” means for any date, the per annum rate of interest equal to the yield onTwo-Year U.S. Treasury Notes as may be published in The Wall Street Journal on such day (orif not published on such day the most recent preceding day on which published) plus sixty (60)basis points.“Illegality” is defined in Section 8.1.1.“Invalidity of the Act” is defined in Section 8.1.2.“Letter of Credit” means an irrevocable standby letter of credit provided by a QualifiedBank to provide either Construction Period Security or Delivery Term Security.“Locational Deliverability Area” or “LDA” means the PJM sub-regions used to calculateResource Clearing Prices as part of the Reliability Pricing Model.“Long-Term Capacity Agreement Pilot Program” or “LCAPP” is the program establishedby P.L. 2011 c. 9 to promote construction of qualified electric generation facilities.“Month” means a calendar month commencing on the first day of such month and endingon the last day of such month.“MW” means megawatt.“NACHA Operating Rules” means the rules issued by NACHA – The ElectronicPayments Association for the administration of the Automated Clearing House.“Non-Defaulting Party” is defined in Section 9.1.1.“Payment Date” is defined in Section 2.2.“Person” means an individual, partnership, corporation, limited liability company, jointventure, association, trust, unincorporated organization, Governmental Authority, or other formof entity.-6-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011“PJM Interconnection, L.L.C.” or “PJM” means the Regional Transmission Organizationthat manages the regional, high-voltage electricity grid serving New Jersey and all or parts ofother states and, among other things, administers the Reliability Pricing Model, and anysuccessor.“PJM Market Rules” means the rules, standards, procedures, and practices set forth inthe PJM Tariff, PJM Operating Agreements, PJM Reliability Assurance Agreement, PJMConsolidated Transmission Owners Agreement, PJM Manuals, PJM Regional PracticesDocument, PJM-Midwest Independent Transmission System Operator Joint OperatingAgreement, and other documents setting forth market rules.“PJM Markets” means the capacity, energy, and ancillary services markets administeredby PJM.“Qualified Bank” means a United States commercial bank or similar financial institutionthat has assets of at least $5 billion and a senior long-term unsecured debt rating of at least “A”by Standard & Poor’s, “A2” by Moody’s Investors Service, or “A” by Fitch Ratings.“Reliability Pricing Model” or “RPM” means PJM’s capacity-market model that securescapacity on behalf of electric load serving entities to satisfy load obligations not satisfied throughthe output of electric generation facilities owned by those entities or otherwise secured by thoseentities through bilateral contracts.“Resource Clearing Price” or “RCP” means the clearing price expressed in $/MW-day forUnforced Capacity established by the Base Residual Auction for the LDA in which the Capacityfacility is located and the applicable Delivery Year as posted by PJM.“RPM Rules” means the provisions of PJM’s tariffs and agreements accepted by theFederal Energy Regulatory Commission and the provisions of PJM’s manuals governing theReliability Pricing Model, as in effect from time to time during the term of this Agreement.“Standard Offer Capacity Price” or “SOCP” means the price for each Delivery Year atwhich the Board has approved Generator to enter into this Agreement with the Utility pursuant tothe Act, which price is listed in Attachment F to this Agreement.“Termination Date” means the earlier to occur of (i) the Conclusion Date or (ii) the EarlyTermination Date.“Termination Event” is defined in Section 8.1.“Total Annual Forecasted Peak Demand” for a given Delivery Year means the sum of theAnnual Forecasted Peak Demands for each Electric Public Utility for such Delivery Year.“Transaction” means the calculations, payments and payment obligations under Section4.1 and the related provisions of this Agreement (including without limitation Section 2.1).-7-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011“Unforced Capacity” means the capacity of a capacity resource that accounts for theEFORd of that capacity resource and as periodically determined by PJM.“Unpaid Amounts” owing to any party means, with respect to an Early Termination Date,the amounts that became payable to such party under Section 2.1 in respect of the Transaction onor prior to such Early Termination Date (including amounts not paid by the other party on theground of the occurrence of an Event of Default, in accordance with Section 2.5) and whichremain unpaid as at such Early Termination Date, together with (to the extent permitted underApplicable Law) interest from (and including) the date such amounts were to have been paid to(but excluding) such Early Termination Date, at the Interest Rate. Such amounts of interest willbe calculated on the basis of a 360-day year, daily compounding and the actual number of dayselapsed.“Utility” is defined in the Preamble hereof.“Utility’s Load Ratio” means the percentage derived by dividing Utility’s AnnualForecasted Peak Demand by Total Annual Forecasted Peak Demand, both for a given DeliveryYear, such that the sum of the Utility Load Ratios for the Electric Public Utilities shall alwaysequal 100%.1.2. Rules of Interpretation1.2.1. General. Unless otherwise required by the context in which any termappears, (a) the singular includes the plural and vice versa; (b) references to “Articles,”“Sections,” “Schedules,” “Annexes,” “Appendices” or “Exhibits” (if any) are to articles,sections, schedules, annexes, appendices or exhibits hereof; (c) all references to a particularentity or an electricity or gas market price index include a reference to such entity’s or index’ssuccessors and (if applicable) permitted assigns; (d) the words “herein,” “hereof” and“hereunder” refer to this Agreement as a whole and not to any particular Section or subsectionhereof; (e) references to this Agreement include a reference to all appendices, annexes, schedulesand exhibits hereto, as the same may be amended, modified, supplemented or replaced from timeto time; (f) the masculine includes the feminine and neuter and vice versa; (g) the definitions ofterms herein shall apply equally to the singular and plural forms of the terms defined;(h) “including” means “including, without limitation” or “including, but not limited to”; and(i) the word “or” is not necessarily exclusive.1.2.2. Terms Not to be Construed For or Against Either Party. Each termhereof will be construed simply according to its fair meaning and not strictly for or against eitherparty. No term hereof will be construed against a party on the ground that the party is the authorof that provision.1.2.3. Headings. The headings used for the sections and articles hereof arefor convenience and reference purposes only and will in no way affect the meaning orinterpretation of the provisions hereof.-8-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 20111.2.4. Rounding. All calculations, including but not limited to RCP, NewJersey RCP, Available Capacity Amount, and Utility Load Ratios, will be rounded to the nearestthird decimal place.SECTION 2OBLIGATIONS2.1. General Conditions. Each party will make each payment specified herein to bemade by it, including without limitation the payments under Section 2.2, subject to Section 2.5and the other provisions hereof.2.2. Calculation and Payment of Transaction Amounts. In the case of the firstDelivery Year, no less than thirty (30) calendar days prior to the Awarded Commencement Dateand, in the case of each subsequent Delivery Year, no less than thirty (30) calendar days prior tothe commencement of such Delivery Year, Utility will provide a statement to Generator of theresult of the calculation under Section 4.1 for the Delivery Year, specifying the party obligated tomake payments with respect to such Delivery Year, and the monthly amount of such payments,including any correction made under Section 2.10. The party obligated to make payments willmake such payments with respect to each Month on or before the last Business Day of thesubsequent Month (the “Payment Date”) to the account specified herein in freely transferablefunds via electronic funds transfer through a system that provides for final credit no later thanone business day after transfer. The system for making such electronic funds transfers may bethe ACH, in which case the paying party will originate the ACH credit for receipt the followingBusiness Day. Each party agrees to be bound by the NACHA Operating Rules in connectionwith payments made via ACH and agrees that the origination of all ACH transactions willcomply with applicable provisions of U.S. law. Whenever payments are made via ACH, thereceiving party hereby authorizes the paying party to initiate credit entries to the account of thereceiving party at the receiving party’s financial institution as set forth in Section 2.6. Thisauthorization will remain in full force and effect until a party has received prior written noticefrom the other party of its termination, such notice to be provided in such time and in suchmanner as to afford the party receiving such notice a reasonable opportunity to act on it.2.3. Obligations of Generator.2.3.1. Generator shall use all commercially reasonable efforts to cause theCapacity Facility to qualify under the RPM Rules as a capacity resource in an amount no lessthan the Awarded Capacity Amount for the Base Residual Auction associated with each DeliveryYear during the term of this Agreement, commencing upon the Awarded Commencement Date.2.3.2. Generator shall use all commercially reasonable efforts to cause theCapacity Facility to achieve commercial operation no later than the Commencement Date.2.3.3. Throughout the Delivery Term, Generator shall:-9-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011(a) Cause the Capacity Facility to comply with all obligations of a capacityresource under the RPM Rules, including without limitation the obligations relating to thesubmission of offers to supply electric energy and ancillary services in PJM markets, andGenerator shall bear all costs associated with such compliance, including without limitation allfees and penalties imposed by PJM;(b) Submit supply offers for an amount of Unforced Capacity no less than theAwarded Capacity Amount from the Capacity Facility in accordance with the RPM Rules in theBase Residual Auction associated with each Delivery Year during the term of this Agreement,such that the Unforced Capacity shall be offered at the lowest commercially reasonable priceunder the RPM rules;(c) Submit supply offers from the Capacity Facility for the maximum amountof Associated Energy that the Capacity Facility can provide in the PJM day-ahead energy marketin accordance with PJM Market Rules throughout the Delivery Term, such that the AssociatedEnergy shall be offered at the lowest commercially reasonable price under PJM’s Market Rules;(d) Submit supply offers from the Capacity Facility for the maximum amountof Associated Ancillary Services that the Capacity Facility can provide in the PJM ancillaryservices markets in accordance with PJM Market Rules throughout the Delivery Term, such thatthe Associated Ancillary Services shall be offered at the lowest commercially reasonable priceunder PJM’s Market Rules;(e) Neither physically nor financially withhold any Unforced Capacity up tothe amount of Awarded Capacity, or Associated Energy and Associated Ancillary Services, fromthe Capacity Facility;(f) Provide on a timely basis (which, in the case of documentation provided toGenerator by PJM, shall mean within five (5) Business Days of Generator’s receipt of suchdocumentation) all documentation required by Utility to make the calculations and notificationsrequired by Sections 2.2 and 4.1, including without limitation: (i) documentation provided toGenerator by PJM after the conclusion of each Base Residual Auction showing the amount ofUnforced Capacity offered from the Capacity Facility and cleared by PJM in such Base ResidualAuction; (ii) documentation provided to Generator by PJM in advance of each Delivery Yearshowing the all EFORd measurements for the Capacity Facility for the Delivery Year; (iii) theresult of any capability test of the Capacity Facility conducted by PJM; (iv) documentationprovided to Generator by PJM in advance of each Delivery Year showing the Available CapacityAmount for the Delivery Year or required to calculate the Available Capacity Amount for theDelivery Year; and (v) documentation notifying Generator of any correction to an input to acalculation, as provided in Section 2.9; provided that Generator may redact from any suchdocumentation data that do not relate to the Capacity Facility;(g) Provide on a timely basis all documentation reasonably requested byUtility to demonstrate Generator’s compliance with all of its obligations as set forth in thisSection 2.3 and affirmative covenants as set forth in Section 6. Utility shall have the right, uponreasonable notice to Generator, to request such information once each year and, in addition, upon-10-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011the occurrence of any event or upon Utility’s receipt of information that gives Utility reasonablegrounds for concern in good faith as to Generator’s compliance with one or more suchobligations;(h) Prepare and file an annual certification to the Board within thirty (30)calendar days after the end of each Delivery Year describing the Generator’s compliance withSection 2.3.3 (b) through Section 2.3.3 (e) and any material actions taken by the Generator underthis Agreement.2.3.4. Cause to be provided to the Utility throughout the Construction Period,Construction Period Security in an amount to be calculated annually equal to the product of$10,000/MW and the Awarded Capacity Amount and the Utility’s Load Ratio, but in no casemore than the product of $1 million, and the Utility’s Load Ratio. Such Construction PeriodSecurity shall be in the form of a Letter of Credit or Cash held in escrow by the Utility, whichshall have the right to draw upon the Construction Period Security as provided in Section 9.4. Inthe event of the application of any such Construction Period Security toward any amount owedhereunder to Generator the Generator shall have no obligation to increase the amount of theConstruction Period Security beyond the initial amount provided.2.3.5. Cause to be provided to the Utility throughout the Delivery Term,Delivery Term Security in an amount to be calculated annually equal to the product of$25,000/MW and the Awarded Capacity Amount and the Utility’s Load Ratio with the amountof Delivery Term Security declining pro rata at the conclusion of each Delivery Year over anyremaining term of this Agreement. Such Delivery Period Security shall be in the form of a Letterof Credit or Cash held in escrow by the Utility, which shall have the right to draw upon theDelivery Term Security as provided in Section 9.4. In the event of the application of any suchDelivery Term Security toward any amount owed hereunder to Generator the Generator shallhave no obligation to increase the amount of the Delivery Term Security beyond the initialamount provided.2.3.6. Fulfill all Generator’s obligations under, and otherwise comply with allterms of, the Construction Period Security and Delivery Term Security.2.4. Obligations of the Utility. The Utility shall prepare and file an annual report tothe Board within thirty (30) calendar days after the end of each Delivery Year describing (i) thestatus of this Agreement, (ii) the amount of Unforced Capacity and cost of associatedTransactions made under this Agreement, (iii) the performance of the Generator in supplyingUnforced Capacity and Associated Energy and Associated Ancillary Services under thisAgreement, and (iv) any material actions taken by the Generator or the Utility under thisAgreement. Nothing in this Agreement imposes upon Utility the obligation to monitor, enforce,or declare an Event of Default with respect to the price of Unforced Capacity, or the price oramount of Associated Energy or Associated Ancillary Services, which Generator offers in orsupplies to any PJM Market.2.5. Conditions Precedent to Obligations. Each obligation of each party under thisAgreement is subject to (i) the condition precedent that no Event of Default with respect to the-11-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011other party has occurred and is continuing, (ii) the condition precedent that no Early TerminationDate has occurred or been effectively designated, and (iii) the Board has found that thisAgreement is reasonable and that the Utility will be allowed full rate recovery of all prudent andreasonably incurred costs associated with this Agreement.2.6. Accounts; Change of Account2.6.1. Payments are to be made to the following accounts:Generator:Pay:For the Account of:Account Number:Fed. ABA Number:Utility:Pay:For the Account of:Account Number:Fed. ABA Number:2.6.2. Either party may change its account for receiving a payment by givingwritten notice to the other party, which notice will be effective for the next payment date that isat least five Business Days after the effective date of such notice unless such other party givestimely notice of a reasonable objection to such change.2.6.3. The parties agree that any payments hereunder shall be deemed madein full when confirmation is received from the financial institution holding the account intowhich payment is made that the payment has been successfully received in immediatelyavailable funds. Such confirmation shall be considered by the parties as conclusive evidence ofreceipt.2.7. Default Interest; Other Amounts. Prior to the occurrence or effective designationof an Early Termination Date, a party that defaults in the performance of any payment obligationwill, to the extent permitted by law and subject to Section 9.3.3, be required to pay interest(before as well as after judgment) on the overdue amount to the other party on demand for theperiod from (and including) the original due date for payment to (but excluding) the date ofactual payment, at the Interest Rate. Such interest will be calculated on the basis of a 360-dayyear, daily compounding and the actual number of days elapsed. Each payment will be made inU.S. Dollars in freely transferable funds via electronic funds transfer, as set forth in Section 2.2,on the relevant Payment Date (or if that date is not a Business Day, on the next Business Day).2.8. Calculations. Utility shall make all calculations of payments due under Sections2.2 and 4.1 in accordance with the terms of this Agreement, in good faith and with commercialreasonableness, and its determinations and calculations will be binding, subject to the resolutionof any Calculation Dispute. Inaccuracy in any calculation shall not be an Event of Default. The-12-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011sole remedy of the parties with respect to any inaccuracy of a calculation will be the right (butnot the obligation), to commence a Calculation Dispute.2.9. Corrections to Input to Transaction Payment. If PJM revises to correct any of theinputs required for Utility to calculate any payment required under Section 4.1 within the timepermitted by PJM’s applicable tariff rate or rate schedule for the revision of PJM charges, Utilitywill reflect the amount (if any) that is payable as a result of that correction (including withoutlimitation interest on such amount payable from the date of original payment under Section 4.1through the date of payment under this Section 2.9 at the Interest Rate) in the calculation ofpayment of payments due for the Delivery Year after Utility receives notice of the revision.Utility shall calculate the correction so as to place the parties in the same economic position aftersuch payment as they would have been had the correct input been employed initially.2.10. Substitution Return and Handling of Credit Support2.10.1. Election to Change Form of Credit Support. With respect to theConstruction Period Security or the Delivery Term Security, the Generator may, at any time andfrom time to time, replace (i) a Letter of Credit with Cash held under a Cash Escrow Agreement,(ii) Cash held under a Cash Escrow Agreement with a Letter of Credit, or (iii) a Letter of Creditwith a different Letter of Credit, provided that any such substitute Cash and Cash EscrowAgreement or substitute Letter of Credit (as the case may be) meets the requirements forConstruction Period Security or Delivery Term Security, as applicable, whereupon the Utilityshall cooperate with the Generator in obtaining the concurrent release, termination or return ofthe Letter of Credit or Cash and Cash Escrow Agreement (as the case may be) being replaced.2.10.2. Return of Original Credit Support Documents. Without limitation tothe generality of the foregoing, the Utility shall return to the Generator all original CreditSupport Documents, and all amendment, extension and other documents related thereto, withintwenty (20) calendar days of the termination, cancellation or replacement thereof.2.10.3. Handling of Cash Collateral. If any collateral in the form of Cash isexpected to be or is received by the Utility pursuant to this Agreement, whether following aLetter of Credit drawing due to failure on the part of the issuer of the Letter of Credit to renew orextend the Letter of Credit or otherwise, the parties shall cooperate to cause such collateral in theform of Cash to be delivered as soon as practicable to a custodian to be held pursuant to a CashEscrow Agreement. Any collateral in the form of Cash that is received and held by the Utilitypending delivery to a custodian shall be segregated by the Utility from its other property and heldexclusively in accounts with Qualified Banks.-13-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011SECTION 3TERM AND TERMINATIONThis Agreement is effective as of the Effective Date and will remain in effect until thelater to occur of the Termination Date or the fulfillment by the parties of all obligationshereunder.4.1. Transactions.SECTION 4TRANSACTIONS4.1.1. If, for a Delivery Year, the SOCP is greater than the RCP then, subjectto Section 2.5, Utility will pay Generator each Month during the Delivery Year one-twelfth ofthe product of (i) the difference between the SOCP and the RCP, (ii) the Available CapacityAmount, (iii) the number of days in the Delivery Year; and (iv) Utility Load Ratio, each for theapplicable Delivery Year.4.1.2. If, for a Delivery Year, the RCP is greater than the SOCP then, subjectto Section 2.5, Generator will pay Utility each Month an amount equal to one-twelfth of theproduct of (i) the difference between the RCP and the SOCP, (ii) the Available CapacityAmount, (iii) the number of days in the Delivery Year, and (iv) Utility Load Ratio, each for theapplicable Delivery Year.4.1.3. New Jersey RCP shall be calculated for each Delivery Year as theweighted average of the RCPs for the Electric Public Utilities, using the Utility Load Ratios asweights.4.2. Structure of Transaction. Nothing in this Agreement shall entitle or obligateUtility to purchase, or take title to or delivery of, capacity, electric energy, or ancillary servicesfrom the Capacity Facility.SECTION 5REPRESENTATIONS AND WARRANTIES5.1. Mutual Representations and Warranties. Each party represents to the other party,from the Effective Date, and, except as specified below, continuing throughout the DeliveryTerm, that:5.1.1. It is duly organized and validly existing under the laws of thejurisdiction of its organization or incorporation and, if relevant under such laws, in goodstanding.-14-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 20115.1.2. It has the power (i) to execute this Agreement, the Construction PeriodSecurity, Delivery Term Security and any other documentation relating hereto or thereto, (ii) todeliver this Agreement and cause to be delivered the Construction Period Security, DeliveryTerm Security and any other documentation that it is required by this Agreement to deliver and(iii) to perform its obligations hereunder or thereunder and has taken all necessary action toauthorize such execution, delivery and performance.5.1.3. As of the Effective Date, such execution, delivery and performance donot violate or conflict with any law applicable to it, any order or judgment of any court or otheragency of government applicable to it or any of its assets or any contractual restriction bindingon or affecting it or any of its assets.5.1.4. Its obligations under this Agreement, the Construction Period Security,and Delivery Term Security constitute its legal, valid and binding obligations, enforceable inaccordance with their respective terms (subject to applicable bankruptcy, reorganization,insolvency, moratorium or similar laws affecting creditors’ rights generally and subject, as toenforceability, to equitable principles of general application (regardless of whether enforcementis sought in a proceeding in equity or at law)).5.1.5. As of the Effective Date, all governmental and other consents that arerequired to have been obtained by it with respect to this Agreement, the Construction PeriodSecurity, and the Delivery Term Security are in full force and effect and all conditions of anysuch consents have been complied with.5.1.6. As of the Effective Date, no Event of Default or event which, withnotice or the passage of time or both, would constitute an Event of Default has occurred and iscontinuing and no such event or circumstance would occur as a result of its entering into orperforming its obligations hereunder or under the Construction Period Security or Delivery TermSecurity.5.1.7. All applicable information that is furnished in writing by or on behalfof it to the other party required by Section 6.1 is, as of the date of the information, true, accurateand complete in every material respect.5.1.8. It is an “eligible contract participant” within the meaning of Section1(a)18 of the Commodities Exchange Act, as amended.5.1.9. In connection with the negotiation of, the entering into, and theconfirming of the execution of, this Agreement: (i) it is acting as principal (and not as agent orin any other capacity, fiduciary or otherwise); (ii) the other party is not acting as a fiduciary orfinancial or investment advisor for it; (iii) it is not relying upon any representations (whetherwritten or oral) of the other party other than the representations expressly set forth in thisAgreement; (iv) the other party has not given to it (directly or indirectly through any otherPerson) any advice, counsel, assurance, guarantee, or representation whatsoever as to theexpected or projected success, profitability, return, performance, result, effect, consequence, orbenefit (either legal, regulatory, tax, financial, accounting, or otherwise) hereof; (v) it has-15-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011consulted with its own legal, regulatory, tax, business, investment, financial, and accountingadvisors to the extent it has deemed necessary, and it has made its own decision to enter into theTransaction based upon its own judgment and upon any advice from such advisors as it hasdeemed necessary, and not upon any view expressed by the other party; and (vii) it is enteringinto this Agreement with a full understanding of all the risks hereof and thereof (economic andotherwise), and it is capable of assuming and willing to assume (financially and otherwise) thoserisks.5.1.10. It is a “United States person” (within the meaning of section7701(a)(30) of the Internal Revenue Code of 1986, as amended, and is exempt from backupwithholding under Internal Revenue Code section 3406 and relevant U.S. Department of theTreasury regulations.5.2. Generator’s Representations and Warranties. Generator hereby represents andwarrants to Utility as of the Effective Date that:by the Board.5.2.1. Generator’s selection to participate in the LCAPP has been approved5.2.2. Generator is approved by the Board pursuant to the Act as eligible toenter into standard offer capacity agreements with the Electric Public Utilities for the AwardedCapacity Amount at the SOCP.5.2.3. Generator will not, either alone or in combination with any Affiliate ofGenerator that is eligible to participate in the LCAPP, enter into financially-settled standard offercapacity agreements for more than 700 MW of Unforced Capacity pursuant to the LCAPP.SECTION 6AFFIRMATIVE COVENANTSEach party agrees with the other that, so long as either party has or may have anyobligation hereunder:6.1. Furnish Specified Information.6.1.1. Each party will deliver to the other party such proof of the names, truesignatures and authority of Persons signing this Agreement on its behalf as the other party mayreasonably request upon execution hereof;6.1.2. Generator will deliver to Utility on a timely basis:(a) All information required by the Utility to perform the calculationsspecified in Sections 2.2 and 4.1, including without limitation information supplied to Generatorby PJM;-16-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011(b) All documents, including all written notifications and othercommunications from PJM, related to Generator’s compliance or non-compliance with the RPMRules;(c) All additional documents required for Utility to provide an annual reportto the Board as specified in Section 2.4.6.2. Maintain Authorizations. Each party will use all reasonable efforts, including themaintenance of records and provision of notices, to maintain in full force and effect all consents,licenses or approvals of PJM and of any Governmental Authority or other authority that arerequired to be obtained by it with respect to this Agreement and the Security Agreement and itsobligations hereunder and thereunder and will use all reasonable efforts to obtain any that maybecome necessary in the future.6.3. Comply with Laws and RPM Rules. Each party will comply in all materialrespects with all Applicable Laws and orders and all RPM Rules to which it may be subject iffailure so to comply would materially impair its ability to perform its obligations hereunder orunder the Construction Period Security or Delivery Term Security.6.4. Reporting Requirements. Generator shall be responsible for any recordkeeping,reporting and other requirements applicable to this Agreement under the Commodity ExchangeAct, as amended, and the regulations of the Commodity Futures Trading Commission.SECTION 7EVENTS OF DEFAULT7.1. Events of Default. The occurrence at any time with respect to a party of any ofthe following events constitutes an event of default (an “Event of Default”) with respect to suchparty:7.1.1. Failure to Pay. Failure by the party to make, when due, any paymentunder this Agreement required to be made by it if such failure is not remedied on or before thethird (3 rd ) Business Day after notice of such failure is given to the party.7.1.2. Failure to Provide Information. Failure by Generator to provide toUtility such information or documentation required by Section 2.3.3 or Section 6.1.2 if suchfailure is not remedied on or before the fifth (5 th ) Business Day after notice of such failure isgiven to Generator by Utility.7.1.3. Breach of Agreement. Failure by the party to comply with or performany agreement or obligation (other than an obligation to make any payment under thisAgreement or to provide information or documentation) to be complied with or performed by theparty in accordance with this Agreement if such failure is not remedied on or before the thirtieth(30 th ) calendar day after notice of such failure is given to the party, or, in the case of a failure to-17-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011comply with any applicable provision of the RPM Rules, within the time (if any) provided in theRPM Rules to remedy such failure.7.1.4. Misrepresentation. A representation made or repeated by the party inthis Agreement proves to have been incorrect or misleading in any material respect when madeor repeated or deemed to have been made or repeated, and such misrepresentation is not curedwithin thirty (30) calendar days after such misrepresentation is made or repeated;7.1.5. Bankruptcy. The party: (i) is dissolved (other than pursuant to aconsolidation, amalgamation or merger); (ii) becomes insolvent or is unable to pay its debts orfails or admits in writing its inability generally to pay its debts as they become due; (iii) makes ageneral assignment, arrangement or composition with or for the benefit of its creditors; (iv)institutes or has instituted against it a proceeding seeking a judgment of insolvency orbankruptcy or any other relief under any bankruptcy or insolvency law or other similar lawaffecting creditors’ rights, or a petition is presented for its winding-up or liquidation, and, in thecase of any such proceeding or petition instituted or presented against it, such proceeding orpetition (A) results in a judgment of insolvency or bankruptcy or the entry of an order for reliefor the making of an order for its winding-up or liquidation or (B) is not dismissed, discharged,stayed or restrained in each case within fifteen (15) calendar days of the institution orpresentation thereof; (v) has a resolution passed for its winding-up, official management orliquidation (other than pursuant to a consolidation, amalgamation or merger); (vi) seeks orbecomes subject to the appointment of an administrator, provisional liquidator, conservator,receiver, trustee, custodian or other similar official for it or for all or substantially all its assets;(vii) causes or is subject to any event with respect to it which, under the Applicable Laws of anyjurisdiction, has an analogous effect to any of the events specified in clauses (i) to (vi)(inclusive); or (viii) takes any action in furtherance of, or indicating its consent to, approval of,or acquiescence in, any of the foregoing acts; or7.1.6. Merger Without Assumption. The party consolidates or amalgamateswith, or merges with or into, or transfers all or substantially all its assets to, another entity and, atthe time of such consolidation, amalgamation, merger or transfer the resulting, surviving ortransferee entity fails to assume all the obligations of such party hereunder or under the SecurityAgreement.7.1.7. Failure to Achieve the Commencement Date. Generator fails to causethe Capacity Facility to achieve the Commencement Date by no later than two (2) years after theAwarded Commencement Date, except if an event of Force Majeure causes additional delays.-18-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 20117.1.8. Failure to Participate in a PJM Market. Generator fails to submit asupply offer, consistent with Section 2.3.3 for its Unforced Capacity and the Associated Energyand Associated Ancillary Services from the Capacity Facility. Any Capacity Facility shall berequired to bid no less than the Awarded Capacity Amount beginning with the Base ResidualAuction associated with the Awarded Commencement Date and continuing through the DeliveryTerm, except if an event of Force Majeure delays the Commencement Date.7.1.9. Security Default. With respect to Generator: (i) failure by Generatorto comply with any provision of, or to perform any of its obligations under, either theConstruction Period Security or the Delivery Term Security if such failure is continuing after anyapplicable grace period has elapsed; (ii) the expiration of, termination of, or failure to replace inaccordance with Section 2.11 within five (5) Business Days after Utility has delivered notice toGenerator of such failure, as appropriate, either the Construction Period Security or the DeliveryTerm Security prior to its intended expiration date; (iii) the failing or ceasing of either theConstruction Period Security or the Delivery Term Security to be in full force and effect for itsintended term; (iv) Generator disaffirms, disclaims, repudiates or rejects, in whole or in part, orchallenges the validity of, the Construction Period Security or the Delivery Term Security; or (v)a default or event of default, howsoever characterized, occurs under the Construction PeriodSecurity or the Delivery Term Security.SECTION 8TERMINATION EVENTS8.1. Termination Events. The occurrence at any time of any of the following eventsconstitutes a Termination Event (a “Termination Event”).8.1.1. Illegality. Due to the adoption of, or any change in, any ApplicableLaw after the Effective Date, or due to the promulgation of, or any change in, the interpretationby any court, tribunal or regulatory authority with competent jurisdiction of any Applicable Lawafter such date, it becomes unlawful (other than as a result of a breach by the party of Section6.2) for a party:(1) to perform any absolute or contingent obligation to make a payment or to receivea payment in respect of the Transaction or to comply with any other materialprovision of this Agreement;(2) to perform any contingent or other obligation which the party has or any othermaterial provision of this Agreement; or(3) to provide or perform its obligations under the Construction Period Security or theDelivery Period Security.-19-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 20118.1.2. Invalidity of the Act. If a court invalidates or declares unconstitutionalthe Act or portion thereof requiring or specifying some performance, right, or obligation ofUtility or Generator.SECTION 9REMEDIES9.1. Right to Terminate Following Event of Default or Termination Event.9.1.1. If at any time an Event of Default with respect to a party (the“Defaulting Party”) has occurred and is then continuing, then the other party (the “Non-Defaulting Party”) may, by not more than twenty (20) calendar days notice in writing to theDefaulting Party specifying the relevant Event of Default, designate a day not earlier than five(5) Business Days after such notice is effective as an Early Termination Date.9.1.2. If at any time a Termination Event has occurred and is then continuing,then either party in the case of an Illegality or an Invalidity of the Act, may, by not more thantwenty (20) calendar days notice in writing to the other party specifying the relevant TerminationEvent, designate a day not earlier than five (5) Business days after such notice is effective as anEarly Termination Date.9.2. Effect of Designation.9.2.1. If notice designating an Early Termination Date is given, theDefaulting Party shall have five (5) Business Days to cure any Event of Default. If after suchfive (5) Business Days the Event of Default or Termination Event is continuing, then the EarlyTermination Date will occur on the date so designated, whether or not the relevant Event ofDefault or Termination Event is then continuing.9.2.2. Upon the occurrence or effective designation of an Early TerminationDate, no further payments under Section 2.1 or 2.7 will be required to be made, and thisAgreement shall be null and avoid, except with respect to the provisions hereof required to effectpayments of the amounts, if any, payable in respect of an Early Termination Date, whichamounts shall be determined and paid pursuant to Section 9.3.9.3. Payments on Early Termination. If an Early Termination Date occurs, thefollowing provisions will apply.9.3.1. Events of Default. If the Early Termination Date results from an Eventof Default, the Defaulting Party will pay the Non-Defaulting Party: (i) all Unpaid Amountsowing to the Non-Defaulting Party; (ii) all expenses payable under Section 9.5: and (iii), in thecase of an Event of Default relating to participating in a Base Residual Auction, an amount equalto the product of (a) the amount, if any, by which the RCP for such Base Residual Auctionexceeds the SOCP, (b) the Awarded Capacity Amount; (c) three hundred and sixty-five (365);-20-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011(d) the Utility Load Ratio, and (e) the number of Delivery Years remaining in the Delivery Termstarting with and including the Delivery Year associated with such Base Residual Auction.9.3.2. Termination Events. If an Early Termination Date results from Section8.1.1 (an Illegality) or Section 8.1.2 (an Invalidity of the Act), each party shall pay to the otherall Unpaid Amounts owing pursuant to the terms of this Agreement.9.3.3. Notice and Payment. The party designating an Early Termination Dateshall provide notice of such Early Termination Date to the other party. Upon Utility’s issuanceor receipt of such notice, Utility shall, as soon as practicable, calculate the amounts payableunder Section 9.3.1 or 9.3.2, as applicable, and shall provide the calculation to the parties,specifying the party who is obligated to pay and the amount of such payment. An amountcalculated as being due in respect of an Unpaid Amount will be payable, as applicable: (i) on theday that notice of the amount payable is effective (in the case of an Early Termination Datewhich is designated or occurs as a result of an Event of Default); or (ii) on the day which is two(2) Business Days after the date on which notice of the amount payable is effective (in the caseof an Early Termination Date which is designated as a result of a Termination Event). Suchamount will be paid together with (to the extent permitted under Applicable Law) interestthereon (before as well as after judgment), from (and including) the relevant Early TerminationDate to (but excluding) the date such amount is paid, at the Interest Rate. Such interest will becalculated on the basis of daily compounding and the actual number of days elapsed.9.4. Rights Under Construction Period Security and Delivery Term Security9.4.1. Parties’ Rights and Remedies. If at any time an Early TerminationDate has occurred as the result of an Event of Default or a Termination Event with respect to theGenerator, then, unless the Generator has paid in full all of its obligations under this Agreementthat are then due, the Utility may exercise one or more of the following rights and remedies:(a) All rights and remedies available to the Utility under the terms of theapplicable Letter of Credit or Cash Escrow Agreement, including without limitation the right todraw on such Letter of Credit and Cash held under such Cash Escrow Agreement;(b) All other rights and remedies available to the Utility under applicable lawas the beneficiary in the case of a letter of credit or secured party in the case of Cash held inescrow; and(c) The right to set-off any amounts payable by the Generator with respect toany obligations under this Agreement against any Cash held on behalf of the Utility under anyCash Escrow Agreement.9.4.2. Deficiencies and Excess Proceeds. The Utility will return to theGenerator any Letter of Credit or Cash held on behalf of the Utility under a Cash EscrowAgreement remaining after liquidation, set-off and/or application under Section 9.4.1 aftersatisfaction in full of all amounts payable by the Generator with respect to any of its obligations-21-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011under the Agreement. The Generator in all events will remain liable for any amounts remainingunpaid after any liquidation, set-off and/or application under such Section 9.4.1.9.5. Expenses. A Defaulting Party will, on demand, indemnify and hold harmless theother party for and against all reasonable out-of-pocket expenses, including legal fees, incurredby the Non-Defaulting Party by reason of the enforcement and protection of its rights hereunderor under the Construction Period Security, the Delivery Term Security, or by reason of the earlytermination of the Transaction, including, but not limited to, costs of collection.9.6. LIMITATION OF LIABILITY. NO PARTY WILL BE REQUIRED TO PAYOR BE LIABLE FOR INCIDENTAL, CONSEQUENTIAL, INDIRECT, OR PUNITIVEDAMAGES (WHETHER OR NOT ARISING FROM ITS NEGLIGENCE) TO ANY OTHERPARTY EXCEPT TO THE EXTENT THAT THE PAYMENTS REQUIRED TO BE MADEPURSUANT HERETO ARE DEEMED TO BE SUCH DAMAGES. IF AND TO THEEXTENT ANY PAYMENT REQUIRED TO BE MADE PURSUANT HERETO IS DEEMEDTO CONSTITUTE LIQUIDATED DAMAGES, THE PARTIES ACKNOWLEDGE ANDAGREE THAT SUCH DAMAGES ARE DIFFICULT OR IMPOSSIBLE TO DETERMINEAND THAT SUCH PAYMENT IS INTENDED TO BE A REASONABLE APPROXIMATIONOF THE AMOUNT OF SUCH DAMAGES AND NOT A PENALTY.SECTION 10TRANSFER10.1. Restriction of Assignments. Except as otherwise provided in this Section 10,neither party may assign this Agreement without (i) the other party’s prior written consent, suchconsent not to be unreasonably delayed, conditioned or withheld, it being understood that refusalto consent to the assignment of the Agreement to a Person that does not own or control theoperation of the Capacity Facility shall not be deemed to be unreasonable, and (ii) the priorapproval of the Board. Any assignment in violation of this provision shall be void.10.2. Generator’s Assignment Without Consent. Notwithstanding the foregoing oranything expressed or implied herein to the contrary, Generator may, without the prior writtenconsent of Utility and with notice to the Board, and subject to the last sentence of this Section10.2, assign this Agreement (i) to a purchaser of all or substantially all of the assets of Generator;or (ii) in connection with the grant of a security interest to any Facility Lender, provided thatsuch security interest does not interfere with the rights of obligations of any party under theConstruction Period Security or Delivery Term Security, (iii) in connection with a merger ofGenerator with another Person or any other transaction resulting in a direct or indirect change ofcontrol of Generator. The foregoing shall be subject to the provisions that such purchaser,Facility Lender, or the Person surviving such merger, as applicable, (i) agrees in writing to bebound by the terms of this Agreement, including the satisfaction of all obligations through itsownership of or control over the operation of the Capacity Facility, and not from another electricgenerating facility, (ii) shall not under any circumstances have equity or ownership rights tomore than 700 MW of Unforced Capacity from electric generation facilities with standard offer-22-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011capacity agreements, and (iii) shall provide or maintain Construction Period Security andDelivery Term Security as required under this Agreement. In connection with any assignment ofthis Agreement by the Generator under this Section, the Generator may transfer, sell, pledge,encumber or collaterally assign its rights under this Agreement or the accounts, revenues orproceeds hereof in connection with any financing or other financial arrangements, and shallprovide notice of such assignment to the Board. Utility agrees to reasonably cooperate withGenerator with respect to any such financing and other financial arrangements, including but notlimited to entering into with the Facility Lender a customary lender consent agreement, whichshall include, but not be limited to, customary terms regarding notice to the Facility Lender ofany potential Event of Default hereunder and standstill periods with respect to the exercise ofremedies hereunder.10.3. Utility’s Assignment Without Consent. Notwithstanding the foregoing oranything expressed or implied herein to the contrary, Utility may, without the prior writtenconsent of Generator and with notice to the Board, assign this Agreement (i) to a purchaser of allor substantially all of the assets of Utility; or (iii) in connection with a merger of Utility withanother Person or any other transaction resulting in a change of control of Utility; provided thatsuch purchaser, Affiliate or the Person surviving such merger, as applicable, agrees in writing tobe bound by the terms of this Agreement.10.4. Assumption by Assignee; No Release from Liabilities. Any permitted assignee ortransferee of a party’s interest in this Agreement shall assume all existing and future obligationsof such party to be performed under this Agreement. Whether or not prior written consent to anassignment is required hereunder, the assignor shall give notice to the other party and to theBoard promptly after a permitted assignment of this Agreement. Unless otherwise agreed to bythe parties and except as set forth in Sections 10.2 and 10.3 above, upon any permittedassignment of this Agreement to an assignee and such assignee’s written assumption of thisAgreement, the assigning party shall be released from the performance of its obligations underthis Agreement for the period from and after the date of such assignment and assumption;provided, however, that in all other cases, the assigning party shall continue to be bound by thisAgreement unless the parties otherwise agree.SECTION 11NOTICES11.1. Effectiveness. Any notice or other communication in respect hereof may be givenin any manner set forth below (except that a notice or other communication under Section 7, 8 or9 will not be effective if given by facsimile transmission or electronic messaging system) to theaddress or number or in accordance with the electronic messaging system details provided andwill be deemed effective as indicated: (i) if in writing and delivered in person or by courier, onthe date it is delivered; (ii) if sent by telex, on the date the recipient’s answerback is received;(iii) if sent by facsimile transmission, on the date that transmission is received by a responsibleemployee of the recipient in legible form (the burden of proving receipt will be on the sender and-23-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011will not be met by a transmission report generated by the sender’s facsimile machine); (iv) if sentby certified or registered mail (airmail, if overseas) or the equivalent (return receipt requested),on the date that mail is delivered or its delivery is attempted; or (v) if sent by electronicmessaging system, on the date that electronic message is received, unless the date of thatdelivery (or attempted delivery) or that receipt, as applicable, is not a Business Day or thatcommunication is delivered (or attempted) or received, as applicable, after the close of businesson a Business Day, in which case that communication will be deemed given and effective on thefirst following day that is a Business Day.11.2. Addresses for Notices.11.2.1. Addresses for notices or communications to Generator:Address:11.2.2. Address for notices or communications to Utility:Address:11.2.3. Change of Addresses. Either party may by notice to the other changethe address, telex or facsimile number or electronic messaging system details at which notices orother communications are to be given to it.12.1. Notice of Dispute.SECTION 12RESOLUTION OF DISPUTES12.1.1. In the event of any dispute, controversy or claim arising out of orrelating to this Agreement or the breach, termination or validity thereof should arise between theparties (a “Dispute”), a party may declare a Dispute by delivering to the other party a writtennotice identifying the disputed issue.-24-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 201112.1.2. If PJM’s RPM is eliminated, then a Dispute shall be deemed to haveoccurred and both parties shall attempt to develop a replacement for the RCP as provided underSection 12.2.2 to (i) amend this Agreement and (ii) permit Transactions to continue over theremaining Delivery Term, subject to Board approval.12.1.3. If PJM’s RPM is modified in a material manner such that it adverselyaffects the performance, calculation or payment of the Transaction, then a party may declare aDispute and both parties shall attempt to develop a replacement for the RCP as provided underSection 12.2.2 to (i) amend this Agreement and (ii) permit Transactions to continue over theremaining Delivery Term, subject to Board approval.12.2. Resolution by the Parties12.2.1. If the Dispute relates to the accuracy of Utility’s calculation of anypayment required to be made under this Agreement (a “Calculation Dispute”), then Generatormust provide written notice of the Dispute to Utility within ten (10) Business Days ofGenerator’s receipt of Utility’s calculation of the payment pursuant to Section 2.2., which noticemust state the nature of Generator’s disagreement with Utility’s calculation and include alldocumentation upon which Generator bases its disagreement. Within ten (10) Business Days ofUtility’s receipt of a written notice claiming a Calculation Dispute, Utility shall either: (a) notifyGenerator that Utility agrees the initial calculation was in error and provide a revised calculationof the payment that is the subject of the Calculation Dispute; or (b) provide Generator with thebasis of Utility’s determination that the calculation was correct, including all documentationupon which Utility relies. If Generator does not accept Utility’s revised calculation or Utility’sexplanation of the original calculation, then, within ten (10) Business Days, executives of bothparties shall meet at a mutually agreeable time and place and thereafter as often as theyreasonably deem necessary, to exchange relevant information and to attempt to resolve theDispute.12.2.2. If the Dispute is not a Calculation Dispute, then upon receipt of awritten notice claiming a Dispute, executives of both parties shall meet at a mutually agreeabletime and place within ten (10) Business Days after delivery of such notice and thereafter as oftenas they reasonably deem necessary, to exchange relevant information and to attempt to resolvethe Dispute. In such meetings and exchanges, a party shall have the right to designate asconfidential any information that such party offers. No confidential information exchanged insuch meetings for the purpose of resolving a Dispute may be used by a party in litigation againstthe other party.12.2.3. Any correction to a calculation upon which the parties agree to resolvethe Calculation Dispute, shall be payable within ten (10) Business Days of such resolution plusinterest at the Interest Rate. .12.2.4. If the parties are unable to resolve a Dispute between themselvespursuant to Section 12.2, then the Dispute will be submitted to the Board for resolution.12.3. Effect of Dispute-25-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011The pendency of a Dispute shall not suspend, either: (a) the obligation of the parties toperform their obligations under this Agreement, including the obligation to make payments, priorto a Termination Date; or (b) the effectiveness of a notice of an Event of Default under Section9.1.1 or a notice designating an Early Termination Date under Section 9.1.2.SECTION 13MISCELLANEOUS13.1. Entire Agreement. This Agreement constitutes the entire agreement andunderstanding of the parties with respect to its subject matter and supersedes all oralcommunication and prior writings with respect thereto.13.2. Amendments. No amendment, modification or waiver in respect hereof will beeffective unless (i) in writing (including a writing evidenced by a facsimile transmission) andexecuted by each of the parties or confirmed by an exchange of telexes or electronic messages onan electronic messaging system and (ii) until approved by the Board.13.3. Remedies Cumulative. Except as provided in this Agreement, the rights, powers,remedies and privileges provided in this Agreement are cumulative and not exclusive of anyrights, powers, remedies and privileges provided by law.13.4. Counterparts. This Agreement (and each amendment, modification and waiver inrespect of it) may be executed and delivered in counterparts (including by facsimiletransmission), each of which will be deemed an original.13.5. Execution of Clearing Requirement. In the event the Transaction is determined tobe subject to any requirement that it be executed or cleared pursuant to the Commodities FuturesTrading Commission or similar exchange or multiparty platform, the parties agree to (i)cooperate to preserve and enforce the provisions of this Agreement and (ii) consent to anycommercially reasonable margin or other requirements.13.6. No Waiver of Rights. A failure or delay in exercising any right, power orprivilege in respect hereof will not be presumed to operate as a waiver, and a single or partialexercise of any right, power or privilege will not be presumed to preclude any subsequent orfurther exercise, of that right, power or privilege or the exercise of any other right, power orprivilege.13.7. Relationship of the Parties. The parties acknowledge that the relationshipbetween Utility and Generator is an independent contractual relationship and nothing in thisAgreement shall create any joint venture, partnership or principal/agent relationship betweenUtility and Generator. Neither Utility nor Generator shall have any right, power or authority toenter into any agreement or commitment, act on behalf of, or otherwise bind the other party inany way.-26-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 201113.8. Governing Law and Jurisdiction13.8.1. Governing Law. This Agreement will be governed by and construed inaccordance with the substantive law of the State of New Jersey, without regard to the applicationof such state’s laws relating to conflicts of laws.13.8.2. Jurisdiction. With respect to any suit, action or proceedings relatinghereto (“Proceedings”), each party irrevocably: (i) submits to the exclusive jurisdiction of thecourts of the State of New Jersey; and (ii) waives any objection which it may have at any time tothe laying of venue of any Proceedings brought in any such court, waives any claim that suchProceedings have been brought in an inconvenient forum and further waives the right to object,with respect to such Proceedings, that such court does not have any jurisdiction over such party.Nothing in this Agreement precludes either party from bringing Proceedings in any otherjurisdiction in order to enforce any judgment obtained in any Proceedings referred to in thepreceding sentence.13.9. Waiver of Immunities. Each party irrevocably waives, to the fullest extentpermitted by Applicable Law, with respect to itself and its revenues and assets (irrespective oftheir use or intended use), all immunity on the grounds of sovereignty or other similar groundsfrom (i) suit, (ii) jurisdiction of any court, (iii) relief by way of injunction, order for specificperformance or for recovery of property, (iv) attachment of its assets (whether before or afterjudgment) and (v) execution or enforcement of any judgment to which it or its revenues or assetsmight otherwise be entitled in any Proceedings in the courts of any jurisdiction and irrevocablyagrees, to the extent permitted by Applicable Law, that it will not claim any such immunity inany Proceedings.13.10. Severability. The invalidity or unenforceability of any provision of thisAgreement shall not affect the other provisions hereof. If any provision of this Agreement isheld to be invalid, the scope of the rights and duties created thereby shall be reduced by thesmallest extent necessary to conform such provision to applicable law, preserving to the greatestextent the intent of the parties to create such rights and duties as set out herein. If necessary topreserve the intent of the parties hereto and the prevailing economic balance between the partiesat the Effective Date, the parties shall negotiate in good faith to amend this Agreement, adoptinga substitute provision that is legally binding and enforceable for the one deemed invalid orunenforceable, provided that such amended Agreement shall be subject to Board approval.-27-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 201113.11. Waiver of Jury Trial. TO THE FULLEST EXTENT PERMITTED BY LAW,EACH OF THE PARTIES HERETO WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BYJURY IN RESPECT OF LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH PARTY FURTHERWAIVES ANY RIGHT TO CONSOLIDATE ANY ACTION IN WHICH A JURY TRIAL HASBEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BEOR HAS NOT BEEN WAIVED. EACH PARTY ACKNOWLEDGES THAT IT AND THEOTHER PARTY HAVE BEEN INDUCED TO ENTER HEREINTO BY, AMONG OTHERTHINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.IN WITNESS WHEREOF the parties have executed this Agreement as of the date first abovewritten.By:Name:Title:Company:By:Name:Title:Company:-28-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011ATTACHMENT ADESCRIPTION OF THE CAPACITY FACILITYGeneral Technology (such as combined cycle, steam cycle, integrated gasification combinedcycle, nuclear, wind, etc.):Size (net MW of installed capacity):Full Load Heat Rate (BTU/kWh, HHV, summer rating):Primary Fuel (such as coal, gas, residual oil, distillate oil):Secondary Fuel (if applicable):Number and Configuration of Prime Movers (such as two industrial frame gas turbines plus onesteam turbine generator, single pulverized fuel boiler plus steam turbine generator, twocirculating fluidized bed boiler plus steam turbine generator, nuclear plant uprate, twentyonshore wind turbines):Location (town or city, county, state):Owner(s) and Ownership Percentage(s):-29-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011ATTACHMENT BFORM OF CONSTRUCTION PERIOD SECURITY LETTER OF CREDITIRREVOCABLE NONTRANSFERABLE STANDBY LETTER OF CREDITReference Number:____________________Date: __________________AMOUNT:USD _____________________EXPIRY: __________________________BENEFICIARY:[UTILITY][ADDRESS OF UTILITY]APPLICANT:[GENERATOR][ADDRESS OF GENERATOR]Ladies and Gentlemen:[BANK] (“we” or the “Bank”) hereby establish our Irrevocable Nontransferable StandbyLetter of Credit No. _________ (this “Letter of Credit”) in your favor in the amount of XXXAND XX/100 Dollars ($) (the “Available Amount”), effective immediately andexpiring at 5:00 p.m., Eastern Prevailing Time, on the Expiration Date (as hereinafter defined).This Letter of Credit expires and shall be of no further force or effect upon the close ofbusiness on ______________ or, if such day is not a Business Day (as hereinafter defined), onthe next [preceding] [succeeding] Business Day (the “Expiration Date”); provided, however, thatthis Letter of Credit shall automatically be extended for additional one-year terms unless weprovide written notice to you, by certified mail return receipt requested or overnight delivery, atleast 60 days prior to the then current Expiration Date. For the purposes hereof, “Business Day”shall mean any day on which commercial banks are not authorized or required to close in NewYork, NY.Subject to the terms and conditions herein, funds under this Letter of Credit are availableto Beneficiary by presentation of your sight draft(s) drawn on the Bank of the following, on orprior to 5:00 p.m. Eastern Prevailing Time, on or prior to the Expiration Date:1. The original of this Letter of Credit and all amendments (or photocopy of theoriginal for partial drawings); and2. The Drawing Certificate issued in the form of Exhibit A attached hereto andwhich forms an integral part hereof, duly completed (including a Statement of Damages, in the-30-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011case of a drawing pursuant to paragraph 1.A, 1.B, 1.C or 1.D thereof) and purportedly bearingthe signature of an executive officer or director of the Beneficiary.Notwithstanding the foregoing, any drawing hereunder may be requested by transmittingthe requisite documents as described above to the Bank by facsimile at ______________ or suchother number as specified from time-to-time by the Bank.The facsimile transmittal shall be deemed delivered when received, provided, however,that the original documents referenced in paragraphs 1 and 2 above and the sight draft referencedabove are received by the Bank prior to 5:00 p.m. Eastern Prevailing Time on the third BusinessDay following receipt of such facsimile transmittal.Partial drawing of funds shall be permitted under this Letter of Credit, and this Letter ofCredit shall remain in full force and effect with respect to any continuing balance; provided that,the Available Amount shall be reduced by the amount of each such drawing.This Letter of Credit may be cancelled upon written notice from the Beneficiary,requesting that the Letter of Credit be cancelled, accompanied by the original of this Letter ofCredit and all amendments.This Letter of Credit is not transferable or assignable. Any purported transfer orassignment shall be void and of no force or effect.Banking charges shall be the sole responsibility of the Applicant.This Letter of Credit sets forth in full our obligations and such obligations shall not in anyway be modified, amended, amplified or limited by reference to any documents, instruments oragreements referred to herein, except only the attachment referred to herein; and any suchreference shall not be deemed to incorporate by reference any document, instrument oragreement except for such attachment.The Bank engages with the Beneficiary that Beneficiary’s drafts drawn under and incompliance with the terms of this Letter of Credit will be duly honored if presented to the Bankon or before the Expiration Date.Except so far as otherwise stated, this Letter of Credit is subject to the InternationalStandby Practices ISP98 (also known as International Chamber of Commerce Publication No.590), or revision currently in effect (the “ISP”). As to matters not covered by the ISP, the lawsof the State of New York, without regard to the principles of conflicts of laws thereunder (otherthan Section 5-1401 of the General Obligations Law of the State of New York), shall govern allmatters with respect to this Letter of Credit.-31-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011AUTHORIZED SIGNATURE for Issuer(Name)Title:-32-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011EXHIBIT ADRAWING CERTIFICATETO [ISSUING BANK NAME]IRREVOCABLE NONTRANSFERABLE STANDBY LETTER OF CREDITNo. _______________DRAWING CERTIFICATEBankBank AddressSubject:Irrevocable Nontransferable Standby Letter of CreditReference Number:The undersigned executive officer or director of [UTILITY] (the “Beneficiary”), herebycertifies under penalty of perjury to [ISSUING BANK NAME] (the “Bank”), and[GENERATOR] (the “Applicant”), with reference to Irrevocable Nontransferable Standby Letterof Credit No. , dated (the Letter of Credit”), issued by the Bank in favorof the Beneficiary, as follows as of the date hereof:1. The Beneficiary is entitled to payment of an amount equal to $_________ underthat certain Standard Offer Capacity Agreement between Applicant and Beneficiary dated as of_______________, 20___ (the “Agreement”) for the following reason(s) [check applicableprovision]:[ ]A. An “Early Termination Date” (as defined in the Agreement) has occurred or beendesignated as a result of an “Event of Default” (as defined in the Agreement) or TerminationEvent for which the Applicant owes a termination payment, and the true calculation of suchpayment amount is set forth in detail in the attached Statement of Damages.[ ]B. (i) (A) The Bank has heretofore provided written notice to the Beneficiary of theBank’s intent not to renew the Letter of Credit following the present Expiration Date thereof or(B) the Letter of Credit will expire in fewer than 30 days from the date hereof, and (ii) theApplicant is required to but has not provided Beneficiary alternative Construction PeriodSecurity (as defined in the Agreement). The Applicant will hold the proceeds of the Letter of-33-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011Credit as cash collateral for any and all amounts owing to the Applicant under the Agreementuntil such time as it is entitled to payment of such amount pursuant to the Agreement.2. Based upon the foregoing, the Beneficiary hereby makes demand under the Letterof Credit for payment of _____________________________ U.S. DOLLARS AND____/100ths (U.S.$_________), which amount does not exceed (i) the amount set forth inparagraph 1 above and (ii) the Available Amount under the Letter of Credit as of the date hereof.3. Funds paid pursuant to the provisions of the Letter of Credit shall be wiretransferred to the Beneficiary in accordance with the following instructions:_________________________________________________________________________________________________________Unless otherwise provided herein, capitalized terms which are used and not definedherein shall have the meaning given each such term in the Letter of Credit.IN WITNESS WHEREOF, this Certificate has been duly executed and delivered,[together with the attached Statement of Damages,] on behalf of the Beneficiary by itsundersigned executive officer or director as of this ____ day of ___________ , _____.Beneficiary:[UTILITY]By:Name:Title:Copy to:[GENERATOR][ADDRESS OF GENERATOR][ATTACH STATEMENT OF DAMAGES, IF APPLICABLE]-34-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011STATEMENT OF DAMAGESFor the reason(s) indicated in the Drawing Certificate to which this Statement ofDamages is attached, and which this Statement of Damages is an integral part of, the Beneficiarycertifies (i) that it has calculated that $(or a greater amount) is presently dueand owing to Beneficiary on account of [a continuing “Event of Default”] [a Termination Event][an “Early Termination Date”] (as defined in the Agreement), calculated as set forth in detailbelow, and (ii) such calculation is made in accordance with Sections 2.3.4 and 9 of theAgreement.[INSERT DETAILED CALCULATION OF DAMAGES]-35-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011ATTACHMENT CFORM OF CASH ESCROW AGREEMENT FOR CONSTRUCTION PERIODSECURITYPursuant to this Escrow Agreement (“Agreement”) dated [__________], [UTILITY] (the“Secured Party”) and [GENERATOR] (the “Depositor”) hereby establish an Escrow Account(the “Account”) with ____________ (the “Agent”) (the Secured Party, Depositor and Agenthereafter referred to individually as a “Party” and collectively as the “Parties”), to be maintainedand administered for the purposes described in Schedule I attached hereto in accordance with thefollowing terms and conditions:The funds and/or property described on Schedule I attached hereto and incorporatedherein (the “Cash Deposit”) will be deposited in the Account upon delivery thereof to the Agentin the manner and at the time(s) specified in the said Schedule I. The Agent is hereby authorizedand directed by the Secured Party and the Depositor, as their escrow agent, to hold, deal with anddispose of the Cash Deposit as provided in the Instructions set forth in Schedule II attachedhereto and incorporated herein; subject to and in accordance with, however, the terms andconditions set forth in the following paragraphs of this Agreement, which in all events shallgovern and control over any contrary or inconsistent provisions contained in Schedules I or IIattached hereto.Terms not defined but used herein and in Schedules I, II, III and IV hereto will have themeanings given to them in the Standard Offer Capacity Agreement (the “SOCA”), dated as of[________], 20__ between Secured Party and Depositor.1. Agent’s Duties. Agent’s duties and responsibilities shall be limited to thoseexpressly set forth in this Agreement, and Agent shall not be subject to, or obliged to recognize,any other agreement between any or all of the other Parties or any other persons, even thoughreference thereto may be made herein; provided, however, this Agreement may be amended atany time or times by an instrument in writing signed by all of the Parties. Agent shall not besubject to or obligated to recognize any notice, direction or instruction of any or all of the Partiesor of any other person, except as expressly provided for and authorized in Schedule II, and inperforming any duties under this Agreement, the Agent shall not be liable to any Party forconsequential damages (including, without limitation lost profits), losses or expenses, except andto the extent attributable to any gross negligence or willful misconduct on the part of the Agent.2. Court Orders or Process. If any controversy arises between the Parties, or withany other party, concerning the subject matter of this Agreement, its terms or conditions, Agentwill not be required to determine and/or resolve the controversy or to take any action regardingit. Agent may hold all documents and funds and may wait for settlement of any such controversyby final appropriate legal proceedings or other means as, in Agent’s discretion, Agent mayrequire as evidence of final settlement, despite what may be set forth elsewhere in thisAgreement. In such event, Agent will not be liable for interest or damage. Agent is authorized,in its sole discretion, to comply with orders issued or process entered by any court with respect tothe Account, the Cash Deposit or this Agreement, without determination by the Agent of such-36-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011court’s jurisdiction in the matter. If any part of the Cash Deposit are at any time attached,garnished, or levied upon under any court order, or in case the payment, assignment, transfer,conveyance or delivery of any such property shall be stayed or enjoined by any court order, or incase any order, judgment or decree shall be made or entered by any court affecting such propertyor any part thereof, then in any such event, Agent is authorized, in its sole discretion, to relyupon and comply with any such order, writ, judgment or decree which it is advised by legalcounsel of its own choosing is binding upon it; and if Agent complies with any such order writ,judgment or decree, it shall not be liable to either the Secured Party or the Depositor or to anyother person, firm or corporation by reason of such compliance, even though such order, writ,judgment or decree may be subsequently reversed, modified, annulled, set aside or vacated.3. Agent’s Actions and Reliance. Agent shall not be personally liable for any acttaken or omitted by it hereunder if taken or omitted by it in good faith and in the exercise of itsown best judgment, except and to the extent any such act or omission constitutes grossnegligence or willful misconduct on the part of the Agent. Agent shall also be fully protected inrelying upon any written notice, instruction, direction, certificate or document provided to itunder and pursuant to this Agreement that in good faith it believes to be genuine, includingwritten instructions from the Secured Party or the Depositor in the form of the attachedExhibit(s), if any.4. Collections. Unless otherwise specifically indicated in Schedule II, Agent shallproceed as soon as practicable to collect any checks, interest due, matured principal or othercollection items with respect to Cash Deposit at any time deposited in the Account. All suchcollections shall be subject to the usual collection procedures regarding items received by Agentfor deposit or collection. Agent shall not be responsible for any collections with respect to theCash Deposit if Agent is not registered as record owner thereof or otherwise is not entitled torequest or receive payment thereof as a matter of legal or contractual right. All collectionpayments or receipts shall be deposited to the respective Account, except as otherwise providedin Schedule II. Agent shall not be required or have a duty to notify anyone of any payment ormaturity under the terms of any instrument, security or obligation deposited in the Account, norto take any legal action to enforce payment of any check, instrument or other security depositedin the Account. The Account is a safekeeping escrow account, and no interest shall be paid byAgent on any money deposited or held therein, except as provided in Section 6 hereof.5. Agent Responsibility. Agent shall not be responsible or liable for the sufficiencyor accuracy of the form, execution, validity or genuineness of documents, instruments orsecurities now or hereafter deposited in the Account, or of any endorsement thereon, or for anylack of endorsement thereon, or for any description therein. Registered ownership of or otherlegal title to Cash Deposit deposited in the Account shall be maintained in the name of Agent, orits nominee, only if expressly provided in Schedule II. Agent may maintain qualifying CashDeposit in a Federal Reserve Bank or in any registered clearing agency as Agent may select, andmay register such deposited Cash Deposit in the name of Agent or its agent or nominee on therecords of such Federal Reserve Bank or such registered clearing agency or a nominee of either.Agent shall not be responsible or liable in any respect on account of the identity, authority or-37-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011rights of the persons executing or delivering or purporting to execute or deliver any suchdocument, security or endorsement or this Agreement.6. Investments. All monies held in the Account shall be invested by Agent in atriple “A” rated money market fund or in such other investments as may be provided for inSchedule III. The shares of the funds are not deposits or obligations of, or guaranteed by anybank, nor are they insured by the Federal Deposit Insurance Corporation, the Federal ReserveBoard or any other agency. The investment in such fund or other investments may involveinvestment risk, including possible loss of principal. The Agent shall not be liable for losses,penalties or charges incurred upon any sale or purchase of any such investment. All interest,dividends, distributions and other accretions to the Cash Deposit shall [become part of the CashDeposit] [be disbursed pursuant to Schedule III]. All entities entitled to receive interest orincome from the Account will provide Agent with a W-9 or W-8 IRS tax form prior to thedisbursement of interest or income. A statement of citizenship will be provided if requested byAgent.7. Notices/Directions to Agent. Notices and directions to Agent from the SecuredParty or the Depositor, or from other persons authorized to give such notices or directions asexpressly set forth in Schedule II, shall be in writing and signed by an authorized representativeas identified pursuant to Schedule II, and shall not be deemed to be given until actually receivedby Agent’s employee or officer who administers the Account. Agent shall not be responsible orliable for the authenticity or accuracy of notices or directions properly given hereunder if thewritten form and execution thereof on its face purports to satisfy the requirements applicablethereto as set forth in Schedule II, as determined by Agent in good faith without additionalconfirmation or investigation.8. Books and Records. Agent shall maintain books and records regarding itsadministration of the Account, and the deposit, investment, collections and disbursement ortransfer of Cash Deposit, shall retain copies of all written notices and directions sent or receivedby it in the performance of its duties hereunder, and shall afford each of the Secured Party andthe Depositor reasonable access, during regular business hours, to review and make photocopies(at Depositor’s cost) of the same.9. Disputes Among Depositors and/or Third Parties. In the event Agent is notifiedof any dispute, disagreement or legal action between the Secured Party and the Depositor and/orany third parties, relating to or arising in connection with the Account, the Cash Deposit or theperformance of the Agent’s duties under this Agreement, the Agent shall be authorized andentitled, subject to Section 2 hereof, to suspend further performance hereunder, to retain and holdthe Cash Deposit then in the Account, and to take no further action with respect thereto until thematter has been fully resolved, as evidenced by written notification signed by the Secured Partyand the Depositor and any other parties to such dispute, disagreement or legal action.10. Notice by Agent. Any notices which Agent is required or desires to givehereunder to the Secured Party or the Depositor shall be in writing and may be given by mailingthe same to the address indicated below opposite the signature of such Party (or to such otheraddress as said Party may have theretofore substituted therefore by written notification to Agent),-38-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011by United States certified or registered mail, postage prepaid, by reputable overnight courierservice, or by facsimile, so long as receipt of any such facsimile is confirmed. For all purposeshereof, any notice so mailed shall be as effective as though served upon the person of the Partyto whom it was mailed on the third (3rd) business day after the time it is deposited in the UnitedStates mail by Agent, properly addressed and with postage prepaid, whether or not such Partythereafter actually receives such notice. Notice given in any other manner shall be effectiveupon receipt. Whenever under the terms hereof the time for Agent’s giving a notice orperforming an act falls upon a Saturday, Sunday, or holiday, such time shall be extended to thenext business day.11. Agent Compensation and Expenses. Agent shall be paid a fee for its services asset forth on Schedule IV attached hereto and incorporated herein, which shall be subject toincrease upon notice sent to the Secured Party and the Depositor, and reimbursed for itsreasonable costs and expenses incurred. The Depositor will pay all Agent’s usual charges andAgent may deduct such sums from the funds deposited. If Agent’s fees, reasonable costs orexpenses provided for herein are not promptly paid when due, and if there is no cash orinsufficient cash in the Account to pay the same, then upon thirty (30) days’ prior written noticeto the Secured Party and the Depositor, Agent may sell such portion of the Cash Deposit held inthe Account as necessary and reimburse itself therefor from the proceeds of such sale. In theevent that the conditions of this Agreement are not promptly fulfilled; or if Agent renders anyservice not provided for in this Agreement; or if the Secured Party and the Depositor request asubstantial modification of its terms; or if any controversy arises, or if Agent is made a party toor intervenes in any litigation pertaining to this escrow or its subject matter or, in the exercise ofits business judgment, finds it necessary to consult with counsel regarding the same, then in anysuch case Agent shall be reasonably compensated for such extraordinary services and reimbursedfor all costs, attorney’s fees (including reasonably allocated costs of in-house counsel), andexpenses reasonably incurred by Agent in connection with such default, delay, controversy orlitigation, and Agent shall have the right to retain all documents and/or other things of value atany time held by Agent in this escrow until such compensation, fees, costs, and expenses arepaid. The Depositor promise to pay these sums upon demand. The Depositor and its respectivesuccessors and assigns agree to indemnify and hold Agent harmless against any and all losses,claims, damages, liabilities, and expenses, including reasonable costs of investigation, counselfees (including reasonably allocated costs of in-house counsel) and disbursements that may beimposed on Agent or incurred by Agent in connection with the performance of its duties underthis Agreement. Agent shall have a first lien on the Cash Deposit for such compensation andexpenses.12. Agent Resignation. It is understood that Agent reserves the right to resign at anytime by giving written notice of its resignation, specifying the effective date thereof, to theSecured Party and the Depositor. Within thirty (30) days after receiving the aforesaid notice, theSecured Party and the Depositor agree to appoint a successor escrow agent to which Agent maytransfer the Cash Deposit then held in the Account, less its unpaid fees, costs and expenses. If asuccessor escrow agent has not been appointed and has not accepted such appointment by theend of such thirty (30) day period, Agent may apply to a court of competent jurisdiction for theappointment of a successor escrow agent, and the costs, expenses and reasonable attorney’s fees-39-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011which Agent incurs in connection with such a proceeding shall be paid by the Secured Party andthe Depositor.13. Escrow Termination. If this Agreement shall not have previously terminated,then it shall terminate on [___________], as provided in Schedule II, at which time the CashDeposit then held in the Account, less Agent’s unpaid fees, costs and expenses shall bedistributed in the following manner:[____________________________________________________]14. Governing Law. This Agreement shall be construed, enforced, and administeredin accordance with the laws of the State of [New Jersey].15. Automatic Succession. Any company into which the Agent may be merged orwith which it may be consolidated, or any company to whom Agent may transfer a substantialamount of its Escrow business, shall be the Successor to the Agent without the execution orfiling of any paper or any further act on the part of any of the Parties, anything herein to thecontrary notwithstanding.16. Disclosure: The Parties hereby agree not to use the name of [insert name ofAgent] to imply an association with the transaction other than that of a legal escrow agent.17. Counterparts: This Agreement may be executed in any number of counterparts,each of which shall be an original, but all of which, when taken together, shall constitute and beone and the same instrument. The exchange of copies of this Agreement and of signature pagesby facsimile transmission shall constitute effective execution and delivery of this Agreement asto the Parties and may be used in lieu of the original Agreement for all purposes. Signatures ofthe Parties transmitted by facsimile shall be deemed to be their original signatures for allpurposes.The undersigned Agent hereby agrees to hold, deal with and dispose of the Cash Depositat any time deposited to the Account in accordance with the foregoing Agreement.[Signature page follows]-40-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011IN WITNESS WHEREOF, the undersigned have affixed their signatures and herebyadopt as part of this instrument Schedules I, II, III and IV, which are incorporated by reference.SECURED PARTY:By:Its:(Address)DEPOSITOR:By:Its:(Address)(City, State and Zip Code)(City, State and Zip Code)(Telephone)(Telephone)(Facsimile Number)Tax I.D.(Facsimile Number)Tax I.D._____________________________________,as AgentBy:Its:Notices to Agent shall be sent to:[Name][Address][City, State, Zip]With Fax Copy to:[Name][Facsimile Number]-41-

SCHEDULE ITO CASH ESCROW AGREEMENTPURPOSE AND MANNER OF DEPOSITSBoard / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011Credit Support provided by Depositor in the form of Cash under the SOCA, allinvestments of such Cash, and all proceeds of such investments.All Credit Support in the form of Cash provided by the Depositor shall be deposited inthe Account promptly upon receipt by the Agent.Instructions for transfer of funds into the Account:____________________________________________________________________________________-42-

SCHEDULE IITO CASH ESCROW AGREEMENTINSTRUCTIONS OF DEPOSITORSBoard / LCAPP AgentFinal Proposed Form SOCAMarch 1, 20111. Upon written notice signed by the Secured Party to the Agent that one or more ofthe following events has occurred, Agent shall withdraw Cash in the amount specified in suchnotice from the Account (as described on Schedule I) and shall transfer such Cash in accordancewith the Secured Party’s instructions.(d)An Early Termination Date (as defined in the SOCA) has occurred or beendesignated as a result of an Event of Default or a Termination Event (as defined inthe Agreement) and a specified amount of the Termination Payment (as defined inthe SOCA) owed by the Depositor to the Secured Party remains outstanding.2. Upon written notice signed by both the Secured Party and the Depositor that theDepositor has replaced a specified amount of Cash in the Account with a Letter of Credit (asdefined in the SOCA), the Agent shall withdraw such amount of Cash from Depositor’sSubaccount and transfer such Cash in accordance with the Depositor’s instructions.3. The Agent shall liquidate such Cash Deposit from the Account as may benecessary to meet the withdrawal instructions under paragraphs 1 through 2 of this Schedule II.7. Authorized persons referred to in Sections 1 and 7 of the Agreement are asspecified below, as such names may be amended from time to time by notice to the Agent:For Depositor:For Secured Party:-43-

SCHEDULE IIITO CASH ESCROW AGREEMENTPERMITTED INVESTMENTSBoard / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011-44-

SCHEDULE IVTO CASH ESCROW AGREEMENTSCHEDULE OF FEES FOR SERVICESAS ESCROW AGENTBoard / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011--45-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011ATTACHMENT DFORM OF DELIVERY TERM SECURITY LETTER OF CREDITIRREVOCABLE NONTRANSFERABLE STANDBY LETTER OF CREDITReference Number:____________________Date: __________________AMOUNT:USD _____________________EXPIRY: __________________________BENEFICIARY:[UTILITY][ADDRESS OF UTILITY]APPLICANT:[GENERATOR][ADDRESS OF GENERATOR]Ladies and Gentlemen:[BANK] (“we” or the “Bank”) hereby establish our Irrevocable Nontransferable StandbyLetter of Credit No. _________ (this “Letter of Credit”) in your favor in the amount of XXXAND XX/100 Dollars ($) (the “Available Amount”), effective immediately andexpiring at 5:00 p.m., Eastern Prevailing Time, on the Expiration Date (as hereinafter defined).This Letter of Credit expires and shall be of no further force or effect upon the close ofbusiness on ______________ or, if such day is not a Business Day (as hereinafter defined), onthe next [preceding] [succeeding] Business Day (the “Expiration Date”); provided, however, thatthis Letter of Credit shall automatically be extended for additional one-year terms unless weprovide written notice to you, by certified mail return receipt requested or overnight delivery, atleast 60 days prior to the then current Expiration Date. For the purposes hereof, “Business Day”shall mean any day on which commercial banks are not authorized or required to close in NewYork, NY.Subject to the terms and conditions herein, funds under this Letter of Credit are availableto Beneficiary by presentation of your sight draft(s) drawn on the Bank of the following, on orprior to 5:00 p.m. Eastern Prevailing Time, on or prior to the Expiration Date:1. The original of this Letter of Credit and all amendments (or photocopy of theoriginal for partial drawings); and2. The Drawing Certificate issued in the form of Attachment A attached hereto andwhich forms an integral part hereof, duly completed (including a Statement of Damages, in the--46-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011case of a drawing pursuant to paragraph 1.A, 1.B or 1.C thereof) and purportedly bearing thesignature of an executive officer or director of the Beneficiary.Notwithstanding the foregoing, any drawing hereunder may be requested by transmittingthe requisite documents as described above to the Bank by facsimile at ______________ or suchother number as specified from time-to-time by the Bank.The facsimile transmittal shall be deemed delivered when received, provided, however,that the original documents referenced in paragraphs 1 and 2 above and the sight draft referencedabove are received by the Bank prior to 5:00 p.m. Eastern Prevailing Time on the third BusinessDay following receipt of such facsimile transmittal.Partial drawing of funds shall be permitted under this Letter of Credit, and this Letter ofCredit shall remain in full force and effect with respect to any continuing balance; provided that,the Available Amount shall be reduced by the amount of each such drawing.This Letter of Credit may be cancelled upon written notice from the Beneficiary,requesting that the Letter of Credit be cancelled, accompanied by the original of this Letter ofCredit and all amendments.This Letter of Credit is not transferable or assignable. Any purported transfer orassignment shall be void and of no force or effect.Banking charges shall be the sole responsibility of the Applicant.This Letter of Credit sets forth in full our obligations and such obligations shall not in anyway be modified, amended, amplified or limited by reference to any documents, instruments oragreements referred to herein, except only the attachment referred to herein; and any suchreference shall not be deemed to incorporate by reference any document, instrument oragreement except for such attachment.The Bank engages with the Beneficiary that Beneficiary’s drafts drawn under and incompliance with the terms of this Letter of Credit will be duly honored if presented to the Bankon or before the Expiration Date.Except so far as otherwise stated, this Letter of Credit is subject to the InternationalStandby Practices ISP98 (also known as International Chamber of Commerce Publication No.590), or revision currently in effect (the “ISP”). As to matters not covered by the ISP, the lawsof the State of New York, without regard to the principles of conflicts of laws thereunder (otherthan Section 5-1401 of the General Obligations Law of the State of New York), shall govern allmatters with respect to this Letter of Credit.--47-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011AUTHORIZED SIGNATURE for Issuer(Name)Title:--48-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011EXHIBIT ADRAWING CERTIFICATETO [ISSUING BANK NAME]IRREVOCABLE NONTRANSFERABLE STANDBY LETTER OF CREDITNo. _______________DRAWING CERTIFICATEBankBank AddressSubject:Irrevocable Nontransferable Standby Letter of CreditReference Number:The undersigned executive officer or director of [UTILITY] (the “Beneficiary”), herebycertifies under penalty of perjury to [ISSUING BANK NAME] (the “Bank”), and[GENERATOR] (the “Applicant”), with reference to Irrevocable Nontransferable Standby Letterof Credit No. , dated (the Letter of Credit”), issued by the Bank in favorof the Beneficiary, as follows as of the date hereof:1. The Beneficiary is entitled to payment of an amount equal to $_________ underthat certain Standard Offer Capacity Agreement between Applicant and Beneficiary dated as of_______________, 20___ (the “Agreement”) for the following reason(s) [check applicableprovision]:[ ]A. The Payment Date under Section 2.2 of the Agreement has occurred with respectto such amount, and such amount is presently due and owing under Section 4.1.2 of theAgreement.[ ]B. An “Early Termination Date” (as defined in the Agreement) has occurred or beendesignated as a result of an “Event of Default” (as defined in the Agreement) or TerminationEvent for which the Applicant owes a termination payment, and the true calculation of suchpayment amount is set forth in detail in the attached Statement of Damages.-49-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011[ ]C. (i) (A) The Bank has heretofore provided written notice to the Beneficiary of theBank’s intent not to renew the Letter of Credit following the present Expiration Date thereof or(B) the Letter of Credit will expire in fewer than 30 days from the date hereof, and (ii) theApplicant is required to but has not provided Beneficiary alternative Delivery Term Security (asdefined in the Agreement). The Applicant will hold the proceeds of the Letter of Credit as cashcollateral for any and all amounts owing to the Applicant under the Agreement until such time asit is entitled to payment of such amount pursuant to the Agreement.2. Based upon the foregoing, the Beneficiary hereby makes demand under the Letterof Credit for payment of _____________________________ U.S. DOLLARS AND____/100ths (U.S.$_________), which amount does not exceed (i) the amount set forth inparagraph 1 above and (ii) the Available Amount under the Letter of Credit as of the date hereof.3. Funds paid pursuant to the provisions of the Letter of Credit shall be wiretransferred to the Beneficiary in accordance with the following instructions:_________________________________________________________________________________________________________Unless otherwise provided herein, capitalized terms which are used and not definedherein shall have the meaning given each such term in the Letter of Credit.IN WITNESS WHEREOF, this Certificate has been duly executed and delivered,[together with the attached Statement of Damages,] on behalf of the Beneficiary by itsundersigned executive officer or director as of this ____ day of ___________ , _____.Beneficiary:[UTILITY]By:Name:Title:Copy to:[GENERATOR][ADDRESS OF GENERATOR][ATTACH STATEMENT OF DAMAGES, IF APPLICABLE]-50-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011STATEMENT OF DAMAGESFor the reason(s) indicated in the Drawing Certificate to which this Statement ofDamages is attached, and which this Statement of Damages is an integral part of, the Beneficiarycertifies (i) that it has calculated that $(or a greater amount) is presently dueand owing to Beneficiary on account of [a failure to make a payment under Section 4.1.2 of theAgreement] [an “Early Termination Date”] (as defined in the Agreement), calculated as set forthin detail below, and (ii) such calculation is made in accordance with Sections [2.3.4 and 9 of theAgreement.[INSERT DETAILED CALCULATION OF DAMAGES]-51-

-52-Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011ATTACHMENT EFORM OF CASH ESCROW AGREEMENT FOR DELIVERY TERM SECURITYPursuant to this Escrow Agreement (“Agreement”) dated [__________], [UTILITY] (the“Secured Party”) and [GENERATOR] (the “Depositor”) hereby establish an Escrow Account(the “Account”) with ____________ (the “Agent”) (the Secured Party, Depositor and Agenthereafter referred to individually as a “Party” and collectively as the “Parties”), to be maintainedand administered for the purposes described in Schedule I attached hereto in accordance with thefollowing terms and conditions:The funds and/or property described on Schedule I attached hereto and incorporatedherein (the “Cash Deposit”) will be deposited in the Account upon delivery thereof to the Agentin the manner and at the time(s) specified in the said Schedule I. The Agent is hereby authorizedand directed by the Secured Party and the Depositor, as their escrow agent, to hold, deal with anddispose of the Cash Deposit as provided in the Instructions set forth in Schedule II attachedhereto and incorporated herein; subject to and in accordance with, however, the terms andconditions set forth in the following paragraphs of this Agreement, which in all events shallgovern and control over any contrary or inconsistent provisions contained in Schedules I or IIattached hereto.Terms not defined but used herein and in Schedules I, II, III and IV hereto will have themeanings given to them in the Standard Offer Capacity Agreement (the “SOCA”), dated as of[________], 20__ between the Secured Party and Depositor.1. Agent’s Duties. Agent’s duties and responsibilities shall be limited to thoseexpressly set forth in this Agreement, and Agent shall not be subject to, or obliged to recognize,any other agreement between any or all of the other Parties or any other persons, even thoughreference thereto may be made herein; provided, however, this Agreement may be amended atany time or times by an instrument in writing signed by all of the Parties. Agent shall not besubject to or obligated to recognize any notice, direction or instruction of any or all of the Partiesor of any other person, except as expressly provided for and authorized in Schedule II, and inperforming any duties under this Agreement, the Agent shall not be liable to any Party forconsequential damages (including, without limitation lost profits), losses or expenses, except andto the extent attributable to any gross negligence or willful misconduct on the part of the Agent.2. Court Orders or Process. If any controversy arises between the Parties, or withany other party, concerning the subject matter of this Agreement, its terms or conditions, Agentwill not be required to determine and/or resolve the controversy or to take any action regardingit. Agent may hold all documents and funds and may wait for settlement of any such controversyby final appropriate legal proceedings or other means as, in Agent’s discretion, Agent mayrequire as evidence of final settlement, despite what may be set forth elsewhere in thisAgreement. In such event, Agent will not be liable for interest or damage. Agent is authorized,in its sole discretion, to comply with orders issued or process entered by any court with respect to-53-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011the Account, the Cash Deposit or this Agreement, without determination by the Agent of suchcourt’s jurisdiction in the matter. If any Cash Deposit are at any time attached, garnished, orlevied upon under any court order, or in case the payment, assignment, transfer, conveyance ordelivery of any such property shall be stayed or enjoined by any court order, or in case any order,judgment or decree shall be made or entered by any court affecting such property or any partthereof, then in any such event, Agent is authorized, in its sole discretion, to rely upon andcomply with any such order, writ, judgment or decree which it is advised by legal counsel of itsown choosing is binding upon it; and if Agent complies with any such order writ, judgment ordecree, it shall not be liable to either the Secured Party or the Depositor or to any other person,firm or corporation by reason of such compliance, even though such order, writ, judgment ordecree may be subsequently reversed, modified, annulled, set aside or vacated.3. Agent’s Actions and Reliance. Agent shall not be personally liable for any acttaken or omitted by it hereunder if taken or omitted by it in good faith and in the exercise of itsown best judgment, except and to the extent any such act or omission constitutes grossnegligence or willful misconduct on the part of the Agent. Agent shall also be fully protected inrelying upon any written notice, instruction, direction, certificate or document provided to itunder and pursuant to this Agreement that in good faith it believes to be genuine, includingwritten instructions from the Secured Party or the Depositor in the form of the attachedExhibit(s), if any.4. Collections. Unless otherwise specifically indicated in Schedule II, Agent shallproceed as soon as practicable to collect any checks, interest due, matured principal or othercollection items with respect to Cash Deposit at any time deposited in the Account. All suchcollections shall be subject to the usual collection procedures regarding items received by Agentfor deposit or collection. Agent shall not be responsible for any collections with respect to anyof the Cash Deposit if Agent is not registered as record owner thereof or otherwise is not entitledto request or receive payment thereof as a matter of legal or contractual right. All collectionpayments or receipts shall be deposited to the respective Account, except as otherwise providedin Schedule II. Agent shall not be required or have a duty to notify anyone of any payment ormaturity under the terms of any instrument, security or obligation deposited in the Account, norto take any legal action to enforce payment of any check, instrument or other security depositedin the Account. The Account is a safekeeping escrow account, and no interest shall be paid byAgent on any money deposited or held therein, except as provided in Section 6 hereof.5. Agent Responsibility. Agent shall not be responsible or liable for the sufficiencyor accuracy of the form, execution, validity or genuineness of documents, instruments orsecurities now or hereafter deposited in the Account, or of any endorsement thereon, or for anylack of endorsement thereon, or for any description therein. Registered ownership of or otherlegal title to Cash Deposit deposited in the Account shall be maintained in the name of Agent, orits nominee, only if expressly provided in Schedule II. Agent may maintain qualifying CashDeposit in a Federal Reserve Bank or in any registered clearing agency as Agent may select, andmay register such deposited Cash Deposit in the name of Agent or its agent or nominee on therecords of such Federal Reserve Bank or such registered clearing agency or a nominee of either.Agent shall not be responsible or liable in any respect on account of the identity, authority or-54-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011rights of the persons executing or delivering or purporting to execute or deliver any suchdocument, security or endorsement or this Agreement.6. Investments. All monies held in the Account shall be invested by Agent in atriple “A” rated money market fund or in such other investments as may be provided for inSchedule III. The shares of the funds are not deposits or obligations of, or guaranteed by anybank, nor are they insured by the Federal Deposit Insurance Corporation, the Federal ReserveBoard or any other agency. The investment in such fund or other investments may involveinvestment risk, including possible loss of principal. The Agent shall not be liable for losses,penalties or charges incurred upon any sale or purchase of any such investment. All interest,dividends, distributions and other accretions to the Cash Deposit shall [become part of the CashDeposit] [be disbursed pursuant to Schedule III]. All entities entitled to receive interest orincome from the Account will provide Agent with a W-9 or W-8 IRS tax form prior to thedisbursement of interest or income. A statement of citizenship will be provided if requested byAgent.7. Notices/Directions to Agent. Notices and directions to Agent from the SecuredParty or the Depositor, or from other persons authorized to give such notices or directions asexpressly set forth in Schedule II, shall be in writing and signed by an authorized representativeas identified pursuant to Schedule II, and shall not be deemed to be given until actually receivedby Agent’s employee or officer who administers the Account. Agent shall not be responsible orliable for the authenticity or accuracy of notices or directions properly given hereunder if thewritten form and execution thereof on its face purports to satisfy the requirements applicablethereto as set forth in Schedule II, as determined by Agent in good faith without additionalconfirmation or investigation.8. Books and Records. Agent shall maintain books and records regarding itsadministration of the Account, and the deposit, investment, collections and disbursement ortransfer of Cash Deposit, shall retain copies of all written notices and directions sent or receivedby it in the performance of its duties hereunder, and shall afford each of the Secured Party andthe Depositor reasonable access, during regular business hours, to review and make photocopies(at Depositor’s cost) of the same.9. Disputes Among Depositors and/or Third Parties. In the event Agent is notifiedof any dispute, disagreement or legal action between the Secured Party and the Depositor and/orany third parties, relating to or arising in connection with the Account, the Cash Deposit or theperformance of the Agent’s duties under this Agreement, the Agent shall be authorized andentitled, subject to Section 2 hereof, to suspend further performance hereunder, to retain and holdthe Cash Deposit then in the Account, and to take no further action with respect thereto until thematter has been fully resolved, as evidenced by written notification signed by the Secured Partyand the Depositor and any other parties to such dispute, disagreement or legal action.10. Notice by Agent. Any notices which Agent is required or desires to givehereunder to the Secured Party or the Depositor shall be in writing and may be given by mailingthe same to the address indicated below opposite the signature of such Party (or to such otheraddress as said Party may have theretofore substituted therefor by written notification to Agent),-55-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011by United States certified or registered mail, postage prepaid, by reputable overnight courierservice, or by facsimile, so long as receipt of any such facsimile is confirmed. For all purposeshereof, any notice so mailed shall be as effective as though served upon the person of the Partyto whom it was mailed on the third (3rd) business day after the time it is deposited in the UnitedStates mail by Agent, properly addressed and with postage prepaid, whether or not such Partythereafter actually receives such notice. Notice given in any other manner shall be effectiveupon receipt. Whenever under the terms hereof the time for Agent’s giving a notice orperforming an act falls upon a Saturday, Sunday, or holiday, such time shall be extended to thenext business day.11. Agent Compensation and Expenses. Agent shall be paid a fee for its services asset forth on Schedule IV attached hereto and incorporated herein, which shall be subject toincrease upon notice sent to the Secured Party and the Depositor, and reimbursed for itsreasonable costs and expenses incurred. The Depositor will pay all Agent’s usual charges andAgent may deduct such sums from the funds deposited. If Agent’s fees, reasonable costs orexpenses provided for herein are not promptly paid when due, and if there is no cash orinsufficient cash in the Account to pay the same, then upon thirty (30) days’ prior written noticeto the Secured Party and the Depositor, Agent may sell such portion of the Cash Deposit held inthe Account as necessary and reimburse itself therefor from the proceeds of such sale. In theevent that the conditions of this Agreement are not promptly fulfilled; or if Agent renders anyservice not provided for in this Agreement; or if the Secured Party and the Depositor request asubstantial modification of its terms; or if any controversy arises, or if Agent is made a party toor intervenes in any litigation pertaining to this escrow or its subject matter or, in the exercise ofits business judgment, finds it necessary to consult with counsel regarding the same, then in anysuch case Agent shall be reasonably compensated for such extraordinary services and reimbursedfor all costs, attorney’s fees (including reasonably allocated costs of in-house counsel), andexpenses reasonably incurred by Agent in connection with such default, delay, controversy orlitigation, and Agent shall have the right to retain all documents and/or other things of value atany time held by Agent in this escrow until such compensation, fees, costs, and expenses arepaid. The Depositor promise to pay these sums upon demand. The Depositor and its respectivesuccessors and assigns agree to indemnify and hold Agent harmless against any and all losses,claims, damages, liabilities, and expenses, including reasonable costs of investigation, counselfees (including reasonably allocated costs of in-house counsel) and disbursements that may beimposed on Agent or incurred by Agent in connection with the performance of its duties underthis Agreement. Agent shall have a first lien on the Cash Deposit for such compensation andexpenses.12. Agent Resignation. It is understood that Agent reserves the right to resign at anytime by giving written notice of its resignation, specifying the effective date thereof, to theSecured Party and the Depositor. Within thirty (30) days after receiving the aforesaid notice, theSecured Party and the Depositor agree to appoint a successor escrow agent to which Agent maytransfer the Cash Deposit then held in the Account, less its unpaid fees, costs and expenses. If asuccessor escrow agent has not been appointed and has not accepted such appointment by theend of such thirty (30) day period, Agent may apply to a court of competent jurisdiction for theappointment of a successor escrow agent, and the costs, expenses and reasonable attorney’s fees-56-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011which Agent incurs in connection with such a proceeding shall be paid by the Secured Party andthe Depositor.13. Escrow Termination. If this Agreement shall not have previously terminated,then it shall terminate on [___________], as provided in Schedule II, at which time the CashDeposit then held in the Account, less Agent’s unpaid fees, costs and expenses shall bedistributed in the following manner:[____________________________________________________]14. Governing Law. This Agreement shall be construed, enforced, and administeredin accordance with the laws of the State of [New Jersey].15. Automatic Succession. Any company into which the Agent may be merged orwith which it may be consolidated, or any company to whom Agent may transfer a substantialamount of its Escrow business, shall be the Successor to the Agent without the execution orfiling of any paper or any further act on the part of any of the Parties, anything herein to thecontrary notwithstanding.16. Disclosure: The Parties hereby agree not to use the name of [insert name ofAgent] to imply an association with the transaction other than that of a legal escrow agent.17. Counterparts: This Agreement may be executed in any number of counterparts,each of which shall be an original, but all of which, when taken together, shall constitute and beone and the same instrument. The exchange of copies of this Agreement and of signature pagesby facsimile transmission shall constitute effective execution and delivery of this Agreement asto the Parties and may be used in lieu of the original Agreement for all purposes. Signatures ofthe Parties transmitted by facsimile shall be deemed to be their original signatures for allpurposes.The undersigned Agent hereby agrees to hold, deal with and dispose of the Cash Depositat any time deposited to the Account in accordance with the foregoing Agreement.[Signature page follows]-57-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011IN WITNESS WHEREOF, the undersigned have affixed their signatures and herebyadopt as part of this instrument Schedules I, II, III and IV, which are incorporated by reference.SECURED PARTY:By:Its:(Address)DEPOSITOR:By:Its:(Address)(City, State and Zip Code)(City, State and Zip Code)(Telephone)(Telephone)(Facsimile Number)Tax I.D.(Facsimile Number)Tax I.D._____________________________________,as AgentBy:Its:Notices to Agent shall be sent to:[Name][Address][City, State, Zip]With Fax Copy to:[Name][Facsimile Number]-58-

SCHEDULE ITO CASH ESCROW AGREEMENTPURPOSE AND MANNER OF DEPOSITSBoard / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011Credit Support provided by Depositor in the form of Cash under the SOCA, allinvestments of such Cash, and all proceeds of such investments.All Credit Support in the form of Cash provided by the Depositor shall be deposited inthe Account promptly upon receipt by the Agent.Instructions for transfer of funds into the Account:____________________________________________________________________________________-59-

SCHEDULE IITO CASH ESCROW AGREEMENTINSTRUCTIONS OF DEPOSITORSBoard / LCAPP AgentFinal Proposed Form SOCAMarch 1, 20111. Upon written notice signed by the Secured Party to the Agent that one or more ofthe following events has occurred, Agent shall withdraw Cash in the amount specified in suchnotice from the Account (as described on Schedule I) and shall transfer such Cash in accordancewith the Secured Party’s instructions.(a)(b)(c)The Depositor has failed to pay an amount presently due and owing under Section4.1.2 of the Agreement, which amount remains outstanding.An Event of Default (as defined in the SOCA) or a Termination Event (as definedin the SOCA) with respect to the Depositor has occurred and is continuing, andthe Depositor owes the Secured Party a specified amount in respect of such Eventof Default, which amount remains outstanding.An Early Termination Date (as defined in the SOCA) has occurred or beendesignated as a result of an Event of Default or a Termination Event (as defined inthe Agreement) and a specified amount of the Termination Payment (as defined inthe SOCA) owed by the Depositor to the Secured Party remains outstanding.2. Upon written notice signed by both the Secured Party and the Depositor that theDepositor has replaced a specified amount of Cash in the Account with a Letter of Credit (asdefined in the SOCA), the Agent shall withdraw such amount of Cash from Depositor’sSubaccount and transfer such Cash in accordance with the Depositor’s instructions.3. The Agent shall liquidate such Cash Deposit from the Account as may benecessary to meet the withdrawal instructions under paragraphs 1 through 2 of this Schedule II.7. Authorized persons referred to in Sections 1 and 7 of the Agreement are asspecified below, as such names may be amended from time to time by notice to the Agent:For Depositor:For Secured Party:-60-

SCHEDULE IIITO CASH ESCROW AGREEMENTPERMITTED INVESTMENTSBoard / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011-61-

SCHEDULE IVTO CASH ESCROW AGREEMENTBoard / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011-1-

Board / LCAPP AgentFinal Proposed Form SOCAMarch 1, 2011ATTACHMENT FSCHEDULE OF APPROVED STANDARD OFFER CAPACITY PRICESDelivery Year(ending May 31 st )2015201620172018201920202021202220232024202520262027202820292030203120322033Standard Offer Capacity Price($/MW-day)-2-

Health, Safety, and Economic Policy -- Public Utility and Energy InfrastructureInvestment Issues (9:15 am – 10:30 am)Matthew M. Weissman, Esq., PSEG Services Company – Moderator1. New Jersey’s Aging Water Infrastructure and the Distribution System InvestmentCharge – Michael A. Sgro, Esq., New Jersey American Water Company2. Energy Utility Infrastructure Investment and Energy Efficiency Programs --Tracey Thayer, Esq., New Jersey Natural Gas Company3. Electric Capacity “Stimulus” – The Long-term Capacity Agreement PilotProgram Statute -- Robert Chilton, Gabel Associates_______________________________________________________________________This panel will address the variety of cutting edge approaches being taken by theNew Jersey Legislature, the BPU, the Division of Rate Counsel, and New Jersey’s water,natural gas, and electric utilities to ensure appropriate levels of investment in NewJersey’s utility infrastructure to• support public health and safety;• further economic development and job growth;• further energy conservation, efficiency goals, and generally support theEnergy Master Plan; and• address perceived electric capacity shortages and related policy goals.We will cover, or at least consider, a variety of related issues:• The ratemaking basics, and not-so-basics, at issue (regulatory lag; the“nexus” to a rate case requirement; the utility’s ability to earn a return oninvestment; different mechanisms for incorporating investments into ratebase)• Speed with which new approaches can sometimes be adopted, sometimesthrough use of BPU website (e.g., energy stimulus programs of early2009; LCAPP proceeding of 2011)• “Motivation” and policy bases for these programs -- Is there a realdistinction between the energy company programs (job-oriented, arisingfrom the economic downturn) and water company initiatives, which havebeen heavily health and safety driven? Is this assumed distinction eventrue? (i.e., are water programs just as good for jobs, and energy programsjust as important for health/safety/societal benefit?) And what about theLCAPP program – is the driving force lower prices? Economicdevelopment and employment? Environmental benefits?

• And speaking of LCAPP, we will discuss a variety of the controversialissues that statute has raised, e.g.,• How sensitive are the benefits of the new capacity toprojection/assumptions about market prices? Will ratepayersbenefit by, or pay for, for the new generation?• Long term vs. short term – does the LCAPP reduce/eliminateinvestor incentive to build “unsubsidized” capacity, encourage thepremature retirement of existing plants and higher prices in thelong run?• What is the significance/implication of the pending federal actionswith respect to the LCAPP statute/process?2

PULS SPRING CLE PROGRAM – APRIL 26, 2011 AT THE LAW CENTERNew Jersey’s Aging Water Infrastructure and the Distribution System Investment ChargeMichael A. Sgro, Esq., New Jersey American Water CompanyBackground• Traditional utility ratemaking v. accelerating infrastructure investment needso Converging “end of useful life” dates for existing infrastructure, especially pipeso Capital intensity of water industry remains extremely higho Competition for capital raises stakeso Capital is finite and there are other investment needso Delay in recovering costs of, or earning on, capital investments is a recognizedchallenge• Use of CWIP and AFUDC• Major projects v. major programs• Legal basiso Nexus to base rate case• In re Redi-Flo Corporation, 76 N.J. 21 (1978)• Rate case linkages can be established in different ways• Re-opening recently concluded cases• Linking to an ongoing proceeding• Including language in settlement that a case would be filedo Interim relief from regulatory lag• I/M/O Proposed Increased Instrastate Industrial Sand Rates by CentralRR Co. of NJ 66 N.J. 12 (1974)• BPU has broad discretion to fix rates• BPU discretion includes adjustment clauseso Consistent with broad BPU policies regarding safe, adequate and proper serviceincluding:• conservation of resources, including natural resources, water supply, andenergy efficiency• conserve and preserve the environment• energy efficiency• proper, efficient maintenance of utility property and resources[NJSA 48:2-13 and 2-23]Infrastructure Program Features• Types of projects (elements of the distribution system)o Incremental to planned capital budgetso System reliability and infrastructure reinforcement• Cleaning and lining sound, properly sized mains• Replacing structurally deficient or upsizing undersized mains• Valve and hydrant replacement• Meters and serviceso Not revenue producing investmento Details provided in filing• Subject to audit or review in administrative proceeding• Discovery propounded and responded to

• Recovery methodologieso Rider or surcharge mechanism- provisional, subject to audit or reviewo Base rate treatment of recovery between cases resets rider or surchargecalculation• Investment levels between cases can be capped or collared• Program can have limited duration or minimum time frameConsistency with BPU Mandate; Goals; Benefits to Customers• Safe, adequate and proper service at reasonable rates• Economic stimulus• Conservation and protection of natural resources• Efficient use of resources• Predictable, incremental, small rate increases• Better service (more reliable: fewer unplanned outages, fewer leaks or aestheticcomplaints)• Better coordination with municipalities and other utilities2

PUBLIC UTILITY LAW SECTION SPRING CLE PROGRAMAPRIL 26, 2011 AT THE LAW CENTERAFTERNOON PLENARY SESSION(1 pm – 2:15 pm)RENEWABLE ENERGY ISSUESJames C. Meyer, Esq., Riker Danzig Scherer Hyland & Peretti, LLP – Moderator1. Overview of the NJ Regulatory Scheme Governing Renewables – James Meyer2. Solar Applications – Michael Perna, Con Edison Solutions3. Offshore Wind – Robert Gibbs, PSEG Global, LLC and Garden State OffshoreEnergy, LLC4. The Rest - Unsung Class I Renewables – Michael Winka, Office of Clean Energy,New Jersey Board of Public Utilities

Overview of NJ Regulatory Scheme Regarding Renewable EnergyI. General Types of Renewable EnergyClass I – electric energy produced from solar technologies, photovoltaictechnologies, wind energy, fuel cells (powered by renewable fuels),geothermal technologies, wave or tidal action, and methane gas fromlandfills or certain biomass facilities.Class II –electric energy produced at certain hydropower facilities and resourcerecovery facilities.A-2529 - would add electric energy produced at small hydropower facilities(3MW or less) as Class I.Other qualifications in BPU rules apply for use of Class I and II energy.Authority: N.J.S.A. 48:3-51, N.J.A.C. 14:8-1.2, N.J.A.C. 14:8-2.2, 2.5, and 2.6.II. Types of Renewable Energy ProjectsNet Metered/Behind the Meter (On-site)Grid SupplyVarious Structures for each, e.g., Customer Owned (EPC), Power PurchaseAgreement, Facilities Lease2

III. Regulatory Scheme Including Major IncentivesA. Economic Incentives1. REC-related Incentivesa. Renewable Portfolio Standards (RPS) generally-Class I and II-Solar carve-out, enhanced in P.L. 2009, c. 289, SolarEnergy Advancement and Fair Competition Act (SEAFCA)-Offshore Wind carve-out, per P.L. 2010, c. 57, OffshoreWind Economic Development Act (OWEDA)b. Renewable Energy Certificates (RECs) v. AlternativeCompliance Payments (ACPs)d. Solar RECs (SRECs)-SREC Registration Program-Available to net metered and grid supply projects-Constraints–connected to NJ distribution system-A2529 (10MW+ requires BPU approval)e. Utility Programs linked to SRECs/RGGI incentivesf. ORECs1. Purchase of SRECs--SREC Financing/Contracting Programs--PSE&G Solar Loans2. Utility Solar Generation3. BPU authority to implement state and utility programs-OWEDA-BPU’s Specially Adopted New RulesAuthority:-RPS/ACP/RECs: N.J.S.A. 48:3-87(d)-(p) (includes substantialamendments by SEAFCA), N.J.A.C. 14:8-2.1 et seq.-Utility Programs: N.J.S.A. 48:3-98.1 (RGGI programs/investments),N.J.S.A. 48:3-87(k) (loans/contracting/financing programs).-BPU Prog. Authority N.J.S.A. 48:3-98.1(a)(3); N.J.S.A. 48:3-60(a)(3).-Offshore Wind: N.J.S.A. 48:3-87(d)(4), 48:3-87.1, (OWEDA); 43 N.J.R.658 (Mar. 7, 2011)(N.J.A.C. 14:8-6 et seq., Rules for Qualified OffshoreWind Projects).3

2. Federal Tax Creditsa. Investment Tax Credit under IRC §48.b. Cash Grants under Section 1603 of the American Recovery andReinvestment Act of 2009 (“ARRA”), as extended by the 2010Tax Relief Act.c. Production Credit under IRC §45.3. Clean Energy Program Rebatesa. REIP-Availability is limitedb. No stand-alone solar rebates4. Energy Sales/ConsumptionB. Physical Incentivesa. On-site generation avoids EDC chargesb. Off-site retail (end-use) service implicationsAuthority: N.J.S.A. 48:3-77 (exemption from charges), N.J.S.A.48:3-51 (definition of “on-site generation facility”); N.J.S.A. 48:3-77.1 (off-site thermal customer).a. Net Meteringb. Interconnection RequirementsAuthority:Net metering: N.J.S.A. 48:3-87(e)(1), N.J.A.C. 14:18-4.3.Interconnection: N.J.S.A. 48:3-87(e)(2), N.J.A.C. 14:18-5.2.4

C. Non-Title 48 Laws Supporting Renewable Systems--P.L. 2008, c. 90 (exempts certain renewable systems from real propertytaxation)--P.L. 2009, c. 35 (permits location of certain wind and solar facilities as a“permitted use” within municipal industrial zones)--P.L. 2009, c. 146 (defines “inherently beneficial” use for zoningvariance purposes to include a wind, solar, or photovoltaic energy facilityor structure)--P.L. 2010, c. 4 (exempts solar panels from impervious coverdesignation)D. Pending LegislationA-2529 (modifies definition of Class I renewable energy, defines“connected to the distribution system” to generate SRECs, and addressescompliance with RPS). Status: passed Legislature, CV by Governor.A-2557 (authorizes municipalities to transfer interests in public roads toconnect a solar, wind, CHP or biomass generator with a non-contiguousparcel, and requires electric public utility to install distribution lines).Status: in Senate Environment and Energy Committee.S-2371 (requires that contracts by non-utility load serving entities forpurchase of SRECs be 15 years or longer). Status: introduced.E. Ongoing Regulatory Developments Regarding Regulatory Scheme--SRECs for greater than 10MW solar projects.--SACP prices for 2016 and beyond.--Offshore wind permanent rules/money flow.--Energy Master Plan impacts.5

Page 11 of 1 DOCUMENTNEW JERSEY REGISTERCopyright © 2011 by the New Jersey Office of Administrative LawVOLUME 43, ISSUE 05ISSUE DATE: MARCH 7, 2011SPECIAL ADOPTIONSPUBLIC UTILITIESBOARD OF PUBLIC UTILITIESOFFSHORE WIND RENEWABLE ENERGY43 N.J.R. 658(a)Special Adopted New Rules: N.J.A.C. 14:8-6Adopted: February 10, 2011 by the New Jersey Board of Public Utilities, Lee A. Solomon, President; Jeanne M. Fox,Joseph L. Fiordaliso and Nicholas Asselta, Commissioners.Filed: February 10, 2011 as R.2011 d.087.Authority: N.J.S.A. 48:2-13 and 48:3-49 et seq.BPU Docket Number: EX10040290.Effective Date: February 10, 2011.Expiration Date: August 10, 2012.Take noticethat the Board of Public Utilities has adopted new rules at N.J.A.C. 14:8-6, to codify new statutory requirementsenacted through the Offshore Wind Economic Development Act, P.L. 2010, c. 57, which amended N.J.S.A. 48:3-49 etseq. The rules are designed to provide an application process and a framework under which the Board will consider and,if appropriate, approve applications for qualified offshore renewable facilities and Offshore Renewable EnergyCertificates (ORECs). Major components of the proposed rules include application requirements, the need for an escrowaccount, the ability for the Board to designate the application window, and the ability for the Board to imposeappropriate conditions upon any OREC grant.These special adopted new rules will remain in effect until August 10, 2012 or until the rules are proposed forpublic comment and readopted through standard rulemaking procedures.

43 N.J.R. 658(a)Page 2Full text of the special adopted new rules follows:SUBCHAPTER 6.QUALIFIED OFFSHORE WIND PROJECTS14:8-6.1 DefinitionsThe following words and terms, when used in this subchapter, shall have the following meanings, unless the contextclearly indicates otherwise. Additional definitions that apply to this subchapter can be found at N.J.A.C. 14:3-1.1 and14:4-1.2."Key employee" means any individual employed by the applicant in a supervisory capacity or empowered to makediscretionary decisions with respect to the project."Offshore wind energy" means electric energy produced by a qualified offshore wind project."Offshore wind renewable energy certificate" or "OREC" means a certificate issued by the Board or its designee,representing the environmental attributes of one megawatt hour of electric generation from a qualified offshore windproject."Qualified offshore wind project" means a wind turbine electric generation facility in the Atlantic Ocean and connectedto the electrical transmission system in this State, and includes the associated transmission-related interconnectionfacilities and equipment, and approved by the Board pursuant to section 3 of P.L. 1999, c. 23 (N.J.S.A. 48:3-51)."Wind energy zone" means property located in the South Jersey Port District established pursuant to the South JerseyPort Corporation Act, N.J.S.A. 12:11A-1 et seq., or as may be amended.14:8-6.2 Offshore wind renewable portfolio standards requirements(a) Each supplier/provider that sells electricity to retail customers in New Jersey shall ensure that the electricity it sellseach reporting year in New Jersey includes at least the minimum percentage of offshore wind (OSW) energy requiredfor that energy year as set by the Board following the approval of a qualified offshore wind project.(b) The total OSW energy requirement for an energy year shall reflect the projected OREC production of qualifiedOSW projects, for the period covered by the granted ORECs, from the commercial operation start date of the qualifiedOSW projects.(c) OREC obligations are a component of Class I renewable energy requirements, and satisfaction of OREC obligationsshall be counted toward Class I renewable energy requirements.(d) A Statewide OREC target will be determined by the Board based on projected OSW production. The total will beallocated among all suppliers/providers in proportion to their retail sales.(e) A supplier/provider shall meet the requirements for OSW energy generation through:1. Retirement of offshore wind renewable energy certificates through a renewable energy trading program approved bythe Board; or2. Submittal of offshore wind alternative compliance payments.(f) Any offshore wind alternative compliance payments collected shall be refunded to the ratepayers.

43 N.J.R. 658(a)Page 314:8-6.3 Application process(a) An entity seeking to receive ORECs in connection with an offshore wind project shall submit an application to theBoard for approval as a qualified offshore wind project. The application must meet the requirements set forth in thissection, as well as all applicable requirements of this chapter, and of other applicable State and Federal laws.(b) The Board will announce the open and close dates for the annual application period, and may, at its discretion, allowadditional application periods.(c) The Board shall approve, conditionally approve, or deny the application within 180 days of the receipt of acompleted application. The parties may consent to an extension beyond 180 days.(d) The applicant shall meet with Board staff and representatives of the Division of Rate Counsel no less than 30 daysprior to submission of an application to discuss all aspects of the application.(e) All applications must be consistent with Board application standards as set forth in Title 14 of the New JerseyAdministrative Code.14:8-6.4 Determination of completeness of application(a) Upon receipt of the application, Board staff will review the application for administrative completeness inaccordance with the requirements set forth in N.J.A.C. 14:8-6.5.(b) Board staff will notify the applicant within 30 days of the submission if the application is administratively completeor is deficient. If the application is deficient, the applicant will be advised which items must be remedied to correct thedeficiency or deficiencies.(c) Once Board staff notifies the applicant that the application is complete as filed, the 180-day period for the Board toapprove, conditionally deny, or deny the application will commence on the date the complete application was filed.(d) If Board staff has notified the applicant that a deficiency or deficiencies exist, the 180-day period will not commenceuntil all deficiencies have been remedied and the filing is deemed by Board staff to be administratively complete.(e) If Board staff notifies the applicant that the application with the remediation of the deficiency or deficiencies is nowcomplete, the 180-day period for the Board to approve, conditionally deny, or deny the application will commence onthe last filing date of the remediation of all deficiencies.14:8-6.5 Application requirements(a) Each application shall meet the requirements set forth in (a)1 through 16 below. The application shall include:1. Full business information, including the developer's name, primary contact person, website, telephone numbers,e-mail address and street address;[page=659] i. The proposal must list all key employees and include resumes of employees that have an identifiable trackrecord in construction and operation of power plants of similar size and scope;ii. The applicant shall describe any work done to date by the key employees in developing projects of similar scope,especially any ocean-based energy project or New Jersey large scale energy project sitting work;

43 N.J.R. 658(a)Page 4iii. If the work described was not performed by the entire team, the applicant must delineate the experience or workperformed by key employees;iv. The applicant shall disclose, in detail, any prior business bankruptcies, defaults, disbarments, investigations,indictments, or other actions against either the applicant or any key employees identified in (a)1i above;v. The applicant shall commit to certifying, after award, that its proposed key employees will remain the project teamfor the duration of the project, subject to any changes approved by the Board. Enforcement of this provision shall be acondition of the order granting ORECs;vi. The applicant is not permitted to reallocate the personnel/resources or key employees they used to obtain the OREC,without prior approval of the Board; andvii. To the extent that there is a claim, the applicant shall include, as appropriate, employment documentation, includeletters of intent/commitment/contract that if an OREC award is granted, manufacturing services will be sourced from aNew Jersey location;2. A detailed description of the project, including maps, surveys and other visual aides. The description shall include,but need not be limited to: the type, size and number of proposed turbines and foundations; the history, to date, of thesame type, size and manufacturer of installed turbines and foundations globally; and a detailed implementation plan thathighlights key milestone activities during the permitting, financing, design, equipment solicitation, manufacturing,shipping, assembly, in-field installation, testing, equipment commissioning and service start-up.i. The project developers shall:(1) Demonstrate applicable experience in projects of the size and scope proposed;(2) Demonstrate that the wind technology is viable, cost competitive, and suitable for use in New Jersey's offshoreenvironment under varying and expected meteorological and climate conditions;(3) Indicate the areas used for all aspects of the project including the location(s), the construction staging area(s), andport usage;(4) Include a map with the location of the site(s) clearly marked by longitude and latitude and the Federal Bureau ofOcean Energy Management, Regulation and Enforcement block numbers;(5) Describe any current uses, conflicts, or characteristics of the ocean and land areas identified pursuant to (a)2i(4)above;(6) Specify whether the project is located at one site, or divided among several sites;(7) Define the attributes which make the site(s) attractive and list any potential problems, constraints or limitations withsiting an energy facility at that location or locations;(8) To the fullest extent possible, indicate the major types of equipment that will be installed, and if not yet selected,indicate the candidate technologies and the characteristics specified;(9) Indicate whether the project team plans to own or lease equipment;

43 N.J.R. 658(a)Page 5(10) Describe the equipment candidate(s), the specifications, warranties, how long it has been commercially available,approximately how many are currently in service, and where they are installed;(11) Include a description of the ability of the equipment to work in New Jersey's offshore and near shore climates andthe basis for that conclusion; and(12) Indicate the equipment's delivery time once an order has been placed;ii. For actual construction, successful candidates are permitted to replace or update equipment identified in the proposalwith more technologically advanced equipment that is equal to or better than the equipment identified in the proposal,subject to Board approval.iii. Applicants shall describe construction plans in detail, identifying proposed subcontractors, with evidence of thecapability of performing necessary tasks, as well as proposed time frames for completion of all necessary tasks.iv. Applicants shall identify all applicable Federal and State statutes and regulations and municipal code requirements,with the names of the Federal, State and local agencies to contact for compliance, and a commitment to provide proof ofall such compliance on an ongoing basis.v. Applicants shall indicate the proposed nameplate capacity for the entire project and the anticipated number ofindividual units for the selected technology or for each candidate technology; and estimate the net yearly energy outputfor the project, accounting for losses and include any assumptions, such as the assumed capacity factor, that are thebasis for the estimate.vi. Applicants shall account for, to the fullest extent possible, the coincidence between time of generation for the projectand peak electricity demand; provide an estimate, with support, of the amount of energy being generated over the termof the life of the turbines; and estimate, with support, the level of generation that their proposed project will be able toprovide over the life of the equipment, assuming the project runs for the equipment's full life;3. A complete financial analysis of the project, which includes:i. Pro forma income statements;ii. Balance sheets;iii. Cash flow projections for the proposed OREC period, including the internal rate of return, and a description andestimate of any State or Federal tax benefits that may be associated with the project;iv. A comprehensive business plan with fully documented estimates of all associated and relied upon revenue andexpense projections; andv. A full cost accounting of the project, including total construction and decommissioning costs;4. The proposed method of financing the project, which includes:i. Identification of equity investors, fixed income investors, and any other sources of capital;ii. A demonstrated ability to finance construction through market sources, which may include tax exempt bondfinancing through the New Jersey Economic Development Authority;

43 N.J.R. 658(a)Page 6iii. A detailed financial plan including all sources of capital including, but not limited to, equity, long and short termdebt, and other sources. Such financial plan shall include the names, functions and fees of all financial and legaladvisors. The plan shall specify if and under what conditions equity or other ownership interests in the project can betransferred to other parties and consideration involved. The developer shall notify the Board in writing of any changeswithin 30 days and such changes will be subject to Board approval pursuant to this subchapter; andiv. A commitment that audited financial statements shall be filed with the Board on a quarterly and annual basis;5. Documentation to demonstrate that the developer has applied for all current eligible State and Federal grants, rebates,tax credits and programs available to offset the cost of the project or provide tax advantages.i. The developer shall document all Federal or State tax incentives for which it is applying or has applied or otherwiseare applicable, even if such incentives have not been sought or approved.ii. Applicants shall provide in a financial pro forma all tax credits or other subsidies upon which they are relying on intheir pricing proposal.iii. The applicant shall commit that the cost difference in the event that changes in the project reduces or eliminates taxbenefits, or tax benefits do not materialize for any reason including changes in tax laws, will not be made up byratepayers.iv. The applicant shall demonstrate a commitment to pass along tax credits or other governmental benefits to ratepayersthat are greater than projected. This pass along of benefits will be effective without the need for any subsequent Boardapproval/confirmation following an initial Board Order approving OREC pricing, and will serve as a condition of theOREC approval;6. The projected electrical output and anticipated market prices over the anticipated life of the project, including aforecast of electricity revenues from the sale of energy derived from the project and capacity, as well as revenuesanticipated by the sale of any ORECs, Renewable [page=660] Energy Certificates (RECs), air emission credits oroffsets, or any tradable environmental attributes created by the project.i. The applicants shall submit a project revenue plan which forecasts revenues as well as identifies the strategy foroffering the electricity provided in the electric market and for generating all expected revenues;ii. The project revenue plan must link the anticipated revenues to the project time schedule and costs for the entireproject lifecycle term extending to the expected life of the turbines and eventual decommissioning;iii. Applicants shall specify financial expectations and marketing strategies for securing revenue from expected capacitybased payments in PJM markets, energy based payments in PJM markets, Renewable Energy Certificate (REC) revenuefrom Renewable Portfolio Standard (RPS) or voluntary markets, and emission credits from various air emissionreduction cap and trade programs;iv. Proposals must include the total installed capacity in megawatts for the entire project as well as expected term ofOREC energy production in megawatt-hours; andv. The total amount of clean energy being generated over the term of the OREC program and the life of the turbinesmust also be provided.7. An operations and maintenance plan for the initial OREC term of the project is required and must:

43 N.J.R. 658(a)Page 7i. Detail routine, intermittent and emergency protocols;ii. Demonstrate that the applicant has the financial capacity and technical expertise to perform all necessaryupkeep/maintenance over the life of the project;iii. Identify the primary risks to the built infrastructure and how the potential risks, including, but not limited to,hurricanes, lightning, fog, rogue wave occurrences, and exposed cabling, shall be mitigated;iv. Describe emergency shut down provisions in the event of a need for the immediate stoppage of turbine blades;v. Identify specific and concrete elements to ensure both construction and operational cost controls;vi. Provide proof of insurance;vii. Be integrated into the financial analysis of the project, and must identify the projected plan for the subsequentoperational term, assuming any necessary Federal lease agreements are maintained and renewed; andviii. Include a complete operation and maintenance plan for the life of the plant;8. The anticipated carbon dioxide emissions impact of the project. Data must be supplied on the environmental airimpacts of each proposed wind-farm;9. A decommissioning plan for the project including provisions for financial assurance for decommissioning as requiredby the applicable State and Federal governmental entities.i. Proposals must estimate an expected useful economic life as well as specify a project decommissioning plan for thetechnology and installation area proposed.ii. The decommissioning plan must include the anticipated cost of decommissioning the project based on applicableand/or anticipated regulatory and engineering requirements and provide for the necessary future funding. Segregateddecommissioning funds shall be required;10. A list of all State and Federal regulatory agency approvals, permits, or other authorizations required pursuant toState and Federal law for the offshore wind project, and copies of all submitted permit applications and any issuedapprovals and permits for the offshore wind project.i. An award to build an OSW facility is contingent upon the successful entity obtaining all required local, State and/orFederal permits and/or approvals.ii. Applicants shall show that they are currently in the PJM queue or that the proposed project is PJM queue eligible.iii. Each applicant shall identify all local, State and/or Federal permits and/or approvals required to build and operate theproject and the expected time to obtain such permits and/or approvals. Developers shall provide the Board with copiesof each permit or approval within 14 days of receipt by the developer. This is a continuing obligation upon thedeveloper and shall serve as a condition of any OREC award.iv. Applicants shall identify the nature of its ocean lease and land ownership requirements for all aspects of the projectincluding all required interconnection areas.v. Progress must be demonstrated in securing leases and land required, and applicants shall propose a plan for

43 N.J.R. 658(a)Page 8accomplishing remaining steps toward acquiring leases or land ownership. The type and number of entities securingleases or owning land must be indicated.vi. Applicants shall identify each appropriate State or Federal agencies they will be contacting for land acquisitionissues and provide the Board with a summary of the required arrangements.vii. Applicants are required to demonstrate adequate financial resources to acquire any land or leases needed toundertake this project.viii. The books and records of the applicant shall be subject to review and audit by the Board, or any other State entityor State designee.ix. The applicant shall supply the Board with filings made to any other regulatory, governmental administrative agency.This includes, but is not limited to, any compliance filings or any inquiries by these agencies;11. The cost-benefit analysis for the project, to show net benefits for the State, which shall include at a minimum:i. A detailed input-output analysis of the impact of the project on income, employment, wages, indirect business taxes,and output in the State with particular emphasis on in-State manufacturing employment.(1) The Board will not specify what input-output models are acceptable, and will allow applicants to use any model thatsuccessfully captures New Jersey economic benefits. Suggested models include, but are not limited to:(A) Rutgers R/ECON model;(B) Regional Economic Models, Inc. (REMI);(C) MIG Inc. IMPLAN model; and(D) The Bureau of Economic Analysis RIMS II model;ii. Ratepayer net costs with explicit listing of foundations, assumptions and conditions;iii. Environmental net benefits with explicit listing of foundations, assumptions and conditions;iv. Other benefits, such as increased in-State activity from construction, operations and maintenance, and equipmentpurchases;v. In-State impacts or benefits that need to be included in the cost-benefit analysis-income include, but are not limitedto:(1) Employment;(2) Wages;(3) Indirect business taxes; and(4) Output, with a "particular emphasis" on manufacturing employment. Output refers to the sales of sectors orindustries that would be supplying the offshore wind project with materials (such as turbines, steel and cement forsupport structures, wire for transmission cables) and services (such as construction and installation services, as well as

43 N.J.R. 658(a)Page 9engineering, legal, finance, and other professional services);vi. Detailed information, including location, type or occupation, and salary for assumed employment impacts withinNew Jersey. Confirmation of employment impacts must be provided;vii. The Board will evaluate the credibility of asserted economic benefits. The applicants shall propose consequences ifclaimed benefits do not materialize, and the employment impact may become conditions of any OREC award;viii. Applicants shall provide information on any State grants or other subsidies from the New Jersey EconomicDevelopment Authority or other agencies associated with the proposed wind project and include the subsidy as part ofthe project cost-benefit analysis;ix. Direct, indirect and induced effects will be considered in the evaluation, as such effects should be considered as partof the evaluation associated with construction and operation of the project;x. The major assumptions and inputs used in the modeling must be specified by the applicant;xi. The Board staff may ask the applicant to rerun the model with other assumptions and inputs to be provided by theBoard staff;xii. The Board staff may test an applicant's cost benefit analysis on its own model, which, preferably, would be the sameone used by an applicant but it could be a different one, by replicating the analysis using model inputs supplied by theapplicant;[page=661] xiii. Applicants shall also submit an explanation of the location, type and salary of employmentopportunities to be created by the project with job totals expressed as full-time equivalent positions assuming 1,820hours per year;xiv. Applicants shall provide an analysis of the anticipated environmental benefits and environmental impacts of theproject.(1) Each project must document all associated impacts from pre-construction activities through decommissioningincluding, but not limited to, environmental, water use, water quality, avian, marine mammals, sea turtle, noise,aesthetics, tourism, navigation and endangered species. This includes sea-bed disruption of marine life, morbidity ormortality among avian, mammal or benthic populations, emissions of combustion by-products to the air or oil or othertoxic releases to the ocean, or solid waste generation.(2) Applicants shall specifically describe how their activities will be coordinated with the New Jersey Department ofEnvironmental Protection (NJDEP) Ecological Baseline Studies, and indicate how each resource issue, if impacted, willbe addressed.(3) The applicant shall provide information regarding the direct emissions impacts of the project, including carbondioxide, sulfur dioxide, particulate emissions, as well as other relevant environmental impacts, such as impacts on themarine environment.(4) The applicant shall provide an assessment of environmental impacts from the project compared to other similarClass I renewable energy projects.(5) Environmental impacts (direct and comparative) must be quantified to the extent they are significant and it ispossible to quantify them.

43 N.J.R. 658(a)Page 10(6) The comparative environmental impacts shall be monetized, to the extent possible, for evaluation as part of theoverall cost-benefit analysis; andxv. Applicants shall submit an analysis of the potential positive and negative impacts on residential and industrialratepayers of electricity rates over the life of the project that may be caused by OREC requests;12. A proposed OREC pricing method and schedule for the Board to consider.i. An electric power supplier or basic generation service provider shall comply with the OREC program through thepurchase of ORECs at a price and for the time period required by the Board.ii. Payment will not occur until electricity is produced by a qualified offshore wind project.iii. The burden remains on the applicant to propose a reasonable OREC price. The Board will then accept, modify orreject the proposed price of the OREC and the associated term. The Board requires a fixed, flat OREC price for theproposed term or a fixed price for every contract year. All proposals must include a total price that reflects capacity,energy and other elements of generation.iv. OREC pricing will be on a pay for performance basis, with payments to be on a $/MWh basis, subject to anyquantity caps, with the offshore wind developer responsible for any cost overruns. Ratepayers will not be responsiblefor any cost overruns and for costs associated with non-performance.v. If the pricing proposal satisfies the cost-benefit standards set forth in the statute and the Board's regulations, theBoard may approve the application subject to the application satisfying other required conditions.vi. The Board may conditionally approve an application at a lower OREC price if that OREC price would allow anapplicant to satisfy the cost-benefit standards. The applicant may then accept or reject the lower OREC price.vii. OREC pricing on an actual renewable premium basis would represent a project's revenue requirement, taking intoconsideration tax credits and other subsidies, minus the actual value of spot energy market prices and/or capacity prices;13. A timeline for the permitting, licensing and construction of the proposed offshore windproject. The proposal mustspecify the expected project time requirements in the aggregate from start to finish as well as the time required toaccomplish each specific activity related to project design, resource monitoring, impact studies, permitting,construction, and decommissioning activities with associated milestones delineated for each category of activity;14. A plan for interconnection, including engineering specifications and costs.i. Applicants shall document tasks required and discuss issues associated with electrical interconnection, including thedistance between the project and a suitable point to interconnect with the electrical grid. Each proposed point ofinterconnection shall be discussed.ii. Land acquisition requirements, new equipment to be installed, upgrades to existing equipment required, and anyfeasibility studies required and the time frame for review must be identified.iii. A detailed description of how the proposed project will address and mitigate load constraints in the electricdistribution and PJM transmission system must be included for each site.iv. The proposal must demonstrate to the greatest extent possible how the project will address current or potential future

43 N.J.R. 658(a)Page 11load pocket or constraint problems with the electric distribution system and the PJM transmission system.v. The applicant shall indicate the location of transmission lines and all points of interconnection to the PJM systemserving New Jersey.vi. Applicants shall provide information to the Board for costs associated with network upgrades that flow from theproject even if not directly caused by the interconnection;15. All applicants must establish a $ 100,000 escrow account and submit proof of that escrow account with theapplication to pay for consultants and other costs associated with the review of the application.i. The applicant shall immediately notify Board staff in the event the escrow drops below 25 percent of the initialescrow value.ii. Board staff will direct the applicant, if appropriate, to place an additional amount into escrow, based upon the currentand expected costs associated with the application review.iii. Failure to replenish the escrow account to the level required by Board staff with 10 days of notification will serve torender the application incomplete and toll the time for review; and16. Any other information deemed necessary by the Board in order to conduct a thorough evaluation of the proposal.The Board may hire consultants or other experts if the Board determines that obtaining such outside expertise would bebeneficial to the review of the proposal.(b) In considering an application for a qualified offshore wind project, submitted pursuant to (a) above, the Board shalldetermine that the application satisfies, at a minimum, the following conditions:1. The filing must be consistent with the New Jersey Energy Master Plan, adopted pursuant to section 12 of P.L. 1977,c. 146 (N.J.S.A. 52:27F-14), in effect at the time the Board deems the application complete;2. The cost-benefit analysis must demonstrate positive economic and environmental net benefits to the State because itis a key component of the legislation;3. The comparison of purchases of Class I RECs to out-of-State wind projects;4. An applicant's cost-benefit analysis must provide three basic types of information:i. Impacts on New Jersey ratepayers: an analysis of the potential impacts on residential and industrial ratepayers ofelectricity rates over the life of the project that may be caused by incorporating any State subsidy into rates;ii. Net benefits to the New Jersey economy through impacts on income, employment, wages, indirect business taxes,and output, with particular emphasis on in-State manufacturing employment; andiii. Net environmental effects of the project;5. Applicants shall show that the financing mechanism is based upon the actual electrical output of the project, andfairly balances the risks and rewards of the project between ratepayers and shareholders. Applicants shall ensure thatany costs of non-performance, in either the construction or operational phase of the project, shall be borne byshareholders; and

43 N.J.R. 658(a)Page 126. Applicants shall demonstrate financial integrity and sufficient access to capital to allow for a reasonable expectationof completion of construction of the project.i. Applicants shall prove that they have the financial resources to perform the proposed work, appropriate technicalexpertise, access to adequate facilities or the ability to get them, a good performance record and be qualified under allapplicable laws and regulations.[page=662] ii. Applicants shall submit audited financial statements or other evidence of adequate financial capacity tothe Board in order to ensure that the project can be successfully completed as proposed.14:8-6.6 Funding mechanism (Reserved)

Excerpts from New Jersey’s Codified Statutes And Rules Regarding Renewable Energy 1Statutory Excerpts48:3-51. DefinitionsAs used in P.L.1999, c. 23 (C.48:3-49 et al.):***“Class I renewable energy” means electric energy produced from solar technologies, photovoltaic technologies,wind energy, fuel cells, geothermal technologies, wave or tidal action, and methane gas from landfills or a biomassfacility, provided that the biomass is cultivated and harvested in a sustainable manner;“Class II renewable energy” means electric energy produced at a resource recovery facility or hydropower facility,provided that such facility is located where retail competition is permitted and provided further that theCommissioner of Environmental Protection has determined that such facility meets the highest environmentalstandards and minimizes any impacts to the environment and local communities;“Co-generation” means the sequential production of electricity and steam or other forms of useful energy used forindustrial or commercial heating and cooling purposes;“Combined heat and power facility” or “co-generation facility” means a generation facility which produces electricenergy, steam, or other forms of useful energy such as heat, which are used for industrial or commercial heating orcooling purposes. A combined heat and power facility or co-generation facility shall not be considered a publicutility;“Competitive service” means any service offered by an electric public utility or a gas public utility that the boarddetermines to be competitive pursuant to section 8 or section 10 of P.L.1999, c. 23 (C.48:3-56 or C.48:3-58) or thatis not regulated by the board;“Commercial and industrial energy pricing class customer” or “CIEP class customer” means that group of nonresidentialcustomers with high peak demand, as determined by periodic board order, which either is eligible orwhich would be eligible, as determined by periodic board order, to receive funds from the Retail Margin Fundestablished pursuant to section 9 of P.L.1999, c. 23 (C.48:3-57) and for which basic generation service is hourlypriced;“Comprehensive resource analysis” means an analysis including, but not limited to, an assessment of existingmarket barriers to the implementation of energy efficiency and renewable technologies that are not or cannot bedelivered to customers through a competitive marketplace;“Customer” means any person that is an end user and is connected to any part of the transmission and distributionsystem within an electric public utility's service territory or a gas public utility's service territory within this State;“Demand side management” means the management of customer demand for energy service through theimplementation of cost-effective energy efficiency technologies, including, but not limited to, installed conservation,load management and energy efficiency measures on and in the residential, commercial, industrial, institutional andgovernmental premises and facilities in this State;“Electric generation service” means the provision of retail electric energy and capacity which is generated off-sitefrom the location at which the consumption of such electric energy and capacity is metered for retail billingpurposes, including agreements and arrangements related thereto;“Electric power generator” means an entity that proposes to construct, own, lease or operate, or currently owns,1 In effect on March 24, 2011. Please refer to the official publications for full, accurate and updated provisions.1

leases or operates, an electric power production facility that will sell or does sell at least 90 percent of its output,either directly or through a marketer, to a customer or customers located at sites that are not on or contiguous to thesite on which the facility will be located or is located. The designation of an entity as an electric power generator forthe purposes of P.L.1999, c. 23 (C.48:3-49 et al.) shall not, in and of itself, affect the entity's status as an exemptwholesale generator under the Public Utility Holding Company Act of 1935, 15 U.S.C. s.79 et seq.;“Electric power supplier” means a person or entity that is duly licensed pursuant to the provisions of P.L.1999, c. 23(C.48:3-49 et al.) to offer and to assume the contractual and legal responsibility to provide electric generationservice to retail customers, and includes load serving entities, marketers and brokers that offer or provide electricgeneration service to retail customers. The term excludes an electric public utility that provides electric generationservice only as a basic generation service pursuant to section 9 of P.L.1999, c. 23 (C.48:3-57);“Electric public utility” means a public utility, as that term is defined in R.S.48:2-13, that transmits and distributeselectricity to end users within this State;***“Offshore wind energy” means electric energy produced by a qualified offshore wind project;“Offshore wind renewable energy certificate” or “OREC” means a certificate, issued by the board or its designee,representing the environmental attributes of one megawatt hour of electric generation from a qualified offshore windproject;“Off-site end use thermal energy services customer” means an end use customer that purchases thermal energyservices from an on-site generation facility, combined heat and power facility, or co-generation facility, and that islocated on property that is separated from the property on which the on-site generation facility, combined heat andpower facility, or co-generation facility is located by more than one easement, public thoroughfare, or transportationor utility-owned right-of-way;“On-site generation facility” means a generation facility, and equipment and services appurtenant to electric sales bysuch facility to the end use customer located on the property or on property contiguous to the property on which theend user is located. An on-site generation facility shall not be considered a public utility. The property of the end usecustomer and the property on which the on-site generation facility is located shall be considered contiguous if theyare geographically located next to each other, but may be otherwise separated by an easement, public thoroughfare,transportation or utility-owned right-of-way, or if the end use customer is purchasing thermal energy servicesproduced by the on-site generation facility, for use for heating or cooling, or both, regardless of whether thecustomer is located on property that is separated from the property on which the on-site generation facility is locatedby more than one easement, public thoroughfare, or transportation or utility-owned right-of-way;“Person” means an individual, partnership, corporation, association, trust, limited liability company, governmentalentity or other legal entity;“PJM Interconnection, L.L.C.” or “PJM” means the privately-held, limited liability corporation that is a FERCapprovedRegional Transmission Organization, or its successor, that manages the regional, high-voltage electricitygrid serving all or parts of 13 states including New Jersey and the District of Columbia, operates the regionalcompetitive wholesale electric market, manages the regional transmission planning process, and establishes systemsand rules to ensure that the regional and in-State energy markets operate fairly and efficiently;***“Qualified offshore wind project” means a wind turbine electricity generation facility in the Atlantic Ocean andconnected to the electric transmission system in this State, and includes the associated transmission-relatedinterconnection facilities and equipment, and approved by the board pursuant to section 3 of P.L.2010, c. 57(C.48:3-87.1);***“Renewable energy certificate” or “REC” means a certificate representing the environmental benefits or attributes ofone megawatt-hour of generation from a generating facility that produces Class I or Class II renewable energy, but2

shall not include a solar renewable energy certificate or an offshore wind renewable energy certificate;***“Resource recovery facility” means a solid waste facility constructed and operated for the incineration of solid wastefor energy production and the recovery of metals and other materials for reuse;***“Societal benefits charge” means a charge imposed by an electric public utility, at a level determined by the board,pursuant to, and in accordance with, section 12 of P.L.1999, c. 23 (C.48:3-60);“Solar alternative compliance payment” or “SACP” means a payment of a certain dollar amount per megawatt hour(MWh) which an electric power supplier or provider may submit to the board in order to comply with the solarelectric generation requirements under section 38 of P.L.1999, c. 23 (C.48:3-87);“Solar renewable energy certificate” or “SREC” means a certificate issued by the board or its designee, representingone megawatt hour (MWh) of solar energy that is generated by a facility connected to the distribution system in thisState and has value based upon, and driven by, the energy market;***“Transmission and distribution system” means, with respect to an electric public utility, any facility or equipmentthat is used for the transmission, distribution or delivery of electricity to the customers of the electric public utilityincluding, but not limited to, the land, structures, meters, lines, switches and all other appurtenances thereof andthereto, owned or controlled by the electric public utility within this State; andL.1999, c. 23, § 3, eff. Feb. 9, 1999. Amended by L.2001, c. 242, § 1, eff. Sept. 6, 2001; L.2002, c. 84, § 1, eff. Sept.9, 2002; L.2009, c. 34, § 1, eff. March 31, 2009; L.2009, c. 240, § 1, eff. Jan. 16, 2010; L.2009, c. 289, § 1, eff. July1, 2010; L.2010, c. 57, § 1, eff. Aug. 19, 2010; L.2011, c. 9, § 2, eff. Jan. 28, 2011.[Moderator Note: The provisions of N.J.S.A. 48:3-49 et. seq. were enacted in 1999 as part of the Electric Discountand Energy Competition Act (“EDECA”), and subsequently amended]Renewable Portfolio Standards/Renewable Energy Certificates/Alternative CompliancePayments48:3-87. Emissions disclosure requirements; emissions portfolio standards; renewable energy portfoliostandards; renewable energy trading program; net metering standards; electric and gas energy efficiencyportfolio standards; fees; solar alternative compliance payments***d. Notwithstanding any provisions of the “Administrative Procedure Act,” P.L.1968, c. 410 (C.52:14B-1 et seq.) tothe contrary, the board shall initiate a proceeding and shall adopt, after notice, provision of the opportunity forcomment, and public hearing, renewable energy portfolio standards that shall require:(1) that two and one-half percent of the kilowatt hours sold in this State by each electric power supplier and eachbasic generation service provider be from Class I or Class II renewable energy sources;(2) beginning on January 1, 2001, that one-half of one percent of the kilowatt hours sold in this State by each electricpower supplier and each basic generation service provider be from Class I renewable energy sources. The boardshall increase the required percentage for Class I renewable energy sources so that by January 1, 2006, one percentof the kilowatt hours sold in this State by each electric power supplier and each basic generation service providershall be from Class I renewable energy sources and shall additionally increase the required percentage for Class Irenewable energy sources by one-half of one percent each year until January 1, 2012, when four percent of thekilowatt hours sold in this State by each electric power supplier and each basic generation service provider shall befrom Class I renewable energy sources.3

An electric power supplier or basic generation service provider may satisfy the requirements of this subsection byparticipating in a renewable energy trading program approved by the board in consultation with the Department ofEnvironmental Protection;(3) that the board establish a multi-year schedule, applicable to each electric power supplier or basic generationservice provider in this State, beginning with the one-year period commencing on June 1, 2010, and continuing foreach subsequent one-year period up to and including, the one-year period commencing on June 1, 2025, thatrequires suppliers or providers to purchase at least the following number of kilowatt-hours from solar electric powergenerators in this State:EY 2011 306 Gigawatthours (Gwhrs)EY 2012 442 GwhrsEY 2013 596 GwhrsEY 2014 772 GwhrsEY 2015 965 GwhrsEY 2016 1,150 GwhrsEY 2017 1,357 GwhrsEY 2018 1,591 GwhrsEY 2019 1,858 GwhrsEY 2020 2,164 GwhrsEY 2021 2,518 GwhrsEY 2022 2,928 GwhrsEY 2023 3,433 GwhrsEY 2024 3,989 GwhrsEY 2025 4,610 GwhrsEY 2026 5,316 GwhrsEY 2027, and for every energy year thereafter, at least 5,316 Gwhrs per energy year to reflect an increasing numberof kilowatt-hours to be purchased by suppliers or providers from solar electric power generators in this State, and toestablish a framework within which suppliers and providers shall purchase at least 2,518 Gwhrs in the energy year2021 and 5,316 Gwhrs in the energy year 2026 from solar electric power generators in this State, provided, however,that the number of solar kilowatt-hours required to be purchased by each supplier or provider, when expressed as apercentage of the total number of solar kilowatt-hours purchased in this State, shall be equivalent to each supplier'sor provider's proportionate share of the total number of kilowatt-hours sold in this State by all suppliers andproviders.The solar renewable portfolio standards requirements in paragraph (3) of this subsection shall automatically increaseby 20% for the remainder of the schedule in the event that the following two conditions are met: (a) the number ofSRECs generated meets or exceeds the requirement for three consecutive reporting years, starting with energy year2013; and (b) the average SREC price for all SRECs purchased by entities with renewable energy portfoliostandards obligations has decreased in the same three consecutive reporting years. The board shall exempt providers'existing supply contracts that are: (a) effective prior to the date of P.L.2009, c. 289; or (b) effective prior to anyfuture increase in the solar renewable portfolio standard beyond the multi-year schedule established in paragraph (3)of this subsection. This exemption shall apply to the number of SRECs that exceeds the number mandated by thesolar renewable portfolio standards requirements that were in effect on the date that the providers executed theirexisting supply contracts. This limited exemption for providers' existing supply contracts shall not be construed tolower the Statewide solar purchase requirements set forth in paragraph (3) of this subsection. Such incremental newrequirements shall be distributed over the electric power suppliers and providers not subject to the existing supplycontract exemption until such time as existing supply contracts expire and all suppliers are subject to the newrequirement.An electric power supplier or basic generation service provider may satisfy the requirements of this subsection byparticipating in a renewable energy trading program approved by the board in consultation with the Department ofEnvironmental Protection, or compliance with the requirements of this subsection may be demonstrated to the boardby suppliers or providers through the purchase of SRECs.4

The renewable energy portfolio standards adopted by the board pursuant to paragraphs (1) and (2) of this subsectionshall be effective as regulations immediately upon filing with the Office of Administrative Law and shall beeffective for a period not to exceed 18 months, and may, thereafter, be amended, adopted or readopted by the boardin accordance with the provisions of the “Administrative Procedure Act.”The renewable energy portfolio standards adopted by the board pursuant to paragraph (3) of this subsection shall beeffective as regulations immediately upon filing with the Office of Administrative Law and shall be effective for aperiod not to exceed 30 months after such filing, and shall, thereafter, be amended, adopted or readopted by theboard in accordance with the “Administrative Procedure Act”; and(4) within 180 days after the date of enactment of P.L.2010, c. 57 (C.48:3-87.1 et al.), that the board establish anoffshore wind renewable energy certificate program to require that a percentage of the kilowatt hours sold in thisState by each electric power supplier and each basic generation service provider be from offshore wind energy inorder to support at least 1,100 megawatts of generation from qualified offshore wind projects.The percentage established by the board pursuant to this paragraph shall serve as an offset to the renewable energyportfolio standard established pursuant to paragraphs (1) and (2) of this subsection and shall reduce thecorresponding Class I renewable energy requirement.The percentage established by the board pursuant to this paragraph shall reflect the projected OREC production ofeach qualified offshore wind project, approved by the board pursuant to section 3 of P.L.2010, c. 57 (C.48:3-87.1),for twenty years from the commercial operation start date of the qualified offshore wind project which productionprojection and OREC purchase requirement, once approved by the board, shall not be subject to reduction.An electric power supplier or basic generation service provider shall comply with the OREC program establishedpursuant to this paragraph through the purchase of offshore wind renewable energy certificates at a price and for thetime period required by the board. In the event there are insufficient offshore wind renewable energy certificatesavailable, the electric power supplier or basic generation service provider shall pay an offshore wind alternativecompliance payment established by the board. Any offshore wind alternative compliance payments collected shallbe refunded directly to the ratepayers by the electric public utilities.The rules established by the board pursuant to this paragraph shall be effective as regulations immediately uponfiling with the Office of Administrative Law and shall be effective for a period not to exceed 18 months, and may,thereafter, be amended, adopted or readopted by the board in accordance with the provisions of the “AdministrativeProcedure Act,” P. L.1968, c. 410 (C.52:14B-1 et seq.).e. Notwithstanding any provisions of the “Administrative Procedure Act,” P.L.1968, c. 410 (C.52:14B-1 et seq.) tothe contrary, the board shall initiate a proceeding and shall adopt, after notice, provision of the opportunity forcomment, and public hearing:***(3) credit or other incentive rules for generators using Class I renewable energy generation systems that connect toNew Jersey's electric public utilities' distribution system but who do not net meter.Such rules shall require the board or its designee to issue a credit or other incentive to those generators that do notuse a net meter but otherwise generate electricity derived from a Class I renewable energy source and to issue anenhanced credit or other incentive, including, but not limited to, a solar renewable energy credit, to those generatorsthat generate electricity derived from solar technologies.Such standards or rules shall be effective as regulations immediately upon filing with the Office of AdministrativeLaw and shall be effective for a period not to exceed 18 months, and may, thereafter, be amended, adopted orreadopted by the board in accordance with the provisions of the “Administrative Procedure Act.”***[f-h. omitted]5

i. After the board establishes a schedule of solar kilowatt-hour sale or purchase requirements pursuant to paragraph(3) of subsection d. of this section, the board may initiate subsequent proceedings and adopt, after appropriate noticeand opportunity for public comment and public hearing, increased minimum solar kilowatt-hour sale or purchaserequirements, provided that the board shall not reduce previously established minimum solar kilowatt-hour sale orpurchase requirements, or otherwise impose constraints that reduce the requirements by any means.j. The board shall determine an appropriate level of solar alternative compliance payment, and establish a 15-yearsolar alternative compliance payment schedule, that permits each supplier or provider to submit an SACP to complywith the solar electric generation requirements of paragraph (3) of subsection d. of this section. The board mayinitiate subsequent proceedings and adopt, after appropriate notice and opportunity for public comment and publichearing, an increase in solar alternative compliance payments, provided that the board shall not reduce previouslyestablished levels of solar alternative compliance payments, nor shall the board provide relief from the obligation ofpayment of the SACP by the electric power suppliers or basic generation service providers in any form. Any SACPpayments collected shall be refunded directly to the ratepayers by the electric public utilities.k. The board may allow electric public utilities to offer long-term contracts and other means of financing, includingbut not limited to loans, for the purchase of SRECs and the resale of SRECs to suppliers or providers or others,provided that after such contracts have been approved by the board, the board's approvals shall not be modified bysubsequent board orders.l. The board shall implement its responsibilities under the provisions of this section in such a manner as to:(1) place greater reliance on competitive markets, with the explicit goal of encouraging and ensuring the emergenceof new entrants that can foster innovations and price competition;(2) maintain adequate regulatory authority over non-competitive public utility services;(3) consider alternative forms of regulation in order to address changes in the technology and structure of electricpublic utilities;(4) promote energy efficiency and Class I renewable energy market development, taking into considerationenvironmental benefits and market barriers;(5) make energy services more affordable for low and moderate income customers;(6) attempt to transform the renewable energy market into one that can move forward without subsidies from theState or public utilities;(7) achieve the goals put forth under the renewable energy portfolio standards;(8) promote the lowest cost to ratepayers; and(9) allow all market segments to participate.m. The board shall ensure the availability of financial incentives under its jurisdiction, including, but not limited to,long-term contracts, loans, SRECs, or other financial support, to ensure market diversity, competition, andappropriate coverage across all ratepayer segments, including, but not limited to, residential, commercial, industrial,non-profit, farms, schools, and public entity customers.n. For projects which are owned, or directly invested in, by a public utility pursuant to section 13 of P.L.2007, c. 340(C.48:3-98.1), the board shall determine the number of SRECs with which such projects shall be credited; and indetermining such number the board shall ensure that the market for SRECs does not detrimentally affect thedevelopment of non-utility solar projects and shall consider how its determination may impact the ratepayers.6

o. The board, in consultation with the Department of Environmental Protection, electric public utilities, the Divisionof Rate Counsel in, but not of, the Department of the Treasury, affected members of the solar energy industry, andrelevant stakeholders, shall periodically consider increasing the renewable energy portfolio standards beyond theminimum amounts set forth in subsection d. of this section, taking into account the cost impacts and public benefitsof such increases including, but not limited to:(1) reductions in air pollution, water pollution, land disturbance, and greenhouse gas emissions;(2) reductions in peak demand for electricity and natural gas, and the overall impact on the costs to customers ofelectricity and natural gas;(3) increases in renewable energy development, manufacturing, investment, and job creation opportunities in thisState; and(4) reductions in State and national dependence on the use of fossil fuels.p. Class I RECs shall be eligible for use in renewable energy portfolio standards compliance in the energy year inwhich they are generated, and for the following two energy years. SRECs and ORECs shall be eligible for use inrenewable energy portfolio standards compliance in the energy year in which they are generated, and for thefollowing two energy years.L.1999, c. 23, § 38, eff. Feb. 9, 1999. Amended by L.2007, c. 112, § 8, eff. July 6, 2007; L.2007, c. 300, § 1;L.2007, c. 340, § 12, eff. Jan. 13, 2008; L.2009, c. 289, § 2; L.2010, c. 34, § 15, eff. June 29, 2010; L.2010, c. 57, §2, eff. Aug. 19, 2010.[Moderator Note: Major amendments to the solar RPS, SREC and SACP provisions were enacted in The SolarAdvancement and Fair Competition Act, P.L. 2009, c. 289 (A-3520)]Net Metering and Interconnection48:3-87. Emissions disclosure requirements; emissions portfolio standards; renewable energy portfoliostandards; renewable energy trading program; net metering standards; electric and gas energy efficiencyportfolio standards; fees; solar alternative compliance payments***e. Notwithstanding any provisions of the “Administrative Procedure Act,” P.L.1968, c. 410 (C.52:14B-1 et seq.) tothe contrary, the board shall initiate a proceeding and shall adopt, after notice, provision of the opportunity forcomment, and public hearing:(1) net metering standards for electric power suppliers and basic generation service providers. The standards shallrequire electric power suppliers and basic generation service providers to offer net metering at non-discriminatoryrates to industrial, large commercial, residential and small commercial customers, as those customers are classifiedor defined by the board, that generate electricity, on the customer's side of the meter, using a Class I renewableenergy source, for the net amount of electricity supplied by the electric power supplier or basic generation serviceprovider over an annualized period. Systems of any sized capacity, as measured in watts, are eligible for netmetering. If the amount of electricity generated by the customer-generator, plus any kilowatt hour credits held overfrom the previous billing periods, exceeds the electricity supplied by the electric power supplier or basic generationservice provider, then the electric power supplier or basic generation service provider, as the case may be, shallcredit the customer-generator for the excess kilowatt hours until the end of the annualized period at which point thecustomer-generator will be compensated for any remaining credits or, if the customer-generator chooses, credit thecustomer-generator on a real-time basis, at the electric power supplier's or basic generation service provider'savoided cost of wholesale power or the PJM electric power pool's real-time locational marginal pricing rate,adjusted for losses, for the respective zone in the PJM electric power pool. Alternatively, the customer-generatormay execute a bilateral agreement with an electric power supplier or basic generation service provider for the saleand purchase of the customer-generator's excess generation. The customer-generator may be credited on a real-timebasis, so long as the customer-generator follows applicable rules prescribed by the PJM electric power pool for itscapacity requirements for the net amount of electricity supplied by the electric power supplier or basic generationservice provider. The board may authorize an electric power supplier or basic generation service provider to cease7

offering net metering whenever the total rated generating capacity owned and operated by net metering customergeneratorsStatewide equals 2.5 percent of the State's peak electricity demand;(2) safety and power quality interconnection standards for Class I renewable energy source systems used by acustomer-generator that shall be eligible for net metering.Such standards or rules shall take into consideration the goals of the New Jersey Energy Master Plan, applicableindustry standards, and the standards of other states and the Institute of Electrical and Electronic Engineers. Theboard shall allow electric public utilities to recover the costs of any new net meters, upgraded net meters, systemreinforcements or upgrades, and interconnection costs through either their regulated rates or from the net meteringcustomer-generator; and…***Such standards or rules shall be effective as regulations immediately upon filing with the Office of AdministrativeLaw and shall be effective for a period not to exceed 18 months, and may, thereafter, be amended, adopted orreadopted by the board in accordance with the provisions of the “Administrative Procedure ActOffshore Wind48:3-87.1. Off-shore wind projects; application requirements; approval conditions; approval time limitationa. An entity seeking to construct an offshore wind project shall submit an application to the board for approval bythe board as a qualified offshore wind project, which shall include, but need not be limited to, the followinginformation:(1) a detailed description of the project, including maps, surveys and other visual aides. This description shallinclude, but need not be limited to: the type, size and number of proposed turbines and foundations; the history todateof the same type, size and manufacturer of installed turbines and foundations globally; and a detailedimplementation plan that highlights key milestone activities during the permitting, financing, design, equipmentsolicitation, manufacturing, shipping, assembly, in-field installation, testing, equipment commissioning and servicestart-up;(2) a completed financial analysis of the project including pro forma income statements, balance sheets, and cashflow projections for a 20-year period, including the internal rate of return, and a description and estimate of anyState or federal tax benefits that may be associated with the project;(3) the proposed method of financing the project, including identification of equity investors, fixed incomeinvestors, and any other sources of capital;(4) documentation that the entity has applied for all eligible federal funds and programs available to offset the costof the project or provide tax advantages;(5) the projected electrical output and anticipated market prices over the anticipated life of the project, including aforecast of electricity revenues from the sale of energy derived from the project and capacity, as well as revenuesanticipated by the sale of any ORECs, RECs, air emission credits or offsets, or any tradable environmental attributescreated by the project;(6) an operations and maintenance plan for the initial 20-year operation of the project that: details routine,intermittent and emergency protocols; identifies the primary risks to the built infrastructure and how the potentialrisks, including but not limited to hurricanes, lightning, fog, rogue wave occurrences, and exposed cabling, shall bemitigated; and identifies specific and concrete elements to ensure both construction and operational cost controls.This operations and maintenance plan shall be integrated into the financial analysis of the project, and shall identifythe projected plan for the subsequent 20 years, following conclusion of the initial 20-year operations, assuming anynecessary federal lease agreements are maintained and renewed;(7) the anticipated carbon dioxide emissions impact of the project;8

(8) a decommissioning plan for the project including provisions for financial assurance for decommissioning asrequired by the applicable State and federal governmental entities;(9) a list of all State and federal regulatory agency approvals, permits, or other authorizations required pursuant toState and federal law for the offshore wind project, and copies of all submitted permit applications and any issuedapprovals and permits for the offshore wind project;(10) a cost-benefit analysis for the project including at a minimum:(a) a detailed input-output analysis of the impact of the project on income, employment, wages, indirect businesstaxes, and output in the State with particular emphasis on in-State manufacturing employment;(b) an explanation of the location, type and salary of employment opportunities to be created by the project with jobtotals expressed as full-time equivalent positions assuming 1,820 hours per year;(c) an analysis of the anticipated environmental benefits and environmental impacts of the project; and(d) an analysis of the potential impacts on residential and industrial ratepayers of electricity rates over the life of theproject that may be caused by incorporating any State subsidy into rates;(11) a proposed OREC pricing method and schedule for the board to consider;(12) a timeline for the permitting, licensing and construction of the proposed offshore wind project;(13) a plan for interconnection, including engineering specifications and costs; and(14) any other information deemed necessary by the board in order to conduct a thorough evaluation of the proposal.The board may hire consultants or other experts if the board determines that obtaining such outside expertise wouldbe beneficial to the review of the proposal.b. (1) In considering an application for a qualified offshore wind project, submitted pursuant to subsection a. of thissection, the board shall determine that the application satisfies the following conditions:(a) the filing is consistent with the New Jersey energy master plan, adopted pursuant to section 12 of P.L.1977, c.146 (C.52:27F-14), in effect at the time the board is considering the application;(b) the cost-benefit analysis, submitted pursuant to paragraph (10) of subsection a. of this section, demonstratespositive economic and environmental net benefits to the State;(c) the financing mechanism is based upon the actual electrical output of the project, fairly balances the risks andrewards of the project between ratepayers and shareholders, and ensures that any costs of non-performance, in eitherthe construction or operational phase of the project, shall be borne by shareholders; and(d) the entity proposing the project demonstrates financial integrity and sufficient access to capital to allow for areasonable expectation of completion of construction of the project.(2) In considering an application for a qualified offshore wind project, submitted pursuant to subsection a. of thissection, the board shall also consider:(a) the total level of subsidies to be paid by ratepayers for qualified offshore wind projects over the life of theproject; and(b) any other elements the board deems appropriate in conjunction with the application.c. An order issued by the board to approve an application for a qualified offshore wind project pursuant to this9

section shall, at a minimum, include conditions to ensure the following:(1) no OREC shall be paid until electricity is produced by the qualified offshore wind project;(2) ORECs shall be paid on the actual electrical output of the project that is delivered into the transmission system ofthe State;(3) ratepayers and the State shall be held harmless for any cost overruns associated with the project; and(4) the applicant will reimburse the board and the State for all reasonable costs incurred for regulatory review of theproject, including but not limited to consulting services, oversight, inspections, and audits.An order issued by the board pursuant to this subsection shall specify the value of the OREC and the term of theorder.An order issued by the board pursuant to this subsection shall not be modified by subsequent board orders, unlessthe modifications are jointly agreed to by the parties.d. The board shall review and approve, conditionally approve, or deny an application submitted pursuant to thissection within 180 days after the date a complete application is submitted to the board.L.2010, c. 57, § 3, eff. Aug. 19, 2010.[Moderator Note: This Section was enacted in the Offshore Wind Economic Development Act, P.L. 2010, c. 57(S2036)]BPU Renewable Programs/Cost Recovery via Societal Benefit Charge (SBC)48:3-60. Recovery of costs; societal benefits chargea. Simultaneously with the starting date for the implementation of retail choice as determined by the board pursuantto subsection a. of section 5 of this act, the board shall permit each electric public utility and gas public utility torecover some or all of the following costs through a societal benefits charge that shall be collected as a nonbypassablecharge imposed on all electric public utility customers and gas public utility customers, as appropriate:***(3) The costs of demand side management programs that were approved by the board pursuant to its demand sidemanagement regulations prior to April 30, 1997. For the purpose of establishing initial unbundled rates pursuant tosection 4 of this act, the societal benefits charge shall be set to recover the same level of demand side managementprogram costs as is being collected in the bundled rates of the electric public utility on the effective date of this act.Within four months of the effective date of this act, and every four years thereafter, the board shall initiate aproceeding and cause to be undertaken a comprehensive resource analysis of energy programs, and within eightmonths of initiating such proceeding and after notice, provision of the opportunity for public comment, and publichearing, the board, in consultation with the Department of Environmental Protection, shall determine the appropriatelevel of funding for energy efficiency and Class I renewable energy programs that provide environmental benefitsabove and beyond those provided by standard offer or similar programs in effect as of the effective date of this act;provided that the funding for such programs be no less than 50% of the total Statewide amount being collected inpublic electric and gas utility rates for demand side management programs on the effective date of this act for aninitial period of four years from the issuance of the first comprehensive resource analysis following the effectivedate of this act, and provided that 25% of this amount shall be used to provide funding for Class I renewable energyprojects in the State. In each of the following fifth through eighth years, the Statewide funding for such programsshall be no less than 50 percent of the total Statewide amount being collected in public electric and gas utility ratesfor demand side management programs on the effective date of this act, except that as additional funds are madeavailable as a result of the expiration of past standard offer or similar commitments, the minimum amount offunding for such programs shall increase by an additional amount equal to 50 percent of the additional funds madeavailable, until the minimum amount of funding dedicated to such programs reaches $140,000,000 total. After theeighth year the board shall make a determination as to the appropriate level of funding for these programs. Such10

programs shall include a program to provide financial incentives for the installation of Class I renewable energyprojects in the State, and the board, in consultation with the Department of Environmental Protection, shalldetermine the level and total amount of such incentives as well as the renewable technologies eligible for suchincentives which shall include, at a minimum, photovoltaic, wind, and fuel cells. The board shall simultaneouslydetermine, as a result of the comprehensive resource analysis, the programs to be funded by the societal benefitscharge, the level of cost recovery and performance incentives for old and new programs and whether the recovery ofdemand side management programs' costs currently approved by the board may be reduced or extended over alonger period of time. The board shall make these determinations taking into consideration existing market barriersand environmental benefits, with the objective of transforming markets, capturing lost opportunities, making energyservices more affordable for low income customers and eliminating subsidies for programs that can be delivered inthe marketplace without electric public utility and gas public utility customer funding;***L.1999, c. 23, § 12, eff. Feb. 9, 1999.Utility Renewable Programs/BPU authority to Direct Programs48:3-98.1. Energy efficiency, renewable energy and conservation programs; cost recovery; definitionsa. Notwithstanding the provisions of any other law or rule or regulation to the contrary:(1) an electric public utility or a gas public utility may provide and invest in energy efficiency and conservationprograms in its respective service territory on a regulated basis pursuant to this section, regardless of whether theenergy efficiency or conservation program involves facilities on the utility side or customer side of the point ofinterconnection;(2) an electric public utility or a gas public utility may invest in Class I renewable energy resources, or offer Class Irenewable energy programs on a regulated basis pursuant to this section, regardless of whether the renewable energyresource is located on the utility side or customer side of the point of interconnection; and(3) the board may provide funding for energy efficiency, conservation, and renewable energy improvements throughthe societal benefits charge established pursuant to section 12 of P.L.1999, c. 23 (C.48:3-60), the retail margin oncertain hourly-priced and larger non-residential customers pursuant to the board's continuing regulation of basicgeneration service pursuant to sections 3 and 9 of P.L.1999, c. 23 (C.48:3-51 and 48:3-57), or other moniesappropriated for such purposes. The board may also direct electric public utilities and gas public utilities toundertake energy efficiency, conservation, and renewable energy improvements, and shall allow the recovery ofprogram costs and incentive rate treatment pursuant to subsection b. of this section.b. An electric public utility or a gas public utility seeking cost recovery for any program pursuant to this sectionshall file a petition with the board to request cost recovery. In determining the recovery by electric public utilitiesand gas public utilities of program costs for any program implemented pursuant to this section, the board may takeinto account the potential for job creation from such programs, the effect on competition for such programs, existingmarket barriers, environmental benefits, and the availability of such programs in the marketplace. Unless the boardissues a written order within 180 days after the filing of the petition approving, modifying or denying the requestedrecovery, the recovery requested by the utility shall be granted effective on the 181st day after the filing withoutfurther order by the board. Ratemaking treatment may include placing appropriate technology and program costinvestments in the respective utility's rate base, or recovering the utility's technology and program costs throughanother ratemaking methodology approved by the board, including, but not limited to, the societal benefits chargeestablished pursuant to section 12 of P.L.1999, c. 23 (C.48:3-60). All electric public utility and gas public utilityinvestment in energy efficiency and conservation programs or Class I renewable energy programs may be eligiblefor rate treatment approved by the board, including a return on equity, or other incentives or rate mechanisms thatdecouple utility revenue from sales of electricity and gas.c. Within 120 days after the date of enactment of P.L.2007, c. 340 (C.26:2C-45 et al.), the board shall issue an orderthat allows electric public utilities and gas public utilities to offer energy efficiency and conservation programs, toinvest in Class I renewable energy resources, and to offer Class I renewable energy programs in their respectiveservice territories on a regulated basis. The board's order shall be reflected in rules and regulations thereafter to be11

adopted by the board pursuant to the “Administrative Procedure Act,” P.L.1968, c. 410 (C.52:14B-1 et seq.).d. As used in this section:“Class I renewable energy program” means any regulated program approved by the board pursuant to this sectionfor the purpose of facilitating the development of Class I renewable energy in the State.“Energy efficiency and conservation program” means any regulated program, including customer and communityeducation and outreach, approved by the board pursuant to this section for the purpose of conserving energy ormaking the use of electricity or natural gas more efficient by New Jersey consumers, whether residential,commercial, industrial, or governmental agencies.“Program costs” means all reasonable and prudent costs incurred in developing and implementing energy efficiency,conservation, or Class I renewable energy programs approved by the board pursuant to this section. These costs shallinclude a full return on invested capital and foregone electric and gas distribution fixed cost contributions associatedwith the implementation of the energy efficiency, conservation, or Class I renewable energy programs until thosecost contributions are reflected in base rates following a base rate case if such costs were reasonably and prudentlyincurred.L.2007, c. 340, § 13, eff. Jan. 13, 2008.[Moderator Note: Section was enacted as part of the omnibus Regional Greenhouse Gas Initiative (“RGGI”)legislation]On-site Generation-Exemption from Charges48:3-77. Power generated at on-site generation facilities; chargesa. Whenever an on-site generation facility produces power that is not consumed by the on-site customer, and thatpower is delivered to an off-site end-use customer in this State, all the following charges shall apply to the sale ordelivery of such power to the off-site customer:(1) The societal benefits charge or its equivalent, imposed pursuant to section 12 of P.L.1999, c. 23 (C.48:3-60);(2) The market transition charge or its equivalent, imposed pursuant to section 13 of P.L.1999, c. 23 (C.48:3-61);and(3) The transition bond charge or its equivalent, imposed pursuant to section 18 of P.L.1999, c. 23 (C.48:3-67).b. None of the following charges shall be imposed on the electricity sold solely to the on-site customer of an on-sitegenerating facility, except pursuant to subsection c. of this section:(1) The societal benefits charge or its equivalent, imposed pursuant to section 12 of P.L.1999, c. 23 (C.48:3-60);(2) The market transition charge or its equivalent, imposed pursuant to section 13 of P.L.1999, c. 23 (C.48:3-61);and(3) The transition bond charge or its equivalent, imposed pursuant to section 18 of P.L.1999, c. 23 (C.48:3-67).c. Upon finding that generation from on-site generation facilities installed subsequent to the starting date of retailcompetition as provided in subsection a. of section 5 of P.L.1999, c. 23 (C.48:3-53) has, in the aggregate, displacedcustomer purchases from an electric public utility by an amount such that the kilowatt hours distributed by theelectric public utility have been reduced to an amount equal to 92.5 percent of the 1999 kilowatt hours distributed bythe electric public utility, the board shall impose, except as provided in subsection d. of this section, the chargeslisted in subsections a., b., and c. of this section on the on-site customer. Such charges shall not be levied on anypower consumption that is displaced by an on-site generation facility that is installed before the date of such finding:12

(1) The societal benefits charge or its equivalent, imposed pursuant to section 12 of P.L.1999, c. 23 (C.48:3-60);(2) The market transition charge or its equivalent, imposed pursuant to section 13 of P.L.1999, c. 23 (C.48:3-61);and(3) The transition bond charge or its equivalent, imposed pursuant to section 18 of P.L.1999, c. 23 (C.48:3-67).d. Notwithstanding the provisions of subsection c. of this section, a charge shall not be imposed on powerconsumption by the on-site customer that is derived from an on-site generation facility:(1) That the on-site customer or its agent installed on or before the effective date of P.L.1999, c. 23 (C.48:3-49 etal.), including any expansion of such a facility for the continued provision of on-site power consumption by thesame on-site customer that occurs after the effective date of P.L.1999, c. 23; or(2) For which the on-site customer or its agent has made, on or before the effective date of P.L.1999, c. 23 (C.48:3-49 et al.), substantial financial and contractual commitments in planning and development, including having appliedfor any appropriate air permit from the Department of Environmental Protection, including any expansion of such afacility for the continued provision of on-site power consumption by the same on-site customer that occurs after theeffective date of P.L.1999, c. 23.e. A societal benefits charge, market transition charge, transition bond charge, and transitional energy facilitiesassessment or their equivalent, shall be imposed on the sale or delivery of power to an off-site end use thermalenergy services customer that is derived from the on-site generation facility serving that customer.L.1999, c. 23, § 28, eff. Feb. 9, 1999. Amended by L.2009, c. 240, § 2, eff. Jan. 16, 2010.48:3-77.1. Franchise rights of electric public utility to provide electric delivery servicesIn order to avoid duplication of existing public utility electric distribution infrastructure, and to maximize economicefficiency and electrical safety, delivery of electric power from an on-site generation facility to an off-site end usethermal energy services customer as defined in section 3 of P.L.1999, c. 23 (C.48:3-51), shall utilize the existinglocally franchised public utility electric distribution infrastructure. The New Jersey electric public utility havingfranchise rights to provide electric delivery services within the municipality shall provide electric delivery servicesat the standard prevailing tariff rate that is normally applicable to the individual off-site end use thermal energyservices customer.L.2009, c. 240, § 4, eff. Jan. 16, 2010.13

Excerpts from NJBPU Rules[Note: The following provisions of chapters N.J.A.C. 14:8 (Renewable Energy and EnergyEfficiency) expired on April 18, 2011, but were subject to action by the Board of Public Utilities(BPU) on March 30, 2010 that re-proposed the chapter with amendments and specially adoptedcertain solar provisions. Check the New Jersey Register for the text of the BPU’s action]General Definitions14:8-1.2 DefinitionsThe following words and terms, when used in this chapter, shall have the following meanings unless the contextclearly indicates otherwise. Additional definitions that apply to this chapter can be found at N.J.A.C. 14:3-1.1 and14:4-1.2.“Class I renewable energy” means electric energy produced from solar technologies, photovoltaic technologies,wind energy, fuel cells powered by renewable fuels, geothermal technologies, wave or tidal action, and/or methanegas from landfills or a biomass facility, provided that the biomass is cultivated and harvested in a sustainablemanner. Types of class I renewable energy that qualify for use in meeting the requirements of this subchapter are setforth at N.J.A.C. 14:8-2.5.“Class II renewable energy” means electric energy produced at a resource recovery facility or hydro power facility,provided that such facility is located where retail competition is permitted and provided further that theCommissioner of Environmental Protection has determined that such facility meets the highest environmentalstandards and minimizes any impacts to the environment and local communities. Types of class II renewable energythat qualify for use in meeting the requirements of this subchapter are set forth at N.J.A.C. 14:8-2.6.“Fossil fuel” means natural gas, petroleum, coal, or any form, of solid, liquid, or gaseous fuel derived from suchmaterial.“Net metering” means a system of metering electricity in which the EDC:1. Credits a customer-generator at the full retail rate for each kilowatt-hour produced by a class I renewable energysystem installed on the customer-generator's side of the electric revenue meter, up to the total amount of electricityused by that customer during an annualized period; and2. Compensates the customer-generator at the end of the annualized period for any remaining credits, at a rate equalto the supplier/provider's avoided cost of wholesale power.“NJDEP” means the New Jersey Department of Environmental Protection.“Renewable energy” means class I renewable energy or class II renewable energy, as those terms are defined in thissection.“Societal benefits charge” or “SBC” means a charge imposed by an electric public utility, at a level determined bythe Board, in accordance with N.J.S.A. 48:3-60.“Solar electric generation” means creation of electricity using a system that employs solar radiation to produceenergy that powers an electric generator. Solar electric generation includes technologies that utilize the photovoltaiceffect. Solar electric generation is a type of class I renewable energy.“Supplier/provider” means an electric power supplier or a basic generation service provider, as these terms aredefined at N.J.A.C. 14:4-1.2.RPS/RECs and ACP14

14:8-2.1 Purpose and scope(a) Each supplier/provider, as defined at N.J.A.C. 14:8-1.2, that sells electricity to retail customers in New Jersey,shall include in its electric energy portfolio electricity generated from renewable energy sources. This subchapter isdesigned to encourage the development of renewable sources of electricity and new, cleaner generation technology;minimize the environmental impact of air pollutant emissions from electric generation; reduce possible transport ofemissions and minimize any adverse environmental impact from deregulation of energy generation; and support thereliability of the supply of electricity in New Jersey.(b) This subchapter governs the retail electricity sales of each supplier/provider, as defined in N.J.A.C. 14:8-1.2.This subchapter does not govern installed capacity obligations, as defined at N.J.A.C. 14:8-2.2.(c) This subchapter does not apply to a private or government aggregator that contracts for electric generationservice or electric related services, either separately or bundled, for its own facilities or on behalf of other businessand residential customers in this State. This subchapter does not apply to an energy agent, as defined at N.J.A.C.14:8-1.2. A supplier/provider that is contractually obligated to sell electricity to an aggregator shall comply with thissubchapter by including the amount sold to the aggregator as part of its energy portfolio.14:8-2.2 DefinitionsThe following words and terms, when used in this subchapter, shall have the meanings given below, unless thecontext clearly indicates otherwise:“Alternative compliance payment” or “ACP” means a payment of a certain dollar amount per megawatt-hour, whicha supplier/provider may submit in lieu of supplying the class I or class II renewable energy required under Table Ain N.J.A.C. 14:8-2.3.“Attribute” means a characteristic associated with electricity generated using a particular renewable fuel, such as itsgeneration date, facility geographic location, unit vintage, emissions output, fuel, State program eligibility, or othercharacteristic that can be identified, accounted, and tracked.“Bioenergy crop” means plants cultivated and harvested specifically for use as fuel for the purpose of generatingelectricity.“Biomass” has the same meaning as that assigned to this term in Executive Order No. 13134, published in theFederal Register on August 16, 1999.Executive Order No. 13134 defines biomass as “. . . any organic matter that isavailable on a renewable or recurring basis (excluding old-growth timber), including dedicated energy crops andtrees, agricultural food and feed crop residues, aquatic plants, wood and wood residues, animal wastes, and otherwaste materials.”“Black liquor” means a viscous liquid containing inorganic chemicals and organic material such as lignin andaliphatic acids, which is separated from wood during chemical pulping.“Energy portfolio” means all of the electrical energy supplied by a particular electric power supplier or basicgeneration service provider to New Jersey retail customers.“Fuel cell” means an electrochemical device that converts chemical energy in a hydrogen or hydrogen-rich fueldirectly into electricity, without combustion.“Generation Attribute Tracking System” or “GATS” means the environmental and emissions attributes trackingsystem for electric generation that is administered by PJM Environmental Information Services.“Geothermal energy” means energy generated by a steam turbine, driven by hot water or steam extracted fromgeothermal reservoirs in the earth's crust.“Installed capacity obligation” means the requirement for an electric power supplier or basic generation serviceprovider to obtain an amount of electrical generation capacity to meet load service obligations under the reliability15

ules of PJM Interconnection. Installed capacity includes the generation capacity which a company considers part ofits own electric system, including wholly owned units, jointly-owned units, non-utility generation (NUGs), andpurchases.“Old-growth timber” means wood or plant matter taken from a forest in the late successional stage of forestdevelopment, including plant matter taken from the forest floor. Late successional forests contain live and dead treesof various sizes, species, composition, and age class structure. The age and structure of old-growth timber variessignificantly by forest type and from one biogeoclimatic zone to another.“Qualification life” means, for any solar electric generation facility, the period beginning on the date on which thefacility was interconnected to the local electric distribution system; and ending on the first May 31 that is at least 15years after the date of completion of the interconnection. For example, if a facility's inspections required underN.J.A.C. 14:8-2.9(i) were completed on August 1, 2004, then the facility's qualification life would begin August 1,2004, and end on May 31, 2020.“Qualified renewable energy” means electricity that may be used in complying with the minimum portfoliorequirements set forth at N.J.A.C. 14:8-2.3 for class I renewable energy, including solar electric generationrequirements, and/or class II renewable energy. Provisions governing the types of energy that qualify as class Irenewable energy, solar electric generation, and class II renewable energy, are set forth at N.J.A.C. 14:8-2.4, 2.5 and2.6, respectively.“Renewable Energy Certificate” or “REC” means a certificate representing the environmental benefits or attributesof one megawatt-hour of generation from a generating facility that meets the requirements of this subchapter. Class IRECs represent the environmental benefits or attributes of one megawatt-hour of class I renewable energygeneration; class II RECs represent the environmental benefits or attributes of one megawatt-hour of class IIrenewable energy generation; and solar RECs represent the environmental benefits or attributes of one megawatthourof solar electric generation.“Renewable fuel” means a fuel that is naturally regenerated over a short time scale and is either derived from the sun(such as thermal, photochemical or photoelectric), or from other natural sources such as wind, hydropower,geothermal and tidal energy, or photosynthetic energy stored in biomass. This term does not include a fossil fuel, awaste product from a fossil source, or a waste product from an inorganic source.“Reporting year” means the 12-month period from June 1st through May 31st. A reporting year shall be numberedaccording to the calendar year in which it ends, so that reporting year 2005 runs from June 1, 2004 through May 31,2005.“Resource recovery facility” means a solid waste facility that incinerates solid waste for the purposes of producingenergy and recovering metals and other materials for reuse.“Solar alternative compliance payment” or “SACP” means a payment of a certain dollar amount per megawatt-hour,which a supplier/provider may submit in lieu of complying with the solar electric generation requirements in TableA in N.J.A.C. 14:8-2.3.“Solar REC” means a type of REC, as defined in this section, issued by the Board or its designee, which representsthe environmental benefits or attributes of one megawatt-hour of solar electric generation, as defined in N.J.A.C.14:8-1.2.“Total cost of solar incentives” means the sum of the following for a reporting year, provided that any particular costthat is within more than one of the categories listed below shall not be counted twice:14:8-2.3 Minimum percentage of renewable energy required(a) Each supplier/provider, as defined at N.J.A.C. 14:8-1.2, that sells electricity to retail customers in New Jersey,shall ensure that the electricity it sells each reporting year in New Jersey includes at least the minimum percentageof qualified renewable energy, as defined at N.J.A.C. 14:8-2.2, required for that reporting year from each category16

specified in Table A below, except as provided at (h), (j) or (k) below:Table AWhat Percentage Of Energy Supplied Must Be Renewable Energy?SolarElectric Class I Class II TotalReporting Generation Renewable Renewable RenewableYear (solar RECs) Energy Energy EnergyJune 1, 2004--May 31,2000.01% .74% 2.5% 3.25%June 1, 2005--May 31,20060.017% 0.983% 2.5% 3.5%June 1, 2006--May 31,20070.0393% 2.037% 2.5% 4.5763%June 1, 2007--May 31,20080.0817% 2.924% 2.5% 5.5057%June 1, 2008--May 31,20090.16% 3.84% 2.5% 6.5%June 1, 2009--May 31,20100.221% 4.685% 2.50% 7.406%June 1, 2010--May 31,20110.305% 5.492% 2.50% 8.297%June 1, 2011--May 31,20120.394% 6.320% 2.50% 9.214%June 1, 2012--May 31,20130.497% 7.143% 2.50% 10.14%June 1, 2013--May 31,20140.621% 7.977% 2.50% 11.098%June 1, 2014--May 31,20150.765% 8.807% 2.50% 12.072%June 1, 2015--May 31,20160.928% 9.649% 2.50% 13.077%June 1, 2016--May 31,20171.118% 10.485% 2.50% 14.103%June 1, 2017--May 31,20181.333% 12.325% 2.50% 16.158%June 1, 2018--May 31,20191.572% 14.175% 2.50% 18.247%June 1, 2019--May 31,20201.836% 16.029% 2.50% 20.365%June 1, 2020--May 31,20212.120% 17.880% 2.50% 22.5%(b) The Board shall adopt rules setting the minimum percentages of solar electric generation, class I renewableenergy, and class II renewable energy required for reporting year 2022 and each subsequent reporting year. Theseminimum percentages shall be no lower than those required for reporting year 2021 in Table A above, except as mayhave been adjusted as provided in (j) and (k) below. Each of the rules setting such minimum percentage shall beadopted at least two years prior to the minimum percentage being required.17

(c) A supplier/provider shall meet the requirements for solar electric generation in Table A above through submittalof solar RECs, or through submittal of one or more SACPs, as those terms are defined at N.J.A.C. 14:8-2.2.(d) A supplier/provider may meet the class I and class II renewable energy requirements in Table A above bysubmitting RECs in accordance with N.J.A.C. 14:8-2.8.(e) A supplier/provider may, in lieu of meeting the requirements in Table A above, comply with this subchapter bysubmitting the appropriate number of ACPs or SACPs, in accordance with N.J.A.C. 14:8-2.10.(f) The following shall apply to the type of energy, and type of documentation, used for compliance with each of therequirements in Table A above:1. Solar RECs may be used to meet any requirement in Table A, whether the requirement is for solar electricgeneration, class I renewable energy, or class II renewable energy;2. Class I RECs may be used to meet class I renewable energy requirements or class II renewable energyrequirements, but shall not be used to meet solar electric generation requirements; and3. Class II RECs shall be used only to meet class II renewable energy requirements, and shall not be used tomeet solar electric generation requirements or class I renewable energy requirements.(g) A supplier/provider shall not demonstrate compliance with thissubchapter using direct supply of any type ofrenewable energy. All RPS compliance shall be submitted in the form of RECs.***(i) The same renewable energy shall not be used for more than one of the following:1. Creation of a solar REC under N.J.A.C. 14:8-2.9;2. Creation of a REC under N.J.A.C. 14:8-2.8 or 2.9; or3. Creation of a REC, or of any other type of attribute or credit, under authority other than N.J.A.C.14:8-2.9 such as another state's renewable energy standards or any voluntary clean electricity market orvoluntary clean electricity program.(j) If the Board determines that the total cost of solar incentives for a reporting year exceeds two percent of the totalretail cost of electricity for that reporting year, then the percentage of solar electric generation required under TableA for the reporting year in which the Board makes its determination shall continue to be the percentage required ineach subsequent reporting year, until the limitation ends under (k) below. For example, if the Board determines onDecember 1, 2018 that the cost limitation was triggered, the percentage of solar electric generation required shallremain at 1.572 percent until the limitation ends under (k) below. The Board may revise Table A accordingly byadministrative correction pursuant to N.J.A.C. 1:30-2.7.(k) If the limitation in (j) above was triggered, the limitation shall end after the Board determines that the total costof solar incentives for a reporting year did not exceed two percent of the total retail cost of electricity for thatreporting year.1. For the next reporting year after the limitation ends under (k) above, the percentage of solar electricgeneration required shall be the percentage in Table A for the reporting year immediately following thereporting year in which the limitation in (j) above was triggered.2. Thereafter, the percentage of solar generation shall continue to increase each reporting year in increments asset out in Table A above until it reaches 2.12 percent or, if a minimum percentage of solar electric generationhas been adopted pursuant to (b) above for reporting year 2022 or after, then until it reaches the percentage for18

the last subsequent reporting year for which a minimum percentage has been adopted.i. For example, if the limitation in (j) above is imposed in the reporting year ending May 31, 2019, and theBoard determines on December 1, 2020 that the two-percent threshold was not met in the reporting yearending May 31, 2020, then the percentage of solar electric generation required for the reporting year endingMay 31, 2022 shall be 1.836 percent, and the percentage for the reporting year ending May 31, 2023 shallbe 2.120 percent.3. The Board may revise Table A accordingly by administrative correction pursuant to N.J.A.C. 1:30-2.714:8-2.4 Compliance with solar electric generation requirements(a) The requirements in Table A in N.J.A.C. 14:8-2.3 for solar electric generation shall be met through the submittalof solar RECs, as defined at N.J.A.C. 14:8-2.2; or submittal of SACPs in accordance with N.J.A.C. 14:8-2.10.(b) A supplier/provider shall not use a solar REC that has been used to satisfy another state's renewable energyrequirements, or used for any other purpose, market or program, for compliance with the requirements at N.J.A.C.14:8-2.3 for solar electric generation.14:8-2.5 Compliance with class I renewable energy requirements(a) This section sets forth the types of energy that qualify as class I renewable energy for the purposes of thissubchapter. The Board has determined that energy listed at (b) below qualifies as class I renewable energy, with noprior approval required. Energy listed at (d) and (e) below shall qualify as class I renewable energy if the conditionsspecified in those subsections are met.(b) The following qualify as class I renewable energy for the purposes of this subchapter, with no prior approvalrequired:1. Solar electric generation in the form of solar RECs;2. Electricity derived from wind energy;3. Electricity derived from wave or tidal action;4. Electricity that is geothermal energy, as defined in N.J.A.C. 14:8-2.2;5. Electricity generated by the combustion of methane gas captured from a landfill;6. Electricity generated by a fuel cell powered by methanol, ethanol, landfill gas, digestor gas, biomass gas, orother renewable fuel. Electricity generated by a fuel cell powered by a fossil fuel shall not qualify as class Irenewable energy for the purposes of this subchapter; and7. Electricity generated by the combustion of gas from the anaerobic digestion of food waste and sewage sludgeat a biomass generating facility.(c) For purposes of this section, the term “combustion of biomass” includes both the burning of captured methanegas derived from biomass, as well as the direct firing of biomass.(d) Electricity produced through combustion of the following types of biomass shall qualify as class I renewableenergy, provided that the NJDEP provides Board staff with a biomass sustainability determination for the biomass inaccordance with (f) and (g) below:1. A bioenergy crop, as defined at N.J.A.C. 14:8-2.2, including wood produced at a biomass energy plantation;19

2. Wood from the thinning or trimming of trees and/or from a forest floor, provided that the wood is not oldgrowthtimber, as defined at N.J.A.C. 14:8-2.2; and that the wood is unadulterated by non-cellulose substancesor material;3. Gas generated by anaerobic digestion of biomass fuels other than food waste and sewage sludge, includingbioenergy crops and agricultural waste; and4. Either of the following types of wood, provided that the wood is unadulterated by noncellulose substances ormaterial:i. Ground or shredded pallets or other scrap wood, with all nails and other metal removed, produced at afacility that is classified as a Class B recycling facility by the New Jersey Department of EnvironmentalProtection's Bureau of Landfill and Recycling Management, or at an equivalent recycling facility approvedby the State environmental agency in which the facility is located; orii. Wood shavings and/or scrap from a lumberyard or a paper mill, excluding black liquor, as defined atN.J.A.C. 14:8-2.2.(e) Electricity produced through combustion of a type of biomass not described in this section may qualify as class Irenewable energy for the purposes of this subchapter, provided that the NJDEP provides Board staff with a biomasssustainability determination for the biomass in accordance with (f) and (g) below.(f) To support a biomass sustainability determination, a supplier/provider or biomass facility operator shalldemonstrate all of the following:1. The generation facility meets NJDP requirements for state-of-the-art (SOTA) air pollution control at N.J.A.C.7:27-8;2. The generation facility's ash management practices comply with NJDEP requirements; and3. All plant matter used directly as biomass fuel was cultivated and harvested in a sustainable manner, inaccordance with a management plan approved by the State environmental agency or agricultural agency in thestate in which the plant was grown. If the plant matter is not used directly as biomass fuel, but is subject toalteration after its harvest and before its use as biomass fuel, this determination is not required.(g) To obtain a biomass sustainability determination, a supplier/provider or biomass facility operator shall submit arequest for the determination, including any documentation required by NJDEP. The request shall be submitted tothe NJBPU Office of Clean Energy, PO Box 350, Trenton, New Jersey 08625. The supplier/provider or biomassfacility operator shall simultaneously provide a copy of the request to the NJDEP's Office of Innovative Technology,PO Box 409, Trenton, New Jersey 08625.(h) If a biomass sustainability determination is required for class I renewable energy used to comply with thissubchapter, the supplier/provider shall submit the determination as part of the annual report required under N.J.A.C.14:8-2.11, or the biomass facility operator shall submit the determination by September 1 of each year. If thedetermination is not submitted annually, the energy shall not qualify for use to comply with this subchapter, and thesupplier/provider shall submit RECs or ACPs to make up the shortfall. A determination submitted to board staffafter the due date of the annual report shall not be accepted, and the electricity shall not be counted towards thesupplier/provider's compliance with this subchapter.(i) A supplier/provider that uses electricity generated through use of biomass to comply with this subchapter shallmaintain documentation that the biomass meets the requirements of this section. If the supplier/provider or biomassfacility operator obtained an NJDEP biomass sustainability determination, the supplier/provider or biomass facilityoperator shall maintain the request for the determination and all supporting documentation on file for five years, andshall produce that documentation upon request by the Board or its designee. In addition, the supplier/provider orbiomass facility operator shall annually provide to the Board an affidavit from the operator of the generating facility,certifying that the generating facility continues to operate in conformity with the request and documentation20

originally provided.(j) If a generating facility that uses biomass is covered by a NJDEP biomass sustainability determination, and thereis a change in the operation of the facility or in the composition of the biomass used as fuel, including in itscultivation and harvesting, any supplier/provider that intends to rely on the facility in the following year for RPScompliance shall do one of the following:1. Submit a new application for a biomass sustainability determination to the Board. The new application shallbe submitted as part of the annual report required under N.J.A.C. 14:8-2.11; or2. Ensure that the biomass facility operator submits a new determination within 30 days after the change ismade, and no later than the date upon which the annual report is due under N.J.A.C. 14:8-2.11.(k) Failure to submit the information required under (j) above shall disqualify the electricity produced from thefacility from use as class I renewable energy as of the date the change in the operation or fuel was made.(l) Electricity produced through combustion of the following substances shall not qualify as class I renewable energyfor the purposes of this subchapter:1. Treated, painted or chemically coated wood;2. Municipal solid waste;3. Tires;4. Sewage sludge;5. Wood waste, including demolition waste and construction waste;6. Old-growth timber, as defined at N.J.A.C. 14:8-2.2; and7. Wood harvested from a standing forest, except for a forest that is part of a bioenergy plantation.14:8-2.6 Compliance with class II renewable energy requirements(a) This section sets forth the types of energy that qualify as class II renewable energy for the purposes of thissubchapter. The Board has determined that energy listed at (b) below qualifies as class II renewable energy, with noprior approval required. Energy described at (c) below shall qualify as class II renewable energy if the conditionsspecified in (c) are met.(b) The following qualify as class II renewable energy for the purposes of this subchapter:1. Electricity generated by a hydroelectric facility that has a maximum design capacity of 30 megawatts or lessfrom all generating units combined; and2. Electricity generated by a resource recovery facility located in New Jersey, covered by all required NJDEPapprovals, and operating in compliance with all applicable New Jersey environmental laws.(c) Electricity generated by a resource recovery facility located outside of New Jersey shall qualify as class IIrenewable energy if both of the following criteria are met:1. The facility is located in a state with retail competition, as defined at N.J.A.C. 14:4-1.2; and2. NJDEP makes an environmental compliance determination, stating that the facility meets or exceeds all21

NJDEP requirements that would apply to the facility if it were located in New Jersey, or meets equivalentenvironmental requirements.(d) To obtain an NJDEP environmental compliance determination for a resource recovery facility, asupplier/provider or facility operator shall submit a request for the determination, including the documentation listedat (e) below, to the NJBPU Office of Clean Energy, PO Box 350, Trenton, New Jersey 08625. The supplier/provideror facility operator shall simultaneously provide a copy of the request to the NJDEP's Office of InnovativeTechnology, PO Box 409, Trenton, New Jersey 08625.(e) A request for an environmental compliance determination regarding a resource recovery facility shall include allinformation required by NJDEP, including, but not limited to, the following:1. The most recent stack test data reports, or summary reports, for all criteria pollutants emitted by the facility,including any stack test data for mercury emissions from the facility. If stack test data are available on aquarterly basis, the most recent four quarters shall be submitted. These data, if available, should provide, at aminimum, the mercury inlet and outlet concentration for each unit, in addition to the percent removal;2. A description of the municipal solid waste (MSW) recycling program in the jurisdictions that provide solidwaste to the facility, including any solid waste from an industry source. This description shall state the entitiesthat administer the recycling program(s), the percentage of MSW provided through local government contractsand/or agreements, the company providing any industry source MSW, and the amount of solid waste purchasedon the spot market, if any; and3. Residual ash testing data from the most recent 12-month period, including data reports or summary reportsfor total metals, Toxicity Characteristic Leaching Procedure (TCLP), or other leveling tests performed, and thetotal amount of tetracholrodibenzo-p-dioxins (TCDD) in the ash.(f) If an environmental compliance determination is required for electricity to qualify as class II renewable energy,the determination shall be obtained prior to generating the electricity. If a supplier/provider delivers electricitygenerated at a facility that requires an NJDEP environmental compliance determination, but did not obtain such adetermination prior to the generation of that electricity, the electricity shall not be counted towards thesupplier/provider's compliance with this subchapter.(g) A supplier/provider that uses electricity generated from a resource recovery facility to comply with thissubchapter shall:1. Maintain documentation showing that the facility meets the requirements of this section; and2. If the supplier/provider or facility operator obtained an NJDEP environmental compliance determination, thesupplier/provider or facility operator shall:i. Maintain the request submitted to NJDEP for the environmental compliance determination and allsupporting documentation on file for five years;ii. Produce the request and documentation upon request by the Board or its designee; andiii. Annually provide to the Board an affidavit from the operator of the resource recovery facility, certifyingthat the facility has not violated its Federal or State environmental permits in the previous year, andcontinues to operate in conformity with the request and documentation originally provided to NJDEP.(h) If there is a change in the operation of a resource recovery facility or in the composition of its fuel, thesupplier/provider or facility operator shall submit the following information to the Board within 30 days after thechange is made. Failure to submit the following shall disqualify the electricity produced by the facility from use asclass II renewable energy as of the date of the change:1. Documentation demonstrating that, after the change, the resource recovery facility continues to meet the22

equirements of this section for class II renewable energy; and2. In the case of a facility covered by an NJDEP environmental compliance determination, a new determinationshall be obtained from NJDEP and filed with the Board.(i) In addition to the other types of energy that qualify as class II renewable energy under this section, any energythat qualifies as class I renewable energy under N.J.A.C. 14:8-2.4 may be used to satisfy the requirements for classII renewable energy.14:8-2.7 Requirements that apply to both class I and class II renewable energy(a) To qualify as class I or class II renewable energy for the purposes of this subchapter, energy shall meet therequirements in N.J.A.C. 14:8-2.5 and 2.6, and in addition shall meet the requirements of this section.(b) To qualify as class I or class II renewable energy for the purposes of this subchapter, energy shall be generatedwithin or delivered into the PJM region, as defined in N.J.A.C. 14:4-1.2. Energy generated outside the PJM regionshall be considered delivered into the PJM region if it has been added to the PJM region through dynamicscheduling of the output to load inside the PJM region, pursuant to section 1.12(b) of the Amended and RestatedOperating Agreement of PJM Interconnection, L.L.C., including future supplements and amendments. TheAmended and Restated Operating Agreement is available at http://www.pjm.com/documents/agreements.html.(c) If class I or class II renewable energy is generated outside of the PJM region, but was delivered into the PJMregion, the energy may be used to meet the requirements of this subchapter only if the energy was generated at afacility that commenced construction on or after January 1, 2003.14:8-2.8 Renewable Energy Certificates (RECs)(a) A supplier/provider may submit one or more Renewable Energy Certificates, or RECs, as defined in N.J.A.C.14:8-2.2, to meet the percentage of renewable energy required under Table A in N.J.A.C. 14:8-2.3. Asupplier/provider that wishes to use RECs to comply with this subchapter shall meet the requirements of this section.(b) RECs may be used for compliance with this subchapter as follows:1. For solar RECs based on energy generated on or after June 1, 2009, a solar REC used for compliance withthis subchapter shall be based on energy that was generated either during the reporting year for which the RECis submitted, or during the reporting year immediately preceding the reporting year for which the REC issubmitted.2. For solar RECs based on energy generated before June 1, 2009, a solar REC used for compliance with thissubchapter shall be based on energy that was generated during the reporting year for which the REC issubmitted.3. For all RECs other than solar RECs, all RECs used for compliance with this subchapter shall be based onenergy that was generated during the reporting year for which the REC is submitted.4. For all types of RECs, fractional megawatt-hours may be carried over in accordance with N.J.A.C. 14:8-2.9(g).(c) An REC used for compliance with this subchapter shall be issued by the Board or its designee, or by PJM-EISthrough GATS, as follows:1. A class I REC that is based on electricity generated on a customer-generator's premises shall be issued by theBoard or its designee in accordance with N.J.A.C. 14:8-2.9;2. A solar REC shall be issued by the Board or its designee in accordance with N.J.A.C. 14:8-2.9;23

3. A class I REC that is not based on electricity generated on a customer-generator's premises shall be issued byPJM-EIS through GATS; and4. A class II REC shall be issued by PJM-EIS through GATS.(d) A supplier/provider shall not use a REC that is based on electricity generated on a customer-generator's premisesto comply with this subchapter unless the customer-generator facility is eligible for net metering under N.J.A.C.14:8-3.(e) Once a REC has been submitted for compliance with this subchapter, the REC shall be permanently retired andshall not be used again.14:8-2.9 Board issuance of RECs(a) The Board or its designee shall issue class I RECs in accordance with this section, for use in complying with theclass I renewable portfolio standard in Table A of N.J.A.C. 14:8-2.3, based on electricity generated by a customergeneratoron the customer-generator's premises. The Board or its designee shall issue solar RECs in accordance withthis section, for use in complying with the renewable portfolio standard for solar electric generation in Table A ofN.J.A.C. 14:8-2.3, based on electricity generated by a solar electric generation facility. The Board may, after publicnotice, issue an order discontinuing Board issuance of such RECs and/or approving use of such RECs issued by PJMInterconnection or another entity for compliance with this subchapter.(b) In measuring generation in order to determine the number of RECs to issue, the Board or its designee shallaccept either of the following measurement methods, as applicable:1. Periodic readings of a meter that records megawatt-hour production of electrical energy. The readings may betaken or submitted by any person, but shall be verified by the Board or its designee; or2. For a solar electricity system with a capacity of less than 10 kilowatts, annual engineering estimates and/ormonitoring protocols approved by the Board. Acceptable estimation methodologies and monitoring protocolsare located on the Board's website at www.njcleanenergy.com. This method is not applicable for class I RECs.(c) The Board or its designee shall issue RECs in whole units, each representing the environmental attributes of onemegawatt-hour of electric generation.(d) For the purposes of this subsection, “electric distribution system” has the meaning set forth at N.J.A.C. 14:4-1.2and “electric distribution company” means the owner or operator of an electric distribution system. Electricgeneration qualifies for issuance of RECs only if:1. It is produced by a generating facility that is interconnected with an electric distribution system that suppliesNew Jersey; or2. For class I renewable energy, other than solar electric generation, it is produced by a generating facility that isnot interconnected with an electric distribution system that supplies New Jersey and:i. The generating facility reports its generation electronically to PJM-EIS no less frequently than monthlyvia a meter that satisfies all requirements of American National Standards Institute (ANSI) “Electric MetersCode for Electricity Metering,” C12.1-2008, incorporated herein by reference, as amended orsupplemented, and complies with any additional requirements established by PJM;ii. The generating facility reports its generation electronically no less frequently than monthly to an electricdistribution company that is a member of PJM, via a meter that satisfies all requirements of AmericanNational Standards Institute (ANSI) “Electric Meters Code for Electricity Metering,” C12.1-2008 andcomplies with any additional requirements established by PJM and that electric distribution company then24

provides the generator's report electronically no less frequently than monthly to PJM-EIS; oriii. The generating facility has its sale settled in the PJM wholesale market.(e) The Board may waive the requirements at (d) above by Board order if the Board determines that such waiverwould facilitate participation in the regional REC tracking system adopted by the Board, and determines that such awaiver would significantly advance the purposes expressed in N.J.A.C. 14:8-2.1(a).(f) If a REC is to be used for RPS compliance for a reporting year, the application for the REC shall be submittedwithin the reporting year, or within the true-up period immediately following the reporting year.(g) If a generator has accumulated a fraction of a megawatt hour by the end of a reporting year, the fraction may becarried over and combined with energy generated in one or more subsequent reporting years in order to make a fullmegawatt hour that is eligible for a REC. In such a case, the combined energy shall be eligible for issuance of a REConly during the reporting year in which accumulated generation reaches one full megawatt hour. Only a fraction of amegawatt hour shall be carried over. If a full megawatt hour is generated by the end of a reporting year and anapplication for a REC is not submitted by the end of the true-up period immediately following the reporting year, themegawatt hour shall not be eligible for a REC and shall not be usable for RPS compliance.(h) Because each true-up period is also the first three months of a new reporting year, an REC based on energygenerated during this three-month period shall be used only for RPS compliance for the new reporting year;provided however, that a solar REC generated during that three-month period can be used for compliance either inthe new reporting year or the immediately subsequent reporting year.(i) A request for issuance of a solar REC or class I RECs shall be submitted to the Board on a form posted on theBoard's website at www.njcleanenergy.com. The Board shall require submittal of information and certificationsneeded to enable the Board or its designee to verify the generation that forms the basis of the requested RECs. TheBoard shall require inspections of generation equipment, monitoring and metering equipment, and other facilitiesrelevant to verifying electric generation. The Board shall impose application fees, inspection fees, and/or othercharges for work required to verify electric generation and issue RECs.(j) Each REC shall include the following:1. The date upon which or period during which the electricity was generated;2. The date upon which the REC was issued;3. A unique tracking number, assigned by the issuer of the REC; and4. An expiration date. The expiration date of a solar REC shall be the last day of the true-up period followingthe reporting year after the reporting year in which the energy that formed the basis for the solar REC wasgenerated. The expiration date of an REC other than a solar REC shall be the last day of the true-up periodfollowing the reporting year in which the energy that formed the basis for the REC was generated.(k) The Board or its designee shall not issue a REC based on electric generation that has previously been used forcompliance with this subchapter, or that has been used to satisfy another state's renewable energy requirements orany voluntary clean electricity market or program.(l) The Board or its designee shall not issue a solar REC based on electricity generated by a solar electric generationfacility after the end of its qualification life. However, the Board or its designee may issue class I RECs based onelectricity generated by the facility after the end of its qualification life; such class I RECs may be used forcompliance with the requirements in N.J.A.C. 14:8-2.3, Table A, for class I renewable energy.(m) A customer-generator that is eligible for net metering owns the renewable attributes of the energy it generateson or after October 4, 2004, unless there is a contract with an express provision that assigns ownership of therenewable attributes. The owner of a solar electric generation facility that is not eligible for net metering owns the25

enewable attributes of the energy it generates on or after March 16, 2009, unless there is a contract with an expressprovision that assigns ownership of the renewable attributes.14:8-2.10 Alternative compliance payments (ACPs and SACPs)(a) A supplier/provider may choose to submit one or more alternative compliance payments (ACPs) or solaralternative compliance payments (SACPs), as those terms are defined in N.J.A.C. 14:8-2.2, in lieu of supplying thepercentage of renewable energy required under Table A in N.J.A.C. 14:8-2.3. A supplier/provider that wishes to useACPs or SACPs to comply with this subchapter shall meet the requirements of this section.(b) The President of the Board shall appoint an ACP advisory committee to provide recommendations to the Boardregarding the appropriate cost of ACPs, as well as other characteristics of their use. The Board shall consider theadvisory committee's recommendation and shall, through Board order, set prices for ACPs and SACPs. At aminimum, the price of an ACP or an SACP shall be higher than the estimated competitive market cost of thefollowing:1. The cost of meeting the requirement through purchase of a REC or solar REC; or2. The cost of meeting the requirement through generating the required renewable energy.(c) The Board shall review the amount of ACPs other than SACPs at least once per year, in consultation with theACP advisory committee, and shall adjust these amounts as needed to comply with (b)1 and 2 above and to reflectchanging conditions in the environment, the energy industry, and markets. The purposes of the review shall includeproviding the Board with supporting information to establish the amount of the SACP for the first reporting year forwhich no SACP has been established in Table C below, in consultation with the ACP advisory committee, based onthe Board's determination of what will be needed to comply with (b)1 and 2 above in that reporting year.(d) To comply with this subchapter using ACPs or SACPs, a supplier/provider shall submit the following to theBoard, as applicable:1. One ACP for each megawatt-hour of class I or class II renewable energy required; or2. One SACP for each megawatt-hour of solar electric generation required.(e) The Board shall use the ACP monies submitted to meet the requirements of this subchapter to fund renewableenergy projects through the Clean Energy Program. The Board shall use SACP monies to fund solar energy projectsthrough the New Jersey Clean Energy Program.(f) Table C sets forth the SACP for each reporting year from reporting year 2009 through reporting year 2016:Table CSACP ScheduleReporting YearSACPJune 1, 2008 - May 31, 2009 $711.00June 1, 2009 - May 31, 2010 $693.00June 1, 2010 - May 31, 2011 $675.00June 1, 2011 - May 31, 2012 $658.00June 1, 2012 - May 31, 2013 $641.00June 1, 2013 - May 31, 2014 $625.00June 1, 2014 - May 31, 2015 $609.00June 1, 2015 - May 31, 2016 $594.0026

Net Metering14:8-4.2 DefinitionsThe following words and terms, when used in this subchapter, shall have the following meanings, unless the contextclearly indicates otherwise. Additional definitions that apply to this subchapter can be found at N.J.A.C. 14:3-1.1and 14:8-1.2.“Annualized period” means a period of 12 consecutive monthly billing periods. A customer-generator's firstannualized period begins on the first day of any single monthly billing period, at the customer's choice.“Avoided cost of wholesale power” means the average locational marginal price of energy in the applicable utility'stransmission zone. This cost can be obtained through the website maintained by PJM Interconnection atwww.pjm.com.“Customer-generator” means an electricity customer, such as an industrial, large commercial, residential or smallcommercial customer that generates electricity on the customer's side of the meter, using a class I renewable energysource.“Customer-generator facility” means the equipment used by a customer-generator to generate, manage and/ormonitor electricity. A customer-generator facility typically includes an electric generator and/or interconnectionequipment.14:8-4.3 Net metering general provisions, annualized period selection(a) All electric distribution companies (EDCs) and supplier/providers, as defined at N.J.A.C. 14:4-1.2 and 14:8-1.2,respectively, shall offer net metering to their customers that generate electricity on the customer's side of the meter,using class I renewable energy sources, provided that the generating capacity of the customer-generator's facilitydoes not exceed the amount of electricity supplied by the electric power supplier or basic generation service providerto the customer over an annualized period.(b) The EDC shall develop a tariff providing for net metering. Each supplier/provider and EDC shall make netmetering available to eligible customer-generators on a first-come, first-served basis.(c) If, in a given monthly billing period, a customer-generator supplies more electricity to the electric distributionsystem than the EDC or supplier/provider delivers to the customer-generator, the EDC and supplier/provider shallcredit the customer-generator for the excess. To do this, the EDC or supplier/provider shall reduce the customergenerator'sbill for the next monthly billing period to compensate for the excess electricity from the customergeneratorin the previous billing period.(d) The EDC and supplier/provider shall carry over credit earned under (c) above from monthly billing period tomonthly billing period, and the credit shall accumulate until the end of the annualized period, as defined at N.J.A.C.14:8-4.2.(e) At the end of each annualized period, the supplier/provider shall compensate the customer-generator for anyexcess kilowatt hours generated, at the electric power supplier's or basic generation service provider's avoided costof wholesale power, as defined at N.J.A.C. 14:8-4.2.(f) The EDC or supplier/provider shall offer each customer-generator one opportunity to select a monthly billingperiod as the start of the customer-generator's annualized period. This shall apply to all customer-generators,whether they began net metering prior to March 2, 2009, or after that date.(g) A customer-generator may submit its annualized period selection to the EDC or supplier/provider at any time.However, an EDC or supplier/provider is not required to accept a customer-generator selection of an annualizedperiod that begins before the first full day of the first monthly billing period after the submittal of the selection.27

(h) If a customer-generator begins net metering after March 2, 2009, and does not submit an annualized periodselection, the EDC or supplier/provider shall assign the customer-generator a default annualized period until suchtime as the customer-generator may choose to submit an annualized period selection. The default annualized periodshall begin on the first full day of the first monthly billing period after the customer-generator's facility isinterconnected and generating electricity.(i) If any customer-generator has been net metering for one monthly billing period or more before it submits itsannualized period selection, the following shall apply:1. If the customer-generator has been net metering for more than 12 monthly billing periods, the time betweenthe selection submittal and the end of the customer-generator's most recently ended annualized period shall betreated as one annualized period; and2. If the customer-generator has been net metering for fewer than 12 monthly billing periods, the time betweenthe selection submittal and the first day of the first full monthly billing period after the customer-generator'sfacility is interconnected and generating electricity shall be treated as one annualized period.(j) A customer-generator shall retain its chosen annualized period permanently unless either of the following occurs:1. The customer-generator switches electric suppliers. In such a case, the electric power supplier or basicgeneration service provider with whom service is terminating shall treat the end of the service period as if itwere the end of the annualized period; or2. The EDC or supplier/provider, at its discretion, chooses to accept a customer-generator request for a newannualized period.(k) A customer-generator that is eligible for net metering owns the renewable attributes of the electricity it generatesunless there is a contract with an express provision that assigns ownership of the renewable attributes. Thecustomer-generator may trade or sell the attributes to another person, or may use the attributes as the basis for anapplication for one or more RECs.(l) A supplier/provider or EDC shall provide net metering at non-discriminatory rates that are identical, with respectto rate structure, retail rate components, and any monthly charges, to the rates that a customer-generator would becharged if not a customer-generator, except that a supplier/provider or EDC may use a special load profile for thecustomer-generator, which incorporates the customer-generator's real time generation, provided the special loadprofile is approved by the Board.(m) A supplier/provider or EDC shall not charge a customer-generator any fee or charge, or require additionalequipment, insurance or any other requirement, unless the fee, charge, or other requirement is specifically authorizedunder this subchapter, or the fee would apply to other customers that are not customer-generators.(n) Nothing in this subchapter shall abrogate any person's obligation to comply with all applicable Federal or Statelaws, rules or regulations.Interconnection14:8-5.2 General interconnection provisions(a) Each EDC shall provide the following three review procedures for applications for interconnection of customergeneratorfacilities:1. Level 1: An EDC shall use this review procedure for all applications to connect inverter-based customergeneratorfacilities, which have a power rating of 10 kW or less, and which meet the certification requirementsat N.J.A.C. 14:8-5.3. Level 1 interconnection review procedures are set forth at N.J.A.C. 14:8-5.4;28

2. Level 2: An EDC shall use this review procedure for applications to connect customer-generator facilitieswith a power rating of two MW or less, which meet the certification requirements at N.J.A.C. 14:8-5.3. Level 2interconnection review procedures are set forth at N.J.A.C. 14:8-5.5; and3. Level 3: An EDC shall use this review procedure for applications to connect customer-generator facilitiesthat do not qualify for either the level 1 or level 2 interconnection review procedures. Level 3 interconnectionreview procedures are set forth at N.J.A.C. 14:8-5.6.(b) Each EDC shall designate an employee or office from which an applicant can obtain basic application forms andinformation through an informal process. On request, this employee or office shall provide all relevant forms,documents, and technical requirements for submittal of a complete application for interconnection review under thissection, as well as specific information necessary to contact the EDC representatives assigned to review theapplication.(c) Upon request, the EDC shall meet with an applicant who qualifies for level 2 or level 3 interconnection review,to assist them in preparing the application.(d) An application for interconnection review shall be submitted on a standard form, available from the EDC. Theapplication form will require the following types of information:1. Basic information regarding the applicant and the electricity supplier(s) involved;2. Information regarding the type and specifications of the customer-generator facility;3. Information regarding the contractor who will install the customer-generator facility;4. Certifications and agreements regarding utility access to the customer-generator's property, emergencyprocedures, liability, compliance with electrical codes, proper operation and maintenance, receipt of basicinformation; and5. Other similar information as needed to determine the compliance of a particular applicant with this chapter.(e) An EDC shall not be responsible for the cost of determining the rating of equipment owned by a customergenerator,or of equipment owned by other local customers.(f) (Reserved)(g) If the interconnection of a customer-generator facility is subject to interconnection requirements of FERC orPJM, the provisions of this subchapter that apply to interconnection apply to that facility only to the extent that theydo not conflict with the interconnection requirements of FERC or PJM.(h) If an applicant for interconnection disagrees with an EDC's determination of fact or need regarding matterscovered in this subchapter, or if any person has a complaint regarding matters covered in this subchapter, theapplicant or other person may file an informal complaint with the Board under N.J.A.C. 14:1-5.13, or may file apetition with the Board under N.J.A.C. 14:1-5.29

NEW JERSEY ETHICS LAWS: FOSTERING IMPARTIAL DECISION-MAKING.Ethics rules and standards of conduct arise from the core values that a state desiresto promote among its officers and state employees. At a high level, these are thevalues of honesty, integrity, fairness and openness that “hold the respect andconfidence of the people.” NJ Uniform Ethics Code at 5. This is of consequencebecause the daily work of executive state agencies directly touch on the lives of itscitizens.For present concerns, we might consider the state utility regulatory agency in theexercise of its adjudicatory function. The ultimate objective in cases of this nature, andof grave interest to the public, is the agency’s entry of a correct and sustainable order.To achieve this critical end requires a fair hearing on the matters in dispute and anethically drafted recommendation based on the evidence of record and the relevant law.This brings into focus the first-line decision-maker, i.e., the administrative law judge,and the special power, responsibilities and ethical obligations that the state attaches tothis role. In large part, these are set out in the Code of Judicial Conduct ForAdministrative Law Judges (“ALJ Code) that has been incorporated by reference intothe Uniform Administrative Procedure Rules of the New Jersey Administrative Code.I. Ethics Rules For The Administrative Law JudgeAt least one commentator has noted that state ALJs have the most complex mixture ofroles and the attendant ethics rules. This is certainly true for New Jersey, to wit:• The ALJ is required to be patient, calm, detached and courteous to allparties, witnesses and observers. Further, the ALJ must act to maintainprofessionalism among all participants. See ALJ Code; Canon 3 (4).• The ALJ’s evidentiary rulings shall be made with the intent to promotefundamental principles of fairness and justice and to aid the ascertainmentof truth. N.J.A.C. 1:1-15.1.• An ALJ will decide on what goes into the record based on the state’sadministrative code and the applicable rules of evidence. N.J.A.C.1:1-14.6(i). The main concern is that evidence be relevant and reliable.N.J.A.C.1:1-15.1. Notably, the ALJ has the discretionary power to excludeany evidence if its probative value is substantially outweighed by the riskthat its admission will either (1) necessitate an undue consumption of time;or (2), create a substantial danger of undue prejudice or confusion. Id. By1

far, the most important role of the ALJ is the creation of a fair andcomplete record. Thus, it is critical for the ALJ to govern the process inan impartial manner that accords “to all persons who are legally interestedin a proceeding, or their representative, full right to be heard according tolaw.” ALJ Code, Canon 3 A. (6).• The ALJ must be knowledgeable about the governing law, the rules ofevidence, and statutory administrative law procedures. Canon 3 A. (2) ofthe ALJ Code provides that an ALJ shall be “faithful to the law andmaintain professional competence in it.”• The ALJ will need to engage the settled rules of statutory constructionwhen interpreting statutory provisions and prior Commission orders. Thelaw is, what it is, and not what any particular party simply asserts it to be.• The ALJ is not truly independent in terms of deviating from the law or indeciding on the facts. Agency precedent in establishing policy must berespected to large degree or explained way. Case law, i.e., the opinions ofreviewing courts, is also binding on the ALJ.• The ALJ is required to act independently of personal ideology or politicalmeddling, and to guard against any improper influences that might, forexample, be coming from regulated companies or from any of the varioustypes of special interest groups or from press accounts or other officialsources. Canon 3. A. (2) of the ALJ Code specifically directs that a judgeshall be “unswayed by partisan interests, public clamor, or fear ofcriticism.” In the same vein, an ALJ shall not allow familial, social, politicalor other relationships to influence teither the judge’s conduct or judgment.ALJ Code, Canon 2B.• Throughout the proceeding, the ALJ will treat all of the lawyers, witnessand other persons in a fair and impartial way. When procedures areemployed that “appear” to unfairly or irrationally give an advantage to oneside over the other, the public trust senses an indignity. Further, reviewingcourt judges will indeed look to see whether the basic elements of fairnessand equality in treatment were provided to all the participants.• The ALJ must be attentive to and monitor outside actions for any conflictswith their official roles. For example, the ALJ will not negotiate for2

employment with a party when that party is in a case pending before theALJ.• Canon 3A(5) directs that an ALJ shall “perform judicial duties without biasor prejudice.” It is necessary for the ALJ to set aside personal biases andavoid situations that might leave parties or the lawyers or the public tobelieve that the Commission or ALJ might favor or accept the views offriends more easily than those of unknown parties. Likewise, the ALJ willset aside any feelings of dislike toward any party or its legalrepresentative. Trust in the adjudication process is broken by theperception that a party never had a fair chance to prevail in a casebecause the decision-maker owed the other side special favors orbecause a certain party was disfavored on grounds of something differentfrom the merits.• According to Canon 4, neither an ALJ, nor a member of the judge’s family.or a person treated as a member of the judge’s family residing in thejudge’s household, shall accept a gift, bequest, favor or loan from anyonesubject to a few enumerated exceptions. The commentary under Canon4D(5)(h) explains that this subsection prohibits judges from accepting giftsand other favors from lawyers or their firms if they come, or are likely tocome, before the judge. A decision-maker’s acceptance of gifts isprohibited and for good reason. It is well considered that the influence ofmoney and extravagant gifts offer temptation to the average man to rule ordecide in a way that is not neutral. The public trusts that regulatorydecisions will be decided outside of any influences other than the facts ofrecord. Period.• An ALJ shall neither initiate nor consider ex parte or other communicationsas to substantive matters concerning a pending or impending proceeding.ALJ Code Canon 3, A(6); Communications between an ALJ and one party,outside the presence of the other parties, is always suspect. The NewJersey law is clear in barring such communications when relevant to themerits of a contested proceeding. N.J.A.C. 1:1-14.5 (a). Discussions onscheduling or other practical administrative matters, however, are notsubject to the ban. Id. at subsection (b). Further, the law directs that ininstances where ex parte communications are unavoidable, the judge isrequired to promptly advise all parties of the prohibited communications.Id. at subsection (a). Ex parte communications are a serious matter. Inthe due process sense, they deny a party “notice” that it is going to be3

confronted with evidence independently gathered by the decision-maker.In effect then, that party is denied the “opportunity” to respond in somemanner and either rebut or explain away that evidence. A correct andsustainable regulatory decision depends on strict compliance with thisethical standard that is intended to preserve equal and fair treatment of allparties.• The ALJ does more than decide who is the winner or loser on a disputedissue. He or she will have to set out a written initial decision that discussesall of the evidence presented, applies the relevant law, and explains whythe record at at hand supports the decision being recommended. The ALJis required to issue an initial decision that is based exclusively on thetestimony, documents, and arguments accepted by the judge forconsideration in reaching a decision, together with any acceptedstipulations and matters officially noticed. N.J.A.C 1:1-18.1.This cursory review of the New Jersey ethics laws shows that the role of the ALJ is to beexercised with integrity, impartiality and independence. These attributes, promoted bythe state, are of upmost importance to the parties during the pendency of a contestedregulatory proceeding and ultimately will be reflected in the initial decision that istendered to the ultimate agency decision-maker.II. Some Thoughts on Personal BiasCanon 3 of the ALJ Code states that an ALJ shall perform judicial duties withoutbias or prejudice. Canon 3 (5).Decision-makers, be they ALJ’s or commissioners, do not abandon their outside livesand interests nor are they required to function in unrealistic ways. An ALJ will oftenmake small talk, before or after a hearing, with the lawyers that appear time and againin regulatory proceedings. Such social exchanges do not, and should not call thedecision-maker’s impartiality into question. So too, ALJs, Commissioners and certainsets of party or intervenor attorneys often belong to the same bar associations or attendthe same legal or regulatory conferences. There is bound to be some social interactionat these events. Yet, such professional associations are not factors that, standing alone,amount to any type of impropriety.To some extent, personal feelings toward lawyers will develop and these areunavoidable. For example, in the criminal courts of Cook County, it was always thought4

y defense counsel that a judge might be more prone to accept the arguments of theprosecuting attorneys who are assigned to the courtroom and appear on a regularbasis. When I was a young attorney, I worked as an assistant public defender. It was amurder case and the judge took all of the attorneys into his chambers for a pre-trialconference. I was the only female in the group. The judge looked directly at me andproudly point to a Time magazine cover that was framed and hanging in his chambers.That cover had a photograph of this very judge behind the words, “Women should notbe lawyers.” This might well have been his personal bias – but throughout the trial(which was a jury trial) – he made correct legal rulings and treated me no differentlythan my male colleagues before the jury.The point of my telling this story is that no decision-maker, in any forum, is a blank slate.They each come with a variety of experiences, competencies, views and opinions. And,in the utility regulatory community, it seems that the same lawyers appear on casesagain and again. As such, some feelings, either good or bad, are inevitable. Yet, oncean ALJ or a Commissioner assumes the role designated to them by law, they can anddo cast side these feelings and render fair and impartial decisions – based on theevidence and only the evidence.III. Even The Appearance of Impropriety Matters.According to New Jersey ethics law, an ALJ shall disqualify himself or herself inany proceeding in which the judge’s impartiality might reasonably be questioned.Canon 3, C (1). A judge shall, on his or her own motion, withdraw fromparticipation in any proceeding in which the judge’s ability to provide a fair andimpartial hearing might reasonably be questioned, including but not limited to theinstances outlined in (a) 1 through 8 of N.J.A.C. 1:1-14.12.Commentary under Canon 2A provides that the test for appearance of improprietyis whether the conduct would create in reasonable minds a perception that theadministrative law judge’s ability to carry out judicial responsibilities withintegrity, impartiality, and competence is impaired.It is necessary for the ALJ to avoid situations that might leave parties or the public tobelieve that the ALJ might favor or accept the views of family, friends or associates moreeasily than those of unknown parties. Likewise, having an interest in the outcome of aproceeding has long been viewed as a disqualifying. Hence, the rules mandate that theALJ withdraw from participation in the proceeding where such circumstances arepresent.5

Whether or not it can be proved that a decision-maker has allowed some personalinterests to sway his or her resolution of a dispute, the perception-of-fairness standarddemands that he or she be enjoined from deciding the case is he has some identifiablepotential bias. Few situations threaten public trust in the adjudication process thanperception that a litigant never had a real chance to prevail in a case because thedecision-maker owed the other side special favors, acted upon personal bias orprejudice, or was otherwise responsive to improper influences.IV. Case Law MaterialsConflicts of InterestCity of Hammond v. State, 411 N.E.2d 152 (Indiana 1980) (fireman, who received a 6-month suspension, challenged the propriety of the city attorney’s dual role in the hearingprocess. The court agreed that it offended due process for the city attorney’s office tohave participated in both the prosecution and the decision-making process of the case).Voeltz v. John Morrell & Co., 564 N.W. 2d 315 (S.D. 1997) (ALJ’s decision wasreversed for reason that it was incumbent upon her to recuse herself when negotiatingfor employment with a party to the case).N.States Power Co. v. Minn.Pub.Utilities Commission, 414 N.W.2d 383 (Minn. 1987)(court upheld state commission’s determination that a conflict arose in a utility’s ratecase proceeding when, during its pendency, one of the commissioners discussedpossible employment with the utility).In the Matter of the Petition of the Bergen County Utilities Authority, 553 A.2d 849(N.J. 1989) (court reversed and remanded for reconsideration, a 3-page order enteredby the Board of Utilities that rejected the ALJ’s 40-page initial decision. The court furtherdirected that one of the commissioners not participate on remand due to conflict thathad been created by the possibility of his receiving a job from petitioner).Bias or PrejudiceNorthwestern Bell Telephone Co. v. Stofferahn, 461 N.W. 2d 129 (S.D. 1990) (trialcourt upheld in finding a member of the Public Utilities Commission disqualified fromhearing any pending cases involving deregulation where the company is a party, due torecord facts showing an unalterably closed mind, bias and prejudice.Croissant v. Joliet Park District, 566 N.E. 2d 248 (1990) (court held that theadvantage to a commissioner from the challenged board actions, was no different from6

the advantage that any other board member, or resident, or taxpayer of the park district,would gain from improvements to the park district airport).In the Matter of 1616 Second Avenue Restaurant v. New York State LiquorCommission, 550 N.E.2d 910 (New York 1990) (regardless of whether commissionChairman had actually prejudged the matter, his testimony before a state senatecommittee that discussed pending charges against restaurant gave impression that hehad done so).Appearances of Impropriety/impartialityAnstey v. Iowa State Commerce Commission, 292 N.W.2d 380 (Iowa 1980) (while noreversal of order was required due to ex parte communications the chairman had withemployees of the petitioning utility because the conversations occurred after theCommission had dismissed the franchise petition such that input from the utility couldnot influence a “matter then pending” or which would go to the merits of its petition ifrefilled, the Court reasoned that there were other ways for parties to request morespecific findings and conclusions that would avoid the appearance of impropriety almostcertain to attend to a one-sided discussion of matters in controversy).Wells v. Del Norte School District, 753 P.2d 770 (Colorado 1987) (court held that thehearing examiner’s having lunch conversations with counsel and witnesses for theBoard of Education while a teacher dismissal hearing was in recess, cast such a doubton the impartiality of the decision as to vitiate the proceedings).In the Matter of the Minnesota Public Utilities Commission, 417 N.W. 274 (Minn.1987) (court upheld the commission’s authority in reopening a rate order on grounds ofimproper communications had between two commissioners and a representative of theutility at the time that the rate case was pending. It was reasoned that the commissionhad the implied power to correct its prior decision on the basis of the “fraud on the court”doctrine)Cincinnati Bar Association v. Sauter, 772 N.E. 2d 620 (Ohio 2002) (law clerk for anappellate court judge disciplined for sending an ex parte e-mail to a friend at the Cityattorney’s office suggesting standards of review for an upcoming oral argument beforethe court. The judge was forced to recuse himself to restore the appearance ofimpartiality that the law clerk’s e-mail had compromised).Malcolm A. Sussel v. City and County of Honolulu Civil Service Commission, 784P.2d 867 (Hawaii 1989)(the reviewing court observed that the Chairman of thecommission - hearing the case of a politically motivated demotion under a new mayor-7

had known said mayor for years, contributed to that mayor’s fundraisers, and was bothpresident and majority stockholder of a non-profit corporation having a exclusivecontract to provide bus service to the city. These circumstances, the court concluded,gave rise to an appearance of impropriety and disqualify the Chairman from hearing thecase.Gluth Bros. Construction v. Union National Bank, 548 N.E. 2d 1364 (2nd Dist. 1989)(while companies’ attorney had served as the chairman of the judge’s campaigncommittee this occurred 6 years prior to the case at bar such that absent any evidenceof a present ongoing relationship there was no appearance of impropriety).Ex Parte CommunicationsCitizens Action Coalition of Indiana, Inc. v. Public Service Company of Indiana,Inc., 552 N.E. 2d 834 (Indiana 1990) (court determined than an ex parte communicationbetween chairman of the utility commission and members of the Governor’s staff onlydiscussed a delay in the issuance of decision for purpose of having a settlement benegotiated, and thus, no disputed issues of fact or law were involved. Other allegationsof bias were also rejected-including a charge that the commission considered rate reliefscenarios developed by its staff that were not made part of the record – although thecourt reasoned that it would have been the better practice to do so.In the Matter of William Gary White, 492 S.E. 2d 82 (South Carolina 1997) ( findingsof misconduct included attorney’s sending a letter to judge, after entry of a default orderagainst him, that addressed the merits of the case, and attacked opposing counsel. Acopy of the letter was not sent to opposing counsel).Iowa Supreme Court Board of Professional Ethics and Conduct v. Allan H.Rauch, 650 N.W. 2d 574 (Iowa 2002). (the attorney had an ex parte communicationwith the trial judge in order to obtain a continuance and he misrepresented thatopposing counsel knew of the request. His defense, i.e., that a court administratorinstructed him to talk to the judge about a continuance, was flatly rejected).State of Arizona ex rel. Robert K. Corbin, et al., v. Arizona CorporationCommission, 693 P.2d 362 (Arizona 1984) (an ex parte communication among theCommission’s hearing officer, the Commission’s utilities director, and the utility party tothe rate proceeding prompted a motion to dismiss the utility’s rate application. But, theCommission’s action in declining the recommendation, rendering the proposed ordervoid and allowing for additional briefs so as to enter its own order in the case, was heldproper.8

In the Matter of Frederick W. LaCava, 615 N.E. 2d 93 (Indiana 1993) (attorney wasreprimanded for failing to disclose that he was representing a member of the medicalreview panel in an unrelated malpractice action and that they were social friends foryears, and for engaging in an ex-parte communications with this panel member whichcaused him to change position).PATCO v. Fed. Labor Relations Authority, 685 F.2d 547 (D.C. Cir. 1982) (Court heldthat agency proceedings blemished by impermissible communications are not void, butvoidable. It set out a standard for determining whether an agency’s decision should bevacated).Law Review Articles:Pamela M. Giblin & Jason D. Nichols, Article: Ex Parte Contacts in AdministrativeProceedings: What the Statute Really Means and What It Should Mean, 57 Baylor L.Rev. 23 (2005).Leslie W. Abramson, Article: The Judicial Ethics of Ex Parte and Other Communications,37 Hous. L. Rev. 1343 (2000).Leslie W. Abramson, Article: Appearance of Impropriety: Deciding When a Judge’sImpartiality “Might Reasonably Be Questioned.” 14 Geo. J. Legal Ethics 55 (2000).9

NJSA T. 52, Subt. 2, Ch. 13C, Refs & AnnosPage 1*114381 N.J.S.A. T. 52, Subt. 2, Ch. 13C, Refs &AnnosNEW JERSEY STATUTESANNOTATEDTITLE 52. STATEGOVERNMENT,DEPARTMENTS AND OFFICERSSUBTITLE 2. LEGISLATURECHAPTER 13C. LOBBYINGCurrent with laws effective through L.2010, c.106 and J.R. No. 6.REFERENCESCROSS REFERENCESElection law enforcement commission, see N.J.S.A. §§19:44A-5, 19:44A-6.Lobbying by officers and employees of the office of legislativeservices, see N.J.S.A. § 52:11-71.REFERENCESLAW REVIEW AND JOURNALCOMMENTARIESLegislative ethics in New Jersey. Betty Wilson (Fall 1975) 1Seton Hall Legis.J. 39.REFERENCESUNITED STATES CODE ANNOTATEDDisclosure of lobbying activities, see 2 U.S.C.A. § 1601.REFERENCESUNITED STATES SUPREME COURTFree speech, public employees, prohibition on receipt ofhonoraria, see U.S. v. National Treasury Employees Union,U.S.Dist.Col.1995, 115 S.Ct. 1003, 513 U.S. 454, 130 L.Ed.2d964..© 2011 Thomson Reuters. No claim to original U.S. Govt. works.

NJSA 52:13C-18, Declaration of intent*114384 N.J.S.A. 52:13C-18NEW JERSEY STATUTESANNOTATEDTITLE 52. STATEGOVERNMENT,DEPARTMENTS AND OFFICERSSUBTITLE 2. LEGISLATURECHAPTER 13C. LOBBYINGCurrent with laws effective through L.2010, c.106 and J.R. No. 6.52:13C-18. Declaration of intentThe Legislature affirms that the preservation ofresponsible government requires that the fullestopportunity be afforded to the people of the State topetition their government for the redress ofgrievances and to express freely to individuallegislators, committees of the Legislature and theGovernor their opinion on legislation and currentissues, to Executive Branch officers and agenciestheir opinion on rules and regulations developed andpromulgated by those officers and agencies in theexercise of powers delegated to them by law, and tothe Governor and Executive Branch officers andagencies their opinion on matters involving theadministration of various governmental processes bythe Governor and those officers and agencies in theexercise of powers delegated to them by law.The Legislature finds, however, that thepreservation and maintenance of the integrity of thelegislative process, the regulatory process andgovernmental process, including the developmentand promulgation of rules and regulations oradministration of various governmental processes toeffectuate the implementation of statutory law,requires the identification in certain instances ofpersons and groups who seek to influence thecontent, introduction, passage or defeat of legislation, the proposal, adoption, amendment, or repeal ofrules and regulations or the administration of variousgovernmental processes, and, where it is nototherwise apparent or readily ascertainable, thenature of the interest which those persons andgroups seek to advance or protect through suchactivity.It is in the public interest to closely monitor theactivities of governmental affairs agents andPage 1lobbyists with respect to their involvement ininfluencing legislative, regulatory and governmentalprocesses to ensure the integrity of government.Therefore, it is the purpose of this act, as amendedby P.L.2004, c. 27, to require adequate disclosure incertain instances in order to make available to theLegislature, governmental officials and the publicinformation relative to the activities of persons whoseek to influence the content, introduction, passageor defeat of legislation , the proposal, adoption,amendment or repeal of rules and regulations or theadministration of various governmental processes bysuch means.*114385CREDIT(S)L.1971, c. 183, § 1. Amended by L.1991, c. 243, § 2, eff. Jan. 1,1992; L.2004, c. 27, § 1, eff. June 16, 2004.HISTORICAL NOTESASSEMBLY STATE GOVERNMENTCOMMITTEE STATEMENT2009 Main VolumeAssembly, No. 4617--L.1991, c. 243The Assembly State GovernmentCommittee reports favorably and with committeeamendments Assembly Bill No. 4617.This bill amends and supplements theprovisions of the "Legislative ActivitiesDisclosure Act of 1971" governing disclosure bylegislative agents of their lobbying activities,clients and finances.The legislation broadens in severalrespects the scope of the lobbying law withrespect to financial reporting and professionalregistration by legislative agents:1. Expenditures upon communicationsto public officials are to be subject to financialdisclosure irrespective of whether thecommunication is "express or intentional" andwithout regard to the purpose of the legislativeagent in undertaking the communication;2. Expenditures incurred by alegislative agent to provide a benefit to a publicofficial (so-called "good-will" lobbying) are to besubject to disclosure, just as is presently the casewith expenditures on communication with suchofficials;3. Individuals employed to influenceadministrative rule-making, which is defined to© 2011 Thomson Reuters. No claim to original U.S. Govt. works.

NJSA 52:13C-18, Declaration of intentexclude administrative action on individualmatters such as the granting of a permit or theimposition of a penalty, are to register aslegislative agents and file financial disclosurereports in the same manner as presently requiredof persons employed to influence the legislativeprocess;4. Lobbying activities directed atlegislative staff or at Executive Branch staffresponsible for or involved with administrativerule-making are to be subject to financialdisclosure; and5. Where the client of a legislativeagent is a membership organization orcorporation and the primary economic, social,political, or other interest which the client seeksto advance or protect through its employment ofthe agent is not otherwise apparent from thenotice of representation of the client which theagent must file, then the notice is to include adescription of that interest and a list of thepersons having organizational or financial controlof the organization or corporation.*114386 In addition, the bill requires alegislative agent who serves as a member of anindependent State authority, county improvementauthority or municipal utilities authority, as amember from New Jersey on an inter-state or bistateauthority, or as a member of any State boardor commission to disclose such service in theagent's annual financial report.COMMITTEE AMENDMENTSAmendments to the bill were adopted bythe committee incorporating all of the provisionsnumerically itemized above, except for theextension of the financial disclosure requirement toactivities directed at legislative staff, which wasincluded in the legislation as originally introduced.The amendments also eliminated a prohibitionagainst service by a legislative agent on the severalauthorities, boards and commissions and insteadimposed the requirement that such service bereported in the agent's annual financial report.Finally, the amendments eliminated one provisionprohibiting certain authorities from employing anauthority member to be a legislative agent for theauthority until two years after termination of theperson's service on the authority and anotherprovision requiring legislative agents to makeannual disclosure of income and sources ofincome.HISTORICAL NOTESHISTORICAL AND STATUTORYNOTES2009 Main VolumePage 2Section 22 of L.1971, c. 183, approved June 2, 1971,provided:"[Section] 22. This act shall take effect 60 days after itsenactment, but such actions as may be necessary to prepare forits effectuation may be taken prior thereto."Title of Act:An Act to require the public disclosure of certain informationby certain persons seeking to influence legislation and thepromulgation of administrative rules and regulations in thisState, providing penalties for noncompliance, and repealing the"Legislative Activities Disclosure Act," approved October 16,1964 (P.L.1964, c. 207). L.1971, c. 183; amended L.1991, c.243, § 1.Prior Laws:N.J.S.A. § 52:13C-1 (L.1964, c. 207, § 1).REFERENCESUNITED STATES CODE ANNOTATEDDisclosure of lobbying activities, see 2 U.S.C.A. § 1601.REFERENCESUNITED STATES SUPREME COURTImmunity from antitrust liability, petitioning government forredress, sham litigation, probable cause, see Professional RealEstate Investors, Inc. v. Columbia Pictures Industries, Inc.,U.S.Cal.1993, 113 S.Ct. 1920, 508 U.S. 49, 123 L.Ed.2d 611, 26U.S.P.Q.2d 1641..© 2011 Thomson Reuters. No claim to original U.S. Govt. works.

NJSA 52:13C-19, Short title; Legislative and Governmental Process Activities Disclosure ActPage 1*114387 N.J.S.A. 52:13C-19NEW JERSEY STATUTESANNOTATEDTITLE 52. STATEGOVERNMENT,DEPARTMENTS AND OFFICERSSUBTITLE 2. LEGISLATURECHAPTER 13C. LOBBYINGCurrent with laws effective through L.2010, c.106 and J.R. No. 6.52:13C-19. Short title; Legislative andGovernmental Process ActivitiesDisclosure ActThis act shall be known as the "Legislative andGovernmental Process Activities Disclosure Act ."CREDIT(S)L.1971, c. 183, § 2. Amended by L.2004, c. 27, § 2, eff. June 16,2004.HISTORICAL NOTESHISTORICAL AND STATUTORYNOTES2009 Main VolumeEffective date of L.1971, c. 183, see Historical and StatutoryNotes under N.J.S.A. § 52:13C-18.Prior Laws:N.J.S.A. § 52:13C-2 (L.1964, c. 207, § 2)..© 2011 Thomson Reuters. No claim to original U.S. Govt. works.

NJSA 52:13C-20, Definitions*114388 N.J.S.A. 52:13C-20NEW JERSEY STATUTESANNOTATEDTITLE 52. STATEGOVERNMENT,DEPARTMENTS AND OFFICERSSUBTITLE 2. LEGISLATURECHAPTER 13C. LOBBYINGCurrent with laws effective through L.2010, c.106 and J.R. No. 6.52:13C-20. DefinitionsFor the purposes of this act, as amended andsupplemented, unless the context clearly requires adifferent meaning:a. The term "person" includes an individual,partnership, committee, association, corporation, andany other organization or group of persons.b. The term "legislation" includes all bills,resolutions, amendments, nominations andappointments pending or proposed in either Houseof the Legislature, and all bills and resolutionswhich, having passed both Houses, are pendingapproval by the Governor.c. The term "Legislature" includes the Senate andGeneral Assembly of the State of New Jersey and allcommittees and commissions established by theLegislature or by either House thereof.d. The term "lobbyist" means any person,partnership, committee, association, corporation,labor union or any other organization that employs,engages or otherwise uses the services of anygovernmental affairs agent to influence legislation,regulation or governmental processes.e. (1) The term "Governor" includes the Governoror the Acting Governor; and(2) the term "Lieutenant Governor" means theperson elected to that office, or appointed to fill avacancy therein, pursuant to Article V, Section I ofthe New Jersey Constitution.f. The term "communication with a member of theLegislature", "with legislative staff," "with thePage 1Governor," "with the Lieutenant Governor," "withthe Governor's staff," or "with an officer or staffmember of the Executive Branch" means anycommunication, oral or in writing or any othermedium, addressed, delivered, distributed ordisseminated, respectively, to a member of theLegislature, to legislative staff, to the Governor, tothe Lieutenant Governor, to the Governor's staff, orto an officer or staff member of the ExecutiveBranch, as distinguished from communication to thegeneral public including but not limited to a memberof the Legislature, legislative staff, the Governor, theLieutenant Governor, the Governor's staff, or anofficer or staff member of the Executive Branch. Ifany person shall obtain, reproduce or excerpt anycommunication or part thereof which in its originalform was not a communication under this subsectionand shall cause such excerpt or reproduction to beaddressed, delivered, distributed or disseminated to amember of the Legislature, to legislative staff, to theGovernor, to the Lieutenant Governor, to theGovernor's staff, or to an officer or staff member ofthe Executive Branch, such communication,reproduction or excerpt shall be deemed acommunication with the member of the Legislature,with legislative staff, with the Governor, with theLieutenant Governor, with the Governor's staff, orwith an officer or staff member of the ExecutiveBranch by such person.*114389 g. The term "governmental affairs agent"means any person who receives or agrees to receive,directly or indirectly, compensation, in money oranything of value including reimbursement of hisexpenses where such reimbursement exceeds$100.00 in any three-month period, to influencelegislation, to influence regulation or to influencegovernmental processes, or all of the above, bydirect or indirect communication with, or by makingor authorizing, or causing to be made or authorized,any expenditures providing a benefit to, a member ofthe Legislature, legislative staff, the Governor, theLieutenant Governor, the Governor's staff, or anyofficer or staff member of the Executive Branch, orwho holds himself out as engaging in the business ofinfluencing legislation, regulation or governmentalprocesses, by such means, or who incident to hisregular employment engages in influencinglegislation, regulation or governmental processes, bysuch means; provided, however, that a person shallnot be deemed a governmental affairs agent who, inrelation to the duties or interests of his employmentor at the request or suggestion of his employer,© 2011 Thomson Reuters. No claim to original U.S. Govt. works.

NJSA 52:13C-20, Definitionscommunicates with a member of the Legislature,with legislative staff, with the Governor, with theLieutenant Governor, with the Governor's staff, orwith an officer or staff member of the ExecutiveBranch concerning any legislation, regulation orgovernmental process, if such communication is anisolated, exceptional or infrequent activity in relationto the usual duties of his employment.h. The term "influence legislation" means to makeany attempt, whether successful or not, to secure orprevent the initiation of any legislation, or to secureor prevent the passage, defeat, amendment ormodification thereof by the Legislature, or theapproval, amendment or disapproval thereof by theGovernor in accordance with his constitutionalauthority.i. The term "statement" includes a notice ofrepresentation or a report required by this act, asamended and supplemented.j. (Deleted by amendment, P.L.1991, c. 243).k. The term "member of the Legislature" includesany member or member-elect of, or any person whoshall have been selected to fill a vacancy in, theSenate or General Assembly, and any other personwho is a member or member-designate of anycommittee or commission established by theLegislature or by either House thereof.l. The term "legislative staff" includes all staff,assistants and employees of the Legislature or any ofits members in the member's official capacity,whether or not they receive compensation from theState of New Jersey.m. The term "Governor's staff" includes themembers of the Governor's Cabinet, the Secretary tothe Governor, the Counsel to the Governor and allprofessional employees in the office of the Counselto the Governor, and all other employees of theOffice of the Governor, including employees of thatoffice who may be assigned by the Governor toassist the Lieutenant Governor.n. The term "officer or staff member of theExecutive Branch" means any assistant or deputyhead of a principal department in the ExecutiveBranch of State Government, including all assistantand deputy commissioners; the members and chiefexecutive officer of any authority, board,Page 2commission or other agency or instrumentality in orof such a principal department; and any officer ofthe Executive Branch of State Government otherthan the Governor who is not included among theforegoing or among the Governor's staff, butincluding the Lieutenant Governor when theLieutenant Governor has been appointed by theGovernor to serve in any of the foregoing positions,but who is empowered by law to issue, promulgateor adopt administrative rules and regulations or toadminister governmental processes, and any personemployed in the office of such an officer who isinvolved with the development, issuance,promulgation or adoption of such rules andregulations or administration of governmentalprocesses in the regular course of employment.*114390 o. The term "regulation" includes anyadministrative rule or regulation affecting the rights,privileges, benefits, duties, obligations, or liabilitiesof any one or more persons subject by law toregulation as a class, but does not include anadministrative action (1) to issue, renew or deny, or,in an adjudicative action, to suspend or revoke, alicense, order, permit or waiver under any law oradministrative rule or regulation, (2) to impose apenalty, or (3) to effectuate an administrativereorganization within a single principal departmentof the Executive Branch of State Government.p. The term "influence regulation" means to makeany attempt, whether successful or not, to secure orprevent the proposal of any regulation or to secure orprevent the consideration, amendment, issuance,promulgation, adoption or rejection thereof by anofficer or any authority, board, commission or otheragency or instrumentality in or of a principaldepartment of the Executive Branch of StateGovernment empowered by law to issue, promulgateor adopt administrative rules and regulations.q. The term "expenditures providing a benefit" or"expenditures providing benefits" means anyexpenditures for entertainment, food and beverage,travel and lodging, honoraria, loans, gifts or anyother thing of value, except for (1) any money orthing of value paid for past, present, or futureservices in regular employment, whether in the formof a fee, expense, allowance, forbearance,forgiveness, interest, dividend, royalty, rent, capitalgain, or any other form of recompense, or anycombination thereof, or (2) any dividends or otherincome paid on investments, trusts, and estates.© 2011 Thomson Reuters. No claim to original U.S. Govt. works.

NJSA 52:13C-20, Definitionsr. The term "commission" means the Election LawEnforcement Commission established pursuant tosection 5 of P.L.1973, c. 83 (C.19:44A-5).s. The term "communication with the generalpublic" means any communication:(1) disseminated to the general public throughdirect mail or in the form of a paid advertisement ina newspaper, magazine, or other printed publicationof general circulation or aired on radio, television, orother broadcast medium, and(2) which explicitly supports or opposes aparticular item or items of legislation or regulation,or the content of which can reasonably beunderstood, irrespective of whether thecommunication is addressed to the general public orto persons in public office or employment, asintended to influence legislation or to influenceregulation.t. The terms "influence governmental processes","influencing governmental processes" or "influencegovernmental process" means to make any attempt,whether successful or not, to assist a representedentity or group to engage in communication with, orto secure information from, an officer or staffmember of the Executive Branch, or any authority,board, commission or other agency orinstrumentality in or of a principal department of theExecutive Branch of State Government, empoweredby law to administer a governmental process orperform other functions that relate to such processes.*114391 u. The term "governmental process"means:promulgation of executive orders;rate setting;development, negotiation, award, modification orcancellation of public contracts;issuance, denial, modification, renewal,revocation or suspension of permits, licenses orwaivers;procedures for bidding;imposition or modification of fines and penalties;procedures for purchasing;Page 3rendition of administrative determinations; andaward, denial, modification, renewal ortermination of financial assistance, grants and loans.v. The term "public contract" means a contract thecost or price of which is to be paid with or out ofState funds or the funds of an independent authoritycreated by the State or by the Legislature.CREDIT(S)L.1971, c. 183, § 3. Amended by L.1981, c. 150, § 1, eff. May22, 1981; L.1991, c. 243, § 3, eff. Jan. 1, 1992; L.1991, c. 244,§ 1, eff. Jan. 1, 1992; L.2004, c. 20, § 1, eff. June 16, 2004;L.2004, c. 27, § 3, eff. June 16, 2004; L.2009, c. 66, § 37, eff.June 26, 2009.HISTORICAL NOTESHISTORICAL AND STATUTORYNOTES2009 Main VolumeEffective date of L.1971, c. 183, see Historical and StatutoryNotes under N.J.S.A. § 52:13C-18.Section 6 of L.1981, c. 150, approved May 22, 1981,provides:"[Section] 6. This act shall take effect immediately, but theinitial reports required by this act shall be filed not later thanJanuary 31, 1982 for the year 1981."L.2004, c. 27, § 3, was corrected by the Legislative Counselwith the concurrence of the Attorney General under theauthority of N.J.S.A. § 1:3-1 to incorporate the inadvertentlyomitted provisions of the amendment of this section by L.2004,c. 20, § 1.2010 Electronic UpdateStatements:*114392 Senate state government committee statement toAssembly, No. 3902--L.2009, c. 66, see N.J.S.A. § 19:3-2.1.2009 Main VolumeCommittee statement to Assembly, No. 4617--L.1991, c. 243,see N.J.S.A. § 52:13C-18.Prior Laws:N.J.S.A. 52:13C-3 (L.1964, c. 207, § 3).© 2011 Thomson Reuters. No claim to original U.S. Govt. works.

NJSA 52:13C-20, DefinitionsPage 4REFERENCESCROSS REFERENCESLegislators, Governor or Executive Branch officers, prohibitionof employment as legislative agent as defined bythis section, see N.J.S.A. § 52:13C-21.4.REFERENCESLAW REVIEW AND JOURNALCOMMENTARIESWhat Every Lawyer Should Know About ELEC. Gregory E.Nagy, 253 N.J. Law. 54 (Mag.) (August, 2008).© 2011 Thomson Reuters. No claim to original U.S. Govt. works.

NJSA 52:13C-21, Notice of representation; filing; contents; separate noticesPage 1*114393 N.J.S.A. 52:13C-21NEW JERSEY STATUTESANNOTATEDTITLE 52. STATEGOVERNMENT,DEPARTMENTS AND OFFICERSSUBTITLE 2. LEGISLATURECHAPTER 13C. LOBBYINGCurrent with laws effective through L.2010, c.106 and J.R. No. 6.52:13C-21. Notice of representation; filing;contents; separate noticesa. Any person who, on or after the effective dateof P.L.1991, c. 243 or on or after the effective dateof P.L.2004, c. 27 for the purpose of influencinggovernmental processes, is employed, retained orengages himself as a governmental affairs agentshall, prior to any communication with, or themaking of any expenditures providing a benefit to, amember of the Legislature, legislative staff, theGovernor, the Lieutenant Governor, the Governor'sstaff, or an officer or staff member of the ExecutiveBranch, and in any event within 30 days of theappropriate effective date or of such employment,retainer or engagement, whichever occurs later, filea signed notice of representation with the ElectionLaw Enforcement Commission in such detail as thecommission may prescribe, identifying himself andpersons by whom he is employed or retained, andthe persons in whose interests he is working, and thegeneral nature of his proposed services as agovernmental affairs agent for such persons, whichnotice shall contain the following information:(1) his name, business address and regularoccupation;(2) the name, business address and occupation orprincipal business of the person from whom hereceives compensation for acting as a governmentalaffairs agent;(3)(a) the name, business address and occupationor principal business of any person in whose interesthe acts as a governmental affairs agent inconsideration of the aforesaid compensation, if suchperson is other than the person from whom saidcompensation is received; and(b) if a person, identified under paragraph (2) ofthis subsection as one from whom the governmentalaffairs agent receives compensation, is amembership organization or corporation whosename or occupation so identified does not, eitherexplicitly or by virtue of the nature of the principalbusiness in which the organization or its members,or the corporation or its shareholders, is commonlyknown to be engaged, clearly reveal the primaryspecific economic, social, political, or other interestwhich the organization or corporation mayreasonably be understood to seek to advance orprotect through its employment, retainer, orengagement of the governmental affairs agent, adescription of that primary economic, social,political, or other interest and a list of the personshaving organizational or financial control of theorganization or corporation, including the names,mailing addresses and occupations, respectively, ofthose persons. The commission shall promulgaterules and regulations to govern the content of anyinformation required to be disclosed under thissubparagraph and shall take such steps as arereasonably necessary to ensure that all suchinformation is, in accordance with those rules andregulations, both accurate and complete.*114394 Any list of governmental affairs agentsand their principals required to be publishedquarterly under subsection h. of section 6 ofP.L.1971, c. 183 (C.52:13C-23) shall include, foreach such principal for whom it is not otherwiseapparent, the primary specific interest which theprincipal may reasonably be understood to seek toadvance or protect through its engagement of thegovernmental affairs agent and the category ofpersons required to file additional information, asthat interest and such category shall have beendetermined under subparagraph (b) of thisparagraph;(4) whether the person from whom he receivessaid compensation employs him solely as agovernmental affairs agent, or whether he is aregular employee performing services for hisemployer which include but are not limited to theinfluencing of legislation, regulation orgovernmental processes;(5) the length of time for which he will bereceiving compensation from the person aforesaidfor acting as a governmental affairs agent, if said© 2011 Thomson Reuters. No claim to original U.S. Govt. works.

NJSA 52:13C-21, Notice of representation; filing; contents; separate noticesPage 2length of time can be ascertained at the time offiling;(6) the type of legislation, regulation orgovernmental process or the particular legislation,regulation or governmental process in relation towhich he is to act as governmental affairs agent inconsideration of the aforesaid compensation, andany particular legislation, regulation orgovernmental process or type of legislation,regulation or governmental process which he is topromote or oppose;(7) (Deleted by amendment, P.L.2004, c. 38).b. Any governmental affairs agent who receivescompensation from more than one person for hisservices as a governmental affairs agent shall file aseparate notice of representation with respect to eachsuch person; except that a governmental affairsagent whose fee for acting as such in respect to thesame legislation, regulation or governmentalprocessor type of legislation, regulation orgovernmental process is paid or contributed to bymore than one person may file a single statement, inwhich he shall detail the name, business address andoccupation or principal business of each person sopaying or contributing.CREDIT(S)L.1971, c. 183, § 4. Amended by L.1991, c. 243, § 4, eff. Jan. 1,1992; L.1991, c. 244, § 2, eff. Jan. 1, 1992; L.2004, c. 27, § 4,eff. June 16, 2004; L.2004, c. 38, § 1, eff. June 16, 2004;L.2009, c. 66, § 38, eff. June 26, 2009.*114395HISTORICAL NOTESNotes under N.J.S.A. § 52:13C-18.L.1991, c. 243, § 8, eff. Jan. 1, 1992, provided:"[Section] 8. a. A legislative agent who, prior to the effectivedate of this act, P.L.1991, c. 243, shall have filed under section4 of P.L.1971, c. 183 (C.52:13C-21) a notice of representationwith respect to his employment, retention or engagement assuch an agent, which notice includes all of the informationwhich, under the amendatory provisions of this act other thanthose of subparagraph (b) of paragraph (3) of subsection a. ofthat section, is required as of and after that date to be containedin such a notice, shall not be required to file further noticehereunder with respect to that employment, retention orengagement until the 30th day after such time as the notice sofiled shall cease to include all such information or until one yearafter that effective date, whichever occurs first."b. The filing of any statement of the information requiredunder the amendatory provisions of subparagraph (b) ofparagraph (3) of subsection a. of section 4 of P.L.1971, c. 183(C.52:13C-21) shall not be required to be made until the secondTuesday in January next following enactment."L.2004, c. 38, § 1, was corrected by the Legislative Counselwith the concurrence of the Attorney General under theauthority of N.J.S.A. § 1:3-1 to incorporate the inadvertentlyomitted provisions of the amendment of this section by L.2004,c. 27, § 4.2010 Electronic UpdateStatements:Senate state government committee statement to Assembly,No. 3902--L.2009, c. 66, see N.J.S.A. § 19:3-2.1.2009 Main VolumeCommittee statement to Assembly, No. 4617--L.1991, c. 243,see N.J.S.A. § 52:13C-18.Prior Laws:N.J.S.A. 52:13C-4 (L.1964, c. 207, § 4).REFERENCESLIBRARY REFERENCESHISTORICAL AND STATUTORYNOTES2009 Main VolumeEffective date of L.1971, c. 183, see Historical and Statutory.Statutes 24.Westlaw Topic No. 361.*114396 C.J.S. Statutes § 7.2009 Main Volume© 2011 Thomson Reuters. No claim to original U.S. Govt. works.

NJSA 52:13C-21a, Foreign governmental affairs agent or lobbyist; consent to service of process; filingPage 1*114397 N.J.S.A. 52:13C-21aNEW JERSEY STATUTESANNOTATEDTITLE 52. STATEGOVERNMENT,DEPARTMENTS AND OFFICERSSUBTITLE 2. LEGISLATURECHAPTER 13C. LOBBYINGCurrent with laws effective through L.2010, c.106 and J.R. No. 6.52:13C-21a. Foreign governmental affairsagent or lobbyist; consent to service ofprocess; filingAny governmental affairs agent or lobbyist not aresident of this State, or not a corporation of thisState or authorized to do business in this State, shallfile with the Election Law EnforcementCommission, before attempting to influencelegislation, regulation or governmental process, orwithin 30 days of the effective date of P.L.2004, c.27, as appropriate, its consent to service of processat an address within this State, or by regular mail atan address outside this State.CREDIT(S)L.1981, c. 150, § 4, eff. May 22, 1981. Amended by L.2004, c.27, § 5, eff. June 16, 2004.HISTORICAL NOTESHISTORICAL AND STATUTORYNOTES2009 Main VolumeDate of filing of initial reports for year 1981, see Historicaland Statutory Notes under N.J.S.A. § 52:13C-20..REFERENCESLIBRARY REFERENCES2009 Main VolumeProcess 17.Statutes 24.Westlaw Topic Nos. 313, 361.C.J.S. Process § 8.C.J.S. Statutes § 7.© 2011 Thomson Reuters. No claim to original U.S. Govt. works.

NJSA 52:13C-21b, Prohibition on offering or giving compensation, employment or anything of value to membersof Executive Branch or Legislature; exceptionsPage 1*114398 N.J.S.A. 52:13C-21bNEW JERSEY STATUTESANNOTATEDTITLE 52. STATEGOVERNMENT,DEPARTMENTS AND OFFICERSSUBTITLE 2. LEGISLATURECHAPTER 13C. LOBBYINGCurrent with laws effective through L.2010, c.106 and J.R. No. 6.52:13C-21b. Prohibition on offering or givingcompensation, employment or anythingof value to members of ExecutiveBranch or Legislature; exceptionsExcept as expressly authorized in section 13 ofP.L.1971, c. 182 (C.52:13D-24) or when the lobbyistor governmental affairs agent is a member of theimmediate family of the officer or staff member ofthe Executive Branch or member of the Legislatureor legislative staff, no lobbyist or governmentalaffairs agent shall offer or give or agree to offer orgive, directly or indirectly, any compensation,reward, employment, gift, honorarium or other thingof value to an officer or staff member of theExecutive Branch or member of the Legislature orlegislative staff, totaling more than$250.00 in acalendar year. The $250.00 limit on anycompensation, reward, gift, honorarium or otherthing of value shall also apply to each member of theimmediate family of a member of the Legislature, asdefined in section 2 of P.L.1971, c. 182 (C.52:13D-13) to be a spouse, child, parent, orsibling of the member residing in the samehousehold as the member of the Legislature.b. The prohibition in subsection a. of this section[FN1] on offering or giving, or agreeing to offer orgive, any compensation, reward, gift, honorarium orother thing of value shall not apply if it is in thecourse of employment, by an employer other thanthe State, of an individual covered in subsection a. ofthis section or a member of the immediate family.The prohibition in subsection a. of this section onoffering or giving, or agreeing to offer or give, anycompensation, reward, gift, honorarium or otherthing of value shall not apply if receipt is from amember of the immediate family when the familymember received such in the course of his or heremployment.c. Subsection a. of this section shall not apply ifan officer or staff member of the Executive Branchor member of the Legislature or legislative staff whoaccepted any compensation, reward, gift,honorarium or other thing of value offered or givenby a lobbyist or governmental affairs agent makes afull reimbursement, within 90 days of acceptance, tothe lobbyist or governmental affairs agent in anamount equal to the money accepted or the fairmarket value of that which was accepted if otherthan money. As used in this subsection, "fair marketvalue" means the actual cost of the compensation,reward, gift, honorarium or other thing of valueaccepted.*114399 d. A violation of this section shall notconstitute a crime or offense under the laws of thisState.CREDIT(S)L.2003, c. 255, § 3, eff. April 14, 2004. Amended by L.2004, c.27, § 6, eff. June 16, 2004.[FN1] So in original. The first paragraph probably should besubsection a.HISTORICAL NOTESHISTORICAL AND STATUTORYNOTES2009 Main VolumeL.2003, c. 255, § 8, approved January 14, 2004, provides:"[Section] 8. This act shall take effect on the 90th day nextfollowing enactment except that sections 5, 6 and 7 shall takeeffect immediately.".© 2011 Thomson Reuters. No claim to original U.S. Govt. works.

NJSA 52:13C-21.1, Employment of unregistered governmental affairs agentPage 1*114400 N.J.S.A. 52:13C-21.1NEW JERSEY STATUTESANNOTATEDTITLE 52. STATEGOVERNMENT,DEPARTMENTS AND OFFICERSSUBTITLE 2. LEGISLATURECHAPTER 13C. LOBBYINGCurrent with laws effective through L.2010, c.106 and J.R. No. 6.52:13C-21.1. Employment of unregisteredgovernmental affairs agentAny person who knowingly employs anotherperson to serve as a governmental affairs agent whois not registered as required by section 4 of the act ofwhich this act is a supplement, except upon thecondition that such person register as agovernmental affairs agent as provided by law orwho continues to employ any such person who hasnot registered within the time required by law, shall,upon conviction, be guilty of a crime of the fourthdegree.CREDIT(S)L.1977, c. 92, § 1, eff. May 16, 1977. Amended by L.2004, c.27, § 7, eff. June 16, 2004.REFERENCESCROSS REFERENCESSentence of imprisonment for crime, see N.J.S.A. § 2C:43-6..Statutes 24, 65.Westlaw Topic No. 361.C.J.S. Statutes § 7.REFERENCESLIBRARY REFERENCES2009 Main Volume© 2011 Thomson Reuters. No claim to original U.S. Govt. works.

NJSA 52:13C-21.2, Representation of adverse interest; written consent of employer; violations; penaltyPage 1*114401 N.J.S.A. 52:13C-21.2NEW JERSEY STATUTESANNOTATEDTITLE 52. STATEGOVERNMENT,DEPARTMENTS AND OFFICERSSUBTITLE 2. LEGISLATURECHAPTER 13C. LOBBYINGCurrent with laws effective through L.2010, c.106 and J.R. No. 6.52:13C-21.2. Representation of adverseinterest; written consent of employer;violations; penaltyconviction, be guilty of a crime of the fourth degree.CREDIT(S)L.1977, c. 90, § 1, eff. May 16, 1977. Amended by L.2004, c.27, § 8, eff. June 16, 2004.REFERENCESCROSS REFERENCESSentence of imprisonment for crime, see N.J.S.A. § 2C:43-6.REFERENCESLIBRARY REFERENCESAny governmental affairs agent who knowinglyrepresents an interest adverse to any of hisemployer's without first obtaining such employer'swritten consent thereto, after full disclosure to suchemployer of such adverse interest, shall, upon.Statutes 24, 65.Westlaw Topic No. 361.C.J.S. Statutes § 7.2009 Main Volume© 2011 Thomson Reuters. No claim to original U.S. Govt. works.

NJSA 52:13C-21.3, Causing or securing introduction of legislation in order to obtain employment to preventpassage; penaltyPage 1*114402 N.J.S.A. 52:13C-21.3NEW JERSEY STATUTESANNOTATEDTITLE 52. STATEGOVERNMENT,DEPARTMENTS AND OFFICERSSUBTITLE 2. LEGISLATURECHAPTER 13C. LOBBYINGCurrent with laws effective through L.2010, c.106 and J.R. No. 6.52:13C-21.3. Causing or securingintroduction of legislation in order toobtain employment to prevent passage;penaltyAny governmental affairs agent who knowinglycauses, influences, or otherwise secures theintroduction of any legislation or amendment theretofor the purpose of thereafter being employed toprevent the passage thereof, shall upon conviction beguilty of a crime of the fourth degree.CREDIT(S)L.1977, c. 91, § 1, eff. May 16, 1977. Amended by L.2004, c.27, § 9, eff. June 16, 2004.REFERENCESCROSS REFERENCESClasses of offenses, see N.J.S.A. § 2C:1-4.Degrees of crimes, see N.J.S.A. § 2C:43-1 et seq.Sentence of imprisonment for crime, see N.J.S.A. § 2C:43-6..Statutes 24, 65.Westlaw Topic No. 361.C.J.S. Statutes § 7.REFERENCESLIBRARY REFERENCES2009 Main Volume© 2011 Thomson Reuters. No claim to original U.S. Govt. works.

NJSA 52:13C-21.4, Legislative agents; registration restrictions*114403 N.J.S.A. 52:13C-21.4NEW JERSEY STATUTESANNOTATEDTITLE 52. STATEGOVERNMENT,DEPARTMENTS AND OFFICERSSUBTITLE 2. LEGISLATURECHAPTER 13C. LOBBYINGCurrent with laws effective through L.2010, c.106 and J.R. No. 6.52:13C-21.4. Legislative agents; registrationrestrictionsa. As used in this section, "person" means anymember of the Legislature, the Governor, theLieutenant Governor or the head of a principaldepartment of the Executive Branch.b. No person, within one year next subsequent tothe termination of the office or employment of suchperson, shall register as a "governmental affairsagent" as defined in section 3 of P.L.1971, c. 183 (C.52:13C-20).c. Any person who knowingly and willfullyviolates the provisions of subsection b. of thissection shall be subject to a penalty of not more than$10,000 and shall be barred from activitiesprohibited under subsection b. for up to anadditional five years.d. Upon receiving evidence of any violation ofPage 1this section, the Election Law EnforcementCommission shall have the power to hold, or tocause to be held, hearings about the violation and,upon finding any person to have committed aviolation, to assess such penalty, within the limitsprescribed herein, as it deems proper under thecircumstances, which penalty may be collected in asummary proceeding pursuant to the "PenaltyEnforcement Law of 1999," P.L.1999, c. 274 (C.2A:58-10 et seq.).CREDIT(S)L.2004, c. 34, § 1, eff. July 16, 2004. Amended by L.2009, c. 66,§ 39, eff. June 26, 2009.HISTORICAL NOTESHISTORICAL AND STATUTORYNOTES2009 Main VolumeL.2004, c. 34, § 2, approved June 16, 2004, provides:"[Section] 2. This act shall take effect on the 30th day afterenactment and shall be applicable to persons who terminateoffice or employment after that effective date."2010 Electronic UpdateStatements:*114404 Senate state government committee statement toAssembly, No. 3902--L.2009, c. 66, see N.J.S.A. § 19:3-2.1..© 2011 Thomson Reuters. No claim to original U.S. Govt. works.

NJSA 52:13C-21.5, Contingent fees prohibited*114405 N.J.S.A. 52:13C-21.5NEW JERSEY STATUTESANNOTATEDTITLE 52. STATEGOVERNMENT,DEPARTMENTS AND OFFICERSSUBTITLE 2. LEGISLATURECHAPTER 13C. LOBBYINGCurrent with laws effective through L.2010, c.106 and J.R. No. 6.52:13C-21.5. Contingent fees prohibitedA governmental affairs agent shall not enter intoany agreement, arrangement, or understanding underwhich the governmental affairs agent'scompensation, or any portion thereof, is madecontingent upon the success of any attempt toinfluence legislation, regulation or governmentalprocess.CREDIT(S)L.2004, c. 38, § 2, eff. June 16, 2004.Page 1HISTORICAL NOTESHISTORICAL AND STATUTORYNOTES2009 Main VolumeL.2004, c. 38, § 3, approved June 16, 2004, provides:"[Section] 3. This act shall take effect immediately and applyto any agreement, arrangement, or understanding entered intoafter that effective date."L.2004, c. 38, § 2, was corrected by the Legislative Counselwith the concurrence of the Attorney General under theauthority of N.J.S.A. § 1:3-1 to correct technical errors..© 2011 Thomson Reuters. No claim to original U.S. Govt. works.

NJSA 52:13C-22, Quarterly reports; contents; filing*114406 N.J.S.A. 52:13C-22NEW JERSEY STATUTESANNOTATEDTITLE 52. STATEGOVERNMENT,DEPARTMENTS AND OFFICERSSUBTITLE 2. LEGISLATURECHAPTER 13C. LOBBYINGCurrent with laws effective through L.2010, c.106 and J.R. No. 6.Page 1acted as a governmental affairs agent during thequarter, and any particular items or general types oflegislation, regulation, or governmental processeswhich he actively promoted or opposed during thequarter; and(2) supply any information necessary to make thenotice of representation filed by the governmentalaffairs agent pursuant to section 4 of P.L.1971, c.183(C.52:13C-21), current and accurate as of the finalday of the calendar quarter covered by the report.CREDIT(S)52:13C-22. Quarterly reports;filingcontents;L.1971, c. 183, § 5. Amended by L.1991, c. 244, § 3, eff. Jan. 1,1992; L.2004, c. 27, § 10, eff. June 16, 2004; L.2007, c. 201, §1, eff. Nov. 2, 2007.a. Every governmental affairs agent shall file withthe commission a signed quarterly report of hisactivity in attempting to influence legislation,regulation or governmental processes during eachsuch quarter.b. The quarterly reports required under thissection shall be made in the form and mannerprescribed by the commission and shall be filedbetween the first and tenth days of each calendarquarter for such activity during the precedingcalendar quarter. The commission may, in itsdiscretion, permit joint reports by persons subject tothis act.c. Each such quarterly report shall:HISTORICAL NOTESHISTORICAL AND STATUTORYNOTES*114407 2009 Main VolumeEffective date of L.1971, c. 183, see Historical and StatutoryNotes under N.J.S.A. § 52:13C-18.Prior Laws:N.J.S.A. § 52:13C-5 (L.1964, c. 207, § 5).REFERENCES(1) describe the particular items of legislation,regulation, or governmental process, the particularitems in the annual appropriation legislation orappropriation legislation that is supplemental to thatlegislation, and any general category or type oflegislation, regulation or governmental processregarding which the governmental affairs agent.Statutes 24.Westlaw Topic No. 361.C.J.S. Statutes § 7.LIBRARY REFERENCES2009 Main Volume© 2011 Thomson Reuters. No claim to original U.S. Govt. works.

NJSA 52:13C-22.1, Annual report of contributions and expenditures for purpose of affecting legislation;designation of governmental affairs agent by lobbyist; certification of correctness.Page 1*114408 N.J.S.A. 52:13C-22.1NEW JERSEY STATUTESANNOTATEDTITLE 52. STATEGOVERNMENT,DEPARTMENTS AND OFFICERSSUBTITLE 2. LEGISLATURECHAPTER 13C. LOBBYINGCurrent with laws effective through L.2010, c.106 and J.R. No. 6.52:13C-22.1. Annual report of contributionsand expenditures for purpose ofaffecting legislation; designation ofgovernmental affairs agent by lobbyist;certification of correctness.Each governmental affairs agent or lobbyist shallmake and certify the correctness of a full annualreport to the Election Law EnforcementCommission, of those moneys, loans, paid personalservices or other things of value contributed to it andthose expenditures made, incurred or authorized byit for the purpose of communication with orproviding benefits to any member of the Legislature,legislative staff, the Governor, the LieutenantGovernor, the Governor's staff, or an officer or staffmember of the Executive Branch, or acommunication with the general public, during theprevious year. The report shall include, but not belimited to, the following expenditures which relateto communication with, or providing benefits to, anymember of the Legislature, legislative staff, theGovernor, the Lieutenant Governor, the Governor'sstaff, or an officer or staff member of the ExecutiveBranch, or communication with the general public:media, including advertising; entertainment; foodand beverage; travel and lodging; honoraria; loans;gifts; and salary, fees, allowances or othercompensation paid to an agent. The expendituresshall be reported whether made to the intendedrecipient of the communication or benefit, to agovernmental affairs agent or a lobbyist, or in thecase of a communication to the general public, to thepublisher of that communication. The expendituresshall be reported in the aggregate by category,except that if the aggregate expenditures on behalfof a member of the Legislature, legislative staff, theGovernor, the Lieutenant Governor, the Governor'sstaff, or an officer or staff member of the ExecutiveBranch exceed $25.00 per day, they shall be detailedseparately as to the name of the member of theLegislature, member of legislative staff, theGovernor, the Lieutenant Governor, member of theGovernor's staff, or officer or staff member of theExecutive Branch, date and type of expenditure,amount of expenditure and to whom paid. Wherethe aggregate expenditures for the purpose ofcommunication with or providing benefits to anyone member of the Legislature, member oflegislative staff, the Governor, the LieutenantGovernor, the Governor's staff, or officer or staffmember of the Executive Branch exceed $200.00 peryear, the expenditures, together with the name of theintended recipient of the communication or benefits,shall be stated in detail including the type of eachexpenditure, amount of expenditure and to whompaid. Where those expenditures in the aggregate, orwhere the aggregate expenditures for the purpose ofcommunication with the general public, with respectto any specific occasion are in excess of $100.00, thereport shall include the date and type of expenditure,amount of expenditure and to whom paid. TheElection Law Enforcement Commission may, in itsdiscretion, permit joint reports by governmentalaffairs agents. No governmental affairs agent shallbe required to file a report unless all moneys, loans,paid personal services or other things of valuecontributed to it for the purpose of communicationwith or making expenditures providing a benefit to amember of the Legislature, legislative staff, theGovernor, the Lieutenant Governor, the Governor'sstaff, or officer or staff member of the ExecutiveBranch or for the purpose of communication withthe general public exceed $2,500.00 in any year orunless all expenditures made, incurred or authorizedby it for the purpose of communication with orproviding benefits to a member of the Legislature,legislative staff, the Governor, the LieutenantGovernor, the Governor's staff, or officer or staffmember of the Executive Branch or for the purposeof communication with the general public exceed$2,500.00 in any year.*114409 Any lobbyist who receives contributionsor makes expenditures to influence legislation orregulation shall be required to file and certify thecorrectness of a report of such contributions orexpenditures if the contributions or expendituresmade, incurred or authorized by it for the purpose of© 2011 Thomson Reuters. No claim to original U.S. Govt. works.

NJSA 52:13C-22.1, Annual report of contributions and expenditures for purpose of affecting legislation;designation of governmental affairs agent by lobbyist; certification of correctness.Page 2communication with or providing benefits to amember of the Legislature, legislative staff, theGovernor, the Lieutenant Governor, the Governor'sstaff, or an officer or staff member of the ExecutiveBranch exceed, in the aggregate, $2,500.00 in anyyear. Any lobbyist required to file a report pursuantto this section may designate a governmental affairsagent in its employ or otherwise engaged or used byit to file a report on its behalf; provided suchdesignation is made in writing by the lobbyist, isacknowledged in writing by the designatedgovernmental affairs agent and is filed with theElection Law Enforcement Commission on or beforethe date on which the report of the lobbyist is due forfiling, and further provided that any violation of thisact shall subject both the lobbyist and the designatedgovernmental affairs agent to the penalties providedin this act.Any person other than a governmental affairsagent or lobbyist who receives contributions ormakes expenditures for the purpose ofcommunication with the general public shall berequired to file and certify the correctness of a reportof such contributions or expenditures in the samemanner as governmental affairs agents under theprovisions of this section if the contributions orexpenditures made, incurred or authorized by theperson for the purpose of communication with thegeneral public exceed in the aggregate $2,500 in anyyear.This section shall not be construed to authorizeany person to make or authorize, or to cause to bemade or authorized, any expenditure providing abenefit, or to provide a benefit, the provision orreceipt of which is prohibited under the "New JerseyConflicts of Interest Law," P.L.1971, c. 182 (C.52:13D-12 et seq.) or any code of ethicspromulgated thereunder, or under any other law orany executive order, rule or regulation.1992; L.2004, c. 20, § 2, eff. June 16, 2004; L.2004, c. 27, §11, eff. June 16, 2004; L.2009, c. 66, § 40, eff. June 26, 2009.HISTORICAL NOTESHISTORICAL AND STATUTORYNOTES2009 Main VolumeDate of filing of initial reports for year 1981, see Historicaland Statutory Notes under N.J.S.A. § 52:13C-20.L.2004, c. 27, § 11, was corrected by the Legislative Counselwith the concurrence of the Attorney General under theauthority of N.J.S.A. § 1:3-1 to incorporate the inadvertentlyomitted provisions of the amendment of this section by L.2004,c. 20, § 2.2010 Electronic UpdateStatements:Senate state government committee statement to Assembly,No. 3902--L.2009, c. 66, see N.J.S.A. § 19:3-2.1.2009 Main Volume*114410 Committee statement to Assembly, No. 4617--L.1991, c. 243, see N.J.S.A. § 52:13C-18.Title of Act:An Act to amend and supplement "An act to require thepublic disclosure of certain information by certain personsseeking to influence legislation in this State, providing penaltiesfor noncompliance, and repealing the 'Legislative ActivitiesDisclosure Act', approved October 16, 1964 (P.L.1964, c. 207),"approved June 2, 1971 (P.L.1971, c. 183). L.1981, c. 150.REFERENCESLIBRARY REFERENCES2009 Main VolumeCREDIT(S)L.1981, c. 150, § 2, eff. May 22, 1981. Amended by L.1981, c.513, § 1, eff. Jan. 12, 1982; L.1991, c. 243, § 5, eff. Jan. 1,.Statutes 24.Westlaw Topic No. 361.C.J.S. Statutes § 7.© 2011 Thomson Reuters. No claim to original U.S. Govt. works.

NJSA 52:13C-22.1a, Registered governmental affairs agents required to disclose service as member in certainauthorities, boards and commissions in annual reportPage 1*114411 N.J.S.A. 52:13C-22.1aNEW JERSEY STATUTESANNOTATEDTITLE 52. STATEGOVERNMENT,DEPARTMENTS AND OFFICERSSUBTITLE 2. LEGISLATURECHAPTER 13C. LOBBYINGCurrent with laws effective through L.2010, c.106 and J.R. No. 6.52:13C-22.1a. Registered governmentalaffairs agents required to discloseservice as member in certain authorities,boards and commissions in annualreportA person who is registered as a governmentalaffairs agent and who, on or after the effective dateof P.L.1991, c. 243 (C.52:13C-18 et al.) or on orafter P.L.2004, c. 27 for the purpose of influencinggovernmental processes, serves or shall serve as amember of any independent State authority, countyimprovement authority or municipal utilitiesauthority, or as a member from New Jersey on aninter- state or bi-state authority, or as a member ofany board or commission established by statute orresolution or by executive order of the Governor orby the Legislature or by any agency, department orother instrumentality of the State shall disclose suchservice, including the name of the authority, boardor commission and the date upon which his term as amember thereof expires, in the annual reportrequired to be made under section 2 of P.L.1981, c.150 (C.52:13C-22.1).CREDIT(S)L.1991, c. 243, § 7, eff. Jan. 1, 1992. Amended by L.2004, c. 27,§ 12, eff. June 16, 2004.HISTORICAL NOTESHISTORICAL AND STATUTORYNOTES2009 Main VolumeStatements:Committee statement to Assembly, No. 4617--L.1991, c. 243,see N.J.S.A. § 52:13C-18.Title of Act:An Act concerning lobbyists and legislative agents, amendingP.L.1981, c. 150, and amending the title and amending andsupplementing the body of P.L.1971, c. 183. L.1991, c. 243..© 2011 Thomson Reuters. No claim to original U.S. Govt. works.

NJSA 52:13C-22.4, Written reports required of governmental affairs agents and lobbyistsPage 1*114414 N.J.S.A. 52:13C-22.4NEW JERSEY STATUTESANNOTATEDTITLE 52. STATEGOVERNMENT,DEPARTMENTS AND OFFICERSSUBTITLE 2. LEGISLATURECHAPTER 13C. LOBBYINGCurrent with laws effective through L.2010, c.106 and J.R. No. 6.52:13C-22.4. Written reports required ofgovernmental affairs agents andlobbyistsa. Each governmental affairs agent and lobbyistshall provide to each member of the Legislature,legislative staff, the Governor, the LieutenantGovernor, the Governor's staff, or an officer or staffmember of the Executive Branch who receives abenefit that is required to be reported to thecommission pursuant to section 2 of P.L.1981, c.150 (C.52:13C-22.1), a full written and certifiedreport describing the benefit, including a descriptionof the benefit, the amount of the benefit, the date itwas provided and to whom it was paid.member of the Legislature, legislative staff, theGovernor, the Lieutenant Governor, the Governor'sstaff, or an officer or staff member of the ExecutiveBranch during a calendar year, the reports describingthose benefits required pursuant to subsection a. ofthis section may be combined into one report or filedas separate reports.CREDIT(S)L.1996, c. 144, § 1, eff. Jan. 1, 1997. Amended by L.2004, c. 27,§ 13, eff. June 16, 2004; L.2009, c. 66, § 41, eff. June 26, 2009.HISTORICAL NOTESHISTORICAL AND STATUTORYNOTES2010 Electronic UpdateStatements:Senate state government committee statement to Assembly,No. 3902--L.2009, c. 66, see N.J.S.A. § 19:3-2.1.*114415 2009 Main VolumeTitle of Act:An Act imposing certain notification requirements onlegislative agents and lobbyists and supplementing P.L.1971, c.183 (C. 52:13C-18 et seq.). L.1996, c. 144.b. The reports shall be transmitted to the memberof the Legislature, legislative staff, the Governor, theLieutenant Governor, the Governor's staff, or anofficer or staff member of the Executive Branch byeach governmental affairs agent or lobbyist no laterthan February 1 of each year and shall cover benefitsprovided in the immediately preceding calendaryear. In the event that a governmental affairs agentor lobbyist provides more than one benefit to a.Statutes 24.Westlaw Topic No. 361.C.J.S. Statutes § 7.REFERENCESLIBRARY REFERENCES2009 Main Volume© 2011 Thomson Reuters. No claim to original U.S. Govt. works.

NJSA 52:13C-23, Duties of attorney general*114416 N.J.S.A. 52:13C-23NEW JERSEY STATUTESANNOTATEDTITLE 52. STATEGOVERNMENT,DEPARTMENTS AND OFFICERSSUBTITLE 2. LEGISLATURECHAPTER 13C. LOBBYINGCurrent with laws effective through L.2010, c.106 and J.R. No. 6.52:13C-23. Duties of attorney generalThe commission shall:a. permit public inspection of all statements filedpursuant to this act, as amended and supplemented;b. compile and summarize information containedin statements filed pursuant to this act, as amendedand supplemented, and report the same to theLegislature and the Governor;c. ascertain whether any persons have failed tofile statements as required by this act, as amendedand supplemented, or have filed incomplete orinaccurate statements, and give notice to suchpersons to file such statements as will conform to therequirements of this act, as amended andsupplemented;d. investigate violations of this act, as amendedand supplemented, report to the Legislature and theGovernor thereon, and notify the Attorney Generalof any possible criminal violations of this act, asamended and supplemented, that may warrantfurther investigation and action;e. make such recommendations to the Legislatureand the Governor as will tend to further theobjectives of this act, as amended and supplemented,and take such other action as shall be necessary andproper to effectuate the purposes of this act, asamended and supplemented;f. report to the Legislature and the Governorannually on the administration of this act, asamended and supplemented;g. develop and prescribe methods and forms forPage 1statements required to be filed by this act, asamended and supplemented, and require the use ofsuch forms by persons subject to this act, asamended and supplemented;h. compile and publish quarterly a list of allgovernmental affairs agents then registered, togetherwith the information contained in their notices ofrepresentation and last quarterly report, whichcompilation shall be distributed to all members ofthe Legislature and the Governor, and published inthe New Jersey Register;*114417 i. prepare and publish a summary andexplanation of the registration and reportingrequirements of this act, as amended andsupplemented, for the use and guidance of thosepersons who may be required to file statementsunder this act, as amended and supplemented;j. in accordance with a fee schedule adopted bythe commission as a rule or regulation, establish andcharge reasonable fees for the filing of notices ofrepresentation and quarterly and annual reportspursuant to this act, as amended and supplemented,provided that such fees shall not apply to theorganizations which qualify under subsection (b) ofsection 9 of chapter 30 of the laws of 1966, asamended (C.54:32B-9), and provided further that theamount of such fees shall not exceed the cost to thecommission of processing and maintaining thosenotices and reports and of compiling, summarizingand publishing the information contained therein asprescribed by this act, as amended andsupplemented; andk. during periods when the Legislature is insession, report monthly to the members of theLegislature and the Governor and his staff all newnotices of representation, notices of termination andother notices filed pursuant to this act, as amendedand supplemented, during the preceding month.CREDIT(S)L.1971, c. 183, § 6. Amended by L.1971, c. 349, § 1, eff. Dec.13, 1971; L.1991, c. 244, § 4, eff. Jan. 1, 1992; L.2004, c. 27, §14, eff. June 16, 2004.HISTORICAL NOTES© 2011 Thomson Reuters. No claim to original U.S. Govt. works.

NJSA 52:13C-23, Duties of attorney generalPage 2HISTORICAL AND STATUTORYNOTES2009 Main VolumeEffective date of L.1971, c. 183, see Historical and StatutoryNotes under N.J.S.A. § 52:13C-18.REFERENCESLAW REVIEW AND JOURNALCOMMENTARIESWhat Every Lawyer Should Know About ELEC. Gregory E.Nagy, 253 N.J. Law. 54 (Mag.) (August, 2008)Prior Laws:N.J.S.A. 52:13C-7 (L.1964, c. 207, § 7).REFERENCESCROSS REFERENCESFee in addition to fee collected pursuant to this section to becollected from each legislative agent, see N.J.S.A. §52:13C-23a..REFERENCESLIBRARY REFERENCES2009 Main Volume*114418 States 73.Statutes 24.Westlaw Topic Nos. 360, 361.C.J.S. States §§ 229, 240 to 249, 253.C.J.S. Statutes § 7.© 2011 Thomson Reuters. No claim to original U.S. Govt. works.

NJSA 52:13C-23a, Annual fee*114419 N.J.S.A. 52:13C-23aNEW JERSEY STATUTESANNOTATEDTITLE 52. STATEGOVERNMENT,DEPARTMENTS AND OFFICERSSUBTITLE 2. LEGISLATURECHAPTER 13C. LOBBYINGCurrent with laws effective through L.2010, c.106 and J.R. No. 6.52:13C-23a. Annual feeIn addition to any fee collected pursuant tosubsection j. of section 6 of P.L.1971, c. 183 (C.52:13C-23), the commission shall establish andcollect no later than January 31 of each year a $100fee from each governmental affairs agent for depositPage 1into the General Fund. Such moneys shall beallocated annually by the Legislature for use by thecommission.CREDIT(S)L.2004, c. 37, § 1, eff. Aug. 15, 2004.HISTORICAL NOTESHISTORICAL AND STATUTORYNOTES2009 Main VolumeL.2004, c. 37, § 2, approved June 16, 2004, provides:"[Section] 2. This act shall take effect upon the 60th dayfollowing enactment.".© 2011 Thomson Reuters. No claim to original U.S. Govt. works.

NJSA 52:13C-23.1, Complaint proceedings; penalties*114420 N.J.S.A. 52:13C-23.1NEW JERSEY STATUTESANNOTATEDTITLE 52. STATEGOVERNMENT,DEPARTMENTS AND OFFICERSSUBTITLE 2. LEGISLATURECHAPTER 13C. LOBBYINGCurrent with laws effective through L.2010, c.106 and J.R. No. 6.52:13C-23.1. Complaint proceedings;penaltiesUpon receiving evidence of any violation ofP.L.1971, c. 183 (C.52:13C-18 et seq.), as amendedand supplemented, the commission shall have powerto bring complaint proceedings, to issue subpoenasfor the production of witnesses and documents, andto hold or to cause to be held by the Office ofAdministrative Law, hearings upon such complaint.In addition to any other penalty provided by law,any person who is found to have committed such aviolation shall be liable for a civil penalty not inPage 1excess of $1,000, which penalty may be collected ina summary proceeding pursuant to the "PenaltyEnforcement Law of 1999," P.L.1999, c. 274 (C.2A:58-10 et seq.).CREDIT(S)L.1991, c. 244, § 11, eff. Jan. 1, 1992. Amended by L.2004, c.27, § 15, eff. June 16, 2004.HISTORICAL NOTESHISTORICAL AND STATUTORYNOTES2009 Main VolumePrior Laws:N.J.S.A. §§ 52:13C-22.2, 52:13C-22.3, added by L.1981, c.150, §§ 3, 5.Title of Act:An Act concerning the administration and supervision oflobbying, amending and supplementing P.L.1971, c. 183, andrepealing sections 3 and 5 of P.L.1981, c. 150. L.1991, c. 244..© 2011 Thomson Reuters. No claim to original U.S. Govt. works.

NJSA 52:13C-23.2, Rules and regulationsPage 1*114421 N.J.S.A. 52:13C-23.2NEW JERSEY STATUTESANNOTATEDTITLE 52. STATEGOVERNMENT,DEPARTMENTS AND OFFICERSSUBTITLE 2. LEGISLATURECHAPTER 13C. LOBBYINGCurrent with laws effective through L.2010, c.106 and J.R. No. 6.52:13C-23.2. Rules and regulationsThe commission shall adopt such rules andregulations as may be necessary to effectuate thepurposes of P.L.1971, c. 183 (C.52:13C-18 et seq.),as amended and supplemented.CREDIT(S)L.1991, c. 244, § 12, eff. Jan. 1, 1992..© 2011 Thomson Reuters. No claim to original U.S. Govt. works.

NJSA 52:13C-23, Duties of attorney general*114416 N.J.S.A. 52:13C-23NEW JERSEY STATUTESANNOTATEDTITLE 52. STATEGOVERNMENT,DEPARTMENTS AND OFFICERSSUBTITLE 2. LEGISLATURECHAPTER 13C. LOBBYINGCurrent with laws effective through L.2010, c.106 and J.R. No. 6.52:13C-23. Duties of attorney generalThe commission shall:a. permit public inspection of all statements filedpursuant to this act, as amended and supplemented;b. compile and summarize information containedin statements filed pursuant to this act, as amendedand supplemented, and report the same to theLegislature and the Governor;c. ascertain whether any persons have failed tofile statements as required by this act, as amendedand supplemented, or have filed incomplete orinaccurate statements, and give notice to suchpersons to file such statements as will conform to therequirements of this act, as amended andsupplemented;d. investigate violations of this act, as amendedand supplemented, report to the Legislature and theGovernor thereon, and notify the Attorney Generalof any possible criminal violations of this act, asamended and supplemented, that may warrantfurther investigation and action;e. make such recommendations to the Legislatureand the Governor as will tend to further theobjectives of this act, as amended and supplemented,and take such other action as shall be necessary andproper to effectuate the purposes of this act, asamended and supplemented;f. report to the Legislature and the Governorannually on the administration of this act, asamended and supplemented;g. develop and prescribe methods and forms forPage 1statements required to be filed by this act, asamended and supplemented, and require the use ofsuch forms by persons subject to this act, asamended and supplemented;h. compile and publish quarterly a list of allgovernmental affairs agents then registered, togetherwith the information contained in their notices ofrepresentation and last quarterly report, whichcompilation shall be distributed to all members ofthe Legislature and the Governor, and published inthe New Jersey Register;*114417 i. prepare and publish a summary andexplanation of the registration and reportingrequirements of this act, as amended andsupplemented, for the use and guidance of thosepersons who may be required to file statementsunder this act, as amended and supplemented;j. in accordance with a fee schedule adopted bythe commission as a rule or regulation, establish andcharge reasonable fees for the filing of notices ofrepresentation and quarterly and annual reportspursuant to this act, as amended and supplemented,provided that such fees shall not apply to theorganizations which qualify under subsection (b) ofsection 9 of chapter 30 of the laws of 1966, asamended (C.54:32B-9), and provided further that theamount of such fees shall not exceed the cost to thecommission of processing and maintaining thosenotices and reports and of compiling, summarizingand publishing the information contained therein asprescribed by this act, as amended andsupplemented; andk. during periods when the Legislature is insession, report monthly to the members of theLegislature and the Governor and his staff all newnotices of representation, notices of termination andother notices filed pursuant to this act, as amendedand supplemented, during the preceding month.CREDIT(S)L.1971, c. 183, § 6. Amended by L.1971, c. 349, § 1, eff. Dec.13, 1971; L.1991, c. 244, § 4, eff. Jan. 1, 1992; L.2004, c. 27, §14, eff. June 16, 2004.HISTORICAL NOTES© 2011 Thomson Reuters. No claim to original U.S. Govt. works.

NJSA 52:13C-23, Duties of attorney generalPage 2HISTORICAL AND STATUTORYNOTES2009 Main VolumeEffective date of L.1971, c. 183, see Historical and StatutoryNotes under N.J.S.A. § 52:13C-18.REFERENCESLAW REVIEW AND JOURNALCOMMENTARIESWhat Every Lawyer Should Know About ELEC. Gregory E.Nagy, 253 N.J. Law. 54 (Mag.) (August, 2008)Prior Laws:N.J.S.A. 52:13C-7 (L.1964, c. 207, § 7).REFERENCESCROSS REFERENCESFee in addition to fee collected pursuant to this section to becollected from each legislative agent, see N.J.S.A. §52:13C-23a..REFERENCESLIBRARY REFERENCES2009 Main Volume*114418 States 73.Statutes 24.Westlaw Topic Nos. 360, 361.C.J.S. States §§ 229, 240 to 249, 253.C.J.S. Statutes § 7.© 2011 Thomson Reuters. No claim to original U.S. Govt. works.

NJSA 52:13C-23a, Annual fee*114419 N.J.S.A. 52:13C-23aNEW JERSEY STATUTESANNOTATEDTITLE 52. STATEGOVERNMENT,DEPARTMENTS AND OFFICERSSUBTITLE 2. LEGISLATURECHAPTER 13C. LOBBYINGCurrent with laws effective through L.2010, c.106 and J.R. No. 6.52:13C-23a. Annual feeIn addition to any fee collected pursuant tosubsection j. of section 6 of P.L.1971, c. 183 (C.52:13C-23), the commission shall establish andcollect no later than January 31 of each year a $100fee from each governmental affairs agent for depositPage 1into the General Fund. Such moneys shall beallocated annually by the Legislature for use by thecommission.CREDIT(S)L.2004, c. 37, § 1, eff. Aug. 15, 2004.HISTORICAL NOTESHISTORICAL AND STATUTORYNOTES2009 Main VolumeL.2004, c. 37, § 2, approved June 16, 2004, provides:"[Section] 2. This act shall take effect upon the 60th dayfollowing enactment.".© 2011 Thomson Reuters. No claim to original U.S. Govt. works.

NJSA 52:13C-24, Records of governmental affairs agent; auditsPage 1*114422 N.J.S.A. 52:13C-24NEW JERSEY STATUTESANNOTATEDTITLE 52. STATEGOVERNMENT,DEPARTMENTS AND OFFICERSSUBTITLE 2. LEGISLATURECHAPTER 13C. LOBBYINGCurrent with laws effective through L.2010, c.106 and J.R. No. 6.52:13C-24. Records of governmental affairsagent; auditsAny person engaged in activity which makes himsubject to filing a statement under this act shall keepand preserve all records of his receipts,disbursements and other financial transactions in thecourse of and as a part of his activities as agovernmental affairs agent. Such records shall bepreserved for a period of three calendar years nextsucceeding the calendar year in which they weremade. The provisions of this section shall not applyto any governmental affairs agent with respect toany quarterly period within which the total of hiscompensation including reimbursement of expensesis less than $500.00.The commission shall conduct random audits ofrecords kept and preserved pursuant to this section.CREDIT(S)L.1971, c. 183, § 7. Amended by L.2004, c. 27, § 16, eff. June16, 2004; L.2004, c. 36, § 1, eff. June 16, 2004.HISTORICAL NOTESHISTORICAL AND STATUTORYNOTES2009 Main VolumeEffective date of L.1971, c. 183, see Historical and StatutoryNotes under N.J.S.A. § 52:13C-18.L.2004, c. 36, § 1, was corrected by the Legislative Counselwith the concurrence of the Attorney General under theauthority of N.J.S.A. § 1:3-1 to incorporate the inadvertentlyomitted provisions of the amendment of this section by L.2004,c. 27, § 16.Prior Laws:N.J.S.A. § 52:13C-8 (L.1964, c. 207, § 8)..REFERENCESLIBRARY REFERENCES2009 Main VolumeRecords 2, 3.Statutes 24.Westlaw Topic Nos. 326, 361.*114423 C.J.S. Records §§ 9 to 10.C.J.S. Statutes § 7.© 2011 Thomson Reuters. No claim to original U.S. Govt. works.

NJSA 52:13C-25, Notice of termination; notice of representation of additional person; notice of change ininformation in notice of representationPage 1*114424 N.J.S.A. 52:13C-25NEW JERSEY STATUTESANNOTATEDTITLE 52. STATEGOVERNMENT,DEPARTMENTS AND OFFICERSSUBTITLE 2. LEGISLATURECHAPTER 13C. LOBBYINGCurrent with laws effective through L.2010, c.106 and J.R. No. 6.52:13C-25. Notice of termination; notice ofrepresentation of additional person;notice of change in information in noticeof representationa. Every governmental affairs agent shall file anotice of termination report within 30 days after hisactivity shall cease, on such form as the commissionshall prescribe, and any person who engages agovernmental affairs agent may file a notice oftermination after such agent ceases to represent suchperson.b. A governmental affairs agent who receives oragrees to receive compensation for acting as suchfrom any person not named in the notice ofrepresentation filed pursuant to section 4 ofP.L.1971, c. 183 (C.52:13C-21) shall, within 15days of receiving or agreeing to receive suchcompensation, file an appropriate notificationthereof in writing with the commission.c. A governmental affairs agent shall notify thecommission in writing of any material change in theinformation supplied by him in the notice ofrepresentation filed pursuant to section 4 ofP.L.1971, c. 183 (C.52:13C-21) within 15 days ofthe effective date of such change.CREDIT(S)L.1971, c. 183, § 8. Amended by L.1991, c. 244, § 5, eff. Jan. 1,1992; L.2004, c. 27, § 17, eff. June 16, 2004.HISTORICAL NOTESHISTORICAL AND STATUTORYNOTES2009 Main VolumeEffective date of L.1971, c. 183, see Historical and StatutoryNotes under N.J.S.A. § 52:13C-18.Prior Laws:N.J.S.A. § 52:13C-9 (L.1964, c. 207, § 9)..REFERENCESLIBRARY REFERENCES2009 Main VolumeStatutes 24.*114425 Westlaw Topic No. 361.C.J.S. Statutes § 7.© 2011 Thomson Reuters. No claim to original U.S. Govt. works.

NJSA 52:13C-26, Public records; inspection; duration of preservationPage 1*114426 N.J.S.A. 52:13C-26NEW JERSEY STATUTESANNOTATEDTITLE 52. STATEGOVERNMENT,DEPARTMENTS AND OFFICERSSUBTITLE 2. LEGISLATURECHAPTER 13C. LOBBYINGCurrent with laws effective through L.2010, c.106 and J.R. No. 6.52:13C-26. Public records;duration of preservationinspection;L.1971, c. 183, § 9. Amended by L.1991, c. 244, § 6, eff. Jan. 1,1992.HISTORICAL NOTESHISTORICAL AND STATUTORYNOTES2009 Main VolumeEffective date of L.1971, c. 183, see Historical and StatutoryNotes under N.J.S.A. § 52:13C-18.Prior Laws:N.J.S.A. § 52:13C-10 (L.1964, c. 207, § 10).The statements required by this act, as amendedand supplemented, to be filed with the commission(a) shall constitute part of the public records of theoffice of the commission and shall be available forpublic inspection; and (b) shall be preserved by thecommission for a period of five years from the dateof filing.CREDIT(S).REFERENCESLIBRARY REFERENCES2009 Main VolumeRecords 13, 30.Statutes 24.Westlaw Topic Nos. 326, 361.C.J.S. Records §§ 37 to 39, 74, 76, 78, 80, 112.C.J.S. Statutes § 7.© 2011 Thomson Reuters. No claim to original U.S. Govt. works.

NJSA 52:13C-27, Exemptions*114427 N.J.S.A. 52:13C-27NEW JERSEY STATUTESANNOTATEDTITLE 52. STATEGOVERNMENT,DEPARTMENTS AND OFFICERSSUBTITLE 2. LEGISLATURECHAPTER 13C. LOBBYINGCurrent with laws effective through L.2010, c.106 and J.R. No. 6.52:13C-27. ExemptionsThis act shall not apply to the following activities:a. the publication or dissemination, in theordinary course of business, of news items,advertising which does not constitutecommunication with the general public, editorials orother comments by a newspaper, book publisher,regularly published periodical, or radio or televisionstation, including an owner, editor or employeethereof;b. acts of an officer or employee of theGovernment of this State or any of its politicalsubdivisions, or of the Government of the UnitedStates or of any state or territory thereof or any oftheir political subdivisions, in carrying out the dutiesof their public office or employment, except asprovided in section 10 of P.L.2009, c. 308 (C.18A:3B-55);c. acts of bona fide religious groups acting solelyfor the purpose of protecting the public right topractice the doctrines of such religious groups;d. acts of a duly organized national, State or localcommittee of a political party;e. acts of a person in testifying before a legislativecommittee or commission, at a public hearing dulycalled by the Governor on legislative proposals or onlegislation passed and pending his approval, orbefore any officer or body empowered by law toissue, promulgate or adopt administrative rules andregulations in behalf of a nonprofit organizationincorporated as such in this State who receives nocompensation therefor beyond the reimbursement ofnecessary and actual expenses, and who makes noPage 1other communication with a member of theLegislature, legislative staff, the Governor, theLieutenant Governor, the Governor's staff, or anofficer or staff member of the Executive Branch inconnection with the subject of his testimony;f. acts of a person in communicating with orproviding benefits to a member of the Legislature,legislative staff, the Governor, the LieutenantGovernor, the Governor's staff, or an officer or staffmember of the Executive Branch if suchcommunication or provision of benefits isundertaken by him as a personal expression and notincident to his employment, even if it is upon amatter relevant to the interests of a person by whomor which he is employed, and if he receives noadditional compensation or reward, in money orotherwise, for or as a result of such communicationor provision of benefits;*114428 g. with regard to influencinggovernmental processes as defined in subsections t.and u. of section 3 of P.L.1971, c. 183 (C.52:13C-20) any communications, matters or acts of an attorneyfalling within the attorney-client privilege whileengaging in the practice of law to the extent thatconfidentiality is required in order for the attorney toexercise his ethical duties as a lawyer; andh. with regard to influencing governmentalprocesses as defined in subsections t. and u. ofsection 3 of P.L.1971, c. 183 (C.52:13C-20) anycommunications, matters or acts involving collectivenegotiations, or the interpretation or violation ofcollective negotiation agreements, of a labororganization of any kind which exists or isconstituted for the purpose, in whole or in part, ofcollective bargaining, or of dealing with employersconcerning the grievances, terms or conditions ofemployment, or of other mutual aid or protection inconnection with employment.CREDIT(S)L.1971, c. 183, § 10. Amended by L.1991, c. 243, § 6, eff. Jan.1, 1992; L.2004, c. 20, § 3, eff. June 16, 2004; L.2004, c. 27, §18, eff. June 16, 2004; L.2009, c. 66, § 42, eff. June 26, 2009;L.2009, c. 308, § 47, eff. July 17, 2010.HISTORICAL NOTES© 2011 Thomson Reuters. No claim to original U.S. Govt. works.

NJSA 52:13C-27, ExemptionsHISTORICAL AND STATUTORYNOTES2009 Main VolumeEffective date of L.1971, c. 183, see Historical and StatutoryNotes under N.J.S.A. § 52:13C-18.L.2004, c. 27, § 18, was corrected by the Legislative Counselwith the concurrence of the Attorney General under theauthority of N.J.S.A. § 1:3-1 to incorporate the inadvertentlyomitted provisions of the amendment of this section by L.2004,c. 20, § 3 by inserting "which does not constitutecommunication with the general public" in subsec. a.2009 Legislation2010 Electronic UpdateFor effective date provisions of L.2009, c. 308, approved Jan.18, 2010, and commissioner authority to take anticipatoryadministrative action, see Historical and Statutory Notes underN.J.S.A. § 18A:3B-46.L.2009, c. 308, § 47, was corrected by the LegislativeCounsel with the concurrence of the Attorney General under theauthority of N.J.S.A. § 1:3-1 to incorporate the inadvertentlyPage 2omitted provisions of the amendment of this section by L.2009,c. 66, § 42, by inserting "the Lieutenant Governor," two times insubsec. e.*114429 Statements:Senate state government committee statement to Assembly,No. 3902--L.2009, c. 66, see N.J.S.A. § 19:3-2.1.2009 Main VolumeCommittee statement to Assembly, No. 4617--L.1991, c. 243,see N.J.S.A. § 52:13C-18.Prior Laws:N.J.S.A. § 52:13C-11 (L.1964, c. 207, § 11)..Statutes 24.Westlaw Topic No. 361.C.J.S. Statutes § 7.REFERENCESLIBRARY REFERENCES2009 Main Volume© 2011 Thomson Reuters. No claim to original U.S. Govt. works.

NJSA 52:13C-28, Name tag*114430 N.J.S.A. 52:13C-28NEW JERSEY STATUTESANNOTATEDTITLE 52. STATEGOVERNMENT,DEPARTMENTS AND OFFICERSSUBTITLE 2. LEGISLATURECHAPTER 13C. LOBBYINGCurrent with laws effective through L.2010, c.106 and J.R. No. 6.52:13C-28. Name tagPage 1L.1971, c. 183, § 11. Amended by L.1991, c. 244, § 7, eff. Jan.1, 1992; L.2004, c. 27, § 19, eff. June 16, 2004.HISTORICAL NOTESHISTORICAL AND STATUTORYNOTES2009 Main VolumeEffective date of L.1971, c. 183, see Historical and StatutoryNotes under N.J.S.A. § 52:13C-18.Every governmental affairs agent who, for thepurpose of influencing legislation, is in the StateHouse, the State House Annex, or any other Statebuilding or other location when and where anauthorized meeting of a legislative committee isbeing held shall at all times wear a descriptive nametag of a type prescribed by the commission.CREDIT(S).Statutes 24.Westlaw Topic No. 361.C.J.S. Statutes § 7.REFERENCESLIBRARY REFERENCES2009 Main Volume© 2011 Thomson Reuters. No claim to original U.S. Govt. works.

NJSA 52:13C-29, Employees of legislature as governmental affairs agents; penaltyPage 1*114431 N.J.S.A. 52:13C-29NEW JERSEY STATUTESANNOTATEDTITLE 52. STATEGOVERNMENT,DEPARTMENTS AND OFFICERSSUBTITLE 2. LEGISLATURECHAPTER 13C. LOBBYINGCurrent with laws effective through L.2010, c.106 and J.R. No. 6.52:13C-29. Employees of legislature asgovernmental affairs agents; penaltyAll staff, assistants and employees of theLegislature who receive for their services a statedsalary or similar compensation from the State ofNew Jersey are forbidden to act as governmentalaffairs agents or to seek, receive or agree to receive,directly or indirectly, compensation, in money orany thing of value, for influencing or purporting toinfluence legislation. Whoever violates this sectionis guilty of a crime of the fourth degree.CREDIT(S)L.1971, c. 183, § 12. Amended by L.2004, c. 27, § 20, eff. June16, 2004.HISTORICAL NOTESHISTORICAL AND STATUTORYNOTES2009 Main VolumeEffective date of L.1971, c. 183, see Historical and StatutoryNotes under N.J.S.A. § 52:13C-18.REFERENCESCROSS REFERENCESMisdemeanor to constitute for purpose of sentence a crime offourth degree, see N.J.S.A. § 2C:43-1.Sentence of imprisonment for crime, see N.J.S.A. § 2C:43-6..REFERENCESLIBRARY REFERENCES2009 Main VolumeStates 65, 77, 81.Statutes 24.Westlaw Topic Nos. 360, 361.C.J.S. States §§ 224 to 228, 230, 238 to 253.C.J.S. Statutes § 7.© 2011 Thomson Reuters. No claim to original U.S. Govt. works.

NJSA 52:13C-30, Knowing or willful falsification of statement, notice or report; penaltyPage 1*114432 N.J.S.A. 52:13C-30NEW JERSEY STATUTESANNOTATEDTITLE 52. STATEGOVERNMENT,DEPARTMENTS AND OFFICERSSUBTITLE 2. LEGISLATURECHAPTER 13C. LOBBYINGCurrent with laws effective through L.2010, c.106 and J.R. No. 6.52:13C-30. Knowing or willful falsification ofstatement, notice or report; penaltyAny person who knowingly and willfully falsifiesall or any part of any statement, notice or reportunder this act shall, upon conviction, be guilty of acrime of the fourth degree.CREDIT(S)L.1971, c. 183, § 13. Amended by L.2004, c. 27, § 21, eff. June16, 2004.HISTORICAL NOTESHISTORICAL AND STATUTORYNOTES2009 Main VolumeEffective date of L.1971, c. 183, see Historical and StatutoryNotes under N.J.S.A. § 52:13C-18.Prior Laws:N.J.S.A. § 52:13C-12 (L.1964, c. 207, § 12).REFERENCESCROSS REFERENCESMisdemeanor to constitute for purpose of sentence a crime offourth degree, see N.J.S.A. § 2C:43-1.Sentence of imprisonment for crime, see N.J.S.A. § 2C:43-6..Statutes 24, 65.Westlaw Topic No. 361.C.J.S. Statutes § 7.REFERENCESLIBRARY REFERENCES2009 Main Volume© 2011 Thomson Reuters. No claim to original U.S. Govt. works.

NJSA 52:13C-31, False communication relating to legislation; transmission to legislature or governor; penaltyPage 1*114433 N.J.S.A. 52:13C-31NEW JERSEY STATUTESANNOTATEDTITLE 52. STATEGOVERNMENT,DEPARTMENTS AND OFFICERSSUBTITLE 2. LEGISLATURECHAPTER 13C. LOBBYINGCurrent with laws effective through L.2010, c.106 and J.R. No. 6.52:13C-31. False communication relating tolegislation; transmission to legislatureor governor; penaltyAny person who shall transmit, utter or publish tothe Legislature or the Governor or his staff anycommunication relating to any legislation or be aparty to the preparation thereof, knowing suchcommunication or any signature thereto is false,forged, counterfeit, or fictitious, shall uponconviction, be guilty of a crime of the fourth degree.CREDIT(S)L.1971, c. 183, § 14. Amended by L.2004, c. 27, § 22, eff. June16, 2004.HISTORICAL NOTESHISTORICAL AND STATUTORYNOTES2009 Main VolumeEffective date of L.1971, c. 183, see Historical and StatutoryNotes under N.J.S.A. § 52:13C-18.Prior Laws:N.J.S.A. § 52:13C-13 (L.1964, c. 207, § 13).REFERENCESCROSS REFERENCESMisdemeanor to constitute for purpose of sentence a crime offourth degree, see N.J.S.A. § 2C:43-1.Sentence of imprisonment for crime, see N.J.S.A. § 2C:43-6..Statutes 24, 65.Westlaw Topic No. 361.C.J.S. Statutes § 7.REFERENCESLIBRARY REFERENCES2009 Main Volume© 2011 Thomson Reuters. No claim to original U.S. Govt. works.

NJSA 52:13C-32, Failure to comply with act; injunction*114434 N.J.S.A. 52:13C-32NEW JERSEY STATUTESANNOTATEDTITLE 52. STATEGOVERNMENT,DEPARTMENTS AND OFFICERSSUBTITLE 2. LEGISLATURECHAPTER 13C. LOBBYINGCurrent with laws effective through L.2010, c.106 and J.R. No. 6.52:13C-32. Failure to comply with act;injunctionPage 1L.1971, c. 183, § 15. Amended by L.1991, c. 244, § 8, eff. Jan.1, 1992.HISTORICAL NOTESHISTORICAL AND STATUTORYNOTES2009 Main VolumeEffective date of L.1971, c. 183, see Historical and StatutoryNotes under N.J.S.A. § 52:13C-18.Prior Laws:N.J.S.A. § 52:13C-14 (L.1964, c. 207, § 14).Upon the failure to comply with any provisions ofthis act, as amended and supplemented, by anyperson subject thereto the commission may institutea civil action to enjoin such person from engaging inactivity covered by this act until such time as heshall perform any duty imposed thereby and torequire him to file any statement required by this act,as amended and supplemented, for the period heacted in violation thereof, and the court may proceedin a summary manner.CREDIT(S).REFERENCESLIBRARY REFERENCES2009 Main VolumeAttorney General 7.Injunction 89(1).Statutes 24.Westlaw Topic Nos. 46, 212, 361.C.J.S. Attorney General §§ 26 to 78.C.J.S. Drugs and Narcotics §§ 168 to 169.C.J.S. Injunctions §§ 242 to 243, 245, 250.C.J.S. Statutes § 7.© 2011 Thomson Reuters. No claim to original U.S. Govt. works.

NJSA 52:13C-33, Failure to file notice or report or maintain record; penaltyPage 1*114435 N.J.S.A. 52:13C-33NEW JERSEY STATUTESANNOTATEDTITLE 52. STATEGOVERNMENT,DEPARTMENTS AND OFFICERSSUBTITLE 2. LEGISLATURECHAPTER 13C. LOBBYINGCurrent with laws effective through L.2010, c.106 and J.R. No. 6.52:13C-33. Failure to file notice or report ormaintain record; penaltyAny governmental affairs agent required to file anotice of representation or report or maintain anyrecord under this act who fails to file such a noticeor report or maintain such record shall, uponconviction, be guilty of a crime of the fourth degree.CREDIT(S)L.1971, c. 183, § 16. Amended by L.2004, c. 27, § 23, eff. June16, 2004.HISTORICAL NOTESHISTORICAL AND STATUTORYNOTES2009 Main VolumeEffective date of L.1971, c. 183, see Historical and StatutoryNotes under N.J.S.A. § 52:13C-18.Prior Laws:N.J.S.A. § 52:13C-15 (L.1964, c. 207, § 15).REFERENCESCROSS REFERENCESMisdemeanor to constitute for purpose of sentence a crime offourth degree, see N.J.S.A. § 2C:43-1.Sentence of imprisonment for crime, see N.J.S.A. § 2C:43-6..Statutes 24, 65.Westlaw Topic No. 361.C.J.S. Statutes § 7.REFERENCESLIBRARY REFERENCES2009 Main Volume© 2011 Thomson Reuters. No claim to original U.S. Govt. works.

NJSA 52:13C-34, Obligation to file statement; duty of officer or person; duty after discontinuance of activityPage 1*114436 N.J.S.A. 52:13C-34NEW JERSEY STATUTESANNOTATEDTITLE 52. STATEGOVERNMENT,DEPARTMENTS AND OFFICERSSUBTITLE 2. LEGISLATURECHAPTER 13C. LOBBYINGCurrent with laws effective through L.2010, c.106 and J.R. No. 6.52:13C-34. Obligation to file statement; dutyof officer or person; duty afterdiscontinuance of activityEvery officer, or person performing the functionsof an officer, of any person required by this act tofile any statement shall be under obligation to causesuch person to file such statement within the timeprescribed by this act.period of time prior to such discontinuance.L.1971, c. 183, § 17.CREDIT(S)HISTORICAL NOTESHISTORICAL AND STATUTORYNOTES2009 Main VolumeEffective date of L.1971, c. 183, see Historical and StatutoryNotes under N.J.S.A. § 52:13C-18.Prior Laws:N.J.S.A. § 52:13C-16 (L.1964, c. 207, § 16).REFERENCESLIBRARY REFERENCESThe obligation of any person to file any statementrequired by this act shall continue from day to day,and discontinuance of the activity out of which theobligation arises shall not relieve any person fromthe obligation to file any statement required for any.Statutes 24.Westlaw Topic No. 361.C.J.S. Statutes § 7.2009 Main Volume© 2011 Thomson Reuters. No claim to original U.S. Govt. works.

NJSA 52:13C-35, Voluntary statements by persons not required to filePage 1*114437 N.J.S.A. 52:13C-35NEW JERSEY STATUTESANNOTATEDTITLE 52. STATEGOVERNMENT,DEPARTMENTS AND OFFICERSSUBTITLE 2. LEGISLATURECHAPTER 13C. LOBBYINGCurrent with laws effective through L.2010, c.106 and J.R. No. 6.52:13C-35. Voluntary statements by personsnot required to fileThe commission shall make provision to acceptstatements similar to statements required by this act,as amended and supplemented, from persons whoare not required by law to file such statements butwho choose to make reports upon their activities ininfluencing legislation. The commission shall havefull discretion in prescribing the form and detail ofsuch voluntary statements and may by general rulesdelimit classes of voluntary filings which it will orwill not accept in order to further the purposes ofthis act, as amended and supplemented, and theefficient administration thereof. The informationcontained in such voluntary statements as areaccepted by the commission shall be included in theperiodic reports and summaries which it is requiredto make.CREDIT(S)L.1971, c. 183, § 18. Amended by L.1991, c. 244, § 9, eff. Jan.1, 1992.HISTORICAL NOTESHISTORICAL AND STATUTORYNOTES2009 Main VolumeEffective date of L.1971, c. 183, see Historical and StatutoryNotes under N.J.S.A. § 52:13C-18..REFERENCESLIBRARY REFERENCES2009 Main VolumeStates 73.Statutes 24.Westlaw Topic Nos. 360, 361.C.J.S. States §§ 229, 240 to 249, 253.C.J.S. Statutes § 7.© 2011 Thomson Reuters. No claim to original U.S. Govt. works.

NJSA 52:13C-36, Investigation of violations; order of court for inspection, statements, testimony or impoundmentof documents; confidentiality; immunity from self-incrimination; costsPage 1*114438 N.J.S.A. 52:13C-36NEW JERSEY STATUTESANNOTATEDTITLE 52. STATEGOVERNMENT,DEPARTMENTS AND OFFICERSSUBTITLE 2. LEGISLATURECHAPTER 13C. LOBBYINGCurrent with laws effective through L.2010, c.106 and J.R. No. 6.52:13C-36. Investigation of violations; orderof court for inspection, statements,testimony or impoundment ofdocuments; confidentiality; immunityfrom self-incrimination; costsa. When it shall appear to the commission that aperson required to file any statement under this act,as amended and supplemented, has failed to file suchrequired statement, or has filed a statement false,inaccurate or incomplete in any material matter, orhas otherwise violated the provisions of this act, asamended and supplemented; or when thecommission believes it to be in the public interestthat an investigation should be made to ascertainwhether a person has in fact violated any of theprovisions of this act, as amended andsupplemented, it may apply to the Superior Court foran order or orders directing:(1) That any such person or persons makeavailable to the commission's inspection, or to theinspection of any of its authorized deputies oragents, such records as are required to be kept bythat person pursuant to section 7 of P.L.1971, c. 183(C.52:13C-24); or(2) That any such person file a statement or reportin writing under oath concerning the facts andcircumstances upon which the commission's belief inthe necessity of an investigation is based; or(3) That any person submit to examination underoath by the commission in connection with saidcircumstances, and produce any and all records,books and other documents which may be specifiedby order of the court; or(4) That the commission may impound anyrecord, book or other documents specified by orderof the court.b. Such application by the commission shall setforth all the facts and circumstances upon which itsbelief in the necessity of an investigation is based.The court may proceed on such application in asummary manner; and if the court determines thatfrom the evidence submitted it appears that a personrequired to file any statement under this act, asamended and supplemented, has failed to file suchstatement, or has filed a statement false, inaccurateor incomplete in any material respect, or hasotherwise violated any of the provisions of this act,as amended and supplemented, or that it is in thepublic interest that an investigation be held todetermine whether such violation has occurred, thecourt shall issue such order pursuant to subsection a.of this section as it may deem necessary and proper.*114439 c. The commission shall hold asconfidential all statements, books, records, testimonyand other information or sources of informationcoming into its possession or knowledge as a resultof an investigation pursuant to this section and shallnot disclose or divulge any such materials orinformation to anyone except the court under whoseorder such material or information comes into itsknowledge or possession, unless the court shallorder its disclosure to a grand jury of this State orother appropriate authorities for the purposes ofenforcing the provisions of this act, as amended andsupplemented, or any other law.d. If any person shall refuse to testify or produceany book, paper or other document in anyproceeding under this section as ordered by the courton the grounds that the testimony or evidence,documentary or otherwise, which is required of himmay tend to incriminate him, convict him of a crime,or subject him to a penalty or forfeiture, and shall,notwithstanding, be directed to testify or to producesuch book, paper or document, he shall comply withsuch direction. A person who is entitled by law toassert such privilege, and does so assert, andthereafter complies with such direction, shall notthereafter be prosecuted or subjected to any penaltyor forfeiture in any criminal proceeding which arisesout of and relates to the subject matter of theproceeding. No person so testifying shall be exempt© 2011 Thomson Reuters. No claim to original U.S. Govt. works.

NJSA 52:13C-36, Investigation of violations; order of court for inspection, statements, testimony or impoundmentof documents; confidentiality; immunity from self-incrimination; costsPage 2from prosecution or punishment for perjury on falseswearing committed by him in giving suchtestimony.e. In any action brought under this section, thecourt may award to the State all costs ofinvestigation and trial, including a reasonableattorney's fee to be fixed by the court. If costs areawarded in such an action brought against agovernmental affairs agent, the judgment may beawarded against the governmental affairs agent, andthe governmental affairs agent's employer oremployers joined as defendants, jointly, severally, orboth. If the defendant prevails, he shall be awardedall costs of trial, and may be awarded a reasonableattorney's fee to be fixed by the court and paid bythe State of New Jersey.CREDIT(S)L.1971, c. 183, § 19. Amended by L.1977, c. 451, § 1, eff.March 2, 1978; L.1991, c. 244, § 10, eff. Jan. 1, 1992; L.2004,c. 27, § 24, eff. June 16, 2004.HISTORICAL NOTESHISTORICAL AND STATUTORYNOTES2009 Main VolumeEffective date of L.1971, c. 183, see Historical and StatutoryNotes under N.J.S.A. § 52:13C-18.REFERENCESCROSS REFERENCESPerjury and other falsification in official matters, see N.J.S.A. §2C:28-1 et seq. *114440REFERENCESLAW REVIEW AND JOURNALCOMMENTARIESWhat Every Lawyer Should Know About ELEC. Gregory E.Nagy, 253 N.J. Law. 54 (Mag.) (August, 2008).REFERENCESLIBRARY REFERENCES2009 Main VolumeStates 65, 73.Statutes 24.Westlaw Topic Nos. 360, 361.C.J.S. States §§ 224 to 227, 229 to 230, 240 to 253.C.J.S. Statutes § 7.© 2011 Thomson Reuters. No claim to original U.S. Govt. works.

SUBCHAPTER 20. LOBBYISTS AND GOVERNMENTAL AFFAIRS AGENTS19:25-20.1 AuthorityThe provisions of this subchapter are promulgated pursuant to the Legislative andGovernmental Process Activities Disclosure Act (P.L. 1971, c.183), as amended, N.J.S.A.52:13C-18, et seq., and following ("the Act").19:25-20.2 DefinitionsThe following words and terms, when used in this subchapter, shall have the followingmeanings unless a different meaning clearly appears from the context."Act" shall mean the Legislative and Governmental Process Activities Disclosure Act, asamended, N.J.S.A. 52:13C-18 et seq.“Benefit recipient” means any member of the Legislature, legislative staff, the Governor,the Governor’s staff, or an officer or staff member of the Executive Branch who is the recipientof a benefit paid for or otherwise derived from a lobbyist’s or governmental affairs agent’sexpenditures providing that benefit or benefits."Commission" shall mean the New Jersey Election Law Enforcement Commission."Communication with a member of the Legislature," "with legislative staff," "with theGovernor," "with the Governor's staff," or "with an officer or staff member of the ExecutiveBranch" shall mean any communication, oral or in writing or any other medium, addressed,delivered, distributed or disseminated, respectively, to a member of the Legislature, to legislativestaff, to the Governor, to the Governor's staff, or to an officer or staff member of the ExecutiveBranch, as distinguished from communication to the general public, including, but not limited to,a member of the Legislature, legislative staff, the Governor, the Governor's staff, or an officer orstaff member of the Executive Branch. If any person shall obtain, reproduce or excerpt anycommunication or part thereof which in its original form was not a communication under thisdefinition and shall cause such excerpt or reproduction to be addressed, delivered, distributed ordisseminated to a member of the Legislature, to legislative staff, to the Governor, to theGovernor's staff, or to an officer or staff member of the Executive Branch, such communication,reproduction or excerpt shall be deemed a communication with the member of the Legislature,with legislative staff, with the Governor, with the Governor's staff, or with an officer or staffmember of the Executive Branch by such person."Communication with the general public" means any communication that is:1. Disseminated to the general public through direct mail or in the form of a paidadvertisement in a newspaper, magazine, or other printed publication ofgeneral circulation or aired on radio, television, or other broadcast medium,including the Internet; andUpdated April, 2010 Page 201

2. Which explicitly supports or opposes a particular item or items of legislationor regulation, or the content of which can reasonably be understood,irrespective of whether the communication is addressed to the general publicor to persons in public office or employment, as intended to influencelegislation or to influence regulation;3. A communication with the general public does not include:i. A communication by a partnership, committee, association,corporation, labor union, or charitable organization made only toits members, partners, employees, and stockholders; orii. A communication in a newspaper, magazine, or other printedpublication of general circulation, or aired on radio, television, orother broadcast medium, including the Internet, whichcommunication is required to be made by law."Compensation," for the purposes of this subchapter, shall be included within thedefinition of the term "receipt.""Contribution," for the purposes of this subchapter, shall be included within the definitionof the term "receipt.""Expenditure" includes every loan, gift, fee, salary, contribution, subscription, advance ortransfer of money or other thing of value, including any item of real or personal property,tangible or intangible, and paid personal services (but not including volunteer services providedwithout compensation) made or paid by any governmental affairs agent or lobbyist, and anypledge or other commitment or assumption of liability to make such transfer. Any suchcommitment or assumption shall be deemed to have been an expenditure upon the date whensuch commitment is made or liability assumed."Expenditures providing a benefit" or "expenditures providing benefits" means anyexpenditures for entertainment, food and beverage, travel and lodging, honoraria, loans, gifts orany other thing of value, except for:1. Any money or thing of value paid for past, present, or future services inregular employment, whether in the form of a fee, expense, allowance,forbearance, forgiveness, interest, dividend, royalty, rent, capital gain, or anyother form of recompense, or any combination thereof; or2. Any dividends or other income paid on investments, trusts, and estates.“Governmental affairs agent" shall mean any person who receives or agrees to receive,directly or indirectly, compensation, in money or anything of value (including reimbursement ofhis or her expenses where such reimbursement exceeds $100.00 in any three-month period), toinfluence legislation, to influence regulation, or to influence governmental processes, or all ofthe above, by direct or indirect communication with, or by making or authorizing, or causing tobe made or authorized, any expenditures providing a benefit to a member of the Legislature,Updated April, 2010 Page 202

legislative staff, the Governor, the Governor's staff, or any officer or staff member of theExecutive Branch, or who holds himself or herself out as engaging in the business of influencinglegislation, regulation, or governmental processes by such means, or who, incident to his or herregular employment, engages in influencing legislation, regulation, or governmental processesby such means. The term "governmental affairs agent" shall also include any person whoreceives or agrees to receive, directly or indirectly, compensation, in money or anything of valuefor the purpose of conducting communication with the general public, or who incident to his orher regular employment conducts communication with the general public, or who holds himselfor herself out as engaging in the business of conducting communication with the general public.However, a person shall not be deemed a governmental affairs agent who, in relation to theduties or interests of his or her employment or at the request or suggestion of his or heremployer, communicates with a member of the Legislature, with legislative staff, with theGovernor, with the Governor’s staff, or with an officer or staff member of the Executive Branchconcerning any legislation, regulation, or governmental process, or who conductscommunication with the general public, if such communication is an isolated, exceptional orinfrequent activity in relation to the usual duties of his or her employment. For the purposes ofthis definition, activities to influence legislation, influence regulation, or influence governmentalprocesses, or to conduct communication with the general public shall be deemed "isolated,exceptional or infrequent" if they constitute less than 20 hours of the time an employee spendsworking at his or her employment during a calendar year.“Governmental process" means:1. Promulgation of executive orders;2. Rate setting;3. Development, negotiation, award, modification or cancellation of publiccontracts.4. Issuance, denial, modification, renewal, revocation or suspension of permits,licenses or waivers;5. Procedures for bidding;6. Imposition or modification of fines and penalties;7. Procedures for purchasing;8. Rendition of administrative determinations; and9. Award, denial, modification, renewal or termination of financial assistance,grants and loans.Updated April, 2010 Page 203

"Governor" includes the Governor or the Acting Governor."Governor's staff" includes the members of the Governor's Cabinet, the Secretary to theGovernor, the Counsel to the Governor and all professional employees in the office of theCounsel to the Governor, and all other employees of the Office of the Governor."Influence governmental processes," "influencing governmental processes" or "influencegovernmental process" mean to make any attempt, whether successful or not, to assist arepresented entity or group to engage in communication with, or to secure information from, anofficer or staff member of the Executive Branch, or any authority, board, commission or otheragency or instrumentality in or of a principal department of the Executive Branch of StateGovernment, empowered by law to administer a governmental process or perform otherfunctions that relate to such processes."Influence legislation" shall mean to make any attempt, whether successful or not, tosecure or prevent the initiation of any legislation or to secure or prevent the passage, defeat,amendment or modification thereof by the Legislature, including efforts to influence thepreparation, drafting, content, introduction and consideration of any bill, resolution, amendment,report or nomination or the approval, amendment or disapproval thereof by the Governor inaccordance with his constitutional authority."Influence regulation" means to make any attempt, whether successful or not, to secure orprevent the proposal of any regulation or to secure or prevent the consideration, amendment,issuance, promulgation, adoption or rejection thereof by an officer or any authority, board,commission or other agency or instrumentality in or of a principal department of the ExecutiveBranch of State Government empowered by law to issue, promulgate or adopt administrativerules and regulations."Legislation" includes all bills, resolutions, amendments, nominations and appointments,pending or proposed, in either House of the Legislature, and all bills and resolutions which,having passed both Houses, are pending approval by the Governor."Legislative staff" includes all staff, assistants and employees of the Legislature or any ofits members in the member's official capacity, whether or not they receive compensation fromthe State of New Jersey."Legislature" includes the Senate and General Assembly of the State of New Jersey andall committees and commissions established by the Legislature or by either House thereof."Lobbyist" shall mean any person, partnership, committee, association, corporation, laborunion, or any other organization that employs, retains, designates, engages or otherwise uses theservices of any governmental affairs agent to influence legislation, regulation, or governmentalprocesses.Updated April, 2010 Page 204

“Member” means an individual or organization who or which pays dues to, makes acontribution of money or time to, or has made an affirmative request to receive materials from acommittee, association, or organization."Member of the Legislature" includes any member or member-elect of, or any personwho shall have been selected to fill a vacancy in, the Senate or General Assembly, and any otherperson who is a member or member-designate of any committee or commission established bythe Legislature or by either House thereof."Officer or staff member of the Executive Branch" means any assistant or deputy head ofa principal department in the Executive Branch of State Government, including all assistant anddeputy commissioners; the members and chief executive officer of any authority, board,commission or other agency or instrumentality in or of such a principal department; and anyofficer of the Executive Branch of State Government other than the Governor who is notincluded among the foregoing or among the Governor's staff, but who is empowered by law toissue, promulgate or adopt administrative rules and regulations, or to administer governmentalprocesses, and any person employed in the office of such an officer who is involved with thedevelopment, issuance, promulgation or adoption of such rules and regulations or administrationof governmental processes in the regular course of employment."Person" includes an individual, partnership, committee, association, corporation, andany other organization or group of persons."Public contract" means a contract the cost or price of which is to be paid with or out ofState funds or the funds of an independent authority created by the State or by the Legislature."Receipt" includes every loan, gift, contribution, fee, subscription, salary, advance ortransfer of money or other thing of value, including any item of real property or personalproperty, tangible or intangible, and paid personal services (but not including voluntary servicesprovided without compensation) made to any governmental affairs agent or lobbyist and anypledge or other commitment or assumption of liability to make such transfer. Any suchcommitment or assumption shall be deemed to have been a receipt upon the date when suchcommitment is made or liability assumed.1. For the purposes of this subchapter, the term "receipt" shall include, but not belimited to, compensation by way of salary, fees, allowances, retainers,reimbursement of expenses, or other similar compensation, when received bya governmental affairs agent. For purposes of this subchapter, the term"receipt" shall also include, but not be limited to, contributions by way offees, dues, gifts or other similar contributions when received by a lobbyist."Regulation" includes any administrative rule or regulation affecting the rights,privileges, benefits, duties, obligations, or liabilities of any one or more persons subject by lawto regulation as a class, but does not include an administrative action:Updated April, 2010 Page 205

1. To issue, renew or deny, or, in an adjudicative action, to establish or makerates that have particular applicability on named or specified petitioners orparties, or to suspend or revoke, a license, order, permit or waiver under anylaw or administrative rule or regulation;2. To impose a penalty; or3. To effectuate an administrative reorganization within a single principaldepartment of the Executive Branch of State Government."Represented entity" means the same as “lobbyist” as defined in this section.19:25-20.3 Exemptions from the Act(a) The provisions of the Act shall not apply to the following activities:1. The acts of the government of the United States or of the State of New Jerseyor of any other state or of any of the political subdivisions or authorities orcommissions of any of the foregoing, or any interstate authority orcommission, or any official, employee, counsel or agent of any of the abovewhen acting in his or her official capacity.2. The publication or dissemination, in the ordinary course of business, of newsitems, advertising which does not constitute communication with the generalpublic, editorials or other comments by a newspaper, book publisher,regularly published periodical, or radio or television station or similar media,including an owner, editor or employee thereof, nor the acts of a recognizedschool or institution of higher education, public or private, in conducting,sponsoring or subsidizing any classes, seminars, forums, discussions or otherevents, in the normal course of its business in which political information ordiscussion thereof or comment thereon is an integral part.3. The acts of bona fide religious groups acting solely for the purpose ofprotecting the public right to practice the doctrine of such religious group.4. The acts of a duly organized national, state or local committee of a politicalparty.5. The acts of a person in testifying before a legislative committee orcommission, at a public hearing duly called by the Governor on legislativeproposals or on legislation passed and pending his or her approval, or beforeany officer or body empowered by law to issue, promulgate or adoptadministrative rules and regulations in behalf of a nonprofit organizationincorporated as such in this State, who receives no compensation thereforbeyond the reimbursement of necessary and actual expenses, and who makesno other communication with a member of the Legislature, legislative staff,Updated April, 2010 Page 206

the Governor, the Governor's staff, or an officer or staff member of theExecutive Branch in connection with the subject of his or her testimony.6. The acts of a person in communicating with or providing benefits to a memberof the Legislature, legislative staff, the Governor, the Governor's staff, or anofficer or staff member of the Executive Branch if such communication orprovision of benefits is undertaken by him or her by exclusive use of his orher personal funds as a personal expression and not incident to his or heremployment, even if it is upon a matter relevant to the interests of a person bywhom or which he or she is employed, and if he or she receives no additionalcompensation or reward, in money or otherwise, for or as a result of suchcommunication or provision of benefits.7. A communication by an individual with an employee of a principaldepartment in the Executive Branch of State government, or with an employeeof any authority, board, commission, or other agency or instrumentality in orof a principal department of the Executive Branch of State government for aroutine, ministerial matter. A communication for a routine, ministerial matterincludes, but is not limited to, a communication to:i. Schedule a meeting date, time, and place;ii. Request the status of an administrative matter;iii. Request procedures or forms;iv. Request information concerning requirements to complywith existing laws or regulations;v. Apply for a permit or license as required by law;vi. Participate in an inspection required by law;vii. Respond to an audit conducted pursuant to law;viii. Make a contact as a salesperson for the sole purpose ofselling goods or services;ix. Inquire about the delivery of services or materials pursuantto an existing contract;x. Provide advice or perform services pursuant to an existingcontract;xi. Prepare documents and materials in response to a requestfor proposal or to participate at a bid conference after bidspecifications have been established;xii. Respond to a subpoena;xiii. Respond to a public emergency or condition involvingpublic health or safety; orxiv. Provide a response to a detailed request for specificinformation.8. Participation by an individual in a task force, advisory board, or workinggroup that is specifically established pursuant to statute or established by theUpdated April, 2010 Page 207

head of a principal department in State government who has statutoryauthority to convene such groups, and where the following conditions are met:i. The individual has been specifically nominated or invitedto participate; andii. The individual receives no separate compensation for his orher service.(b) The provisions of the Act regarding attempts to influence governmental processesshall not apply to the following:1. Any communications, matters or acts of an attorney falling within theattorney-client privilege while engaging in the practice of law to the extentthat confidentiality is required in order for the attorney to exercise his or herethical duties as a lawyer;2. Any communications by an attorney representing a client in the regular courseof a routine litigation or administrative proceeding with the State, or in thecourse of a quasi-judicial civil or administrative proceeding with the State; or3. Any communications, matters or acts involving collective negotiations, or theinterpretation or violation of collective negotiation agreements, of a labororganization of any kind which exists or is constituted for the purpose, inwhole or in part, of collective bargaining, or of dealing with employersconcerning the grievances, terms or conditions of employment, or of othermutual aid or protection in connection with employment.(c) An “administrative proceeding with the State” does not include attempts to influencelegislation or to influence regulation, as those terms are used in this subchapter.19:25-20.3A Presumption of lobbying activityIt shall be a rebuttable presumption that a communication, except as provided in N.J.A.C.19:25-20.3(b), by a governmental affairs agent is a communication for the purpose of influencinglegislation, influencing regulation, or influencing a governmental process if the communicationis made to the Governor, the Governor’s staff, or the Governor’s Chief of Staff, or to theCommissioner, Deputy Commissioner, Assistant Commissioner, Division Director, Chief ofStaff, Executive Director, policy advisor, or a person in an analogous position in a principaldepartment in the Executive Branch of State Government, or in any authority, board,commission or other agency or instrumentality in or of such a principal department, or to aperson empowered by law to issue, adopt, or promulgate administrative rules.19:25-20.3B $250.00 Annual limit on gifts(a) Except as expressly authorized by N.J.S.A. 52:13D-24 and 52:13D-24.1, or when thelobbyist or governmental affairs agent is a member of the immediate family of the officer or staffUpdated April, 2010 Page 208

member of the Executive Branch or member of the Legislature or legislative staff, no lobbyist orgovernmental affairs agent shall offer or give or agree to offer or give, directly or indirectly, anycompensation, reward, employment, gift, honorarium or other thing of value to an officer or staffmember of the Executive Branch or member of the Legislature or legislative staff, totaling morethan $250.00 in a calendar year.(b) The $250.00 limit in (a) above shall not apply to any compensation, reward, gift,honorarium or other thing of value if:1. It is received in the course of employment, from an employer other than theState, of an individual covered in (a) above or a member of the immediatefamily; or2. It is received from a member of the immediate family when the familymember received such in the course of his or her employment.(c) Calculation of the $250.00 limit in (a) above on offering or giving, or agreeing tooffer or give, any compensation, reward, gift, honorarium or other thing of value shall alsoinclude any compensation, reward, employment, gift, honorarium or other thing of value given,directly or indirectly, to each member of the immediate family of the officer or staff member ofthe Executive Branch or member of the Legislature or legislative staff.(d) As used in this section, the term "member of the immediate family" shall mean aspouse, child, parent, or sibling of a member of the Legislature residing in the same household asthe member of the Legislature.(e) The $250.00 limit in (a) above on offering or giving, or agreeing to offer or give, anycompensation, reward, gift, honorarium or other thing of value shall not apply if an officer orstaff member of the Executive Branch or member of the Legislature or legislative staff whoaccepted any compensation, reward, gift, honorarium or other thing of value offered or given bya lobbyist or governmental affairs agent makes a full reimbursement, within 90 days ofacceptance, to the lobbyist or governmental affairs agent in an amount equal to the moneyaccepted or the fair market value of that which was accepted if other than money. As used inthis subsection, "fair market value" means the actual cost of the compensation, reward, gift,honorarium or other thing of value accepted.(f) If a lobbyist or governmental affairs agent receives reimbursement pursuant to (e)above, the lobbyist or governmental affairs agent shall report the receipt and amount of suchreimbursement in the Annual Report, and the receipt of such a reimbursement does not removeor alter the requirement that the lobbyist or governmental affairs agent report the expenditure andthe recipient of the compensation, reward, gift, honorarium or other thing of value on its AnnualReport filed pursuant to this subchapter.(g) Any reimbursement or payment of expenses for travel, subsistence, andentertainment, made by a lobbyist or governmental affairs agent pursuant to N.J.S.A. 52:13D-24,shall be subject to reporting as an expenditure on the Annual Report filed by the lobbyist orgovernmental affairs agent pursuant to this subchapter.Updated April, 2010 Page 209

19:25-20.4 Governmental affairs agent notice of representation(a) Each governmental affairs agent shall file with the Commission a signed notice ofrepresentation on a form prescribed by the Commission, and containing the information requiredby N.J.S.A. 52:13C-21.(b) The notice of representation shall be filed prior to making any communication with,or the making of any expenditures providing a benefit to, a member of the Legislature, withlegislative staff, with the Governor, with the Governor's staff, or with an officer or staff memberof the Executive Branch, or prior to making any communication concerning a governmentalprocess with an officer or member of the Executive Branch, or any authority, board, commission,or other agency or instrumentality in or of a principal department of the Executive Branch ofState Government, or shall be filed within 30 days of employment, retainer or engagement as agovernmental affairs agent, whichever occurs earlier.(c) Each governmental affairs agent must notify the Commission in writing of anymaterial change in the information supplied in the notice of representation within 15 days of theeffective date of such change, or not later than the filing date of the subsequent quarterly report,whichever occurs earlier.(d) If a governmental affairs agent identifies a membership organization or corporationas the lobbyist or person from whom he or she receives compensation for acting as agovernmental affairs agent, and the name or occupation so identified does not, either explicitlyor by virtue of the nature of the principal business in which the organization or its members, orthe corporation or its shareholders, is commonly known to be engaged, clearly reveal the primaryspecific economic, social, political, or other interest which the organization or corporation mayreasonably be understood to seek to advance or protect through its employment, retainer, orengagement of the governmental affairs agent, a description of that primary economic, social,political, or other interest and a list of the persons having organizational or financial control ofthe organization or corporation, including the names, mailing addresses and occupations of thosepersons, shall be included in the notice of representation of the governmental affairs agent.19:25-20.5 Governmental affairs agent quarterly report(a) Each governmental affairs agent shall file with the Commission a quarterly reportcontaining the information required by N.J.S.A. 52:13C-22 and signed by the governmentalaffairs agent.(b) If there has been no activity in the calendar year quarter to influence legislation,influence regulation, or to influence governmental processes, the report shall so state.(c) Such report shall be filed on a form prescribed by the Commission no later than the10th day following the end of the calendar year quarter during which activities influencinglegislations, influencing regulation, or influencing governmental processes occurred.Updated April, 2010 Page 210

(d) Calendar year quarters end on March 31, June 30, September 30 and December 31.(e) A governmental affairs agent shall not be required to report the specific details of atrade secret on a quarterly report filed pursuant to this section, but shall be required to report thatactivity concerning a trade secret occurred during the quarter.19:25-20.6 Name tags(a) Each governmental affairs agent who is an individual shall wear a name tag issued bythe Commission bearing the full name and photograph of the individual, which name tag shall beprominently displayed and visible at all times when such individual is in the State House, theState House Annex, or any other State building or other location when and where an authorizedmeeting of a legislative committee is being held for the purpose of influencing legislation orinfluencing regulation. A governmental affairs agent shall also wear the name tag issued by theCommission at any location when and where a meeting is being held at which there may be anattempt to influence a governmental process.(b) On or about November 15, the Commission shall issue a name tag to agovernmental affairs agent who is an individual, which name tag shall be effective for a 12-month period commencing on the following January 1.(c) Name tags will be issued by the Commission only to a governmental affairs agentwho has paid the annual fee and submitted two photographs as provided in N.J.A.C. 19:25-20.20, and has filed all required notices of representation and quarterly reports for the prior 12-month period.(d) The Commission may terminate the active status of a governmental affairs agentwho fails to renew his or her name tag on or prior to the expiration date provided in (b) above.19:25-20.7 Notice of termination(a) Each governmental affairs agent shall file with the Commission a notice oftermination within 30 days after his or her activities influencing legislation, influencingregulation, or influencing governmental processes cease.(b) Any person who has engaged a governmental affairs agent shall file a notice oftermination after that agent ceases to represent such person.(c) The notice of termination shall be filed on a form prescribed by the Commission.The completed form shall include:1. The effective date of termination;2. The name of the person from whom service was terminated;3. The name and signature of the governmental affairs agent; andUpdated April, 2010 Page 211

4. The date of the notice.(d) A governmental affairs agent who files a notice of termination pursuant to (a) above,and who no longer is conducting activities to influence legislation, regulation, or governmentalprocesses on behalf of any person, shall return the name tag issued to the agent pursuant toN.J.A.C. 19:25-20.6 at the time the agent files his or her notice of termination.19:25-20.8 Voluntary statements(a) Governmental affairs agents filing pursuant to N.J.S.A. 52:13C-35 a voluntary noticeof representation, a voluntary quarterly report, or a voluntary notice of termination shall utilizethe forms prescribed by the Commission.(b) Such statements shall be marked by the governmental affairs agent as "voluntaryfiling."(c) Voluntary filings pursuant to this section are exempt from the fees provided inN.J.A.C. 19:25-20.19.19:25-20.9 Annual report(a) Any lobbyist or governmental affairs agent who or which receives receipts of morethan $2,500 or makes expenditures of more than $2,500 in any calendar year for the purpose ofcommunication with or providing benefits to any member of the Legislature, legislative staff, theGovernor, the Governor's staff, or an officer or staff member of the Executive Branch, for thepurpose of influencing legislation, regulations or governmental processes, or for the purpose ofcommunication with the general public, shall file with the Commission, not later than February15th of each year, an annual report of receipts and expenditures for the previous calendar year onforms supplied by the Commission.(b) A governmental affairs agent retained by or representing more than one lobbyistshall, for purposes of determining aggregate threshold expenditure figures pursuant to thissection, include receipts and expenditures made on behalf of all of the lobbyists by whom thegovernmental affairs agent is employed.19:25-20.9A Annual report of communication with the general public(a) Any person other than a governmental affairs agent or lobbyist who receivescontributions or makes expenditures for the purpose of communication with the general publicshall be required to file and certify the correctness of an annual report of such contributions orexpenditures in the same manner as governmental affairs agents if the contributions orexpenditures made, incurred or authorized by the person for the purpose of communication withthe general public exceed in the aggregate $2,500 in any year.Updated April, 2010 Page 212

(b) Any person who receives contributions or makes expenditures for the purpose ofcommunication with the general public pursuant to (a) above shall make or obtain and maintainfor a period of three calendar years following the year of the communication with the generalpublic all records and documents relating to the communication with the general public. Therecords and documents shall include, but not be limited to, checks, bank statements, contractsand receipts to support the information filed in the annual report filed pursuant to (a) above,except that a record or document of any single expenditure in an amount of $5.00 or less may beexcluded from this requirement.19:25-20.10 Receipts(a) The following receipts of a lobbyist or governmental affairs agent, which relate tocommunication with, or providing benefits to, any member of the Legislature, legislative staff,the Governor, the Governor's staff, or an officer or staff member of the Executive Branch, whichrelate to influencing legislation, regulations, or governmental processes, or to communicationwith the general public, shall be included in the annual report:1. Fees, salary, allowances or other compensation paid to a governmental affairsagent. Receipts required to be reported pursuant to this paragraph shall bedetailed as to amount, from whom received and for what purpose. A law firm,advertising agency, public relations firm, accounting firm or similarorganization which spends only a portion of its time in legislative orregulatory activity, in influencing governmental processes, or forcommunication with the general public on behalf of a lobbyist shall berequired to report only that portion of its fees as are related to influencinglegislation, influencing regulation, influencing governmental processes, or forcommunication with the general public.2. Contributions, loans (except for loans made in the ordinary course of businesson substantially the same terms as those prevailing for comparabletransactions with other persons) or membership fees or dues received by alobbyist. Such contributions, loans, fees or dues received by a lobbyist arereportable if they are made to a lobbyist whose major purpose is to influencelegislation, influence regulation, influence governmental processes, orconduct communication with the general public. For purposes of thisparagraph, a lobbyist shall be deemed to be engaged in influencing legislation,influencing regulation, influencing governmental processes, or conductingcommunication with the general public, as its major purpose for any calendaryear in which expenditures related to such activity constitute more than 50percent of its total expenditures for all purposes. If, under the above test, it isnot the major purpose of the lobbyist to influence legislation, influenceregulation, influence governmental processes, or conduct communication withthe general public, the contributions, loans, fees and dues received by thelobbyist are not reportable by such organization, unless made to the lobbyistwith the specific intent that the contributions, loans, fees or dues be employedto influence legislation, influence regulation, influence governmentalUpdated April, 2010 Page 213

processes, or conduct communications with the general public (in which casethey are reportable as outlined below). If the major purpose of the lobbyist isto engage in influencing legislation, influencing regulation, influencinggovernmental processes, or conducting communication with the generalpublic, the contributions, loans, membership fees or dues received by thelobbyist shall be reported hereunder in the aggregate in the same proportion asthe activities of the lobbyist are related to influencing legislation, influencingregulation, influencing governmental processes, or conducting communicationwith the general public, along with the name and address of the contributor(s)whose contribution(s), allocated as outlined above, aggregate more than$100.00 during the calendar year.Example 1: Trade Association XYZ engages in a wide range of activities,including trade shows, public relations, newsletters to its members, etc., and influencinglegislation. This activity is done through a paid contract governmental affairs agent in Trentonas well as by communications by employees of the Trade Association. XYZ expends over$2,500 during the course of the calendar year on this lobbying activity, although this expenseconstitutes less than 50 percent of its total expenditures for all purposes for that year. TradeAssociation XYZ is a lobbyist required to file an annual report. However, it need not report itscontributions.Example 2: Trade Association EFG has the same fact situation as above, exceptthat Trade Association EFG's lobbying expenses constitute more than 50 percent (for example,80 percent) of its expenditures for all purposes for the year. EFG must file an annual report as alobbyist, including therein an aggregate allocated figure for lobbying contributions made to it (80percent of each contribution must be allocated to lobbying for reporting purposes; the aggregateis then reported). EFG must also report the name and address of all those contributors whosecontributions, after being allocated to lobbying, exceed $100.00.19:25-20.10A Contingent fees, prohibitedA governmental affairs agent shall not enter into any agreement, arrangement, orunderstanding under which the governmental affairs agent's compensation, or any portionthereof, is made contingent upon the success of any attempt to influence legislation, influenceregulation, or influence a governmental process.19:25-20.11 Expenditures(a) The following expenditures of a lobbyist or governmental affairs agent which relateto communication with, or providing benefits to, any member of the Legislature, legislative staff,the Governor, the Governor's staff, or an officer or staff member of the Executive Branch, whichrelate to influencing legislation, regulations, or governmental processes, or to communicationwith the general public, shall be reported in the annual report, and shall be listed in the aggregateby category:Updated April, 2010 Page 214

1. Fees, allowances, retainers, salary or other compensation paid by a lobbyist toa governmental affairs agent. Compensation required to be reported pursuantto this paragraph shall be detailed as to amount, to whom paid and for whatpurpose and shall include consulting, legal or other fees, for servicesperformed or to be performed, as well as expenses incurred in rendering suchservices. In the case of a volunteer, the above calculation shall not includeany calculation of the value of the time for such volunteer, but shall includeonly that amount reimbursed to the volunteer for expenditures related toactivities to influence legislation, influence regulation, influencegovernmental processes, or related to communication with the general publicon behalf of the lobbyist.2. Pro rata share of salary or other compensation paid to an employee of anyorganization whose activities on behalf of that organization qualify him or heras a governmental affairs agent.Example 1: Jones engages in lobbying activity in New Jersey and Pennsylvaniafor ABC Corporation. He spends one-half of his time in lobbying activity in New Jersey. Jones'total salary, as reported on his W- 2 form, is $30,000 per year. Since more than 20 hours of histime is spent on lobbying in New Jersey, Jones is a governmental affairs agent for ABCCorporation and one-half of his salary, $15,000, is allocable to lobbying. ABC Corporation is areporting lobbyist and must include this amount as an expense.Example 2: Smith, another ABC Corporation employee, has spent less than 20hours of his time on direct lobbying on behalf of his employer, and therefore none of his salary isreportable by ABC Corporation.3. Contributions or membership fees or dues paid by the lobbyist, except thatsuch contributions or fees shall not be deemed to be related to influencinglegislation, influencing regulation, influencing governmental processes, orconducting communication with the general public, for the purpose ofreporting under the Act and this subchapter unless made to a governmentalaffairs agent with the specific intent to influence legislation, influenceregulation, influence governmental processes, or conduct communication withthe general public or unless made to a lobbyist whose major purpose is toengage in influencing legislation, influencing regulation, influencinggovernmental processes, or conducting communication with the generalpublic. For the purpose of this paragraph, a lobbyist shall be deemed to beengaged in influencing legislation, influencing regulation, influencinggovernmental processes, or conducting communication with the generalpublic as its major purpose for any calendar year in which expendituresrelated to such activity constitute more than 50 percent of its totalexpenditures for all purposes. Such contributions, fees and dues (other thanthose made with the specific intent to influence legislation, or influenceregulation) made by a lobbyist to an organization, association or union, shallbe reportable hereunder in the same proportion as the activities of theUpdated April, 2010 Page 215

organization, association or union are related to influencing legislation,influencing regulation, influencing governmental processes, or conductingcommunication with the general public. Contributions, fees or dues made withthe specific intent to influence legislation, influence regulation, influencegovernmental processes, or conduct communication with the general public,or all of the foregoing, shall be reported in full. Contributions, fees or duesrequired to be reported pursuant to this paragraph shall be reported in theaggregate, along with the name of any organization, association or union towhom the lobbyist made a contribution in excess of $100.00 for the calendaryear (when allocated as set forth above) as well as the date of eachcontribution, fee or dues.4. Costs of preparation and distribution of material related to influencinglegislation, influencing regulation, influencing governmental processes, orconducting communication with the general public, and paid for by a lobbyistor governmental affairs agent, including all disbursements for preparation anddistribution of printed materials, correspondence, flyers, publications, films,slides, audio and video recordings and video tapes.5. Travel and lodging related to influencing legislation, influencing regulation,influencing governmental processes, or conducting communication with thegeneral public, for the governmental affairs agent.6. Allocated cost of support personnel for the lobbyist or governmental affairsagent. The allocated cost of any support personnel for the lobbyist orgovernmental affairs agent shall be included hereunder if, in relation to theusual duties of their employment, such personnel, individually, spend, overthe course of the reporting year 450 hours in activity supporting the activity ofthe lobbyist or governmental affairs agent in influencing legislation,influencing regulation, influencing governmental processes, or conductingcommunication with the general public. The term “support personnel” shallinclude costs related to the communication by an expert or employee, otherthan a governmental affairs agent, when the communication is made in thecompany of a governmental affairs agent for the sole purpose of providingtechnical or expert advice.Example: Smith is in the government affairs department of ABC Corporation, areporting lobbyist, and spends all of her time engaged in activity related to lobbying. Brown, hersecretary, spends his time doing work supporting Smith's activities. Jones, an analyst in thefinancial department at ABC Corporation, spends 50 percent of his time analyzing legislation forSmith and preparing memoranda to be used in Smith's lobbying activity. King, an attorney inABC's legal department, does some drafting of proposed legislation for Smith. Over the courseof the year, however, this accounts for less than 450 hours of his time at work. Ford spends onethirdof her time preparing testimony on governmental processes for Smith. ABC Corporation,in its annual report, must include Smith's full salary (under (a)2 above), as well as Brown's fullUpdated April, 2010 Page 216

salary, one-half of Jones' salary, and one-third of Ford's full salary, as the cost of supportpersonnel. None of King's salary will have to be included on ABC's report.(b) The following expenditures of a lobbyist or governmental affairs agent which relateto communication with, or providing benefits to, any member of the Legislature, legislative staff,the Governor, the Governor's staff, or an officer or staff member of the Executive Branch("benefit recipient") shall be reported in the Annual Report and shall be listed in the aggregate bycategory, except that if the aggregate expenditures on behalf of any benefit recipient exceed$25.00 per day, or exceed $200.00 per calendar year, the expenditures, together with the nameand office held of the intended recipient of the benefit, shall be stated in detail and shall includethe date and type of each expenditure providing a benefit, and either the reasonable commercialvalue of the benefit as provided in N.J.A.C. 19:25-20.12 with a description of the benefitsufficient for determining its reasonable commercial value, or if the cost is greater than thereasonable commercial value, the cost of the benefit to the lobbyist or governmental affairs agentand the name and address of any person or entity to whom the lobbyist or governmental affairsagent incurred any cost or obligation for providing the benefit.1. Entertainment, including, but not limited to, disbursements for sporting,theatrical and musical events provided to any member of the Legislature,legislative staff, the Governor, the Governor's staff, or an officer or staffmember of the Executive Branch, and paid for by a lobbyist or governmentalaffairs agent.2. Food and beverages provided to any member of the Legislature, legislativestaff, the Governor, the Governor's staff, or an officer or staff member of theExecutive Branch, paid for by a lobbyist or governmental affairs agent. Alsoincluded are payments by lobbyists or governmental affairs agents for food orbeverages for any member of the Legislature, legislative staff, the Governor,the Governor's staff, or an officer or staff member of the Executive Branch atconferences, conventions, banquets or other similar functions. This paragraphshall not apply to the food and beverages provided to an invited speaker whois a member of the Legislature, legislative staff, the Governor, the Governor'sstaff, or an officer or staff member of the Executive Branch, when the foodand beverages are provided to all persons who attend the convention, banquet,or other similar function. “Invited speaker” shall mean a person who isannounced as a speaker in advance of the convention, banquet, or othersimilar function, and shall not include a person who is merely identified andintroduced to persons attending the event.3. Travel and lodging expenses paid for or provided by a lobbyist orgovernmental affairs agent on behalf of any member of the Legislature,legislative staff, the Governor, the Governor's staff, or an officer or staffmember of the Executive Branch.Updated April, 2010 Page 217

4. Honoraria paid to any member of the Legislature, legislative staff, theGovernor, the Governor's staff, or an officer or staff member of the ExecutiveBranch by a lobbyist or governmental affairs agent.5. Loans to any member of the Legislature, legislative staff, the Governor, theGovernor's staff, or an officer or staff member of the Executive Branch from alobbyist or governmental affairs agent except for loans from financialinstitutions made in the ordinary course of business on substantially the sameterms as those prevailing for comparable transactions with other persons.6. Gifts to any member of the Legislature, legislative staff, the Governor, theGovernor's staff, or an officer or staff member of the Executive Branchincluding, but not limited to, material goods or other things of value.(c) For purposes of reporting under the Act or this subchapter, when an expenditureincluded in (b) above is made to a member of the immediate family of any member of theLegislature, legislative staff, the Governor, the Governor's staff, or an officer or staff member ofthe Executive Branch, such expenditure shall be deemed to be made on behalf of the member ofthe Legislature, legislative staff, the Governor, the Governor's staff, or the officer or staffmember of the Executive Branch whose family member received it. A member of the immediatefamily shall mean a spouse, child, parent, or sibling residing in the same household, or anydependent children.19:25-20.12 Valuation of contributions and expendituresWhere a contribution of goods or services is made to a lobbyist or governmental affairsagent to influence legislation, to influence regulation, to influence governmental processes, or toconduct communication with the general public, the value of such receipt shall be its reasonablecommercial value to the lobbyist or governmental affairs agent receiving it. Where anexpenditure of goods or services, including travel, is made by a lobbyist or governmental affairsagent to any member of the Legislature, legislative staff, the Governor, the Governor's staff, oran officer or staff member of the Executive Branch ("benefit recipient"), the value of theexpenditure shall be its reasonable commercial value to the benefit recipient.19:25-20.13 Notice of lobbying benefit(a) A lobbyist or governmental affairs agent shall provide a written benefit notice,certified as correct by the lobbyist or governmental affairs agent, to any member of theLegislature, legislative staff member, Governor, Governor's staff member, or an officer or staffof the Executive Branch ("benefit recipient") who has received from that lobbyist orgovernmental affairs agent a benefit required to be reported on the lobbyist's or governmentalaffairs agent's Annual Report pursuant to N.J.A.C. 19:25-20.14, and the benefit notice shallinclude the same information as required on the Annual Report.(b) The certified benefit notice shall be transmitted by the lobbyist or governmentalaffairs agent to the benefit recipient no later than February 1st of the year following the calendarUpdated April, 2010 Page 218

year in which the benefit was received. Proof of service of the benefit notice shall be obtainedand maintained for a period of at least three years.(c) In the event that a lobbyist or governmental affairs agent has provided a benefitrecipient with more than one benefit during a preceding calendar year, the lobbyist orgovernmental affairs agent may include all such benefits in a single written notice provided tothe benefit recipient.(d) In the event that a lobbyist or governmental affairs agent receives reimbursementfrom any benefit recipient for the reasonable commercial value of any benefit required to bereported on its Annual Report pursuant to N.J.A.C. 19:25-20.14, the lobbyist or governmentalaffairs agent shall report the receipt and amount of such reimbursement in the Annual Report inwhich the benefit is required to be reported. The making of such a reimbursement does notremove or alter the requirement that the lobbyist or governmental affairs agent report theexpenditure and the benefit recipient on its Annual Report pursuant to N.J.A.C. 19:25-20.14.19:25-20.14 Contents of annual report(a) The annual report shall contain the following:1. Name, business address, telephone number of the reporting lobbyist orgovernmental affairs agent;2. Name, address and occupation or business of governmental affairs agent(s)engaged by the reporting lobbyist, or name, address and occupation orbusiness of lobbyist(s) engaging the reporting governmental affairs agent,whichever is applicable;3. The particular items of legislation, regulation, or governmental processes andany general category or type of legislation, regulation, or governmentalprocesses regarding which the governmental affairs agent or lobbyistinfluenced legislation, influenced regulation, or influenced governmentalprocesses during the calendar year, except that a governmental affairs agentwho has provided this information in his or her notice of representation andquarterly reports may satisfy this requirement by so indicating on the annualreport;4. Receipts received by the governmental affairs agent or lobbyist as set forth inN.J.A.C. 19:25-20.10; and5. Expenditures made by the lobbyist or governmental affairs agent, as set forthin N.J.A.C. 19:25-20.11.(b) With respect to any specific event, such as a reception, where expenditures requiredto be reported pursuant to N.J.A.C. 19:25-20.11(b) in the aggregate exceed $100.00, the reportshall include the date, type of expenditure, amount of expenditure and to whom paid. AnyUpdated April, 2010 Page 219

expenditure in excess of $5.00 made to provide a benefit pursuant to N.J.A.C. 19:25- 20.11(b) toa member of the Legislature, legislative staff, the Governor, member of the Governor's staff, oroffices or staff members of the Executive Branch present, attending or participating in the eventwith the actual or constructive knowledge of the lobbyist or governmental affairs agent shall beincluded in the calculation of the per day, or per calendar year, thresholds contained in N.J.A.C.19:25-20.11(b).(c) A governmental affairs agent retained by or representing more than one lobbyist shallinclude in his or her annual report receipts received from and expenditures made on behalf of alllobbyists by whom it is employed.(d) An individual who is a governmental affairs agent and who serves as a member ofany independent State authority, county improvement authority, or municipal utilities authority,or as a member from New Jersey on an interstate or bi-state authority, or as a member of anyboard or commission established by statute or resolution or by executive order of the Governoror by the Legislature or by any agency, department or other instrumentality of the State shalldisclose such service, including the name of the authority, board or commission, and the dateupon which his or her term as a member thereof expires, in the governmental affairs agent'sannual report.19:25-20.15 Audit by Commission; recordkeeping(a) All annual reports of lobbyists or governmental affairs agents required to be filedpursuant to the Act and this subchapter shall be subject to review and audit by the Commission.(b) Each lobbyist and governmental affairs agent subject to reporting under the Act shallmake or obtain and maintain for a period of three calendar years following the year of his, her, orits activity all records and documents relating to his, her, or its activity in influencing legislation,influencing regulation, influencing governmental processes, or communicating with the generalpublic, including, but not limited to, checks, bank statements, contracts and receipts, so as toprovide evidence to support statements in reports filed with the Commission and to permit anadequate basis for auditing by the Commission, except that a record or document of any singleexpenditure in an amount of $5.00 or less may be excluded from this requirement.(c) The Commission shall conduct random audits of records kept and preservedpursuant to this section.19:25-20.16 Responsibilities for filing annual reports; certification(a) The lobbyist and the governmental affairs agent shall have the responsibility of filingannual reports.(b) Each organization which itself has a filing obligation as a lobbyist pursuant to thissubchapter is not relieved of that obligation by virtue of the fact that a governmental affairs agentengaged, designated or employed by it has a filing obligation; except that a lobbyist required tofile an annual report pursuant to the Act may designate a governmental affairs agent in itsUpdated April, 2010 Page 220

employ or otherwise engaged or used by it to file the annual report on its behalf, provided suchdesignation is made in writing by the lobbyist on a form prescribed by the Commission, isacknowledged in writing by the designated governmental affairs agent and is filed with theCommission on or before the date on which the annual report of the lobbyist is due for filing, andfurther provided that any violation of the Act shall subject both the lobbyist and the designatedgovernmental affairs agent to the penalties provided by the Act and this subchapter.(c) Each governmental affairs agent which has a filing obligation pursuant to thissubchapter is not relieved of that obligation by virtue of the fact that the organization engaging,retaining or employing it has or may have a filing obligation as a lobbyist or that thegovernmental affairs agent has been designated by which organization to file an annual report forit; except that any lobbyist organization required to file a report pursuant to the Act whichemploys or otherwise engages or uses a governmental affairs agent or agents whose onlyreportable lobbying activity is on behalf of such organization, may file a single annual reportrequired under N.J.A.C. 19:25-20.14 on behalf of its own lobbying activity and the activities ofsuch governmental affairs agent or agents, provided that any violation of the Act shall subject thelobbyist alone to the penalties provided by the Act and this subchapter.(d) Each report filed with the Commission by a lobbyist or governmental affairs agentshall be certified as to the correctness of the report by the governmental affairs agent or, in thecase of a lobbyist, by a governmental affairs agent employed by the lobbyist or a responsiblefinancial or government affairs officer of the lobbyist.19:25-20.17 Advisory opinionsThe Commission may render advisory opinions as to the applicability of the Act and thissubchapter to a given specific set of facts and circumstances.19:25-20.18 Complaint proceedings; investigations; penalties(a) The term "violation" shall mean the failure to report timely or in the mannerprescribed by the Act and this subchapter, or the failure to make and maintain a record asprescribed by the Act and this subchapter, of any event or transaction required to be reported orrecorded by the Act or this subchapter.(b) Upon receiving evidence of any violation of the Act or this subchapter, theCommission shall have the power to make investigations and bring complaint proceedings, toissue subpoenas for the production of witnesses and documents and to hold or cause to be held,by the Office of Administrative Law, hearings upon such complaint.(c) In addition to any other penalty provided by law, any person who is found to havecommitted a violation of the Act or this subchapter shall be liable for a civil penalty of up to$1,000 for that violation, which penalty may be collected in a summary proceeding pursuant tothe "Penalty Enforcement Law of 1999" (N.J.S.A. 2A:58-10 et seq.).Updated April, 2010 Page 221

19:25-20.18A Opportunity for hearingIn any penalty proceeding undertaken by the Commission pursuant to N.J.S.A. 52:13C-23.1, each respondent shall be afforded the opportunity for a hearing pursuant to the provisionsof the Administrative Procedure Act, N.J.S.A. 52:14B-1 et seq. and 52:14F-1 et seq., andN.J.A.C. 1:1.19:25-20.18B Default for failure to answer complaintIn any penalty proceeding undertaken by the Commission pursuant to N.J.S.A. 52:13C-23.1 or other statutory authority, the Commission may enter a Final Decision, including penalty,against any respondent who fails to file with the Commission a written responsive pleading oranswer within 20 days after service on such respondent in conformity with the rules of the NewJersey Office of Administrative Law of a copy of a complaint alleging a specific violation of thelaw within the Commission's jurisdiction to enforce.19:25-20.18C One-year post-employment prohibition on lobbying(a) As used in this section, "person" means any member of the Legislature, theGovernor, or the head of a principal department of the Executive Branch.(b) No person, within one year next subsequent to the termination of the office oremployment of such person, shall register as a governmental affairs agent.(c) Any person who knowingly or willfully violates the provisions of (b) above shall besubject to a penalty of not more than $10,000 and shall be barred from engaging in activity as agovernmental affairs agent for up to an additional five years.(d) Upon receiving evidence of any violation of this section, the Commission shall havethe power to hold, or cause to be held, hearings about the violation and, upon finding any personto have committed a violation, to assess such penalty, within the limits set forth in (c) above, asit deems proper under the circumstances, which penalty may be collected in a summaryproceeding pursuant to the "Penalty Enforcement Law of 1999" (N.J.S.A. 2A:58-10 et seq.).19:25-20.19 Nonresident governmental affairs agents or lobbyists(a) Any governmental affairs agent or lobbyist not a resident of this State, or not acorporation of this State or authorized to do business in this State, shall file with theCommission, before attempting to influence legislation, influence regulation, or influencegovernmental processes, its consent to service of process at an address within this State, or byregular mail at an address outside this State.(b) Any person other than a governmental affairs agent or lobbyist who receivescontributions or makes expenditures for the purpose of communication with the general publicand not a resident of this State, or not a corporation of this State or authorized to do business inthis State, shall file with the Commission, before engaging in communication with the generalUpdated April, 2010 Page 222

public, its consent to service of process at an address within this State, or by regular mail at anaddress outside this State.19:25-20.20 Annual fee(a) Each governmental affairs agent who is an individual and whose activities are subjectto the Act during any part of a 12-month period commencing on January 1 and ending on thefollowing December 31 shall pay an annual fee of $425.00, and shall submit with the agent’sannual fee two identical, two-by-two-inch, color photographs taken of the governmental affairsagent within six months showing a full-face, front view of the agent with a plain white or offwhitebackground.(b) In the event that the governmental affairs agent is a partnership, committee,association, corporation, or other organization or group of persons, the annual fee shall be$425.00 for each individual from the partnership, committee, association, corporation, or otherorganization or group of persons, who is required to wear a name tag pursuant to N.J.A.C. 19:25-20.6.(c) Payment of the annual fee set forth in (a) and (b) above shall be by check or moneyorder payable to "State of New Jersey, Election Law Enforcement Commission," and shall bemade no later than November 15th for the 12-month period which begins on the followingJanuary 1.(d) In the case of a governmental affairs agent who files an initial notice ofrepresentation, the annual fee shall be due upon the filing of such initial notice of representation,and subsequent annual fees shall be due pursuant to (c) above.(e) No annual fee shall be required if the governmental affairs agent is an organizationthat is exempt from sales and use taxes under section 9(b) of chapter 30 of the laws of 1966, asamended (N.J.S.A. 54:32-9(b)).Updated April, 2010 Page 223

State of New JerseySTATE ETHICS COMMISSIONCHRIS CHRISTIE PO Box 082 ANDREW S. BERNS, Esq.Governor Trenton, NJ 08625-0082 Chairwww.nj.gov/ethicsKIM GUADAGNOPETER J. TOBER, Esq.Lt. GovernorExecutive DirectorTel: (609) 292-1892(888) 223-1355 in NJFax: (609) 633-9252Email: ethics@ethics.state.nj.usUNIFORM ETHICS CODEFOREWORDPursuant to N.J.S.A. 52:13D-23, the State Ethics Commission has adopted this UniformEthics Code to govern and guide the conduct of State officers and employees and special Stateofficers and employees in State agencies in the Executive branch of State Government.The Uniform Ethics Code shall be the primary code of ethics for State agencies. It shallbe supplemented by an agency code of ethics formulated with respect to the particular needs andproblems of the agency to which said code is to apply. Each agency, in consultation with theAttorney General’s Office, must review its enabling legislation to ensure that any agencyspecificconflicts provisions are included in any supplemental agency code. An agency codemust be approved by the Commission.

New Jersey Uniform Ethics Code, February 2011TABLE OF CONTENTSI. DEFINITIONS ......................................................................................................... 3II. GENERAL STANDARDS OF CONDUCT ........................................................... 5III. ACCEPTANCE OF GIFTS ..................................................................................... 6IV. ATTENDANCE AT EVENTS .............................................................................. 7V. POLITICAL ACTIVITY .........................................................................................8VI. OUTSIDE ACTIVITIES AND BUSINESS INTERESTS .................................... 8VII. OFFICIAL STATIONERY ................................................................................... 10VIII. POST-EMPLOYMENT RESTRICTIONS .......................................................... 10IX. RECUSAL ON OFFICIAL MATTERS ............................................................. .12X. CONTRACTS ..................................................................................................... .13XI. RETIREMENT GIFTS ......................................................................................... 15XII. COMPENSATION FOR PUBLISHED WORKS ................................................ 15XIII. FAMILY MEMBERS – CONFLICTS OF INTEREST ....................................... 16XIV. CASINO-RELATED FAMILY MEMBER RESTRICTIONS ............................ 17XV. REPORTING COMPLAINTS ............................................................................ 18XVI. PENALTIES ......................................................................................................... 18APPENDICIES .............................................................................................................. 202

New Jersey Uniform Ethics Code, February 2011I. DEFINITIONSAs used in this Uniform Ethics Code, and unless a different meaning clearly appears from thecontext, the following terms shall have the following meanings.“Commission” means the State Ethics Commission, established in but not of the Department ofLaw and Public Safety pursuant to N.J.S.A. 52:13D-21.“Conflicts Law” means the New Jersey Conflicts of Interest Law, N.J.S.A. 52:13D-12 et seq.“Ethics Liaison Officer” means the individual(s) designated by the agency head to assist theState Ethics Commission in implementing and enforcing the Conflicts Law and related ethicscodes.“Event” means a meeting, conference, seminar, speaking engagement, symposium, trainingcourse, ground-breaking, ribbon-cutting, meal, open house, cocktail party, fundraiser, holidayparty, social function, or similar event that takes place away from the State official’s worklocation, is sponsored or co-sponsored by a supplier or a non-State government source and theinvitation for which is extended to the State official because of his or her official position.“Gift” means any fee, commission, service, compensation, gratuity, or other thing of value ofany kind. If an item has more than a nominal monetary value, it will be characterized as a gift.A gift includes admission to an event for which a member of the general public would becharged, a meal, transportation, or offer of employment.“Head of a State agency” means, in the case of the Executive branch of government, except withrespect to interstate agencies, the department head or, if the agency is not assigned to adepartment, the Governor.“Immediate Family Member” means an individual’s spouse, child, parent or sibling residing inthe same household. N.J.S.A. 52:13D-13(i).“Interest” means (1) the ownership or control of more than 10% of the profits or assets of a firm,association, or partnership, or more than 10% of the stock in a corporation for profit other than aprofessional service corporation organized under the "Professional Service Corporation Act,"P.L. 1969, c. 232 (C. 14A:17-1 et seq.); or (2) the ownership or control of more than 1% of theprofits of a firm, association, or partnership, or more than 1% of the stock in any corporation,which is the holder of, or an applicant for, a casino license or in any holding or intermediarycompany with respect thereto, as defined by the “Casino Control Act,” P.L. 1977, c. 110 (C.5:12-1 et seq.). The provisions of this act governing the conduct of individuals are applicable toshareholders, associates or professional employees of a professional service corporationregardless of the extent or amount of their shareholder interest in such a corporation.“Interested party” means: 1. Any person, or employee, representative or agent thereof, who is ormay reasonably be anticipated to be subject to the regulatory, licensing or supervisory authority3

New Jersey Uniform Ethics Code, February 2011of the State official's agency; 2. Any supplier, or employee, representative or agent thereof; 3.Any organization that advocates or represents the positions of its members to the State official'sagency; or 4. Any organization a majority of whose members are as described in paragraphs 1through 3 above.“Person” means any natural person, association or corporation.“Published work” means any tangible medium of expression, including, but not limited to,literary, pictorial, graphic and sculptural matter; sound recordings; and software. N.J.A.C. 19:61-6.2.“Relative,” as used in section XIII, means an individual’s spouse, and the individual’s or his/herspouse’s parent, child, sibling, aunt, uncle, niece, nephew, grandparent, grandchild, son-in-law,daughter-in-law, stepparent, stepchild, stepbrother, stepsister, half-brother, or half-sister, whetherthe relative is related to the individual or the individual’s spouse by blood, marriage or adoption.“Special State officer or employee” means (1) any person holding an office or employment in aState agency, excluding an interstate agency, for which office or employment no compensation isauthorized or provided by law, or no compensation other than a sum in reimbursement ofexpenses, whether payable per diem or per annum, is authorized or provided by law; (2) anyperson, not a member of the Legislature, holding a part-time elective or appointive office oremployment in a State agency, excluding an interstate agency, or (3) any person appointed as aNew Jersey member to an interstate agency the duties of which membership are not full-time.“State agency” means any of the principal departments in the Executive branch of the StateGovernment, and any division, board, bureau, office, commission or other instrumentality withinor created by such department, and, to the extent consistent with law, any interstate agency towhich New Jersey is a party and any independent State authority, commission, instrumentality oragency. A county or municipality shall not be deemed an agency or instrumentality of the State."State officer or employee" means any person, other than a special State officer or employee (1)holding an office or employment in a State agency, excluding an interstate agency, other than amember of the Legislature or (2) appointed as a New Jersey member to an interstate agency.“Supplier” means any person that is providing or is seeking to provide or may reasonably beexpected to provide goods and/or services to the State officer or employee’s or special Stateofficer or employee’s agency, including, but not limited to, consultants, vendors and lessors.“Unclassified office or position” means any office or position in the unclassified service of thecivil service of the Executive branch of State government.4

New Jersey Uniform Ethics Code, February 2011II. GENERAL STANDARDS OF CONDUCTIt is essential that the conduct of public officials and employees shall hold the respect andconfidence of the people. Public officials must, therefore, avoid conduct that is in violation oftheir public trust or that creates a justifiable impression among the public that such trust is beingviolated. Accordingly, State officers and employees and special State officers and employeesshall conform their conduct to the following standards.1. No State officer or employee or special State officer or employee should have any interest,financial or otherwise, direct or indirect, or engage in any business or transaction or professionalactivity, which is in substantial conflict with the proper discharge of his/her duties in the publicinterest.2. No State officer or employee or special State officer or employee should engage in any particularbusiness, profession, trade or occupation which is subject to licensing or regulation by a specificagency of State Government without promptly filing notice of such activity with theCommission.3. No State officer or employee or special State officer or employee should act in his/her officialcapacity in any matter wherein he/she has a direct or indirect personal financial interest thatmight reasonably be expected to impair his/her objectivity or independence of judgment.4. No State officer or employee or special State officer or employee should knowingly act in anyway that might reasonably be expected to create an impression or suspicion among the publichaving knowledge of his/her acts that he/she may be engaged in conduct violative of his trust asa State officer or employee or special State officer or employee.Misuse of Official Position or Information5. No State officer or employee or special State officer or employee should use or attempt to usehis/her official position to secure unwarranted privileges or advantage for him/herself or others.6. No State officer or employee or special State officer or employee, shall willfully disclose to anyperson, whether or not for pecuniary gain, any information not generally available to members ofthe public which he/she receives or acquires in the course of and by reason of his/her officialduties. No State officer or employee or special State officer or employee shall use for thepurpose of pecuniary gain, whether directly or indirectly, any information not generally availableto members of the public which he/she receives or acquires in the course of and by reason ofhis/her official duties.Representation/Appearance Before a State Agency7. No State officer or employee, nor any partnership, firm or corporation in which he/she has aninterest, nor any partner, officer or employee of any such partnership, firm or corporation, shallrepresent, appear for, or negotiate on behalf of, or agree to represent, appear for, or negotiate onbehalf of, any person or party other than the State in connection with any cause, proceeding,5

New Jersey Uniform Ethics Code, February 2011application or other matter pending before any State agency. Nothing contained herein shall bedeemed to prohibit any such partnership, firm or corporation from appearing on its own behalf.8. No special State officer or employee, nor any partnership, firm or corporation in which he/shehas an interest, nor any partner, officer or employee of any such partnership, firm or corporation,shall represent, appear for, or negotiate on behalf of, or agree to represent, appear for or negotiateon behalf of, any person or party other than the State in connection with any cause, proceeding,application or other matter pending before the particular office, bureau, board, council,commission, authority, agency, fund or system in which such special State officer or employeeholds office or employment.Nothing contained in this section shall be deemed to prohibit any State officer or employee orspecial State officer or employee from representing, appearing for or negotiating on behalf of, oragreeing to represent, appear for, or negotiate on behalf of, any person or party other than theState in connection with any proceeding:i. Pending before any court of record of this State,ii. In regard to a claim for compensation arising under chapter 15 of Title 34 of theRevised Statutes (Workers' Compensation),iii. In connection with the determination or review of transfer inheritance or estatetaxes,iv. In connection with the filing of corporate or other documents in the office of theSecretary of State,v. Before the Division on Civil Rights or any successor thereof,vi. Before the New Jersey State Board of Mediation or any successor thereof,vii. Before the New Jersey Public Employment Relations Commission or anysuccessor thereof,viii. Before the Unsatisfied Claim and Judgment Fund Board or any successor thereofsolely for the purpose of filing a notice of intention pursuant to P.L.1952, c.174,s.5 (C.39:6-65),orix. Before any State agency on behalf of a county, municipality or school district, orany authority, agency or commission of any thereof except where the State is anadverse party in the proceeding and provided he is not holding any office oremployment in the State agency in which any such proceeding is pending.III. ACCEPTANCE OF GIFTSNo State officer or employee or special State officer or employee shall accept any gift,favor, service or other thing of value related in any way to the State official’s public duties.Upon the recommendation of the Special Counsel for Ethics Review and Compliance, theCommission has adopted a zero tolerance policy for acceptance of gifts. (See Report of theSpecial Ethics Counsel to the Governor of the State of New Jersey, dated March 14, 2005.)Accordingly, any gift that is offered to or received by a State officer or employee or special Stateofficer or employee or, his/her spouse, immediate family member, partner or associate shall beimmediately reported to the agency’s Ethics Liaison Officer (“ELO”). Unless the State officer oremployee or special State officer or employee is permitted to receive the gift or thing of value in6

New Jersey Uniform Ethics Code, February 2011accordance with the Commission’s rules on attendance at events (see section IV), no Stateofficer or employee or special State officer or employee or, his/her spouse, immediate familymember, partner or associate shall accept, either directly or indirectly, any gift, favor, service orother thing of value related in any way to the State official’s public duties.The exceptions to the zero tolerance rules for acceptance of gifts are set forth below.1. Unsolicited gifts or benefits of trivial or nominal value, such as complimentary articles offered tothe public in general, and gifts received as a result of mass advertising mailings to the generalbusiness public may be retained by the recipient or the recipient's department for general use ifsuch use does not create an impression of a conflict of interest or a violation of the public trust.The receipt of such complimentary articles is not required to be reported to the ELO.2. A State officer or employee or special State officer or employee may receive a gift, favor, serviceor other thing of value from a vendor under the same terms and conditions as are offered or madeavailable to members of the general public.3. A State employee is permitted to give or receive a gift from a co-worker, a supervisor or asubordinate. The gift should not be excessive or inappropriate for a business environment. Suchgift shall not be reported to the ELO.4. In accordance with N.J.S.A. 52:13D-24, gift provisions do not apply to the acceptance ofcontributions to the campaign of an announced candidate for elective public office.The procedures for reporting receipt of a gift are set forth in Appendix A.IV. ATTENDANCE AT EVENTSAttendance at an event that is sponsored or co-sponsored by an entity other than the Statemust be approved by the agency’s ELO.A State employee must complete the form identified as “Request For Approval ForAttendance At Event,” prior to attendance.A State employee shall not attend an event in his or her official capacity unless alegitimate State purpose will be served.Costs associated with attendance at an event shall be paid or reimbursed in accordancewith N.J.S.A. 52:13D-24 and N.J.A.C. 19:61-6.1 et seq.A State employee is prohibited from accepting honoraria in connection with his/herattendance or participation at an event. N.J.S.A. 52:13D-24.A State employee is prohibited from accepting entertainment, or reimbursement forentertainment, that is collateral to an event, such as a golf outing, tickets to a sporting event or ameal taken other than in a group setting with all attendees present.7

New Jersey Uniform Ethics Code, February 2011The Commission’s rules on attendance at an event and the form that must be completedprior to attendance at an event are set forth in Appendix B.V. POLITICAL ACTIVITYUpon giving notice to the agency ELO, a State employee may be involved in politicalactivities unless:1. the State employee is prohibited from such activities by State or federal statute or agencyrule; or2. the political activity conflicts with the employee’s official duties.Pursuant to N.J.S.A. 52:13D-14 and N.J.S.A. 52:13D-24, a State employee may accept acontribution to the campaign of an announced candidate for elective public office provided thecontribution is not known to be given in lieu of a payment that is prohibited by the ConflictsLaw. Further, a State employee is subject to the Department of Personnel’s Administrative Codeprovisions governing political activity, N.J.A.C. 4A:10-1.2. Note that a State employee is notpermitted to serve as a campaign treasurer on any campaign that is subject to the jurisdiction ofthe Election Law Enforcement Commission.The Commission’s Guidelines on Political Activities and the provisions of N.J.A.C.4A:10-1.2 are set forth in Appendix C.VI. OUTSIDE ACTIVITIES AND BUSINESS INTERESTSNo State officer or employee or special State officer or employee should undertake anyemployment or service, whether compensated or not, which might reasonably be expected toimpair his/her objectivity and independence of judgment in the exercise of his/her official duties.A State officer or employee’s participation in any service, activity or employment that isoutside his/her official State duties may be prohibited by the Conflicts Law, other State orFederal law or regulation, or the code of ethics adopted by the employee’s agency. Accordingly,a State officer or employee shall obtain the approval of the ELO prior to engaging in any of thefollowing outside activities.1. Commencement of any business, trade, profession or other compensated employment,including the acceptance of compensation for a speech or published work;2. Uncompensated or volunteer work for or with any entity; or3. Holding office or title in the governing or advisory board of any entity.Notwithstanding the requirement to disclose outside employment and activities, a Stateagency may exempt disclosure of specific kinds of outside employment or activities if the agencyis satisfied that such activity or employment does not present a conflict of interest.8

New Jersey Uniform Ethics Code, February 2011A State officer or employee is not permitted to hold employment with, hold an interest in,or represent, appear for, or negotiate on behalf of a holder of or applicant for a casino licenseunless the Commission grants a waiver. A waiver is granted in circumstances where it isdetermined by the Commission that such casino activity will not interfere with theresponsibilities of the State officer or employee and will not create a conflict of interest or theappearance of such conflict. A special State officer or employee is prohibited from holding aninterest in or representing, appearing for or negotiating on behalf of a holder of or applicant for acasino license, or any holding or intermediary company with respect thereto, in connection withany matter. However, a special State officer or employee without responsibility for mattersaffecting casino activity may hold employment with a casino license holder or applicant and, ifso employed, may hold an interest in or represent, appear for or negotiate on behalf of his/hercasino employer. N.J.S.A. 52:13D-17.2(b).All State officers and employees shall complete the Outside Activity Questionnaireattached to this document as Appendix D, in accordance with the procedures adopted by his/heragency. These procedures shall, at a minimum, require that each current employee complete thequestionnaire and that each new employee complete the questionnaire upon commencement ofemployment with the agency. The procedures shall also require that a State officer or employeeamend his/her Outside Activity Questionnaire whenever there is a change in the employee’soutside activity or State employment. A State agency shall require disclosure of additionalinformation regarding the outside activities of its employees as necessary to address theparticular needs and problems of the agency.The agency ELO shall review all outside activity questionnaires and determine whetherthe outside activity is permissible in accordance with the Conflicts Law, the Uniform EthicsCode, the agency code of ethics or any other authority. A State officer or employee may appealan agency ELO’s decision to disapprove an outside activity. Such appeal shall be submitted inwriting to the Commission within 60 days of the employee’s receipt of the agency’s decision.The appeal shall cite the relevant section(s) of the Conflicts Law, Uniform Ethics Code, agencycode of ethics or other authority which supports the position of the employee that such outsideactivity should be permitted.Each State agency shall develop a Conflict of Interest questionnaire for special Stateofficers and employees of that agency. Each State agency shall develop a process for the reviewand retention of both Outside Activity Questionnaires and Conflict of Interest Questionnaires.The Commission’s Guidelines Governing Outside Activities are set forth in Appendix E.Blind TrustsA blind trust may be used by a State officer or employee, a special State officer oremployee, his/her spouse or domestic partner or dependent children to avoid conflicts situationscaused by financial interests. The trust must conform to the standards set forth in the Blind TrustGuidelines, Appendix F.9

New Jersey Uniform Ethics Code, February 2011VII. OFFICIAL STATIONERYOfficial stationery shall be used only in connection with the State agency’s officialbusiness. The limitations on use of official stationery also apply to personal stationery paid forby an officer or employee if it is imprinted with the agency office or the title of the State officeror employee.A State officer or employee or special State officer may not use official stationery topromote a candidate for elective office, endorse a State vendor or contractor, express a personalopinion on a matter that is not related to his/her official duties, or to promote his/her financial orother self-interest.Exceptions: A State officer or employee or special State officer or employee may useofficial stationery to write a letter of recommendation for, or respond to an inquiry about, acurrent or former colleague or employee. These permissible uses are only acceptable so long asthe use of official stationery does not create an impression that the State officer or employee isengaged in an unwarranted use of his/her position. For example, it would not be appropriate for aState employee to recommend an individual for inclusion in a program over which the Stateemployee has supervisory or regulatory authority. In addition, there must be a reasonableconnection between the officer's or employee's official duties and the use and purpose of theletter.A State agency may not use official stationery to solicit a contribution from anyinterested party. Solicitation of any other entity must be reviewed and approved by the agency'sELO.The Commission’s Guidelines with respect to the use of official stationery are set forth inAppendix G.Seeking Future EmploymentVIII. POST-EMPLOYMENT RESTRICTIONSState officers or employees who have direct and substantial contact with any interestedparties must refrain from circulating resumes or in any manner seeking employment with thoseindividuals or entities while still in State service. If an employee is solicited for potentialemployment by an entity with which he/she has direct and substantial contact, that solicitationmust be disclosed immediately to the employee's management and to the agency’s ELO.Employees who do not have direct and substantial contact with interested parties may circulateresumes and enter into discussions regarding potential employment with those individuals orentities so long as they avoid any situations that may give rise to an unwarranted advantage. Allemployees are cautioned that discussions, interviews, and negotiations shall not take place onState time.10

New Jersey Uniform Ethics Code, February 2011Lifetime BanAt no time subsequent to the termination of his/her office or employment in any Stateagency may a former State officer or employee or special State officer or employee represent,appear for, negotiate on behalf of, or provide information or services not generally available tomembers of the public, or agree to perform any of those activities, for any party other than theState in connection with a specific cause, proceeding, application or matter with which the Stateofficer or employee or special State officer or employee had been substantially and directlyinvolved at any time during the course of his/her office or employment. N.J.S.A. 52:13D-17.This lifetime ban applies not only to the State officer or employee or special State officer oremployee personally, but also to the partnership, firm or corporation under the followingcircumstances: (1) if the former State officer or employee or special State officer or employee isa shareholder, associate or professional employee of a firm organized as a professional servicecorporation or (2) if the former State officer or employee or special State officer or employeeowns or controls more than 10% of the stock of a corporation or more than 10% of the profits orassets of a firm, association or partnership.One-Year Ban – Certain State OfficialsIn accordance with the recommendation of the Special Counsel for Ethics Review andCompliance, a one-year ban on the activities described in this section shall apply to any head,deputy head or assistant head of any principal department, board, commission or authority, theSuperintendent of State Police, the Governor’s Chief of Staff, Chief of Management andOperations, Chief of Policy and Communications, Chief Counsel, Director of Communications,Policy Counselor, and any deputy or principal administrative assistant to any of theaforementioned members of the staff of the Office of the Governor.For one year after the termination of the State office or employment of any of theindividuals noted above, he/she shall not represent, appear for, or negotiate on behalf of, or agreeto represent, appear for, or negotiate on behalf of any person or party other than the State with orbefore any officer or employee of the State agency in which he/she served. The provisions ofthis subsection shall not apply to any partnership, firm or corporation in which he/she has aninterest or is employed, or to any partner, officer, director or employee of such partnership, firmor corporation. Nothing contained in this section shall prohibit a State agency from contractingwith a former State officer or employee to act on behalf of the State.In addition, the governor and each head of a principal department in the Executive branchare prohibited, for one year after the termination of office or employment, from registering as a“governmental affairs agent,” as that term is defined in N.J.S.A. 52:13C-20. N.J.S.A. 52:13C-21.4.Two-Year Casino Employment RestrictionN.J.S.A. 52:13D-17.2 sets forth post-employment restrictions applicable to State officersor employees subject to financial disclosure by law or executive order, and State officers oremployees or special State officers or employees with responsibility for matters affecting casinoactivities.11

New Jersey Uniform Ethics Code, February 2011Such persons, and members of their immediate families, are prohibited from holding,directly or indirectly, an interest in, or holding employment with, a casino licensee or applicantfor a casino license for a period of two years following the termination of their Stateemployment. In addition, such persons may not represent, appear for, or negotiate on behalf of acasino.If such person or a member of the person’s immediate family is employed by apartnership, firm or corporation providing professional services to a casino licensee or applicantor holding or intermediary company of the licensee or applicant, the entity may engage in casinorelatedmatters but the person or a member of the person’s immediate family must be screenedfrom these matters for a period of two years following the termination of the person’s Stateemployment.If such person holds an equity interest in such entity, or is the former Governor,Lieutenant Governor, or Attorney General or a member of the immediate family of one of theseindividuals, then the entity is also prohibited from representing, appearing for, or negotiating onbehalf of a casino licensee or applicant.WaiversIn accordance with N.J.S.A. 52:13D-17.2, the Commission may grant an exception fromthe above casino employment restrictions for a person’s immediate family member or anemployee who was terminated as a result of a reduction in force, (provided that the employee didnot hold a policy-making management position during the five years prior to termination ofemployment) whenever it determines that such waiver will not create a conflict of interest or theappearance of a conflict of interest.The Commission’s Guidelines with respect to Post-Employment Restrictions are set forthin Appendix H.IX. RECUSAL ON OFFICIAL MATTERSA State officer or employee or special State officer or employee is required to recusehim/herself on an official matter that involves any private sector individual, association,corporation or other entity that employed or did business with the State officer or employee orspecial State officer or employee during the one year prior to the employee’s commencement ofState service.A State officer or employee or special State officer or employee is required to recusehim/herself on an official matter if he/she had any involvement in that matter, other than onbehalf of the State, prior to commencement of his/her State service.A State official is required to recuse himself or herself from an official matter thatinvolves any individual, association, corporation or other entity from which the State officialreceived a campaign contribution, individually or in the aggregate, in an amount required to bereported by N.J.A.C. 19:25-10. Recusal is required regardless of whether the State official is12

New Jersey Uniform Ethics Code, February 2011elected to the office or position associated with the campaign contribution. The recusal shallremain in effect until the expiration of the term of office which the State official was seekingwhen the contribution was made.A State officer or employee or special State officer or employee is required to recusehim/herself on an official matter if he/she has a financial or personal interest that is incompatiblewith the proper discharge of his/her public duties.An incompatible personal or financial interest includes, but is not limited to, outsideemployment; a debtor/creditor relationship; a fiduciary relationship; a source of income; anymatter pertaining to or involving a relative or cohabitant; a relationship with a person providingfunds, goods or services without compensation; any matter pertaining to or involving a businessassociate or business investment; and a leadership role in a professional or trade organization,which interest might reasonably be expected to impair a State official's objectivity andindependence of judgment in the exercise of his/her official duties or might reasonably beexpected to create an impression or suspicion among the public having knowledge of his or heracts that he/she may be engaged in conduct violative of his/her trust as a State official.Upon determining that a State official shall recuse him/herself on any matter, the Stateofficial shall execute the recusal in writing, and shall have no involvement with the subjectmatter of the recusal. If a State official cannot determine whether he/she should execute a letterof recusal in any matter, the State official shall contact his/her agency ELO or the Commissionfor guidance. A State official shall seek the advice of the State agency's counsel, agency ELO orthe Commission as to the propriety of participation in a matter if any person requests that a Stateofficial recuse him/herself from that matter. Oral advice, followed up by a writing, shall beprovided by the agency's counsel, the agency ELO or the Commission to avoid delay. Oraladvice shall subsequently be memorialized by a writing or by inclusion in public minutes.The Commission’s regulations governing recusal, N.J.A.C 19:61-7.1 et seq., whichinclude the required elements for a written recusal, are set forth in Appendix I.X. CONTRACTSWith few exceptions, a State employee may not enter into a contractual agreement withthe State.An agency head, deputy head or assistant head is prohibited from engaging in any privatebusiness transactions with any employee in his/her agency.Limitation on contracting by State officer or employeePursuant to N.J.S.A. 52:13D-19, no State officer or employee shall knowingly undertakeor execute, in whole or in part, any contract, agreement, sale or purchase of the value of $25.00or more, made, entered into, awarded or granted by any State agency. The exceptions to thisprohibition are set forth below. As used in this section, State officer or employee also includeshis or her partners, any other person for the use or benefit of the State employee or on his or her13

New Jersey Uniform Ethics Code, February 2011account or any corporation which he/she controls or in which he/she owns or controls more than1% of the stock.Limitation on contracting by special State officer or employeePursuant to N.J.S.A. 52:13D-19, no special State officer or employee who has duties orresponsibilities in connection with the purchase or acquisition of property or services by the Stateagency where he/she is employed or an officer shall knowingly undertake or execute, in whole orin part, any contract, agreement, sale or purchase of the value of $25.00 or more, made, enteredinto, awarded or granted by that State agency. The exceptions to this prohibition are set forthbelow. As used in this paragraph, special State officer or employee also includes his/her partners,any other person for the use or benefit of the special State employee or on his/her account or anycorporation which he/she controls or in which he/she owns or controls more than 1% of thestock.The restrictions contained above shall apply to the contracts of interstate agencies to theextent consistent with law only if the contract, agreement, sale or purchase is undertaken orexecuted by a New Jersey member to that agency or by his/her partners or a corporation in whichhe/she owns or controls more than 1% of the stock.Permissible Contracts with the State(1) With the prior approval of the Commission, a State officer or employee or special Stateofficer or employee is permitted to enter into the following:(a) purchases, contracts, agreements or sales which are made or let after public noticeand competitive bidding or which, in accordance with public bidding laws or regulationsapplicable to other State agencies, may be made, negotiated or awarded without publicadvertising for bids, or(b) any contract of insurance entered into by the Director of the Division of Purchase andProperty pursuant to N.J.S.A. 52:27B-62.(2) A State officer or employee or a special State officer or employee or his partners or anycorporation or firm in which he/she owns or controls more than 1% of the stock, assets or profitsmay enter into a contract or agreement with a State agency where the contract or agreement is forthe development of scientific or technological discoveries or innovations in which the Stateagency has a property right, if the State agency has a procedure in its code of ethics forauthorizing these contracts or agreements that minimizes actual conflicts of interest, and the codeof ethics was approved in accordance with N.J.S.A. 52:13D-23, and the contract or agreementcomplies with that code procedure.(3) A State officer or employee or a special State officer or employee or his/her partners or anycorporation or firm in which he/she owns or controls more than 1% of the stock, assets or profitsmay enter into a rental agreement with a State agency which operates a facility which rents spaceor provides services to assist small businesses which employ 50 people or less, pursuant to thesame terms and conditions as those offered to members of the public generally.14

New Jersey Uniform Ethics Code, February 2011Please note that the Commission has never approved a request by a State officer oremployee, or special State officer or employee, to enter into a contract with his/her ownagency.The Commission’s Guidelines on Privatization, set forth in Appendix J, are applicable toa State employee’s participation in an open competitive bid process for the privatization ofservices currently being provided by his/her agency.XI. RETIREMENT GIFTSA gift can be given to a State employee upon his/her retirement from State service. Thereare specific limits to the value of a permissible retirement gift. A State employee shall refer toAppendix K for the provisions governing retirement gifts.XII. COMPENSATION FOR PUBLISHED WORKSA State officer or employee or special State officer or employee may not solicit, receive,or agree to receive, compensation from sources other than the State for published work(s) createdas part of his/her official duties on State time and/or using State resources.However, a State officer or employee or special State officer or employee, other than a“designated State officer,” (the Governor, cabinet-level officers and other principaladministrative officers of the State) may, in connection with any service, advice, assistance,appearance, speech or other matter related to his/her official duties, receive or agree to receive,whether directly or indirectly, from sources other than the State, reasonable fees for publishedworks on matters within his/her official duties not created on State time and/or using Stateresources.In addition, a State officer or employee or special State officer or employee may acceptcompensation from sources other than the State for published work(s) on matters unrelated tohis/her official duties created on his/her own time and with non-State resources.Before agreeing to accept or accepting any compensation from a source other than theState for any published work, a State officer or employee or special State officer or employeemust secure his/her State agency’s approval to do so.In determining whether to grant such approval, the State agency shall consider, amongother things, whether the compensation is offered by an interested party, and whether thepublished work uses or discloses information not generally available to the public. Thedetermination shall be consistent with applicable law and agency policy.No State officer or employee or special State officer or employee may use his/her officialtitle in soliciting compensation for a published work.L.The Commission’s Guidelines with respect to Published Works are set forth in Appendix15

New Jersey Uniform Ethics Code, February 2011XIII. FAMILY MEMBERS - CONFLICTS OF INTEREST1. No relative of the Governor may be employed in any unclassified office or positionwithin the State.2. No relative of a commissioner or department head may be employed in anyunclassified office or position within the department over which the department head exercisesauthority.3. A relative of an assistant or deputy department head may be employed in anunclassified office or position within the department in which the assistant or deputy serves,provided that he/she is not assigned to a position over which the assistant or deputy departmenthead exercises authority.4. A relative of a head or assistant head of a division within a department may beemployed in an unclassified office or position within the department in which the division heador assistant division head serves, provided that he/she is not assigned to a position over which theassistant or deputy department head exercises authority.5. A relative of an appointed member of a governing or advisory body of an independentauthority, board, commission, agency or instrumentality of the State may not be employed in anyoffice or position in that entity.6. A relative of an appointed New Jersey member of a governing body of a bi-state ormulti-state agency may not be employed in an office or position in that bi-state or multi-stateagency, unless otherwise permitted by law.7. No State officer or employee or special State officer or employee may supervisehis/her relative, or exercise any authority with regard to personnel actions involving his/herrelative8. Each State agency shall require State officers and employees and special State officersand employees to disclose information sufficient for the agency to determine whether theemployment of any individual within the agency is prohibited.CohabitationThe Commission has determined that the prohibition regarding personnel actions and thesupervision of family members, set forth in paragraph 7 above, is applicable to non-relatedindividuals who share the same household with the same financial interdependence that theCommission views as creating a conflict in spousal situations.16

New Jersey Uniform Ethics Code, February 2011Dating RelationshipIn the case of individuals involved in dating relationships, the Commission has foundviolations of the Conflicts Law in situations where the State employee had official involvementin a matter affecting the individual with whom he/she had a dating relationship. Accordingly, aState officer or employee or special State officer or employee shall not have any involvement inhis/her official capacity in any matter that pertains to or involves an individual with whom he/shehas a dating relationship.The Commission’s guidelines with respect to “Official Interactions with FamilyMembers/Cohabitants and Dating Relationships” is attached hereto as Exhibit M.XIV. CASINO-RELATED FAMILY MEMBER RESTRICTIONSConcurrent Employment RestrictionAn immediate family member of a State officer or employee, or of any “person,” asdefined at N.J.S.A. 52:13D-17.2(a), may not hold directly or indirectly, an interest in, holdemployment with, or represent, appear for, or negotiate on behalf of a holder of, or applicant for,a casino license, or any holding or intermediate company with respect thereto.However, an immediate family member of a State officer or employee or “person” maybe employed by a casino in circumstances where it is determined by the Commission that suchemployment will not interfere with the responsibilities of the State officer or employee or“person” and will not create a conflict of interest or the appearance of such conflict. N.J.S.A.52:13D-17.2(b).Post-Employment RestrictionAn immediate family member of a “person,” as defined at N.J.S.A. 52:13D-17.2(a), maynot hold, directly or indirectly, an interest in, hold employment with, or represent, appear for, ornegotiate on behalf of, any holder of, or applicant for, a casino license in connection with anyphase of casino development permitting, licensure, or any other matter related to casino activity,for a period of two years following the termination of the office or employment of such person.However, an immediate family member of a “person” may be employed by a casino incircumstances where it is determined by the Commission that such employment will not interferewith the responsibilities of the “person” and will not create a conflict of interest or theappearance of such conflict. N.J.S.A. 52:13D-17.2(c)(1).Casino post-employment restrictions that apply to State officials defined as “persons” arenoted in section VIII.17

New Jersey Uniform Ethics Code, February 2011XV. REPORTING COMPLAINTSAllegations that a State officer or employee or special State officer or employee hasviolated a provision of this Uniform Code, the Conflicts Law, the Commission’s rules, an agencycode of ethics or any other standard within the jurisdiction of the Commission should be reportedto the appropriate agency ELO or the Commission staff. Allegations should contain as muchdetailed information as possible and, if the complainant chooses to identify him/herself, shouldinclude contact information so that the ELO or Commission staff can obtain additionalinformation if necessary. A complainant is not required to disclose his/her identity whenreporting an alleged ethics violation.XVI. PENALTIESThe Commission is empowered to impose the following penalties in accordance withspecific provisions of the Conflicts Law. Note that violations committed by a former Stateofficer or employee or special State officer or employee may be subject to penalties so long asthe Commission’s investigation of same was initiated not later than two years followingtermination of service.1. N.J.S.A. 52:13D-17 provides that any person who willfully violates the general postemploymentrestrictions set forth in that provision is a disorderly person, and shall be subject to afine not to exceed $1,000 or imprisonment not to exceed six months, or both. In addition, forviolations occurring after March 15, 2006, any former State officer or employee or formerspecial State officer or employee found by the Commission to have violated any of theprovisions of this section shall be assessed a civil penalty of not less than $500 or more than$10,000.2. N.J.S.A. 52:13D-17.2(h) provides that any person who willfully violates the casino-relatedpost-employment restrictions set forth in Section 17.2 (c) is a disorderly person, and shall besubject to a fine not to exceed $1,000 or imprisonment not to exceed six months, or both. Inaddition, for violations of Section 17.2(c) occurring after March 15, 2006, any former Stateofficer or employee or former special State officer or employee found to have violated any of theprovisions of this section shall be assessed a civil penalty of not less than $500 or more than$10,000.3. N.J.S.A. 52:13D-21(i) provides that any current or former State officer or employee or specialState officer or employee found guilty by the Commission of violating any provision of theConflicts Law, the Uniform Ethics Code, or any agency code of ethics, shall be fined not lessthan $500 nor more than $10,000, and may be suspended from office or employment by order ofthe Commission for a period not to exceed one year. In addition, for violations occurring afterMarch 15, 2006, the State Ethics Commission may also order restitution, demotion, censure orreprimand.This subsection further provides that if the Commission finds that the conduct of theofficer or employee constitutes a willful and continuous disregard of the provisions of theConflicts Law, the Uniform Ethics Code or any agency code of ethics, it may order that personremoved from office or employment and may further bar the person from holding any public18

New Jersey Uniform Ethics Code, February 2011office or employment in this State in any capacity whatsoever for a period not exceeding fiveyears from the date on which the person was found guilty by the Commission.This subsection further provides that the Commission may impose a penalty of $50 perday of violation for failure to file an appropriate financial disclosure statement required to besubmitted to the Commission by law, regulation or executive order.(See penalty provisions set forth at N.J.A.C. 19:61-3.1(j) and N.J.A.C. 19:61-5.6(c).)4. N.J.S.A. 52:13D-23(d) provides that violations of the Uniform Ethics Code or any agencycode of ethics shall be cause for removal, suspension, demotion or other disciplinary action bythe State officer or agency having the power of removal or discipline. With respect to a personwho is in the classified civil service, the procedure leading to such removal or discipline shall begoverned by the Civil Service Act, N.J.S.A. 11A:1-1 et seq. and the Rules of the Department ofPersonnel. No action for removal or discipline shall be taken under this subsection except uponthe referral or with the approval of the Commission.5. N.J.S.A. 52:13D-26 provides that any person who willfully induces or attempts to induce aState officer or employee or special State officer or employee to violate any of the provisions ofthe Conflicts Law is a disorderly person, and shall be subject to a fine not to exceed $500 orimprisonment not to exceed 6 months, or both.19

New Jersey Uniform Ethics Code, February 2011A-1APPENDIX AGUIDELINES GOVERNING RECEIPT OFGIFTS AND FAVORS1. Each department shall require full disclosure by employees to the office of the department headthrough the Ethics Liaison Officer upon receipt of a gift or any other thing of value related in anyway to the State officer or employee’s or special State officer or employee’s public duties.2. Each department should designate an Ethics Liaison Officer to monitor compliance with specificprocedures under which officers and employees shall proceed upon receipt of a gift or any otherthing of value related in any way to their public duties.3. All officers and employees should be instructed that any gift or other thing of value offered to orby an officer or employee that is related in any way to his/her public duties must be reported andremitted immediately to the Ethics Liaison Officer. Similarly, any favor, service, employment oroffer of employment from such person or corporation must be reported immediately.4. The Ethics Liaison Officer shall return a gift or thing of value that is related in any way to anofficer or employee’s public duties to the donor or shall otherwise appropriately dispose of it.5. Unsolicited gifts or benefits of trivial or nominal value, such as complimentary articles offered tothe public in general, and gifts received as a result of mass advertising mailings to the generalbusiness public may be retained by the recipient or the recipient's department for general use ifsuch use does not create an impression of a conflict of interest or a violation of the public trust.An impression of a conflict may be created, for example, if an employee of a regulatory agencyuses a pocket calendar conspicuously marked with the name of a company that it regulates or ifan office in a State agency displays a wall calendar from a vendor, creating the impression of anendorsement.6. The Ethics Liaison Officer will have the responsibility of keeping the records of all suchoccurrences; names of the employees, individuals, and companies involved, and the finaldisposition of the gift or thing of value.7. The assistance of the Director of the State Ethics Commission will be available to all EthicsLiaison Officers to aid them in individual cases.20

New Jersey Uniform Ethics Code, February 2011B-1APPENDIX BSUBCHAPTER 6. ATTENDANCE AT EVENTS, ACCEPTANCE OF HONORARIA,ACCEPTANCE OF COMPENSATION FOR PUBLISHED WORKS, AND ACCEPTANCE OFTHINGS OF VALUE19:61-6.1 ApplicabilityThe rules in this subchapter apply to all State officials in the Executive branch of Stategovernment.19:61-6.2 DefinitionsThe following words and terms, as used in this subchapter, shall have the followingmeanings, unless the context clearly indicates otherwise.“Allowable entertainment expenses” means the costs for a guest speaker, incidental music andother ancillary entertainment at any meal at an event, provided they are moderate and notelaborate or excessive, but does not include the costs of personal recreation, such as being aspectator at or engaging in a sporting or athletic activity which may occur as part of that event.“Approval” means, for the purposes of N.J.A.C. 19:61-6.4 and 6.5, written permission from thedepartment head to attend and/or participate in an event; and/or to accept direct or indirectbenefits in connection with attendance.“Department head” means the administrative or executive head of the State official’s agency orhis or her designee.“Direct benefit” means acceptance by a State official from the sponsor of an event or any otherperson of travel, meals, accommodation, waiver of conference or event fee or any other costsassociated with attending the event for which no payment is made by the State but is notintended to mean nominal refreshments such as nonalcoholic beverages and snacks (doughnuts,pastries and cookies).“Event” means a meeting, conference, seminar, speaking engagement, symposium, trainingcourse, ground-breaking, ribbon-cutting, meal, open house, cocktail party, fundraiser, holidayparty, social function, or similar event that takes place away from the State official’s worklocation, is sponsored or co-sponsored by a supplier or a non-State government source and theinvitation for which is extended to the State official because of his or her official position.“Indirect benefit” means acceptance by a State official from the event sponsor or any otherperson of reimbursement for costs of travel, meals, accommodation, event fees, or any othercosts associated with attending the event for which no reimbursement is made by the State but isnot intended to mean nominal refreshments such as nonalcoholic beverages and snacks(doughnuts, pastries and cookies).B-221

New Jersey Uniform Ethics Code, February 2011“Interested party” means:1. Any person, or employee, representative or agent thereof, who is or may reasonably beanticipated to be subject to the regulatory, licensing or supervisory authority of the Stateofficial’s agency;2. Any supplier, or employee, representative or agent thereof;3. Any organization that advocates or represents the positions of its members to the Stateofficial’s agency; or4. Any organization a majority of whose members are as described in paragraphs 1 through 3above.“Personal funds” means funds of a State official. It does not include funds that are loaned,advanced, promised or reimbursed to a State official for any purpose by an interested party.“Published work” means any tangible medium of expression, including, but not limited to,literary, pictorial, graphic and sculptural matter; sound recordings; and software.“Reasonable expenditures for travel or subsistence” means commercial travel rates directly toand from an event and food and lodging expenses which are moderate and neither elaborate norexcessive.“Supplier” means any person that is providing or is seeking to provide or may reasonably beexpected to provide goods and/or services to the State official’s agency, including, but notlimited to, consultants, vendors and lessors.“Thing of value” includes, but is not limited to, compensation; money; a stock, bond, note orother investment in an entity; employment, offer of employment; gift; reward; honorarium;favor; goods, service; loan; forgiveness of indebtedness; gratuity; property or real property;labor; fee; commission; contribution; rebate or discount in the price of any thing of value; anautomobile or other means of personal transportation; entertainment; meal; or any other thing ofvalue offered to or solicited or accepted by a State official in connection with his or her officialposition.19:61-6.3 Granting of approval(a) For the purposes of N.J.A.C. 19:61-6.4 and 6.5, when a department head grantsapproval to attend an event, the department head shall determine whether a legitimate Statepurpose will be served by attendance and shall consider the provisions of the Conflicts of InterestLaw, the uniform ethics code and the agency code of ethics, any applicable Executive Orders, theguidelines and rules of the Commission, any departmental administrative policies and any otherrelevant considerations. Relevant considerations include, but are not limited to:1. The identity of the sponsor;2. The purpose of the event;3. The identity of other expected participants;B-322

New Jersey Uniform Ethics Code, February 20114. Whether attendance and/or participation in the event will assist the State official incarrying out his or her official duties and support the mission of the agency; and5. The monetary value and character of the costs and benefits provided by the sponsor,including whether the costs and benefits are comparable to those offered to or purchased by otherattendees.(b) Approval shall be requested in writing on the form provided in N.J.A.C. 19:61-6.8.Such forms shall be retained by the State agency for a period of five years from the date ofapproval of the form.(c) When an agency has numerous divisions or similar subunits with very diversemissions, the department head may request that the Commission permit that such divisions ratherthan the department State agency be treated as agencies for the purposes of this subchapter. Thedepartment head shall provide the Commission with information identifying the diversity of themissions of the divisions and justifying their separate treatment as agencies.19:61-6.4 Attendance at an event sponsored by an interested party(a) The State official shall secure the prior approval of the department head to attend suchan event.(b) Except as provided in (c) below:1. The State shall pay the reasonable expenses of the State official associated withattending the event.2. Neither the State official nor the State shall receive any direct or indirect benefit fromany other source.(c) The requirement and prohibition in (b) above need not apply if the event is designedto provide training, dissemination of information, or the exchange of ideas and the State officialis making a speech, is participating in a panel at the event or is an accompanying resource personfor the speaker and/or participant, subject to the reasonable approval of the department head. Thedirect or indirect benefit provided to the State official by the sponsor of the event may includethe following:1. Reimbursement or payment of actual and reasonable expenditures for travel orsubsistence and allowable entertainment expenses associated with attending an event in NewJersey if expenditures for travel or subsistence and entertainment expenses are not paid for by theState of New Jersey;2. Reimbursement or payment of actual and reasonable expenditures for travel orsubsistence outside New Jersey, not to exceed $500.00 per trip, if expenditures for travel orsubsistence and entertainment expenses are not paid for by the State of New Jersey. The $500.00per trip limitation shall not apply if the reimbursement or payment is made by:i. A nonprofit organization of which the State official is, at the time of reimbursement orpayment, an active member as a result of the payment of a fee or charge for membership to theorganization by the State;B-423

New Jersey Uniform Ethics Code, February 2011ii. A nonprofit organization that does not contract with the State to provide goods,materials, equipment, or services; oriii. Any agency of the federal government, any agency of another state or of two or morestates, or any political subdivision of another state.(d) If an actual conflict or the appearance of a conflict could arise under the application of(c) above, (b) above shall govern.(e) Approvals granted under (c) above must be forwarded to the Commission for review.(f) The State official may pay his or her own expenses with his or her personal funds.(g) The State official shall not accept an honorarium or fee for a speech or presentation atan event covered by this section.Examples:An employee of the Department of Environmental Protection has been invited to attend aconference of the Association of Environmental Authorities and has been asked to present a shortprogram to explain a new series of forms being proposed by the Department. The Associationhas offered to waive the $200.00 conference fee; the conference program includes morning andafternoon refreshments and lunch. If the Department head approves the employee’s attendanceand participation in the conference, the employee may accept the waiver of the fee and therefreshments and meal included in the program. A copy of the Department head’s approval mustbe forwarded to the Commission.The Motor Vehicle Commission (MVC) is considering the purchase of new pollutiontesting equipment. One of the companies that plans to submit a bid invites several MVCemployees to a demonstration of the equipment to be held at a hotel conference center. Aseafood buffet will be served after the demonstration. With proper approval, the employees mayattend the demonstration, but because the company plans to submit a bid to provide thisequipment and is therefore an interested party with respect to the MVC, the employees may notpartake of the seafood buffet at the expense of the vendor. The employees may, however, paythe cost of the buffet personally.Three employees from different units of the Department of Transportation are responsiblefor weekly monitoring of a construction project. Each Friday morning, they meet with thecontractor’s representative at the site field office to review the week’s progress and to assessprojected schedules. The meetings generally last one to two hours; coffee is available, but noother refreshments or meals are served or offered. Because no direct or indirect benefits areoffered or provided and because the meetings are part of the employees’ job responsibilities, themeetings are not “events” for the purposes of this subchapter.19:61-6.5 Attendance at an event sponsored by an entity other than an interested party(a) The State official shall secure the prior approval of the department head toattend such an event.B-524

New Jersey Uniform Ethics Code, February 2011(b) The State may pay the reasonable expenses of the State official associated withattending the event or may permit the State official to accept direct or indirect benefits. Direct orindirect benefits may include the following:1. Reimbursement or payment of actual and reasonable expenditures for travel orsubsistence and allowable entertainment expenses associated with attending an event in NewJersey if expenditures for travel or subsistence and entertainment expenses are not paid for by theState of New Jersey;2. Reimbursement or payment of actual and reasonable expenditures for travel orsubsistence outside New Jersey, not to exceed $500.00 per trip, if expenditures for travel orsubsistence and entertainment expenses are not paid for by the State of New Jersey. The $500.00per trip limitation shall not apply if the reimbursement or payment is made by:i. A nonprofit organization of which the State official is, at the time of reimbursement orpayment, an active member as a result of the payment of a fee or charge for membership to theorganization by the State;ii. A nonprofit organization that does not contract with the State to provide goods,materials, equipment, or services; oriii. Any agency of the federal government, any agency of another state or of two or morestates, or any political subdivision of another state.(c) An interested party shall not provide a direct or indirect benefit to the State official inorder to facilitate his or her attendance.(d) A State official making a speech or presentation at the event shall not accept anhonorarium or fee from the sponsor.(e) Under no circumstances shall a State official accept entertainment collateral to theevent, such as a golf outing, or meals taken other than in a group setting with all attendees, orreimbursement therefore.Examples:An employee of the Commerce, Economic Growth and Tourism Commission has beeninvited, by the Mexican Tourist Bureau, an agency of the Mexican government, to attend a seriesof meetings on promoting tourism in both countries. The employee will be giving a speech atdinner on the final day of the meetings and has been offered a $500.00 honorarium. Theemployee may attend the meetings but is not permitted to accept an honorarium in connectionwith his speech. He may accept, directly or by reimbursement, actual expenditures for travel andreasonable subsistence for which no payment or reimbursement is made by the State, not toexceed the statutory limit of $500.00.A local non-profit organization would like to hold a dinner/fundraiser honoring aTechnical Assistant at the Department of Insurance who has been a long-time supporter of theorganization. The organization plans to use the Technical Assistant’s picture, name and officialtitle on the promotional literature. The Technical Assistant may attend the event but isprohibited from allowing such use of his official title for fundraising purposes.B-625

New Jersey Uniform Ethics Code, February 201119:61-6.6 Use of official title for private fundraisingA State official shall not permit the use of his or her official title for the purpose offundraising for a private organization.19:61-6.7 Compensation for published work(s)(a) A State official shall not accept compensation for published work(s) created as part ofhis or her official duties on State time utilizing State resources, but may accept compensation forpublished works not created as part of his or her official duties.(b) A State official shall secure the permission of the department head to acceptcompensation for published work(s) not created as part of his or her official duties. Indetermining whether such approval can be granted, the Department head shall consider theprovisions of the Conflicts of Interest Law, the uniform ethics code, the agency code of ethics,any applicable Executive Orders, the Commission’s Guidelines for Secondary Employment, anyother applicable guidelines or rules of the Commission, any applicable administrative policies ofthe agency, and the following conditions:1. Whether compensation is being paid by an interested party;2. Whether the published work(s) uses or discloses information not generally available tothe public;(c) The State official shall prepare the published work(s) on his or her own time, withoutusing the services of other State officials or resources owned by the State.(d) The State official shall not use his or her official title in any way in solicitingcompensation.Examples:As part of his official duties, a Department of Transportation employee evaluatessurveying equipment and trains Department employees on its use. The employee recentlycompleted an in-depth evaluation of ten different types of surveying instruments and made arecommendation to the purchasing unit. The employee would like to publish the entire report inTransportation Magazine. He has been offered $500 for the article. The Department must makea policy decision as to whether the article may be published. The employee is prohibited fromaccepting compensation for the article, even if the Department grants permission for thepublication, since it was created as part of his official duties prepared on State time and utilizingState resources.An Environmental Technician at the Department of Environmental Protection has beenasked to write an article for an environmental journal on how New Jersey’s automobile emissionstandards differ from those of Pennsylvania. He has been offered $500 for the article. TheEnvironmental Technician is permitted to publish the article and receive compensation since it ison a subject matter related to, but not a part of, his official duties, so long as he prepares thearticle at home, on his own time, without using any State resources.26

New Jersey Uniform Ethics Code, February 2011B-719:61-6.8 Approval request form(a) State officials shall use the following form to request approval to attend events.REQUEST FOR APPROVAL FOR ATTENDANCE AT EVENTDEPARTMENT OF _____________________________________________________Name ________________________ Division ___________________________Title ___________________ Telephone _______ FAX _______E-mail address _________________________________________________________Event __________________________________________________________________Sponsor ________________________________________________________________Is the sponsor an "interested party"? Yes ____ No ____Is the State official a speaker, panel participant or resource person? Yes ___ No __Is the sponsor an agency of the federal government, one or more other states or a political subdivision thereof?Yes ___ No ___Is the sponsor a nonprofit organization? Yes ___ No ___If Yes, is the employee or agency a member? Yes ___ No ___Does the nonprofit organization have any contracts with the State? Yes ___ No ___Location _______________________ Date(s) _________________Overnight accommodation required? Yes ____ No ____Out-of-state travel required? Yes ____ No ____Estimated cost? $___________Agency to pay cost? Yes ____ No ____Sponsor to pay cost? Yes ____ No ____Employee to pay cost? Yes ____ No ____Reason for attendance: ___________________________________________________________________________________________________________________________Will sponsor offer an honorarium or fee? Yes ____ No _____________________________ _________Employee SignatureDateNOTE: Any substitutions or changes of circumstances must be reported.************************************************************************Attendance approved Yes ____ No ____ Note: Acceptance of honoraria or fees is not permitted.Conditions: ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________Signature_______________Date27

New Jersey Uniform Ethics Code, February 2011C-1APPENDIX CSTATE EMPLOYEES' PARTICIPATION IN POLITICAL ACTIVITIESSummarized below are Commission cases addressing State employees' participation inpartisan political activities. The Commission permits involvement in partisan political activitiesprovided that there is no provision in the Departmental code of ethics prohibiting such activities.(Election Law Enforcement Commission, State Ethics Commission and several other agencycodes have specific provisions prohibiting such activities.) State employees, however, may notuse State time or State resources in pursuit of such activities and must provide notice to theDepartmental Ethics Liaison Officer.Two sections of the Conflicts Law, N.J.S.A. 52:13D-14 and 24, address the acceptanceand/or solicitation of campaign contributions.Section 14 provides:No State officer or employee, special State officer or employee, ormember of the Legislature shall accept from any person, whetherdirectly or indirectly and whether by himself or through his spouseor any member of his family or through any partner or associate,any gift, favor, service, employment or offer of employment or anyother thing of value which he knows or has reason to believe isoffered to him with intent to influence him in the performance ofhis public duties and responsibilities. This section shall not applyto the acceptance of contributions to the campaign of an announcedcandidate for elective public office.Section 24 provides:a. No State officer or employee, special State officer or employee,or member of the Legislature shall solicit, receive or agree toreceive, whether directly or indirectly, any compensation, reward,employment, gift, honorarium, out-of-State travel or subsistenceexpense or other thing of value from any source other than theState of New Jersey, for any service, advice, assistance,appearance, speech or other matter related to the officer, employee,or member's official duties, except as authorized in this section.…c. This section shall not apply to the solicitation or acceptance ofcontributions to the campaign of an announced candidate forelective public office, except that campaign contributions may notbe accepted if they are known to be given in lieu of a paymentprohibited pursuant to this section.28

New Jersey Uniform Ethics Code, February 2011C-2In Case No. 45-73, a member of the Commission on Legalized Games of Chancerequested an opinion from the Commission as to whether the provisions of the Conflicts ofInterest Law would restrict his involvement in political activities in the county where he resided.The Attorney General's Office was asked to review the request and issued an opinion whichadvised that the State official was permitted to engage in political activities, barring a prohibitionagainst such activities in the Department's Code of Ethics.In Case No. 201-75, the Commission referred a request for advice as to whether amember of a County Board of Taxation was permitted to become a candidate for and, if elected,hold an Assembly seat, to the Attorney General. Attorney General Opinion M75-2075concluded that a member of a County Board of Taxation holds a State office of profit within themeaning of Article IV, Section V, Paragraph 4, of the New Jersey Constitution and, as such, waspermitted to become a candidate for a seat in the Legislature, but, if elected, must resign as aCounty Board Member before taking his Legislative seat.In Case No. 435-77, the Commission determined that a Department of Health employeewas permitted to serve as chairman or co-chairman of a public employees' committee in supportof a gubernatorial candidate. The State employee was cautioned that he must not use or attemptto use his official position to secure unwarranted privileges or advantages for the candidate of hischoice. Further, he must be careful not to permit his political activities to conflict with theproper discharge of his duties in the public interest.In Case No. 756-79, the Commission determined that it would not be a conflict of interestfor a member of a County Board of Taxation to simultaneously serve as a Commissioner on theCounty Tax Board and hold the position of County Chairman of a political party in the samecounty.In Case No. 972-81, the Commission determined that a Housing Finance Agency("HFA") employee was permitted to run for municipal office in a municipality where housingprojects sponsored by the HFA were located. The employee was cautioned that, if elected, sheshould not have any dealings with any project located in East Orange as long as she was amember of the Council.In Case No. 987-81, the Commission affirmed the Department of Labor EthicsCommittee determination that the employee's position as a Democratic State Committeeman andMember of the Warren County Democratic Committee as well as his candidacy for theLopatcong Township Council did not constitute a violation of the Conflicts of Interest Law. TheCommission also concurred with the caveats imposed by the Department prohibiting the use ofState time, stationery and telephones by the employee for his political activities and furtherextended this prohibition to include any other State resources.In Case No. 34-85, two members of the Board of Dentistry were advised that N.J.S.A.52:13D-24 expressly permits the solicitation and acceptance of campaign contributions forannounced candidates for elective public office. The dentists were cautioned, however, aboutpolitical activities which directly involve persons subject to licensure and review by the Board of29

New Jersey Uniform Ethics Code, February 2011C-3Dentistry. The dentists sent letters, on personal stationery, to thousands of New Jersey licenseddentists, to solicit re-election campaign funds for a New Jersey Assemblyman.In May 1990, the Casino Control Commission ("CCC") requested an Advisory Opinionfrom the Commission as to whether certain political activities, if engaged in by members of theCCC, would violate ethical restrictions contained in the Casino Control Act or the CCC's Codeof Ethics. Because this request involved a statutory interpretation, the Attorney General's Officewas asked to review it. An Opinion was received which stated that, given the directive in theCasino Control Act that the CCC promulgate a code of ethics modeled upon the Code of JudicialConduct, it appeared that without a legislative change to the Casino Control Act, members of theCCC were prohibited from those political and partisan activities that are prohibited by the Codeof Judicial Conduct.In Case No. 17-95, a County Superintendent of Elections employee was advised that shewas permitted to run for a council seat in a partisan political election because her responsibilitiesas Program Coordinator involved only student voter registration, the planning of educationalprograms and the handling of press releases and correspondence. The employee had noresponsibilities in connection with the election process. She was advised, however, that sheshould have no involvement with student voter registration activities in the municipality in whichshe was a council candidate.In 1997, in Case No. 29-97, the Commission considered the effect of section 16(b) of theConflicts Law on State officers and employees who serve as campaign treasurers. Section 16(b)prohibits State officers and employees from representing, appearing for or negotiating on behalfof, or agreeing to perform any of those activities for, a party other than the State in connectionwith any matter pending before any State agency. The Commission’s precedent has establishedthat signing reports, making telephone calls, attending meetings and/or responding to inquiriesby a State agency on behalf of a third party are acts of representation. Campaign reports must besigned by the campaign treasurer and submitted to the Election Law Enforcement Commission(“ELEC”), a State agency, and in the event of a complaint to ELEC, the treasurer would berequired to appear in person or respond in writing to ELEC’s inquiry. Thus, a State officer oremployee is prohibited from serving as a campaign treasurer because the treasurer’s dutiesinclude representing the campaign organization and/or the candidate before ELEC.In Case No. 07-01, a County Superintendent of Elections employee was advised that hisproposed participation in his friend’s campaign for municipal office was not appropriate underthe application of section 23(e)(5), activity which might reasonably be expected to impairobjectivity and independence of judgment, and section 23(e)(7), appearance of impropriety. Inhis official capacity, the employee supervised a staff of 53 employees, represented theSuperintendent of Elections at necessary functions, and assisted voters and interested parties byproviding requested records.The employee expected to participate in the following political activities: door-to-doorcampaigning, participating in phone bank work, coordinating volunteers, giving instructions on30

New Jersey Uniform Ethics Code, February 2011C-4election procedures, staffing the campaign headquarters, participating in voter registration drives,attending rallies and fundraising events, and preparing mailings to registered voters.In prohibiting the activity, the Commission balanced the State employee’s interests withthe public’s interest in ensuring fair and unbiased elections.In Case No. 05-03, the Commission considered an allegation that a Department ofCommunity Affairs (“DCA”) employee violated the Political Activities Prohibition of the DCACode of Ethics when her name and picture appeared on a campaign mailer for a local mayoralcandidate. The campaign mailer prominently featured the State employee in her capacity as aformer mayor. It did not mention her role with the State and did not reference any relationshipbetween the municipality and the DCA. Section XI, Political Activities Prohibition, of the DCACode provides as follows:An employee shall not directly or indirectly use or seek to use hisauthority or the influence of his position to control or modify thepolitical action of another person. An employee during the hoursof duty shall not engage in political activity; nor shall he at anyother time participate in political activities, which would impair hisusefulness in the position in which he is employed. A Stateemployee retains the right to vote as he chooses and to express hisopinions on political subjects and candidates.The Commission dismissed the allegation, noting that Section XI of the DCA Code ofEthics specifically states that a State employee retains the right to express opinions on politicalsubjects and candidates. The State employee exercised that right when she endorsed thecandidate in his election campaign.Additional Restrictions. The Department of Personnel has issued regulations that address thepolitical activities of State employees. These regulations, which reference the Federal HatchAct, are not administered or enforced by the Commission and are printed here for the reader'sinformation and convenience.N.J.A.C. 4A:10-1.2 Political Activitya. No employee in the career or senior executive service shall directly or indirectly use orseek to use his or her position to control or affect the political action of another person or engagein political activity during working hours. See N.J.S.A. 11A:2-23.b. No employee in the career, senior executive or unclassified services whose principalemployment is in connection with a program financed in whole or in part by Federal funds orloans, shall engage in any of the following prohibited activities under the Hatch Act (5 U.S.C.1501 et seq.):31

New Jersey Uniform Ethics Code, February 2011C-51. Be a candidate for public office in a partisan election. This provision does notapply to the Governor, the mayor of a city, the elected head of an executive department or anindividual holding elective office, where that office is the sole employment connection tofederally funded programs;2. Use official authority or influence that interferes with or affects the results of anelection or a nomination for office; or3. Directly or indirectly coerce contributions from subordinates in support of apolitical party or candidate.c. The office of the Special Counsel of the United States Merit System Protection Board hasresponsibility for the investigation of Hatch Act matters.N.J.A.C. 4A:2-5.1 General provisionsb. An appointing authority shall not take or threaten to take any action against an employee inthe career service or an employee in the senior executive service with career status based on theemployee's permissible political activities or affiliations. This subchapter shall also apply toState service employees in the unclassified service who do not serve in policy-making orconfidential positions.32

New Jersey Uniform Ethics Code, February 2011D-1STATE OF NEW JERSEY OUTSIDE ACTIVITY QUESTIONNAIREName:Work Address:Department:Division/Bureau:Civil Service Title:Telephone Number:Functional Title (if different):Job Duties:1. Are you currently engaged in any business, trade, profession and/or part-time or full-time employmentoutside of or in addition to your State employment?If yes, you must answer question 2. YesNo2. Name of Outside Employer(s) or Business(es). Please indicate if you are an owner, partner or corporateofficer.Address:Type of Business:Describe responsibilities:Outside Employment (please specify):Days Worked per Week:Hours Worked: Per DayPer WeekIs your employment or business being performed for or with any other Department employee or official?YesNoIf yes, name of employee or official and title:Does your outside employment or business require/cause you to have contacts with other NJ Stateagencies, vendors, consultants or casino license holders?YesNoIf yes, explain.33

New Jersey Uniform Ethics Code, February 2011D-23. Do you hold a license issued by a State agency that entitles you to engage in a particular business,profession, trade or occupation?Yes No If yes, type of license.When was license issued: Active Inactive4. Do you currently hold or plan to hold outside voluntary position(s)? Yes NoIf yes, explain.5. Are you an officer in any professional, trade or business organization? Yes NoIf yes, explain.6. Are you serving in any public office, or considering appointment or election to any public office?YesNoWhat is the type of elective / appointive position?What are your duties?Hours engaged in elective / appointive activity:7. Do any members of your immediate family, either through employment with or through a partnership or acorporate office, hold an interest in any firm or entity that is (a) performing any service for the State of NewJersey, (b) directly or indirectly receiving funding from the State, or (c) regulated by the State?YesNoFamily Member's nameNature of EmploymentDuration: Permanent Temporary8. Are any members of your immediate family employed by a New Jersey casino or an applicant for a NJcasino license?Yes No34

New Jersey Uniform Ethics Code, February 2011D-3Family Member's NameRelationship:Name of Casino:I certify that this questionnaire contains no willful misstatement of fact or omission of material factand that after it is submitted, any future activity subject to disclosure will be reported before Iengage in such activity.Signature of EmployeeDateImmediate Supervisor (check one)ApprovedDisapprovedSignature:Date:Comments and/or reason for disapproval:Ethics Liaison Officer (check one)ApprovedDisapprovedSignature:Date:Comments and/or reason for disapproval:Please provide the employee with a copy of the Approved/Disapproved Form.35

New Jersey Uniform Ethics Code, February 2011E-1APPENDIX EGUIDELINES GOVERNING OUTSIDE ACTIVITIESThese Guidelines present a comprehensive overview of decisions and policies of the StateEthics Commission concerning outside activities, both compensated and uncompensated. TheCommission has addressed outside activities under the application of standards embodied in theNew Jersey Conflicts of Interest Law, N.J.S.A. 52:13D-12 et seq.: sections 16, representation,appearance or negotiation regarding a proceeding pending before a State agency; 17.2(b), Stateemployee/family member relationships with casino applicants or licensees; 19, contracts withState agencies; 23(e)(1), interest in substantial conflict with official duties; 23(e)(2), licensed orregulated activities; 23(e)(3), unwarranted privilege; 23(e)(5), employment or service reasonablyexpected to impair objectivity and independence of judgment; 23(e)(7), appearance ofimpropriety; 24, receipt of thing of value for service related to official duties; 25, information notgenerally available to the public; and N.J.A.C. 19:61-6.7(b), compensation for published works.Uniform Ethics Code. Pursuant to Section VI of the Uniform Ethics Code, State officers andemployees must obtain the approval of the agency Ethics Liaison Officer prior to engaging inany outside activity. An agency may find it administratively efficient to exempt disclosure ofspecific kinds of outside employment; for example, part-time work for businesses not related tothe position of employment in the agency.Agency Code of Ethics. Each State agency is required to promulgate a code of ethics to addressthe particular needs and problems of the agency. The agency code of ethics is a supplement tothe Uniform Ethics Code and may prohibit certain types of outside employment.Outside activities disapproved by a State employee’s agency may be appealed to theCommission. Appeals should be directed in writing to the Executive Director, State EthicsCommission, 28 West State Street, P.O. Box 082, Trenton, NJ 08625.Review/Approval Process. The following issues must be examined by the agency EthicsLiaison Officer in determining whether an outside activity can be approved. Does the outsideposition require representation before a State agency? Does the outside position involve a casinolicensee or applicant for a casino license? Does the outside activity involve contracting with aState agency? Is there a significant overlap in the duties and responsibilities of the twopositions? Does the State employee’s agency have control, supervision, or jurisdiction over theoutside entity? Does the outside entity receive grants from or contract with the State employee’sagency? Does the outside activity involve a published work? Does the outside interest involvepolitical activity? These Guidelines present summaries of past Commission cases, organizedunder the questions listed above. The case presentations are solely to provide examples ofoutside activities that have been addressed by the Commission. Also included are generalexplanations of the statutory provisions applicable to outside employment/volunteer activities.36

New Jersey Uniform Ethics Code, February 2011E-2Does the Outside Position Require Representation Before a State Agency? Section 16(a) ofthe Conflicts Law prohibits a special State officer or employee, or any partnership, firm orcorporation in which he has an interest, from representing, appearing for, or negotiating onbehalf of, or agreeing to perform any of the aforementioned, on behalf of any person or partyother than the State in connection with any cause, proceeding, application or other matterpending before the particular agency in which such special State officer or employee holds officeor employment.Section 16(b) of the Conflicts Law prohibits a State officer or employee, or anypartnership, firm or corporation in which he has an interest, from representing, appearing for, ornegotiating on behalf of, or agreeing to perform any of the aforementioned, on behalf of, anyperson or party other than the State in connection with any cause, proceeding, application orother matter pending before any State agency.“Interest” is defined in section 13(g) of the Conflicts Law as (1) the ownership or controlof more than 10% of the profits or assets of a firm, association, partnership, or more than 10% ofthe stock in a for-profit corporation, other than a professional service corporation or (2) theownership or control of more than 1% of the stock in any corporation which is the holder of orapplicant for a casino license or in any holding or intermediary company with respect thereto. Inthe case of a professional service corporation, the provisions governing the conduct ofindividuals are applicable to shareholders, associates or professional employees regardless of theextent or amount of their shareholder interest in such corporation.Section 16(c) sets forth exceptions to the general prohibitions of sections 16(a) and 16(b).Those exceptions include matters (1) pending before any court of record in the State, (2) inregard to a workers’ compensation claim, (3) in connection with the determination or review oftransfer, inheritance or estate taxes, (4) in connection with filing of corporate or other documentsin the Office of the Secretary of State, (5) before the Division on Civil Rights, (6) before theState Board of Mediation, (7) before the Public Employment Relations Commission, (8) beforethe Unsatisfied Claim and Judgment Fund Board, (9) before any State agency on behalf of acounty, municipality or school district or any authority, agency or commission thereof exceptwhere the State is an adverse party and provided the State employee does not hold office oremployment in the State agency where the matter is pending.Engineers. In Case No. 6-93, the Commission was asked to consider the extent of the section16(b) prohibition in the case of a Department of Transportation Project Engineer. The ProjectEngineer requested an opinion as to whether his secondary employment performing daminspections for private land owners and completing reports to be submitted to the Department ofEnvironmental Protection and Energy (“DEPE”) constituted representational activity prohibitedby section 16(b). The Commission determined that the preparation of the dam inspectionreports, attendance at meetings at the DEPE, telephone conversations with DEPE employeesregarding the reports and the submission of correspondence to DEPE on behalf of clientsconstituted representational activity prohibited by section 16(b) of the Conflicts Law. TheCommission also determined that submission of the reports by the third-party clients would notmitigate the violation.37

New Jersey Uniform Ethics Code, February 2011E-3In several cases since 1993, the Commission has found that State employees who signdocuments, make telephone calls or submit correspondence in connection with matters pendingbefore a State agency are in violation of section 16.Tax Preparers. The Commission has addressed the issue of whether a State employee's outsideemployment preparing State income tax returns is violative of section 16(b) of the Conflicts Lawon a number of occasions (Cases No. 619-77, 830-79, 828-79, 908-80). In these cases, theCommission permitted the State employees to continue their outside employment as taxpreparers, but advised them that they had an obligation to inform clients that in the event of adispute, the State employees could not appear before the Division of Taxation or any other Stateagency. In 1993, the Commission revisited the issue, determined that the preparer's signature onthe State tax return does not constitute representational activity, and confirmed its earlier rulings.Attorneys. In Case No. 48-89, a Member of the Statewide Health Coordinating Council(“SHCC”) requested advice from the Commission as to the applicability of Section 16(a) of theConflicts Law to her situation. The Member secured employment in the health care departmentof a New Jersey law firm and asked what effect her employment with the firm would have on thefirm and its clients. The firm, a partnership, represented providers of healthcare goods andservices before the Department of Health, the SHCC, and other related public bodies. TheMember’s status with the firm was that of employee; she had no interest in the firm as defined insection 13(g) of the Conflicts Law.The Commission advised the Member that section 16(a) prohibited her from representing,appearing for, or negotiating on behalf of any party other than the State in connection with anymatter pending before the SHCC. This prohibition did not extend to the law firm because theMember had no interest in the firm.In Case No. 394-76, the Commission considered whether it would be a conflict of interestfor a Project Specialist, Department of Health (“DOH”), to maintain a part-time law practice outof his home. In his official capacity, the employee was responsible for developing andevaluating a rate system for payment of hospital costs based on diagnostically related illness.The Commission determined that the DOH employee was permitted to engage in the outsidepractice of law with the understanding that he refrain from representing any person or party,including non-New Jersey governmental agencies, in any case related to rate-setting in healthcare facilities or other providers of medical care. This would avoid any possibility that decisionsor conclusions rendered in such a case could be used to challenge the rate systems in New Jersey.The DOH employee had voluntarily agreed that he would not represent any health care facilitiesor other providers of medical care within the State while employed by the DOH.In Case No. 355-76, Administrative Assistant, Child Care Licensing Section, Division ofYouth and Family Services, Department of Human Services, the Commission determined that noconflict existed between the Administrative Assistant’s State position and his private lawpractice provided that he refrain from offering services in any child, family, or licensing mattersin which DYFS was involved or might be involved.38

New Jersey Uniform Ethics Code, February 2011E-4Campaign Treasurer. In Case No. 29-97, the Commission determined that, under the operationof section 16(b) of the Conflicts Law, State employees are prohibited from acting as campaigntreasurers because campaign reports signed by them must be submitted to the Election LawEnforcement Commission (“ELEC”), and, in the event of a complaint to ELEC, a Stateemployee would be required to appear in person or respond in writing to ELEC’s inquiry.Does the Outside Position Involve a Casino Licensee or Applicant for a Casino License?State Officer or Employee. A State officer or employee, other than a State officer or employeeincluded in the section 17.2(a) definition of “person,” may hold employment with the holder ofor applicant for a casino license only if the Commission grants a waiver. A waiver of theprohibition can be granted if, in the Commission’s judgment, such employment will not interferewith the responsibilities of the State officer or employee and will not create a conflict of interestor reasonable risk of the public perception of a conflict of interest. Waivers may be sought bycontacting the Commission.Family Members. Members of the immediate family of a State officer or employee, or of aperson, may also hold employment with the holder of or applicant for a casino license byobtaining a waiver from the Commission. An immediate family member is defined as a spouse,child, parent or sibling residing in the same household.Does the Outside Activity Involve Contracting With a State Agency? Section 19(a) of theConflicts Law prohibits a State officer or employee or from entering into a contract, valued at$25 or more, with any State agency. A special State officer or employee having any duties orresponsibilities in connection with the purchase or acquisition of property or services by the Stateagency is restricted from contracting with his/her agency. This prohibition also extends topartners or any corporation which the State officer or employee or special State officer oremployee controls or in which he owns or controls more than 1% of the stock.Section 19 exempts only three categories of contracts from this general prohibition: (1)contracts made after public notice and competitive bidding; (2) contracts that may be awardedwithout public advertising and competitive bidding pursuant to N.J.S.A. 52:34-10 or similarprovisions; and (3) contracts of insurance entered into by the Director of the Division ofPurchase and Property, Department of the Treasury, pursuant to N.J.S.A. 52:27(b)-62.State employees must receive the approval of the Commission prior to contracting underany of the section 19(b) exceptions. The Commission has approved many requests over theyears by State employees to bid on contracts that are subject to public notice and competitivebidding. Such requests are generally approved if the contract in question is not with the Stateemployee’s own agency. The Commission has relied on section 23(e)(7), the appearance sectionof the statute, in limiting a State employee’s participation in the contracting process when thecontract is with his/her own agency.39

New Jersey Uniform Ethics Code, February 2011E-5The Commission has also granted approval for contracts that may be awarded withoutpublic advertising and competitive bidding pursuant to N.J.S.A. 52:34-10, where the Stateemployee is the sole source of supply for a particular good or service. N.J.S.A. 52:34-10 alsoexempts purchases from the federal or any State government or any agency or politicalsubdivision thereof; public exigency; contracts where more favorable terms can be obtained froma primary source of supply; seasonal articles or wearing apparel; where commodities traded on anational commodity exchange are to be purchased and fluctuations of the market requireimmediate action; or the equipment to be purchased is of a technical nature and procurementwithout advertising is necessary in order to assure standardization of equipment andinterchangeability of parts.In Case No. 7-91, the Commission for the Blind and Visually Impaired (“CBVI”)requested that the Commission approve an exception to section 19 to permit the CBVI tocontract with a State employee for the development of a computer software package. The Stateemployee was identified by the CBVI as the sole source of supply for generating this program.The Commission approved the contract, pursuant to N.J.S.A. 52:34-10, with the understandingthat all work would be performed on the State employee’s own time and without the use of Stateresources.In 1992, the Commission considered whether a Department of Human Servicescaseworker could continue to perform psychosocial evaluations of juvenile inmates for theDepartment of Corrections (“DOC”), Case No. 30-92. The Commission determined that section19 permitted dual employment by two different State agencies but did not permit personalservice contracts. The Commission determined that caseworker’s arrangement with the DOCwas a personal service contract that did not fall within the exception of section 19(b). Theynoted that while it was a contract that could be awarded without public notice and competitivebidding, the authority for such an award was N.J.S.A. 52:34-9; section 19(b) only allowscontracts which are awarded pursuant to N.J.S.A. 52:34-10.In Case No. 25-94, the Commission considered whether a Statistical Engineer, Bureau ofMaterials Engineering, Department of Transportation, was permitted, under section 19, toprovide photography services to the State Museum and other State agencies. The Commissiondetermined that the Statistical Engineer could not contract with the State Museum to performphotography work because the contracts were not subject to public notice and competitivebidding and did not fall within the exceptions of N.J.S.A. 52:34-10.In Case No. 15-99, the Commission affirmed a Department of Human Services (“DHS”)decision that a DHS employee was prohibited, under section 19 of the Conflicts Law, fromserving as a pool attorney for the Office of the Public Defender (“OPD”). The OPD uses theservices of licensed New Jersey attorneys to handle “pool” cases, cases that have multipledefendants or cases that employees of the OPD cannot handle because of the volume or backlogof work or a conflict of interest. The DHS employee appealed to the Superior Court, AppellateDivision, which upheld the Commission’s decision.40

New Jersey Uniform Ethics Code, February 2011E-6Licensed or Regulated Activities. Pursuant to section 23(e)(2) of the Conflicts Law, alloccupational, trade, business, or professional licenses issued by a State agency must be reportedto the Commission. Such licenses include, but are not limited to, attorney, physician, nurse,pharmacist, engineer, real estate, insurance, private detective, and teacher. If the license isinactive, please so note. As is the case with any secondary employment activity, a Stateemployee must receive the prior approval of the agency Ethics Liaison Officer prior to anyoutside use of a professional license.Is There a Significant Overlap in the Duties and Responsibilities of the Two Positions? InCase No. 40-91, the Commission considered an appeal by the Director of Social Services, Officeof Public Guardian (“OPG”), Department of Community Affairs (“DCA”), that her proposedpursuit of a private practice as an “Eldercare Consultant” was incompatible with her Stateposition of Director of Social Services, OPG. The DCA Ethics Committee denied the secondaryemployment based on the fact that the two positions dealt with the same general area, the dutiesand responsibilities of the two positions were similar, and the possibility existed that there wereindividuals, organizations, and entities that the DCA employee might deal with in both positions.The Commission confirmed the ruling of the DCA Ethics Committee. The Commissionreviewed the situation under sections 16(b), 23(e)(3), (5) and (7) of the Conflicts Law.In Case No. 769-79, the Commission considered whether it would be a conflict of interestfor the Coordinator, Government and Small Business Aids, Division of Economic Development,Department of Labor and Industry, to serve as a trustee of a local development corporationdesigned to help small businesses on a local level. The Commission noted that it appeared thatthe Coordinator would be providing on a local level the same service that he was authorized tooffer in his State position. Moreover, it would not be unreasonable to expect that he wouldreview applications for State aid submitted by the small businesses he had assisted on a locallevel. The Commission determined that it would be a conflict for the Coordinator to hold hispresent State position and concurrently serve as a trustee of the local development corporation.The Commission cited section 23(e)(5) in its determination.In Case No. 1127-82, the Commission considered an appeal by the Assistant Chief of VitalStatistics and Registration, Department of Health (“DOH”), from a determination by the DOHthat he should discontinue activities in connection with a company owned by him and a coworker.The company sold vital records binders to municipalities for use by local registrars forthe purpose of filing original vital records. In his official capacity, the State employee wasresponsible for assisting and instructing local registrars in a number of matters includingmaintenance of vital records files. His partner had even more contact with local registrars inthat he was responsible for supervising and training vital statistics field personnel who providedtechnical assistance and guidelines to them. He further was responsible for conductinginspections of offices of local registrars to ensure compliance with federal and State laws and toensure the proper maintenance of records. The Commission upheld the DOH’s determinationthat the sales activity had sufficient relationship to their official responsibilities so as to comewithin the prohibition of section 23(e)(5).41

New Jersey Uniform Ethics Code, February 2011E-7Does the State Employee’s Agency Have Control, Supervision, or Jurisdiction over theOutside Employer? In numerous cases, the Commission has determined that State employeescannot engage in secondary employment when their activities are subject to regulation orinspection by the agency for which they work.In Case No. 20-92, a Public Health Representative 1, Office of Emergency MedicalServices (“OEMS”), Division of Health Facilities Evaluation and Licensing (“DHFEL”),Department of Health (“DOH”), appealed a decision of the DOH Ethics Committee that hersecondary employment as a per diem evening shift nursing supervisor at a local hospitalconstituted a conflict of interest with her Departmental employment. The OEMS is responsiblefor certifying and conducting routine inspections of hospital-based Mobile Intensive Care Unitprograms.In her capacity as an evening nursing supervisor at the hospital, the DOH employee wasthe on-site administrator in charge of the hospital during her shift. She had received approvalfrom her supervisor prior to accepting the outside employment. Subsequent to that approval,OEMS was transferred to the DHFEL. The DHFEL is responsible for licensing health facilitiesin the State and for conducting inspections of the facilities to ensure compliance with statutoryand regulatory requirements. The Commission found that the DOH Ethics Committee hadbalanced the integrity of the DOH’s inspection system against the employee’s ability to pursuepart-time employment and affirmed the ruling of the Committee and the policy prohibiting suchactivities. The Commission reviewed the situation under sections 23(e)(5) and (7) of theConflicts Law.In Case No. 26-92, the Commission concurred with the Department of Law and PublicSafety that a Safety Specialist, Division or Motor Vehicles (“DMV”), could not engage inoutside employment repairing small holes, chips and cracks in automobile windshields becausehis customers would be subject to DMV inspection.In Case No. 24-97, a Conservation Officer III, Division of Fish, Game and Wildlife,Department of Environmental Protection (“DEP”), appealed the DEP’s denial of his secondaryemployment request to participate in the commercial harvest of eels/elvers. The DEP, throughthe Division, regulates and oversees New Jersey’s freshwater fisheries and regulates thecommercial harvest of elvers. The DEP employee, in his official capacity, spent between 40 and60 percent of his enforcement hours working on elvering enforcement during the season. TheCommission concurred with the DEP’s decision that the employee be denied permission toengage in the commercial harvest of eels/elvers. The Commission reviewed the situation undersections 23(e)(1), (4), (5), and (7) of the Conflicts Law.Does the Outside Entity Receive Grants from or Contract with the State Employee’sAgency? In July 2000, in Case No. 20-00, the Commission determined that, in the absence ofenabling legislation, code of ethics or other applicable guidelines, regulations, or policies thatprohibit such activity, that all outside employment situations involving grant or contractualrelationships take into account the following factors, in addition to the other factors set forth inthese Guidelines, in determining whether approval may be granted.42

New Jersey Uniform Ethics Code, February 2011E-8• Whether the position in question was created as a result of the State grant or contract.• Whether the State employee is in a policymaking or decisionmaking position.• Whether the State employee had any involvement in the drafting or review of the RFP,the award of the grant, negotiation of the contract, or has oversight responsibilities inconnection with the grant or contract.• Whether the State employee, in his/her official capacity, has authority to refer clients tothe outside entity.• Whether the outside position is in the same geographic area as the employee’s Stateposition.• Whether the State employee has had or can be expected to have any official interactionwith the grant recipient or contractor in his/her official capacity.In Case No. 20-00, the Commission noted that its previous decisions regarding specialState officers remained unchanged. Board and commission members make policy, establishgrant criteria, review proposals, make decisions, oversee grants and can be expected to haveofficial interaction with the grant recipient(s). Thus, special State officers cannot representparties before their agencies, cannot receive funding, directly or indirectly, from their agencies,and cannot provide services for agency-funded programs.Published Works. Under N.J.A.C. 19:61-6.7(b), section 24 of the Conflicts Law, andCommission precedent, a State employee may accept compensation for published works underthe following conditions.• There is no prohibition governing such activity in the Department’s enabling legislationor Code of Ethics.• The State employee must obtain prior approval from his/her Department head.• The published work must not use or disclose information not generally available to thepublic.• The State employee must not use State time or resources in connection with the publishedwork.• The State employee must not use his/her official title in connection with publication orpromotion of the published work.• The State employee cannot promote, advertise or solicit sales of the published work toco-workers or individuals with whom he/she has official dealings.43

New Jersey Uniform Ethics Code, February 2011E-9• The State employee may not contract to sell the published work to the State except incompliance with section 19 of the Conflicts Law.• The published work must not have been prepared as part of the State employee’s officialduties.In addition, under the current rule, the receipt of compensation from an “interested party” is notprohibited, but is a factor to be considered in deciding whether to grant approval.In Case No. 255-75, the Commission considered whether employees of the PublicBroadcasting Authority (“PBA”) could receive a compensation fee for journalistic work used ona commercial station. Various journalists employed full-time by the PBA were approached forthe use of news items that they wrote during the hours that they were employed by the State.These scripts, films or tapes were being used on commercial TV channels. The commercialstations wished to compensate the journalists for the use of their work. The Commissiondetermined that it would be a violation of section 24 of the Conflicts Law for State employees toreceive compensation from any source other than the State for news items created as part of theirofficial duties.In Case No. 3-84, the Commission found that the Supervising Program DevelopmentSpecialist, Bureau of Research, Division of Youth and Family Services (“DYFS”), Departmentof Human Services (“DHS”), could not accept a cash award from a gerontological society for apaper prepared by him as a DYFS employee.The DHS was awarded a grant to study abuse of the elderly. Because of his experience inthe field of gerontology, the State employee was assigned the task of preparing a paper on thesubject as part of his official duties. The paper was prepared entirely on State time with grantmonies administered by the State. The State employeethen submitted the paper for consideration for an annual research award and was the recipient ofthat award. The Departmental Ethics Review Board concluded that the acceptance of the cashaward was violative of the Department’s Code of Ethics. The Commission noted that theemployee had solicited the award and affirmed the DHS’ determination. The State employeeappealed the Commission’s decision to the Superior Court, Appellate Division, which upheld theCommission’s determination.In 1997, the Department of Law and Public Safety requested an opinion as to whether aDivision of Law Deputy Attorney General (“DAG”) was permitted to co-author a book aboutpsychics and the paranormal, Case No. 3-97. The DAG wanted to write the book in her privatecapacity and use her married name (she is known by her maiden name in her employment withthe Department). The Commission determined that the DAG was permitted to co-author thebook under the following conditions: that she not refer to her status as a DAG or member of theDepartment; that she not permit the use of her title or employment in connection with publicationor promotion of the book; that she not write about an active case or use information not generallyavailable to the public; that she avoid any legal analysis that could be interpreted as Division of44

New Jersey Uniform Ethics Code, February 2011E-10Law work product; that she not use State time or resources in connection with her outsideactivity.In Case No. 34-98, the Commission determined that the Managing Actuary, Division ofLife and Health, Department of Banking and Insurance ("DOBI"), was permitted to co-authorand market a study guide utilized by students preparing to take the Society of Actuaries ("SOA")professional examination under the Commission's rules, precedent, the Conflicts of Interest Lawand the DOBI Code of Ethics. In approving the activity, the Commission took into account thefollowing factors: the study guide is sold nationally and not just to New Jersey exam registrants,the employee co-authored the book while at Temple, uses only his name and not his official titlein connection with the study guide and does not directly solicit regulated entities.Additional examples of published works situations that have been addressed by theCommission can be found under “Published Works” athttp://nj.gov/ethics/statutes/guide/published_works.html .Political Activity. The Commission permits involvement in partisan political activities providedthat there is no provision in the agency code of ethics prohibiting such activities. Stateemployees, however, may not use State time or State resources in pursuit of such activities andmust notify their Departmental Ethics Liaison Officer. The Department of Personnel has issuedregulations that address the political activities of State employees. These regulations, whichreference the Federal Hatch Act, are not administered or enforced by the Commission.In Commission Case No. 435-77, the Commission determined that a Department ofHealth employee was permitted to serve as chairman or co-chairman of a public employees'committee in support of a gubernatorial candidate. The State employee was cautioned that hemust not use or attempt to use his official position to secure unwarranted privileges oradvantages for the candidate of his choice. Further, he must be careful not to permit his politicalactivities to conflict with the proper discharge of his duties in the public interest.In Commission Case No. 34-85, two members of the Board of Dentistry were advisedthat N.J.S.A. 52:13D-24 expressly permits the solicitation and acceptance of campaigncontributions for announced candidates for elective public office. The dentists were cautioned,however, about political activities which directly involve persons subject to licensure and reviewby the Board of Dentistry. The dentists sent letters, on personal stationery, to thousands of NewJersey licensed dentists, to solicit re-election campaign funds for a New Jersey Assemblyman.Additional examples of political activity situations that have been addressed by theCommission can be found under “Political Activities” athttp://nj.gov/ethics/statutes/guide/political_activities.html .Prohibited Outside Activity – Certain Officials. Section 24d.(1) of the Conflicts Lawprohibits certain designated State officers from soliciting, receiving or agreeing to receive,whether directly or indirectly, any compensation, salary, honorarium, fee, or other form of45

New Jersey Uniform Ethics Code, February 2011E-11income from any source, other than the compensation paid or reimbursed to him/her by the Statefor the performance of official duties, for any service, advice, assistance, appearance, speech orother matter, except for investment income from stocks, mutual funds, bonds, bank accounts,notes, a beneficial interest in a trust, financial compensation received as a result of prioremployment or contractual relationships, and income from the disposition or rental of realproperty, or any other similar financial instrument and except for reimbursement for authorizedtravel.For the purposes of this provision, designated State officer includes: the Governor, theAdjutant General, the Secretary of Agriculture, the Attorney General, the Commissioner ofBanking and Insurance, the Secretary and Chief Executive Officer of the Commerce andEconomic Growth Commission, the Commissioner of Community Affairs, the Commissioner ofCorrections, the Commissioner of Education, the Commissioner of Environmental Protection,the Commissioner of Health and Senior Services, the Commissioner of Human Services, theCommissioner of Labor and Workforce Development, the Commissioner of Personnel, thePresident of the State Board of Public Utilities, the Secretary of State, the Superintendent ofState Police, the Commissioner of Transportation, the State Treasurer, the head of any otherdepartment in the Executive Branch, and the following members of the staff of the Office of theGovernor: Chief of Staff, Chief of Management and Operations, Chief of Policy andCommunications, Chief Counsel to the Governor, Director of Communications, PolicyCounselor to the Governor, and any deputy or principal administrative assistant to any of theaforementioned members of the staff of the Office of the Governor.Note also that, pursuant to Section X of the Uniform Ethics Code, an agency head orassistant head is prohibited from engaging in any private business transactions with anyemployee of his/her agency.General Caveats. The Commission generally provides the following advice to individuals withapproved outside activities. State time cannot be used for outside activities. State resources,including but not limited to telephones, facsimile machines. e-mail, copy machines, mail serviceand office supplies, cannot be used for outside activities. Coworkers and/or individuals withwhom the State employee comes in contact in his/her official capacity cannot be solicited asclients for outside activities, including but not limited to real estate services, cosmetic sales,consulting services, and legal services. State employees are also prohibited from referringclients to any firm with which they are associated.46

New Jersey Uniform Ethics Code, February 2011F-1APPENDIX FBlind Trusts1. For those situations where a blind trust may be utilized by a State officer or employee orspecial State officer or employee, his/her spouse or domestic partner or dependent children, andapproved by the Commission, such trust shall contain the following characteristics:a. The trust shall not contain investments or assets in which the holder's ownership right orinterest is required to be recorded in a public office or those assets whose permanency makestransfer by the trustee improbable or impractical; these investments or assets would include, butnot be limited to, businesses, real estate, security interests in personal property and mortgages;b. The trust shall contain a clear statement of its purpose, namely, to remove from the grantorcontrol and knowledge of investment of trust assets so that conflicts between grantor'sresponsibilities and duties as a public employee or public officer and his or her private businessor financial interests will be eliminated;c. The trust shall be irrevocable, and shall be terminated only upon the death of the publicemployee or public officer or upon termination of his or her status as a public employee or publicofficer whichever shall first occur;d. The trustee shall be directed not to disclose to the grantor any information about any of theassets in the trust;e. The trustee shall be required either to:(1) prepare and file the grantor's personal income tax returns, withholding from distribution ofthe trust's net income amounts sufficient to pay the grantor's tax; and further to participate in theaudit of the grantor's returns during the period of the trust with authority to compromise thegrantor's tax liability; or(2) submit to the grantor, for income tax purposes, a certification of income paid withoutidentifying the assets producing such income;f. Among its other powers, the trustee shall have authority to determine whether any of theassets originally transferred to the trustee are to be sold and, if so, when;g. A provision shall be included in the trust agreement prohibiting the trustee from investing thetrust property in corporations or businesses which do a significant amount of business with theState of New Jersey or from knowingly making any investment in a corporation, business orventure over which the grantor has regulatory or supervisory authority by virtue of his or herofficial position;47

New Jersey Uniform Ethics Code, February 2011F-2h. The grantor shall retain no control over the trustee nor shall he or she be permitted to makeany recommendations or suggestions as to the trust property;i. The trustee shall be a commercial trustee and not a natural person;j. The principal benefit to be retained by the grantor shall be the right to receive income from theassets transferred to the trust;k. The trust shall not become effective until submitted and approved by the Commission; andl. The trust agreement shall provide the trustee will give the Commission access to any recordsor information related to the trust which is necessary for the performance of the Commission'sduties.2. A copy of the executed blind trust agreement shall be filed with the Commission and with thehead of the department in which the State officer or employee holds his/her position. If thegrantor is the head of the department, a copy of the executed blind trust shall be filed with theChief Counsel to the Governor. Attached to such copy shall be a brief statement outlining thebusiness or financial interests from which the State officer or employee seeks to removehimself/herself and the actual or potential conflicts of interest, or appearance of such conflicts,which he/she seeks to avoid by use of the trust agreement.Blind Trust.doc48

New Jersey Uniform Ethics Code, February 2011G-1APPENDIX GGUIDELINES GOVERNING THE USE OF OFFICIAL STATIONERYState officers and employees and special State officers and employees frequently writeletters for various purposes which are not always related to their official duties. Questions aboutthe propriety of letters written on State stationery to further the personal interest of the officer oremployee or another individual or entity have been addressed to the State Ethics Commission.To help resolve these questions, the Commission has established the following Guidelines toclarify the use of official stationery for purposes other than the conduct of a State agency'sbusiness.Permissible Uses of Official StationeryThe Commission has determined that the following uses of State stationery are generallypermissible:1. To recommend a current or former employee or colleague for another position,admission to a school or program, etc.Example: Recommending a subordinate for admission to graduate school.2. To respond to inquiries from a private entity about a current or former employee orcolleague.Example: Providing a character reference for an employee to an adoption agency during thecourse of the employee's application to adopt a child.Note: These permissible uses are only acceptable so long as the use of official stationery doesnot create an impression that the State officer or employee is engaged in an unwarranted use ofhis or her position. For example, it would not be appropriate for a State employee to recommendan individual for inclusion in a program over which the State employee has supervisory orregulatory authority. In addition, there must be a reasonable connection between the officer's oremployee's official duties and the use and purpose of the letter.Impermissible Uses of Official StationeryThe Commission has determined that the following examples represent clearlyimpermissible uses of State stationery:1. To promote a candidate for elective office.Example: Writing an endorsement of a candidate for the legislature for inclusion in a campaignpamphlet.49

New Jersey Uniform Ethics Code, February 2011G-22. To endorse a State vendor or contractor.Example: Writing a letter of general recommendation for a State vendor for dissemination bythe vendor. Note, however, that a letter complimenting the vendor for a job well done may beacceptable even though the vendor may later display the letter.3. To express a personal opinion on a matter that is not related to one's official duties.Example: Sending a letter to the editor of a newspaper commenting on a matter that is notrelated to the duties of the State officer or employee or his or her agency.4. To secure a personal financial gain or pursue a vested interest for one's self.Example: Writing to a private contractor (plumber, electrician) demanding a refund or areduction in a quoted price.Personal Stationery Imprinted with Agency, Office or TitleThe Commission has determined that use of personal stationery imprinted with theagency office or title of a State officer or employee, even though paid for personally, isimpermissible. Such stationery may create the appearance of official stationery or may create animpression that the State officer or employee is acting in an official capacity.The Commission acknowledges that there are occasions when it may be appropriate for aState officer or employee to identify himself or herself by position or title in correspondence onpersonal stationery (i.e., stationery bearing the individual's name and home address).Agency Use of Official Stationery for Solicitations1. State agencies shall not solicit contributions of any kind from vendors to the agency or fromentities regulated by the agency.2. Solicitation of any other entities is subject to review and approval by the agency’s EthicsLiaison Officer prior to any contact by the agency. The Ethics Liaison Officer must be advisedof the purpose of the solicitation, the expected result, the identities of the entities to be solicited,whether there is any personal connection between the agency employees and the solicited entity,and must be provided with a sample of the solicitation letter.3. The Ethics Liaison Officer should determine whether the solicitation would be problematicunder the Uniform Ethics Code, the agency’s code of ethics, the Conflicts of Interest Law, anyGuidelines promulgated by the Commission, and/or any statutory provisions dealing withcharitable contributions. The Ethics Liaison Officer should consider such factors as whether theagency has any business contacts with the recipients of the solicitation, whether any solicitedproducts or services will directly benefit any agency employees, whether the solicitation is of50

New Jersey Uniform Ethics Code, February 2011G-3such magnitude that it could be burdensome to the recipient, and whether the language of thesolicitation is coercive.4. The Ethics Liaison Officer shall copy the Commission on all determinations regardingsolicitations.Circumstances that do not fall within the permissible or impermissible examples aboverequire an individual determination by the Commission. Questions and inquiries should beaddressed to: State Ethics Commission, P.O. Box 082, Trenton, New Jersey 08625-0082; (609)292-1892.51

New Jersey Uniform Ethics Code, February 2011H-1APPENDIX HPOST-EMPLOYMENT RESTRICTIONSNEW JERSEY CONFLICTS OF INTEREST LAWThis memorandum presents a comprehensive overview of the State Ethics Commission'sdecisions, policies and guidelines concerning the post-employment provisions of the ConflictsLaw. Presented below are general explanations of the statutory provisions as well as summariesof past Commission cases. The case presentations are designed only to provide examples ofpost-employment issues that have been addressed by the Commission. Specific questionsregarding a particular situation should be addressed directly to the Commission.The sections of the Conflicts Law covering post-employment are N.J.S.A. 52:13D-17, thegeneral prohibition, and 17.2(c) and (d), the casino post-employment restrictions. In addition,the Uniform Ethics Code contains a one-year ban on certain State officials’ interactions withtheir former agencies.N.J.S.A. 52:13D-17 provides:No State officer or employee or special State officer or employee,subsequent to the termination of his office or employment in anyState agency, shall represent, appear for, negotiate on behalf of, orprovide information not generally available to members of thepublic or services to, or agree to represent, appear for, negotiate onbehalf of, or provide information not generally available tomembers of the public or services to, whether by himself orthrough any partnership, firm or corporation in which he has aninterest or through any partner, officer or employee thereof, anyperson or party other than the State in connection with any cause,proceeding, application or other matter with respect to which suchState officer or employee or special State officer or employee shallhave made any investigation, rendered any ruling, given anyopinion, or been otherwise substantially and directly involved atany time during the course of his office or employment. Anyperson who willfully violates the provisions of this section is adisorderly person, and shall be subject to a fine not to exceed$1,000 or imprisonment not to exceed six months, or both.In addition, for violations occurring after the effective date of P.L.2005, c.382, any former Stateofficer or employee or former special State officer or employee of a State agency in theExecutive Branch found by the State Ethics Commission to have violated any of the provisionsof this section shall be assessed a civil penalty of not less than $500 nor more than $10,000,which penalty may be collected in a summary proceeding pursuant to the "Penalty EnforcementLaw of 1999," P.L.1999, c.274 (C.2A:58-10 et seq.).52

New Jersey Uniform Ethics Code, February 2011H-2N.J.S.A. 52:13D-13(g) defines "interest" as:"Interest" means (1) the ownership or control of more than 10% ofthe profits or assets of a firm, association, or partnership, or morethan 10% of the stock in a corporation for profit other than aprofessional service corporation organized under the "ProfessionalService Corporation Act," P.L. 1969, c.232 (C. 14A:17-1 et seq.);or (2) the ownership or control of more than 1% of the profits of afirm, association, or partnership, or more than 1% of the stock inany corporation, which is the holder of, or an applicant for, acasino license or in any holding intermediary company withrespect thereto, as defined by the "Casino Control Act," P.L. 1977,c.110 (C. 5:12-1 et seq.). The provisions of this act governing theconduct of individuals are applicable to shareholders, associates orprofessional employees of a professional service corporationregardless of the extent or amount of their shareholder interest insuch a corporation.APPLICATION OF SECTION 17 - GENERAL POST-EMPLOYMENT PROHIBITIONSpecific Cause, Proceeding, Application or Other MatterSection 17 prohibits a former State officer or employee or special State officer oremployee from representing, appearing for, negotiating on behalf of, providing information orservices not generally available to the public or agreeing to perform any of those activities forany party, other than the State, in connection with those causes, proceedings, applications orother matters in which the officer or employee had made any investigation, rendered any ruling,given any opinion or been otherwise substantially and directly involved while in Stateemployment. There is no time limit on this prohibition.It is important to note that these restrictions apply to specific causes, proceedings,applications or other matters. This restriction does not extend to "determinations of generalapplicability or the preparation or review of legislation which is no longer pending before theLegislature or the Governor." In addition, the Commission determined In the Matter of Walter J.Maibach, Case No. 179-93, that a regulation enacted pursuant to rulemaking authority isanalogous to legislation and, in accordance with the definition of section 13(h), is not a "matter"when it is no longer pending.Whether a cause, proceeding, application or other matter at issue in a post-employmentquestion is categorized as specific or general is a determination made by the Commission on acase-by-case basis. Questions about the nature of matters with which employees hadinvolvement during the course of their official duties should be directed to the Commission.53

New Jersey Uniform Ethics Code, February 2011H-3Substantial and Direct InvolvementIn certain situations it may be difficult to determine whether a former State officer oremployee or special State officer or employee was "substantially and directly involved" in acertain matter or whether such officer or employee had merely been technically or formallyinvolved. Such determinations are made as individual cases arise. In considering whether aformer State employee had substantial and direct involvement in a matter, the Commission hastypically reviewed such factors as whether the individual had supervisory responsibility,provided input, submitted reports, signed contracts on behalf of the agency, attended meetings,approved applications, had access to confidential information, or was directly involved indecision making.Providing Information Not Generally Available to the PublicSection 17 prohibits former State officers and employees or special State officers oremployees from providing information not generally available to the public. The Commissionnormally solicits input from the former officer's or employee's agency and also considerswhether the information is available under the Open Public Records Act, N.J.S.A. 47:1A-1 et seq.Application of Restriction to Partnership, Firm or CorporationThe restrictions contained in the Conflicts of Interest Law apply to the partnership, firmor corporation under the following circumstances: (1) if the former State officer or employee orspecial State officer or employee is a shareholder, associate or professional employee of a firmorganized as a professional service corporation or (2) if the former State officer or employee orspecial State officer or employee owns or controls more than 10% of the stock of a corporationor more than 10% of the profits or assets of a firm, association or partnership.The post-employment restrictions extend, therefore, to former State officers or employeesand special State officers or employees personally and to any employees or officers of anyprofessional service corporation with which he/she is employed or associated or is a shareholder.In addition, the restriction also extends to those employees or officers of partnerships, firms orcorporations in which the former State officer or employee or special State officer or employeehas more than 10% ownership or control. If a former State officer or employee or special Stateofficer or employee is employed by a company in which he/she does not have more than a 10%interest, and the company is not a professional service corporation, the restrictions contained inthe Conflicts Law pertain to him/her personally but do not extend to the corporation by whichhe/she is employed.PenaltySection 17 of the Conflicts Law was amended in 2006. For violations occurring after theeffective date of the amendment, March 15, 2006, any former State officer or employee orformer special State officer or employee of a State agency in the Executive Branch found by the54

New Jersey Uniform Ethics Code, February 2011H-4Commission to have violated any of the provisions of section 17 shall be assessed a civil penaltyof not less than $500 nor more than $10,000.In addition, the fine for a violation of section 17 that is punishable as a disorderly personsoffense was increased from $500 to $1,000.SAMPLE GENERAL POST-EMPLOYMENT CASES ADDRESSED BY THECOMMISSIONEmployment With a Firm With Which State Officer or Employee Has Contact in His/HerOfficial CapacityThe Commission has addressed the issue of employment with a firm with which a Stateofficer or employee or special State officer or employee has contact in his/her official capacityon numerous occasions. Listed below are some examples.In 1979, the State employee, a Highway Supervisor, Division of Design at theDepartment of Transportation ("DOT") requested permission to accept a position with a firmwith which he came in contact in his official capacity. The Division of Design was responsiblefor all phases of projects involving bridges, drafted the actual contract agreement, supervised itsadministration, and acted as liaison between the consultant and the Department. The actualchoice of the consulting firm was the responsibility of the Contract Selection Committee whichwas separate and apart from the Division of Design. The employee was not a member of theContract Selection Committee.The Commission determined that it would not be a conflict of interest for the employee toaccept a consultant position with the firm. He was, however, permanently restricted fromrepresenting, appearing for or negotiating on behalf of the firm on any matter in which he hadbeen substantially and directly involved during his State employment. The Commissionrequested that as a member of the consulting firm, he refrain from working on any bridgeprojects that were before the DOT while he was a State employee. There were no restrictions onhis participation on behalf of the consulting firm on new matters. In the Matter of Gary Case,Commission Case No. 763-79.In 1980, a Department of Energy employee received an offer of employment from asubcontractor with whom she had interaction in her official capacity. The interaction includedaccompanying the subcontractor on "walk throughs" of institutions applying for grants from theDepartment and auditing and monitoring the status of grant applications.The Commission reviewed the matter under the section 17 post-employment restrictionand also considered whether the employee had exercised an unwarranted privilege prohibited bysection 23(e)(3) of the statute. The Commission determined that although the employee hadsome involvement and contact with the subcontractor in her official capacity, there did notappear to have been any substantial and direct involvement in a specific matter by the employeeduring the course of her employment. As to the unwarranted privilege provision, the55

New Jersey Uniform Ethics Code, February 2011H-5Commission determined that since the employee did not solicit the position with thesubcontractor but rather was approached by the subcontractor and immediately contacted hersupervisor regarding the offer of employment, no unwarranted privilege existed. In the Matter ofFrances Kelly, Commission Case No. 875-80.In 1990, the Commission considered a situation in which the State employee was offereda position as vice-president of Facilities Maintenance for a construction management anddevelopment company. As a State employee, the individual had been an engineer in the Bureauof Lease Construction, Department of the Treasury, and had been involved in monitoringconstruction at 2 of the 14 properties owned by the company and leased to the State.The Commission discussed whether there was an improper "revolving door" appearanceto the employee being offered the position. Upon learning that the development company hadsolicited the employee for the vice-president position and that the employee had not sought theposition, the Commission considered the appearance issue to be resolved. The Commission thendetermined that section 17 did not bar the employment with the development company but thatthe employee could not represent the company with respect to the two properties with which hehad involvement as a State employee. In the Matter of Lewis Ischinger, Commission Case No.5-90.Matters Pending Before Former Employee's Former AgencyFormer State officers and employees or special State officers or employees are notprohibited from working on matters that originated in their former agencies subsequent to theirleaving State service so long as they had no substantial and direct involvement in those matters.In 1974, the former Acting Director of the Division of Water Resources in theDepartment of Environmental Protection (“DEP”) requested an opinion from the Commission asto whether he could accept employment with a consulting firm that had several matters beforethe Division. These matters included a stream encroachment permit, two water pollution controlpermits, a loan offer and grant offer.The Commission determined that since the Acting Director's signature appeared asapproving the two water pollution control permits, the loan offer and the grant offer, he wasprecluded from becoming involved in those matters during his employment with the firm.Because he was not involved with the stream encroachment permit, the Commission found that itdid not fall with the section 17 prohibition. Advisory Opinion No. 23.In 2001, the Commission considered whether the former Administrator, Office ofFinance and Management, Division of Solid Waste, DEP, was permitted to represent ABC inconnection with efforts to obtain a solid waste facility permit to operate a transfer station.In 1994, XYZ had filed an application with the Division for a solid waste facility permitto expand its then operating transfer station and materials recovery facility. Staff who reportedto the former Administrator reviewed the application and prepared a draft permit. A public56

New Jersey Uniform Ethics Code, February 2011H-6hearing on the draft permit was held in July; the former Administrator acted as the hearingexaminer. In August, the final permit was issued under the former Administrator’s signature,with an expiration date of August 2000. In 1995, the permit was further modified to include arecycling operation. The modification was issued under the former Administrator’s signature;his employment with the Division and with the State terminated in March 1997.XYZ filed a permit renewal application in the spring of 2000 and that application waspending with the Division at the time of the Commission’s review. ABC was in the process ofpurchasing the assets of XYZ and wished to become the owner/operator of the transfer station.The former Administrator, or the firm with which he was currently associated, wanted torepresent ABC in its efforts to obtain a solid waste facility permit to operate the transfer station.The Commission determined that the ABC permit application was a new matter for thepurposes of section 17. The XYZ permit was not transferable. When the sale of XYZ’s assets toABC took place, the existing permit would be revoked and ABC would then be required tocomply with DEP regulations applicable to new permits. In the Matter of Robert C. Ciolek, CaseNo. 39-01.Employment by Entities Contracting With Former AgencyIn 1972, the former Chief of the Bureau of Financial Aid at the Department ofCommunity Affairs ("DCA") requested permission to accept employment with the City ofOrange, whose program he was responsible for coordinating during his tenure at the DCA. Theemployee made the contract arrangements with the city for funding from DCA; however, he didnot sign off on the pending contracts.The Commission determined that the former employee made the contract arrangement forfunding by the DCA and that such activity on the part of the employee constituted directinvolvement within the meaning of section 17. All monies for administering the municipality'sprogram came from the DCA. Advisory Opinion No. 2.Subsequent to the rendering of Advisory Opinion No. 2, the contract in which the former BureauChief was originally involved expired. A new contract between Orange and the DCA was readyfor execution. Orange wished to engage the former Bureau Chief under this new contract. TheCommission sought advice from the Attorney General’s Office. In Attorney General OpinionM72-0414, it was determined that the employment of the former Bureau Chief by Orange undera newly executed contract would not violate section 17. The Opinion noted that when the newcontract is signed, the direct connection between the funded program and the former employee issevered. The Opinion further stated that “termination of the contract in which the formeremployee was directly involved appears to be the reasonable point at which the restriction uponthe former employee’s post-employment activities should also be terminated.”57

New Jersey Uniform Ethics Code, February 2011H-7In subsequent cases, the Commission has affirmed its position that a new contract is anew matter for the purposes of the post-employment restriction. (In the Matter of Rose Zeltzer,Case No. 3-95, In the Matter of Michael Rowe, Case No. 2-96, In the Matter of Patricia A.Stolpe, Case No. 35-03).In 1980, the Commission issued two advisory opinions dealing with employment byentities receiving funding from a former agency and distinguished the cases based on the"substantial and direct" involvement criteria articulated in the statute.In the first instance, the Commission addressed a situation that involved an individualwho worked for the State Law Enforcement Planning Agency ("SLEPA") as a Senior Planner.During the course of his employment, he had official associations with a County Director of aPlanning Board who was anxious to participate in a SLEPA Planning Program. The SeniorPlanner advised the Director to send a letter to SLEPA stating the county's interest in theprogram, which the Director did. Several months subsequent to receiving information fromSLEPA, the Director submitted an application seeking SLEPA funding for his County PlanningProgram. The Senior Planner then assisted the Director in completing the application byproviding data relative to the program and, in particular, to the county's personnel and financialneeds. The Senior Planner then became interested in the position that was funded by the SLEPAgrant.The Commission determined that since the individual was substantially and directlyinvolved in the awarding of the SLEPA grant, he was precluded from such employment due tothe post-employment restriction. Advisory Opinion No. 37.The Commission considered two related requests for advice involving former SLEPAemployees who had accepted or desired to accept positions of employment with county agenciesreceiving SLEPA grants. The individuals, in their capacities as State employees, had noinvolvement in processing or otherwise acting upon the grant applications of the county agenciesthat later became their employers.The Commission determined that the employment was not proscribed as the former Stateemployees were not substantially and directly involved in these matters during the course of theirState employment. The Commission determined that, in and of itself, a grantor-granteerelationship between an individual's former State agency and his subsequent non-State employernormally does not give rise to a prohibited post-employment situation within the framework ofsection 17. The Commission noted that, of course, the applicability of the post-employmentrestriction of the Conflicts Law to any given sets of facts and circumstances ultimately can bedetermined only by direct inquiry to the Commission. Advisory Opinion No. 39.Multi-faceted ProjectsThe Commission has considered a number of cases involving multi-faceted projects thatare of long duration or sequential in development and has declined to segment the projects forthe purposes of the post-employment restriction.58

New Jersey Uniform Ethics Code, February 2011H-8In 1998, the Commission was asked whether modifications to an RFP constituted a newmatter for the purposes of the post-employment restriction. The former employeesacknowledged that they were substantially and directly involved with the original RFP duringtheir State employment. However, they advanced the position that the modified RFP was a newmatter because the earlier RFP intended that the work be accomplished through the mandatoryuse of a particular system. The use of that system was not mandatory in the later RFP on whichthey bid. The Commission found that the utilization of alternate methodologies to accomplishproject goals does not constitute a new matter for the purposes of the post-employmentrestriction. In the Matter of Linda Anselmini and Lora Levosky, Commission Case No. 22-98.In 1999, the Commission considered whether the former State employee’s postemploymentactivities in connection with the closure of several contaminated sites were violativeof section 17. The Commission determined that the former employee was substantially anddirectly involved in the closure while he was a DEP employee based on a sizable recordindicating his participation in meetings and correspondence dealing with specifics of the closure.With respect to the matter, the Commission had to determine whether the matter involved theentire closure process or whether the closure process should be segmented based on changes inregulations and modifications in the technologies applied to the site. After an extensive review,the Commission determined that the closure process should not be segmented for the purposes ofthe post-employment restriction and, thus, determined that section 17 precluded the formeremployee’s involvement in the closure on behalf of his employer. In the Matter of Kenneth Siet,Commission Case No. 6-99,In 2004, a former State employee requested that the Commission consider whether hisprevious involvement in a 1996 Landfill Closure/Post Closure Plan (“1996 Plan”) during histenure with the DEP precluded him, or the law firm with which he was now associated, fromrepresenting a party other than the State in litigation stemming from the closure.The employee’s position was that the 1996 Plan had been superseded by a 2002 Plan,with which he had had no involvement, and, thus, the post-employment prohibition did notapply. The Commission viewed the 2002 Plan as a revision to the 1996 Plan, not as a newmatter. Because the former employee was substantially and directly involved in the 1996 Plan,the Commission determined that he was precluded from having any involvement in the landfillclosure. The former employee had no ownership or shareholder interest in the law firm, and thefirm was not organized as a professional service corporation; therefore, the restriction on theformer State employee did not apply to the firm. In the Matter of Robert C. Ciolek, CommissionCase No. 13-04.One-Year Ban – Certain State OfficialsIn accordance with the recommendation of the Special Counsel for Ethics Review andCompliance, the Uniform Ethics Code specifies that for one year after the termination of theState office or employment of any of the individuals noted below, he/she shall not represent,appear for, or negotiate on behalf of, or agree to represent, appear for, or negotiate on behalf of59

New Jersey Uniform Ethics Code, February 2011H-9any person or party other than the State with or before any officer or employee of the Stateagency in which he/she served. The provisions of this subsection shall not apply to anypartnership, firm or corporation in which he/she has an interest or is employed, or to any partner,officer, director or employee of such partnership, firm or corporation. Nothing contained in thissection prohibits a State agency from contracting with a former State officer or employee to acton behalf of the State.The one-year ban applies to any head, deputy head or assistant head of any principaldepartment, board, commission or authority, the Superintendent of State Police, the Governor’sChief of Staff, Chief of Management and Operations, Chief of Policy and Communications,Chief Counsel, Director of Communications, Policy Counselor, and any deputy or principaladministrative assistant to any of the aforementioned members of the staff of the Office of theGovernor.In addition to the prohibition dealing with one’s former agency, the governor and eachhead of a principal department in the Executive branch are prohibited, for one year after thetermination of office or employment, from registering as a “governmental affairs agent,” as thatterm is defined in N.J.S.A. 52:13C-20. N.J.S.A. 52:13C-21.4. This provision is not enforced bythe State Ethics Commission.SummaryIn summary, the general post-employment restrictions do not prohibit a former Stateofficer or employee or special State officer or employee or any firm in which he/she has aninterest from representing a party other than the State concerning:- Determinations of general applicability.- Preparation or review of legislation that is no longer pending before theLegislature or the Governor.- Regulations no longer pending before an agency since these are notspecific causes and are analogous to legislation.- Any matter pending before any State agency, including the individual's former agency, ifthe former officer or employee or special State officer or employee was not "substantiallyand directly" involved in the matter while employed by the State.- Accepting employment with entities that contract with the individual's former agency orany other State agency if the State officer or employee or special State officer oremployee was not "substantially and directly" involved in the matter in question.- Providing information generally available to the public.60

New Jersey Uniform Ethics Code, February 2011H-10- Accepting employment with a firm with which the State officer oremployee or special State officer or employee had contact in his/herofficial capacity.However, certain State officials are subject to additional one-year bans on their postemploymentactivities.Seeking Future EmploymentIn the past, the Commission has determined that employees who have direct andsubstantial contact with any interested parties must refrain from circulating resumes or in anymanner initiating employment discussions with those individuals or entities while still in Stateservice. If an employee is solicited for potential employment by an interested party, thatsolicitation must be disclosed immediately to the employee's management and to thedepartmental ethics liaison officer to avoid a situation where an employee may appear to beusing his/her official position to gain an unwarranted advantage. Employees who do not havedirect and substantial contact with interested parties may circulate resumes and enter intodiscussions regarding potential employment with those firms as long as they avoid a situationthat may give rise to an unwarranted advantage. All employees are cautioned that discussions,interviews, and negotiations should not take place on State time. In the Matter of TheodoreFischer, Commission Case No. 83-88.SECTION 17.2(c) and (d) - CASINO POST-EMPLOYMENT RESTRICTIONN.J.S.A. 52:13D-17.2 (c) and (d) provide:c. No person or any member of his immediate family, nor anypartnership, firm or corporation with which such person isassociated or in which he has an interest, nor any partner, officer,director or employee while he is associated with such partnership,firm or corporation, shall, within two years next subsequent to thetermination of the office or employment of such person, hold,directly or indirectly, an interest in, or hold employment with, orrepresent, appear for or negotiate on behalf of, any holder of, orapplicant for, a casino license in connection with any cause,application or matter, or any holding or intermediary companywith respect to such holder of, or applicant for, a casino license inconnection with any phase of casino development, permitting,licensure or any other matter whatsoever related to casino activity,except as provided in section 3 of P.L.2009, c.26 (C.52:13D-17.3),and except that:61

New Jersey Uniform Ethics Code, February 2011H-11(1) a member of the immediate family of a person may holdemployment with the holder of, or applicant for, a casino license if,in the judgment of the State Ethics Commission, the JointLegislative Committee on Ethical Standards, or the SupremeCourt, as appropriate, such employment will not interfere with theresponsibilities of the person and will not create a conflict ofinterest, or reasonable risk of the public perception of a conflict ofinterest, on the part of the person;(2) an employee who is terminated as a result of a reduction in theworkforce at the agency where employed, other than an employeewho held a policy-making management position at any time duringthe five years prior to termination of employment, may, at any timeprior to the end of the two-year period, accept employment withthe holder of, or applicant for, a casino license if, in the judgmentof the State Ethics Commission, the Joint Legislative Committeeon Ethical Standards, or the Supreme Court, as appropriate, suchemployment will not create a conflict of interest, or reasonable riskof the public perception of a conflict of interest, on the part of theemployee. In no case shall the restrictions of this subsection applyto a secretarial or clerical employee. Nothing herein containedshall alter or amend the post-employment restrictions applicable tomembers and employees of the Casino Control Commission andemployees and agents of the Division of Gaming Enforcementpursuant to subsection e.(2) of section 59 and to section 60 ofP.L.1977, c.110 (C.5:12-59 and C.5:12-60); and(3) any partnership, firm or corporation engaged in the practice oflaw or in providing any other professional services with which anyperson included in paragraph (1) of subsection a. of this section, ora member of the immediate family of that person, is associated,and any partner, officer, director or employee thereof, other thanthat person, or immediate family member, may represent, appearfor or negotiate on behalf of any holder of, or applicant for, acasino license in connection with any cause, application or matteror any holding company or intermediary company with respect tosuch holder of, or applicant for, a casino license in connection withany phase of casino development, permitting, licensure or anyother matter whatsoever related to casino activity, and that personor immediate family member shall not be barred from associationwith such partnership, firm or corporation, if for a period of twoyears next subsequent to the termination of the person's office oremployment, the person or immediate family member (a) isscreened from personal participation in any such representation,appearance or negotiation; and (b) is associated with thepartnership, firm or corporation in a position which does not entailany equity interest in the partnership, firm or corporation. The62

New Jersey Uniform Ethics Code, February 2011H-12exception provided in this paragraph shall not apply to a formerGovernor, Lieutenant Governor, Attorney General, member of theLegislature, person included in paragraph (2) of subsection a. ofthis section, or to the members of their immediate families.d. This section shall not apply to the spouse of a State officer oremployee, which State officer or employee is withoutresponsibility for matters affecting casino activity, who becomesthe spouse subsequent to the State officer's or employee'sappointment or employment as a State officer or employee andwho is not individually or directly employed by a holder of, orapplicant for, a casino license, or any holding or intermediarycompany.Section 17.2(c) prohibits a "person" from holding, directly or indirectly, an interest in, orholding employment with, or representing, appearing for, or negotiating on behalf of, any holderof, or applicant for, a casino license in connection with any cause, application or matter, or anyholding or intermediary company with respect to such holder of, application for, a casino licensein connection with any phase of casino development, permitting, licensure or any other matterwhatsoever related to casino activity. This prohibition extends for a period of two years. Section17.2(c) was amended on December 20, 1993 to provide an exception for members of a "person's"immediate family. Under the amendment, a family member is permitted to hold employmentwith the holder of, or applicant for, a casino license, if the Commission determines that suchemployment will not create a conflict of interest or reasonable risk of the public perception of aconflict of interest. An amendment effective January 25, 1995 provides that a non-policymakingemployee terminated as a result of a reduction in force may, prior to the end of the twoyearperiod, accept employment with a casino license holder or applicant if the Commissiondetermines that there is no actual conflict of interest or the public perception of a conflict. Anamendment dated January 12, 2010 provides an exception to the two year ban if the “person” ora member of the “person’s” immediate family is employed by a partnership, firm or corporationproviding professional services to a casino licensee or applicant or holding or intermediarycompany of the licensee or applicant. Under the exception, the entity may engage in casinorelatedmatters but the “person” or member of the “person’s” immediate family must be screenedfrom these matters for a period of two years following the termination of the person’s Stateemployment. This exception is not applicable if the “person” holds an equity interest in suchentity, or is the former Governor, Lieutenant Governor, or Attorney General or a member of theimmediate family of one of these individuals.Section 17.2(a) defines "person" as:any State officer or employee subject to financial disclosure by lawor executive order and any other State officer or employee withresponsibility for matters affecting casino activity; any specialState officer or employee with responsibility for matters affectingcasino activity; the Governor; any member of the Legislature orfull-time member of the Judiciary; any full-time professionalemployee of the Office of the Governor, or the Legislature;63

New Jersey Uniform Ethics Code, February 2011H-13members of the Casino Reinvestment Development Authority; thehead of a principal department; the assistant or deputy heads of aprincipal department, including all assistant and deputycommissioners; the head of any division of a principal department;any member of the governing body, or the municipal judge or themunicipal attorney of a municipality wherein a casino is located;any member of or attorney for the planning board or zoning boardof adjustment of a municipality wherein a casino is located, or anyprofessional planner, or consultant regularly employed or retainedby such planning board of zoning board of adjustment.Section 13(i) defines "member of the immediate family" as:the person's spouse, child, parent or sibling residing in the samehousehold.Application of Restriction to Partnership, Firm or CorporationThe restrictions contained in section 17.2(c) apply to "persons" and immediate familymembers not granted a waiver and to any partnership, firm or corporation with which such"person" is associated or in which he/she has an interest. The Conflicts Law defines "interest" asthe ownership or control of more than 10% of the stock of a corporation or more than 10% of theprofits or assets of a firm. The restrictions in 17.2(c) do not extend to a partnership, firm orcorporation that is providing professional services if the “person” is not an equity partner.Effect of Restriction on Employment by Casino AssociationIn Advisory Opinion No. 41, the Commission determined that, under the application ofsection 17.2(c), a "person" may not become employed by the Casino Association of New Jersey("Casino Association") immediately upon leaving State service.The Casino Association is a non-profit corporation and holder of a non-gaming casinoservice industry license that operates as a trade association representing the collective interests ofAtlantic City casino licensees. Among other things, the Association works to promote thecommon good of the industry and its members and to provide liaison between the industry andother parties, be they governmental, business, labor, social or civic.In Advisory Opinion No. 41, the Commission noted that section 17.2 is a part of theConflicts Law which has as its paramount objective to "ensure propriety and preserve publicconfidence." N.J.S.A. 52:13D-12(b). Section 17.2 supplements both the Casino Control Act andthe Conflicts Law in fostering and maintaining this objective. It represents an additional step "tosanitize casino gambling and its potentially corrupting effect upon government." See Knight v.Margate, 88 N.J. 374, 392 (1981). It is the Commission's view that a technical interpretation ofsection 17.2(c) that would allow "persons" leaving State service to be employed by the CasinoAssociation would be inconsistent with the overall objectives and purposes of the statute even64

New Jersey Uniform Ethics Code, February 2011H-14though the Casino Association is not a casino license holder. Its membership is exclusivelycasino license holders and it acts to further the aggregate interests of those casino license holdersin a number of areas, including interaction with State government. This is exactly the kind ofrelationship between State "persons" and the casinos that is intended to be regulated by thesection 17.2(c) post-employment ban. Advisory Opinion No. 41.Members of the BarFormer State officers and employees who are also members of the bar must also adhereto the ethical standards adopted by the New Jersey Supreme Court:Except as law may otherwise expressly permit, and subject to RPC 1.9, a lawyer whoformerly has served as a government lawyer or public officer or employee of the governmentshall not represent a private client in connection with a matter: (1) in which the lawyerparticipated personally and substantially as a public officer or employee, or (2) for which thelawyer had substantial responsibility as a public officer or employee; or (3) when the interests ofthe private party are materially adverse to the appropriate government agency, provided,however, that the application of this provision shall be limited to a period of six monthsimmediately following the termination of the attorney’s service as a government lawyer or publicofficer. (RPC 1.11 (a)).The scope of New Jersey's Conflicts of Interest Law is at least as broad as the rulescovering attorney ethics. Requests for advice on the application of the Rules of ProfessionalConduct should be directed to the Supreme Court Advisory Committee on Professional Ethics.65

New Jersey Uniform Ethics Code, February 2011I-1APPENDIX ISUBCHAPTER 7. RECUSAL PROCESS19:61-7.1 PurposeThe purpose of this subchapter is to provide State officials with guidance regarding thecircumstances under which a State official must recuse himself or herself and procedures as toproperly effectuating a recusal.19:61-7.2 ScopeThe rules in this subchapter apply to all State officers and employees and to all specialState officers and employees as defined in the Conflicts of Interest Law, N.J.S.A. 52:13D-13(b)and (e), which definitions are incorporated in N.J.A.C. 19:61-1.10.19:61-7.3 DefinitionsThe following words and terms, as used in this subchapter, shall have the followingmeanings, unless the context clearly indicates otherwise.“Recusal” means the process by which a person is disqualified, or disqualifies himself orherself, from a matter because of a conflict of interest.“Relative” means a spouse, parent, child, sibling, grandparent, grandchild, uncle, aunt,nephew, niece, father-in-law, mother-in-law, daughter-in-law, son-in-law, brother-in-law, sisterin-law,or first cousin, whether in whole or half blood, by marriage, adoption or naturalrelationship, and the spouse of any such person.19:61-7.4 Situations where recusal is required(a) A State official is required to recuse himself or herself from an official matter that involvesany private sector individual, association, corporation or other entity that employed or didbusiness with the State official during the one year prior to the official's commencement of Stateservice. This recusal shall remain in effect for one year after the commencement of the official'sState service.(b) A State official is required to recuse himself or herself on an official matter if he or she hadany involvement in that matter, other than on behalf of the State, prior to commencement of hisor her State service. The recusal shall remain in effect until the agency no longer has any interestin the matter.(c) A State official is required to recuse himself or herself from an official matter that involvesany individual, association, corporation or other entity from which the State official received acampaign contribution, individually or in the aggregate, in an amount required to be reported by66

New Jersey Uniform Ethics Code, February 2011I-2N.J.A.C. 19:25-10. Recusal is required regardless of whether the State official is elected to theoffice or position associated with the campaign contribution. The recusal shall remain in effectuntil the expiration of the term of office which the State official was seeking when thecontribution was made.(d) A State official must recuse himself or herself from a matter if he or she has:1. Any financial interest, direct or indirect, that is incompatible with the discharge of the Stateofficial's public duties; or2. Any personal interest, direct or indirect, that is incompatible with the discharge of the Stateofficial's public duties.(e) For purposes of (d) above, an incompatible financial or personal interest includes, but is notlimited to, outside employment; a debtor/creditor relationship; a fiduciary relationship; a sourceof income; any matter pertaining to or involving a relative or cohabitant; a relationship with aperson providing funds, goods or services without compensation; any matter pertaining to orinvolving a business associate or business investment; and a leadership role in a professional ortrade organization, which interest might reasonably be expected to impair a State official'sobjectivity and independence of judgment in the exercise of his or her official duties or mightreasonably be expected to create an impression or suspicion among the public having knowledgeof his or her acts that he or she may be engaged in conduct violative of his or her trust as a Stateofficial.(f) An incompatible financial or personal interest may exist in other situations which are notclearly within the provisions of (d) and (e) above, depending on the totality of the circumstances.A State official should contact his or her agency ethics liaison officer or the Commission forguidance in such cases.(g) A State official must seek the advice of the State agency's counsel, agency ethics liaisonofficer or the Commission as to the propriety of participation in a matter if any person requeststhat a State official recuse himself or herself from that matter. Oral advice, followed up by awriting, may be provided by the agency's counsel, the agency ethics liaison officer or theCommission to avoid delay. Oral advice should subsequently be memorialized by a writing or byinclusion in public minutes.Examples:1. The spouse of the Director of the Division of Solid and Hazardous Waste (Division),Department of Environmental Protection, recently became a partner in ABC, an environmentalconsulting firm that represents clients before the Division. The Director must recuse himselffrom any involvement with ABC matters that come before the Division. The recusal must bememorialized in writing and conform to the standards of N.J.A.C. 19:61-7.5(b).67

New Jersey Uniform Ethics Code, February 2011I-32. The Director of a program that regulates health insurance carriers has been approached aboutpossible employment by a regulated entity. The entity does not currently have any specific cause,proceeding, application or other matter pending. The solicitation must immediately be disclosedto the Director's supervisor and the Department Ethics Liaison Officer to avoid a situation wherethe State official may appear to be using his or her official position to gain an unwarrantedadvantage. The circumstances surrounding the solicitation and the State official's officialinteractions with the entity must be reviewed before the official proceeds with any job-seekingactivities. If it is determined that the State official may respond to the solicitation, he must recusehimself from any involvement with the entity in his official capacity. Such recusal must conformto the standards of N.J.A.C. 19:61-7.5(b).3. Pursuant to N.J.A.C. 19:61-3.1(e), if a member of the Commission holds office oremployment in the same Department which employs a State official named in an allegation, heor she must disqualify himself or herself from participation in any decisional process relating tothat particular case. One of the Commission meeting agenda items is an allegation that aDepartment of Personnel employee has violated the Conflicts of Interest Law. Because theCommission Chairwoman is the Commissioner of the Department of Personnel, materialsassociated with this matter would not be forwarded to her. In addition, the Chairwoman wouldplace her recusal and the reason for such recusal on the record at the meeting and leave the roomduring non-public deliberations.4. A member of the Real Estate Commission (REC) is a Director and past President of the NewJersey Association of Realtors (NJAR). The NJAR currently opposes a regulation proposed bythe REC, has submitted a letter outlining its position, and plans to attend the REC meeting toexpress its opposition to the regulation. Because the REC member is an officer of the NJAR, hemust recuse himself from discussions and voting on the regulation in question.5. The Governor signed an Environmental Act that requires the establishment of a nine memberOversight Council, four of whom must be county and municipal officials from the region. One ofthe municipal officials appointed to the Council was recently elected and one of the countyofficials appointed to the Council recently lost his bid for State Senate. A local engineering firmmade a substantial campaign contribution to the successful campaign of the municipal official,and another large donation to the county official's unsuccessful campaign for the State Senate.Pursuant to N.J.A.C. 19:61-7.4(c), the recently elected municipal official would have torecuse on those matters involving the engineering firm until his current term of office expires. Ifhe sought re-election and received no contribution from the same engineering firm, the recusalrule would no longer be applicable once the new term commences.Similarly, the county official who unsuccessfully sought a State Senate seat would alsohave to recuse from matters involving the engineering firm for the duration of the term of thatSenate seat because the engineering firm's donation to his campaign could create the impressionof conduct violative of his trust as a State official in his current position. If this county officialsubsequently runs for the State Senate seat again and he accepted another contribution from this68

New Jersey Uniform Ethics Code, February 2011I-4engineering firm, he would also have to recuse for the next term of office for the State Senateseat.19:61-7.5 Procedure for recusal(a) If a State official finds, or is advised by agency counsel or the agency ethics liaisonofficer, that an incompatible financial or personal interest exists on a matter, the State officialmust recuse himself or herself from that matter or seek advice from the Commission. Therecusal must be absolute, that is, the State official must have no involvement with the matterfrom which he or she has recused himself or herself.(b) All recusals, other than those provided for in (c) below, must be memorialized inwriting. See the subchapter Appendix for samples. The writing must:1. Specify the reason for and the date of the recusal;2. Specify the duration of the recusal (which may be expressed in terms related to thependency of the matter in the State agency);3. Specify the effect of the recusal on the State official and his or her State agency (forexample, that the State official is not to be contacted or involved or participate in anymanner concerning the matter from which he or she has been recused);4. Name the person who is to assume responsibility and authority for the matter from whichthe State official has been recused (if applicable); and5. Be disseminated to all persons who might be affected by the State official’s recusal andto the agency ethics liaison officer, who shall maintain the writing for as long as the Stateofficial serves in his or her position.(c) In the case of a State agency that maintains a public record of a proceeding, that is, a Board or Commissionmeeting, formal written recusal is not required; however, the following procedures must be followed:1. To the extent feasible, meeting materials involving a matter from which the State officialmust recuse himself or herself should not be distributed to the State official;2. At the subject meeting, the State official must place his or her recusal and the reason forsuch recusal on the record prior to any discussion of the matter; and3. The State official must leave the room at a non-public portion of the meeting while thematter in question is under discussion.69

New Jersey Uniform Ethics Code, February 2011I-5APPENDIXSample Recusal StatementsSample Recusal Statement: Seeking EmploymentDATE:TO:_______________________Agency Ethics Liaison OfficerState Ethics CommissionFROM:SUBJECT:Name of EmployeeRecusal – Seeking Employment with (Name of Outside Organization)This is to notify you that I am (seriously considering employment with, discussingemployment with, or seeking employment with) (Name of Outside Organization).My seeking employment may present an actual or appearance of a conflict of interest;therefore, I must disqualify/recuse myself from any official duties that involve the aboveorganization. I understand that I may not participate in any way as a State official in any mattersregarding the above organization. Furthermore, I understand that it would be appropriate for anymatters specifically involving the above-named organization to be referred to my supervisor (orsubordinate, if no other option) without consulting me or informing me that such matters arepending. This action is taken with the concurrence of my supervisor (or subordinate), asindicated below.I understand that this recusal will remain in effect until I inform you in writing that allemployment seeking activity has terminated and I receive written permission from the agencyethics liaison officer to resume interactions with the outside organization.______________________________Employee’s NameRecommend: _________________________________ ____________(Name of Employee’s Director/Supervisor) DateApprove: _________________________________ ____________Ethics Liaison OfficerDate70

New Jersey Uniform Ethics Code, February 2011I-6Sample Recusal Statement: ConflictsDATE:TO:FROM:SUBJECT:_______________Designee(s)Name of EmployeeRecusalBecause I may be seen to have a conflict of interest in matters affecting (name of entityor individual) relating to (family relationship, former affiliation with firm, etc.), I am delegatingall responsibility and authority for handling any such matters to you. Please ensure that I amscreened from any information or communications on any such matters.By copy of this memorandum, I am instructing (appropriate contacts in office) to ensurethat I do not receive any communications on any matters affecting (name of entity or individual).This recusal will remain in effect until (state duration of recusal).c: subordinates responsible for screening communicationsEthics Liaison OfficerState Ethics Commission71

New Jersey Uniform Ethics Code, February 2011J-1APPENDIX JState Ethics Commission Position on Privatization IssuesAt its December 7, 1994 meeting, the State Ethics Commission considered whether Stateemployees could, under the application of section 19 of the Conflicts Law, participate in an opencompetitive bid process for the privatization of services currently being provided by their agencyand, if successful, could operate the service under the application of section 17.Application of Section 19: Section 19 prohibits a State officer or employee from entering into acontract, valued at $25 or more, with any State agency. This prohibition also extends to partnersor any corporation which the State officer or employee controls or in which he owns or controlsmore than 1% of the stock. Section 19(b) exempts only three categories of contracts from thisgeneral prohibition:1. Contracts made after public notice and competitive bidding;2. Contracts that may be awarded without public advertising and competitive biddingpursuant to N.J.S.A. 52:34-10 or similar applicable provisions; and3. Any contract of insurance entered into by the Director of the Division of Purchaseand Property, Department of the Treasury, pursuant to N.J.S.A. 52:27B-62.Each of these exceptions requires prior approval of the Commission.Because the contract for the privatization of the program at issue will be made afterpublic notice and competitive bidding, the Commission approved the employees' participation inthe bid process. To deal with concerns expressed in past Commission cases regarding whetherState employees could bid on contracts to be awarded by their own agencies, the Commissionoutlined several safeguards. These safeguards are intended to prevent perceptions of Stateemployees gaining unwarranted advantages or using insider information.In order to approve an employee's participation in an open competitive bid process forservices being privatized by his/her agency, the Commission requires an affidavit to theCommission from the agency management specifying that the employee is not or has not beeninvolved in the privatization decision and will have no involvement in the privatization process,e.g., development of the RFP and winding down of the State-provided service. The affidavitmust also specify that the employee will have no involvement in the evaluation of bids. TheCommission also requires that the agency maintain records identifying all individuals involved inthe privatization process. This requirement will facilitate investigation of any future complaintscharging an employee with the use of insider information.J-272

New Jersey Uniform Ethics Code, February 2011The Commission recommends that the RFP contain a notice to all bidders that agencyemployees or former employees may be submitting proposals. The Commission alsorecommends the "blind" review of the proposals to the maximum extent feasible. This wouldinvolve identifying bidders only by numbers or letters and not by personal or corporate identity.Application of Section 17: The post-employment restriction of the Conflicts Law prohibits aformer State employee from representing, appearing for, negotiating on behalf of or providinginformation or services not generally available to the public to any person or party other than theState in connection with any specific cause, proceeding, application or matter in which he/shehad substantial and direct involvement during his/her State employment.The Commission has taken the position that privatized services that are no longerpending, active or on-going in the State agency that formerly provided the services are not"matters" within the scope of section 17.The Commission is concerned that individuals who expect to have involvement in theprivatized services not participate, while State employees, in the privatization decision andprocess because of the Conflicts Law provisions that prohibit employees from using their officialpositions to gain an unwarranted advantage (section 23(e)(3)), acting in their official capacitiesin matters where they have an interest that may impair their objectivity (section 23(e)(4)), actingin a way that might create the impression of a violation of the public trust (section 23(e)(7)) andusing or disclosing information not generally available to the public (section 25). Thus,procedurally, the Commission requires that an employee express his/her intention to be involvedin any private sector efforts in connection with the privatization to the agency's management andthe Commission as soon as it is feasible so that appropriate steps can be taken to screen theemployee from the agency's privatization activities.The Commission will require notice that the employee was not involved in theprivatization decision or in the privatization process, e.g., preparation of the RFP, review of bids,evaluation of potential providers. The agency will be required to maintain records identifying allemployees involved in the privatization process.73

New Jersey Uniform Ethics Code, February 2011K-1APPENDIX KGUIDELINES REGARDING RETIREMENT GIFTSThese guidelines address the circumstances under which appropriate recognition can begiven to retirees from State service without exceeding the bounds of propriety or giving rise to animpression of violation of the public trust.Typically, retirement functions comprise a get-together, with or without a meal, and thepresentation of a gift or monetary token to the retiree, to his or her spouse, and/or to his or herdependent(s). In planning such events, the responsible group or individual must choose betweentwo approved alternatives with regard to funding and the value of any and all gifts to bepresented.1. Gifts may be funded by a maximum contribution of $5 per person, collected frominvitees to the retirement function. If this method of funding is used, no maximum value is setfor the cost of the gifts, but contributions of more than $5 per invitee are not permitted.or2. The maximum value of retirement gifts cannot exceed $1,000. If this method is used,there is no maximum set on individual contributions, but the total value of retirement gifts and/ormonetary tokens to the retiree, spouse, and dependent(s) cannot exceed $1,000.If, instead of presenting gifts and/or monetary tokens to the retiree, spouse, anddependent(s), a decision is made to make monetary contribution to a qualified organization(under I.R.S. Code 501(c)(3)), no limit is placed on the maximum value of the contribution.Retirement gifts from parties with whom the employee has had involvement in his/herofficial capacity are permissible provided the gift is not excessive or inappropriate for thepurpose for which it is given.Any questions about these guidelines or their implementation should be addressed to:State Ethics Commission28 West State StreetRoom 1407 – P.O. Box 082Trenton, New Jersey 08625(609) 292-189274

New Jersey Uniform Ethics Code, February 2011L-1APPENDIX LPUBLISHED WORKSThe State Ethics Commission staff frequently receives inquiries regarding Stateemployees' activities in connection with authoring and publishing research papers, articles andbooks. The Commission has addressed these situations over the years, primarily under theapplication of sections 23(e)(1), direct or indirect financial or other interest; 23(e)(5), impairmentof objectivity and independence of judgment; 23(e)(7), the appearance of impropriety; 24, receiptof compensation for a matter related to official duties; and 25, disclosure or use for personal gainof information not available to the public. Subsequent to March 1997, the Commission has alsoconsidered such inquiries under N.J.A.C. 19:61-6.7(b), compensation for published works.Section 23(e)(1) of the Conflicts Law provides:No State officer or employee or special State officer or employeeshould have any interest, financial or otherwise, direct or indirect,or engage in any business or transaction or professional activity,which is in substantial conflict with the proper discharge of hisduties in the public interest.Section 23(e)(5) of the Conflicts Law provides:No State officer or employee or special State officer or employeeshould undertake any employment or service, whethercompensated or not, which might reasonably be expected to impairhis objectivity and independence of judgment in the exercise of hisofficial duties.Section 23(e)(7) of the Conflicts Law provides:No State officer or employee or special State officer or employeeshould knowingly act in any way that might reasonably beexpected to create an impression or suspicion among the publichaving knowledge of his acts that he may be engaged in conductviolative of his trust as a State officer or employee or special Stateofficer or employee.Section 24 of the Conflicts Law provides:a. No State officer or employee, special State officer or employee,or member of the Legislature shall solicit, receive or agree toreceive, whether directly or indirectly, any compensation, reward,employment, gift, honorarium, out-of-State travel or subsistence75

New Jersey Uniform Ethics Code, February 2011L-2expense or other thing of value from any source other than theState of New Jersey, for any service, advice, assistance,appearance, speech or other matter related to the officer, employee,or member's official duties, except as authorized in this section.b. A State officer or employee, special State officer or employee,or member of the Legislature may, in connection with any service,advice, assistance, appearance, speech or other matter related to theofficer, employee, or member's official duties, solicit, receive oragree to receive, whether directly or indirectly, from sources otherthan the State, the following:(1) reasonable fees for published books on matters within theofficer, employee, or member's official duties…Section 25 of the Conflicts Law provides:No State officer or employee, special State officer or employee, ormember of the Legislature shall willfully disclose to any person,whether or not for pecuniary gain, any information not generallyavailable to members of the public which he receives or acquires inthe course of and by reason of his official duties. No State officeror employee, special State officer or employee, or member of theLegislature shall use for the purpose of pecuniary gain, whetherdirectly or indirectly, any information not generally available tomembers of the public which he receives or acquires in the courseof and by reason of his official duties.N.J.A.C. 19:61-6.7, Compensation for Published Works, provides:(b) A State official shall secure the permission of thedepartment head to accept compensation for published work(s) notcreated as part of his or her official duties. In determining whethersuch approval can be granted, the Department head shall considerthe provisions of the Conflicts of Interest Law, the uniform ethicscode, the agency code of ethics, any applicable Executive Orders,the Commission’s Guidelines Governing Outside Activities, anyother applicable guidelines or rules of the Commission, anyapplicable administrative policies of the agency, and the followingconditions.1. Whether compensation is being paid by an interested party;2. Whether the published work(s) uses or disclosesinformation not generally available to the public;76

New Jersey Uniform Ethics Code, February 2011L-3(c) The State official shall prepare the published work(s) on hisor her own time, without using the services of other State officialsor resources owned by the State.(d) Except as provided in (e) below, the State official shall notuse his or her official title in any way in soliciting compensation.(e) A State official acting in a scholarly capacity may acceptcompensation for published works created as part of his or herofficial duties on State time utilizing State resources.Summarized below are Commission cases dealing with published works.In Case No. 255-75, the Commission considered whether employees of the PublicBroadcasting Authority (“PBA”) could receive a compensation fee for journalistic work used ona commercial station. Various journalists employed full-time by the PBA were approached forthe use of news items that they wrote during the hours that they were employed by the State.These scripts, films or tapes were being used on commercial TV channels. The commercialstations wished to compensate the journalists for the use of their work.The Commission determined that it would be a violation of section 24 of the ConflictsLaw for State employees to receive compensation from any source other than the State for newsitems created as part of their official duties.In Case No. 402-76, the Commission considered whether a professor at a State collegewas permitted, under the Conflicts Law, to receive payment of royalties for a book he publishedprior to his State employment and for an instructional manual to be used in conjunction with thebook. The instructional manual was authored by him during his State employment.Prior to his State position, while employed at a New York university, the professordevised a method to teach philosophy to elementary school children and authored a book on thetopic. Two years after the professor joined the State college, the Board of Trustees formed theInstitute for the Advancement of Philosophy for Children (“IAPC”) as a means of furtherresearch and curriculum development for the purpose of training elementary school teachers toteach philosophical thinking to children. The professor was appointed Director of the IAPC.The Commission determined that it would not be a violation of the Conflicts Law for theprofessor to receive royalties from the original book, written materials related to the originalbook or future materials authored on the subject of the development of philosophy in theelementary grades. This decision was based on the fact that the State college did not have aspecific policy governing receipt of royalties for published works written by faculty membersduring their employment with the college. The agreement between the professor and the Statecollege to act as Director of the IAPC did not provide that he author any publications inconnection with this topic. The Commission thus determined that writing the instructional77

New Jersey Uniform Ethics Code, February 2011L-4manual and any future curriculum materials related to this issue could not be said to be related tohis official duties. The professor was advised that, in his official capacity, he could notencourage the purchase of any materials that he authored.In Case No. 427-76, the Commission considered whether the Deputy Director, Divisionof Field Services, Department of Education, could collect royalties from a book which he coauthored,with his wife, on the subject of communicating with hearing impaired and autisticindividuals. Prior to his employment with the State, the Deputy Director had been associatedwith a school for the deaf in another state.The Commission determined that the State employee was permitted to collect royaltiesfrom the sale of the book because the subject matter was unrelated to his official duties and hehad no authority or control over the education of hearing impaired or autistic children. The Stateemployee was advised that he could not promote the sale of the book to entities in New Jersey.In Case No. 601-77, the Commission determined that it would not be a conflict of interestfor the Chief Engineer, Operations and Local Aid, DOT, in his private capacity, to write anarticle on transportation systems to be contained in a book entitled “Focus on New Jersey:Problems and Prospects,” to be published by a private publisher. In his official capacity, theemployee functioned as a traffic engineer designing roads for counties and municipalities. Theemployee was well known in his field and as a result had given lectures in approximately 50universities throughout the country on the topics of highway safety and highway traffic.In Case No. 1028-82, the Department of Education requested that the Commission reviewthe outside activities of three Department employees. The three employees were approached byan entity that received funding from the Department to assist in the production of a multi-culturalhandbook to be used in teacher training. The Department was responsible for appointing theBoard of Directors of the outside entity and provided funding for administrative purposes. TheState employees’ Division used the facilities of the private entity for training workshops. Theproject in question was being funded by a federal grant. All three employees’ officialresponsibilities included the development of instructional programs for students not proficient inEnglish.The Commission found that a potential for an appearance of a conflict existed becausethe State employees dealt with the private entity in their official capacity and were involved withessentially the same subject matter in both positions. The Commission also advised theDepartment that the private entity should have solicited assistance from the Department ratherthan directly approaching the State employees.In Case No. 1160-83, the Commission considered whether a Teacher, Adult BasicEducation Program, New Lisbon State School, Department of Human Services, was permitted topublish a cookbook written on her own time. In her official capacity, the State employee wasresponsible for teaching home economics and nutrition programs to the adult developmentallydisabled population at New Lisbon State School. The cookbook was a pictorialcookbook/teachers guide for non-readers and the handicapped. The development of the78

New Jersey Uniform Ethics Code, February 2011L-5cookbook was not part of the employee’s official duties and responsibilities. She was advisednot to make use of the cookbook in her classes after it appeared in published form.In Case No. 1186-83, the Commission considered whether Coordinator III, Office ofEqual Educational Opportunity, Department of Education, was permitted to publish a bookentitled “Analogies and Black History,” developed and financed by him for the purpose ofassisting minority students in taking college entrance exams. The publication was not developedas part of his official duties, although part of his official function was to conduct black history inservicecourses. At the meeting where this matter was considered, the Commission’s Counsel atthe time indicated that State employees may receive reasonable compensation for publishedworks so long as they are not directly compensated by the State for those same works. Counselexplained that State employees would not be permitted to receive compensation if they weredesignated to prepare a book for the State as part of their official duties.The Commission permitted the publication but placed the following restrictions on theemployee. He could not conduct any field testing of his material within the area of hisgeographic assignment; he could not directly promote, advertise or solicit sales of his book toany State employee or any person with whom he had or may have officialdealings; he could not contract to sell these materials to the State of New Jersey unless incompliance with section 19 of the Conflicts Law.In Case No. 3-84, the Commission found that the Supervising Program DevelopmentSpecialist, Bureau of Research, Division of Youth and Family Services (“DYFS”), Departmentof Human Services (“DHS”), could not accept a cash award from a gerontological society for apaper prepared by him as a DYFS employee.The DHS was awarded a grant to study abuse of the elderly. Because of his experience inthe field of gerontology, the State employee was assigned the task of preparing a paper on thesubject as part of his official duties. The paper was prepared entirely on State time with grantmonies administered by the State. The State employee then submitted the paper forconsideration for an annual research award and was the recipient of that award. TheDepartmental Ethics Review Board concluded that the acceptance of the cash award wasviolative of the Department’s Code of Ethics. The Commission noted that the employee hadsolicited the award and affirmed the DHS’ determination. The State employee appealed theCommission’s decision to the Superior Court, Appellate Division, which upheld theCommission’s determination.In 1997, the Department of Law and Public Safety requested an opinion as to whether aDivision of Law Deputy Attorney General (“DAG”) was permitted to co-author a book aboutpsychics and the paranormal, Case No. 3-97. The DAG wanted to write the book in her privatecapacity and use her married name (she is known by her maiden name in her employment withthe Department). The Commission determined that the DAG was permitted to co-author thebook under the following conditions: that she not refer to her status as a DAG or member of theDepartment; that she not permit the use of her title or employment in connection with publication79

New Jersey Uniform Ethics Code, February 2011L-6or promotion of the book; that she not write about an active case or use information not generallyavailable to the public; that she avoid any legal analysis that could be interpreted as Division ofLaw work product; that she not use State time or resources in connection with her outsideactivity.In Case No. 34-96, Assistant Director, Division of Administrative Rules ("DAR"), Officeof Administrative Law (“OAL”), and Case No. 35-96, Assistant Director, Judicial Standards andProcedures ("JSP"), OAL, the employees requested an opinion regarding outside employment.They were co-authors of an annual update of the Administrative Law Volume of the New JerseyPractice Series published by West Publishing Company (“West”). The matter at issue was thepocket part which updates the main text. West paid royalties to the employees.West was an “interested party” under the Commission’s rules. West did business withthe OAL in two ways: it was the sole supplier of law library materials and also had the exclusivelicense to publish the New Jersey Register and the New Jersey Administrative Code. The OALformerly produced these materials. West had a 7-year contract with three 1-year extensionswhich could be exercised at the State’s option. The JSP Assistant Director had no involvementwith West in any of its OAL dealings. The DAR Assistant Director had official contact withWest regarding the license agreement.As to the JSP employee, the Commission determined that she was permitted to engage inthe outside employment. Under the Commission’s rules governing compensation for publishedworks in effect at the time, State employees were flatly prohibited from accepting compensationfrom an interested party. West was an interested party, but after reviewing all of the facts andcircumstances, the Commission determined that her arrangement with West did not do violenceto the intent of the rule. The Commission noted that the intent of the interested party provisionwas to prevent any influence by a discretionary vendor. This did not appear to be the situation inher case.West was a sole-source provider, and she would not be able to influence any decisionregarding West. The royalties were not subject to negotiation; there was a formula based on thesale of the books.As to the DAR employee, the Commission determined that his co-authorship did notconstitute a conflict with his official duties and permitted the outside employment, subject to thecondition that he recuse himself from any actions in connection with contract renewals or rebiddingat the conclusion of the current 7-year contract.The Commission determined that the interested party prohibition was overly broad.Subsequent to the two decisions, in March 1997, the Commission proposed and adopted thecurrent provision regarding compensation for published works. Under the amended rule,N.J.A.C. 19:61-6.7, the fact that compensation is from an interested party does not automaticallypreclude acceptance of compensation, but is only one of a number of factors to be considered.80

New Jersey Uniform Ethics Code, February 2011L-7In Case No. 17-98, a Principal Environmental Specialist, Department of Transportation,requested an opinion from the Commission as to whether he was permitted to author a book onNew Jersey archeological sites to be published by Rutgers University Press (“RUP”). RutgersUniversity is a State agency for the purposes of the Conflicts Law, and RUP is fully integratedinto the University. The employee’s proposed outside activity raised a number of issues: the useof DOT archeological reports prepared by the employee or consultants supervised by him, thereceipt of compensation for published works based on these reports, and contracting withRutgers, a State agency.The Commission determined that the use of DOT archeological reports in connectionwith the proposed published work appeared to be approvable under N.J.A.C. 19:61-6.7 andsection 25 of the Conflicts Law. While there was no precedent directly on point, theCommission noted that State employees have been permitted to accept compensation forpublished works on subject matters related to their official duties. While the employee’s activitywas approvable under the rules governing published works and under section 25 of the ConflictsLaw, the Commission determined that he was prohibited under section 19 of the Conflicts Lawfrom undertaking or executing a contract or agreement for $25 or more with RUP.In Case No. 34-98, the Commission determined that the Managing Actuary, Division ofLife and Health, Department of Banking and Insurance ("DOBI"), was permitted to co-authorand market a study guide utilized by students preparing to take the Society of Actuaries ("SOA")professional examination under the Commission's rules, precedent, the Conflicts of Interest Lawand the DOBI Code of Ethics.The employee co-authored the study guide in 1995 while on the faculty of TempleUniversity. The examination contains ten segments; the study guide deals with only oneparticular segment of the exam. The book previously identified the employee as a facultymember at Temple, but new copies identify him only by name and give no indication of hiscurrent employment with the DOBI. The authors distribute approximately one third of the booksthemselves through direct mail; they purchased an advertisement which is distributed withmaterials sent by the SOA to all exam registrants. The remaining two thirds of the book are soldthrough several mail order books stores that specialize in actuarial books. The study guide isused by student actuaries; the majority of them are employees of insurance companies oractuarial consulting firms. Some students are employed by insurance companies and arereimbursed by their employers when they purchase books; insurance companies also purchasethe study guide directly.In approving the activity, the Commission took into account the following factors: thestudy guide is sold nationally and not just to New Jersey exam registrants, the employee coauthoredthe book while at Temple, uses only his name and not his official title in connectionwith the study guide and does not directly solicit regulated entities.Summary. Under the rule addressing compensation for published works, N.J.A.C. 19:61-6.7,and under Commission precedent, a State employee not acting in a scholarly capacity may acceptcompensation for published works under the following conditions.81

New Jersey Uniform Ethics Code, February 2011L-8• There is no prohibition governing such activity in the Department’s enabling legislationor Code of Ethics.• The State employee must obtain prior approval from his/her Department head.• The published work must not use or disclose information not generally available to thepublic.• The State employee must not use State time or resources in connection with the publishedwork.• The State employee must not use his/her official title in connection with publication orpromotion of the published work.• The State employee cannot promote, advertise or solicit sales of the published work toco-workers or individuals with whom he/she has official dealings.• The State employee may not contract to sell the published work to the State except incompliance with section 19 of the Conflicts Law.• The published work must not have been prepared as part of the State employee’s officialduties.pubworks.docAugust 1999June 2006August 200682

New Jersey Uniform Ethics Code, February 2011M-1APPENDIX MOFFICIAL INTERACTIONS WITH FAMILY MEMBERS/COHABITANTSAND DATING RELATIONSHIPSThe State Ethics Commission staff frequently receives inquiries regarding the proprietyof State officials interacting in the course of their duties with family members. The majority ofthe inquiries concern relatives employed by the same State agency or interactions with familymembers employed in the private sector. Prior to 2006, the New Jersey Conflicts of InterestLaw, N.J.S.A. 52:13D-12 et seq., did not contain an anti- nepotism provision. However, thestatute was amended, effective March 15 2006, to prohibit certain relatives of certain Stateofficials from holding particular governmental positions and also to prohibit State officials fromsupervising, or exercising authority with regard to personnel actions over, a relative of the Stateofficial.N.J.S.A. 52:13D-21.2 provides:a. (1) A relative of the Governor shall not be employed in an officeor position in the unclassified service of the civil service of theState in the Executive Branch of State Government.(2) A relative of the commissioner or head of a principaldepartment in the Executive Branch of State Government shall notbe employed in an office or position in the unclassified service ofthe civil service of the State in the principal department over whichthe commissioner or head of the principal department exercisesauthority, supervision, or control.(3) A relative of an assistant or deputy commissioner or head of aprincipal department in the Executive Branch of State Governmentwho is employed in an office or position in the unclassified serviceof the civil service of the State may be employed in the principaldepartment in which the assistant or deputy commissioner or headserves, but shall not be assigned to a position over which theassistant or deputy commissioner or head exercises authority,supervision, or control.(4) A relative of a head or assistant head of a division of a principaldepartment in the Executive Branch of State government who isemployed in an office or position in the unclassified service of thecivil service of the State may be employed in the principaldepartment in which the head or assistant head of a division serves,but shall not be assigned to a position over which the head orassistant head exercises authority, supervision, or control.83

New Jersey Uniform Ethics Code, February 2011M-2b. (1) A relative of an appointed member of a governing oradvisory body of an independent authority, board, commission,agency or instrumentality of the State shall not be employed in anoffice or position in that independent authority, board,commission, agency or instrumentality.(2) A relative of an appointed New Jersey member of a governingbody of a bi-state or multi-state agency shall not be employed in anoffice or position in that bi-state or multi-state agency, to the extentpermitted by law.c. A State officer or employee or a special State officer oremployee of a State agency in the Executive Branch shall notsupervise, or exercise authority with regard to personnel actionsover, a relative of the officer or employee.d. As used in this section, "relative" means an individual's spouseor the individual's or spouse's parent, child, brother, sister, aunt,uncle, niece, nephew, grandparent, grandchild, son-in-law,daughter-in-law, stepparent, stepchild, stepbrother, stepsister, halfbrother or half sister, whether the relative is related to theindividual or the individual's spouse by blood, marriage oradoption.Attorney General Opinion 06-0006 addresses the issue of the application of the antinepotismprovision, N.J.S.A. 52:13D-21.2, to previously hired employees and advises that a Stateemployee is not required to be terminated when a relative is subsequently appointed to a highlevel position within the agency. However, arrangements must be made to prohibit the relative’sinvolvement in the exercise of authority, supervision, or control with regard to the incumbentholder of the affected State office or position.The casino-related provisions of the Conflicts Law also contain prohibitions that apply toa State official's immediate family members, defined in N.J.S.A. 52:13D-13(i) as the person'sspouse, child, parent or sibling residing in the same household. N.J.S.A. 52:13D-17.2(b) dealswith the concurrent casino-related employment of immediate family members while N.J.S.A.52:13D-17.2(c) deals with post-employment situations of immediate family members. Thesetwo provisions are discussed below under "Casino-Related Prohibitions."The Commission has addressed various family member issues over the years, primarilyunder the application of sections 23(e)(3), unwarranted privilege, 23(e)(4), direct or indirectpersonal financial interest that might reasonably be expected to impair objectivity andindependence of judgment, and 23(e)(7), the appearance of impropriety. Summarized below aresample Commission cases that address a number of common family member scenarios. It shouldbe noted that these cases were decided prior to the March 2006 Nepotism amendment.84

New Jersey Uniform Ethics Code, February 2011M-3STATE EMPLOYMENTFamily Members Employed by the Same Agency. In Case No. 27-91, the Commissionconsidered whether the spousal relationship of the Chief of the Department of Labor AppealTribunal and her husband, a member of the Department of Labor Board of Review ("Board"),gave rise to a conflict of interest or appearance of a violation of the public trust. The AppealTribunal reviews determinations of the Division of Employment Security that are appealed by anaggrieved or dissatisfied claimant. The three-member Board of Review decides appeals ofdecisions issued by the Appeal Tribunal. The Chief did not decide cases; her job dutiesconsisted of devising strategy and creating administrative policies for the Appeal Tribunal.The Board adopted a policy precluding the Member from reviewing or having anyconnection with decisions issued by the Chief on those rare occasions when it was necessary forthe Chief to conduct a hearing and function as an Appeals Examiner. The Commissionconcurred with the Deputy Attorney General who represented the Board that the recusal policy inplace at the Board was a sufficient mechanism to avoid a conflict situation.In Case No. 19-98, the Commission issued a complaint charging the Chairman of theOcean County Soil Conservation District, Department of Agriculture, with violating sections23(e)(4) and (7) of the Conflicts Law when he participated in a controversial matter pendingbefore the District Board in which his brother, an employee of the District, had substantialinvolvement and for voting on matters that involved personnel and salary issues affecting hisbrother.Supervisor/Subordinate Relationships. In Case No. 1161-83, the Commission consideredwhether a situation where spouses worked for the same agency and had a supervisor-subordinaterelationship constituted a conflict of interest. This situation was reviewed under the applicationof section 23(e)(4) of the Conflicts Law which prohibits State employees from acting in theirofficial capacity in a matter wherein they have a direct or indirect personal financial interest thatmight reasonably be expected to impair their objectivity or independence of judgment.The Commission determined that one spouse has a direct personal financial interest in thesalary and continued employment of the other spouse and thus should not be in a position toprovide direct supervision or to take personnel actions such as performance evaluations andsalary increases. The Commission advised the agency to take administrative action to resolvethe conflict situation, and the agency transferred one of the spouses out of the work unit.In Case No. 182-93, the Department of Community Affairs requested an opinion as towhether Commission precedent prohibiting family members from having supervisor/subordinaterelationships should also apply to non-related individuals who share the same household with thesame financial interdependence that the Commission viewed as creating a conflict in spousalsituations. The Commission determined that where non-related supervisor/subordinateemployees share the same household under circumstances where there is financialinterdependence, there must be an intermediate supervisory level between the two and the higher85

New Jersey Uniform Ethics Code, February 2011M-4placed employee should have no supervisory or signing authority regarding personnel mattersaffecting the subordinate employee.In Case No. 9-94, the Commission determined that the Conflicts Law was not violated byvirtue of the fact that a Manager, Division of Motor Vehicles, Department of Law and PublicSafety, worked in the same facility as his two cousins. Because the cousins were not members ofthe Manager's immediate family, as defined in section 13(i) of the Conflicts Law, theCommission determined that a supervisor/subordinate relationship was not per se prohibitedunder Commission precedent. The Commission reviewed the specifics of this particularsituation and noted that the Manager did not directly supervise his cousins, complete their PARSor sign their time sheets. Thus, it was unlikely there could be an appearance of impropriety byvirtue of his cousins working in the same facility.Hiring of Family Members. In Case No. 23-88, the Commission was asked to approve theDepartment's removal of an employee from his position due to a number of violations of theDepartment's Code of Ethics. Among the violations was one that the employee securedemployment for his daughter with a private organization that received funding from theDepartment. The employee directly monitored the organization's performance under thecontract. After the employee's supervisor learned of his daughter's employment, the employeewas relieved of all monitoring responsibilities. After reviewing the various violations, theCommission concurred with the Department's findings and approved the proposed sanction.In Case No. 32-90, the Commission reviewed an allegation that the Warren CountyConservation District ("District") had contracted with the District Manager's wife for financialand bookkeeping services without public announcement or advertisement of the availability ofthe contractual position. The Commission determined that the circumstances surrounding thecontract were violative of section 23(e)(3), the unwarranted privilege section of the statute. Thecontract between the District and the District Manager's wife was terminated.In Case No. 34-92, the Commission found indications of violations of sections 23(e)(3),unwarranted privilege, and 23(e)(7), appearance of impropriety, in connection with the SussexCounty District ("District") Manager's hiring and supervising of her son. The manager and herson resided in the same household. The Commission ordered that her son's employment with theDistrict be terminated and that a complaint against the District Manager be prepared. TheCommission later approved a consent order in this matter.In Case No. 2-93, the Commission found indications of violations of section 23(e)(3),unwarranted privilege, and 23(e)(7), appearance of impropriety, in connection with the Directorof the Library of the Blind and Handicapped's hiring and supervision of her daughter for summeremployment. The position was never advertised to the job-seeking public and the Director didnot use any of the State contractors who normally performed the services in question. TheCommission approved a consent order with the Director.86

New Jersey Uniform Ethics Code, February 2011M-5In Case No. 23-96, the Commission issued a complaint alleging that a DeputySuperintendent of Elections violated the Conflicts Law when, among other activities, she hiredand supervised six family members. The Deputy Superintendent entered into a consent orderwith the Commission.In Case No. 9-98(B), the Commission reviewed an allegation concerning the hiring of theson of the Director of Human Resources, Department of Corrections (“DOC”), for a positionwithin the DOC. The Director had asked the Chief of the Bureau of Parole if he would beinterested in hiring his son while a DOC employee was out on sick leave. The Bureau Chief thenforwarded a personnel action request to the DOC Office of Human Resources seeking a freezeexemption to appoint a new employee. The form was signed by the Director. Other individualswere on the certified list who ranked higher than the Director’s son and were not advised of theinterim position. The Commission determined that there were indications that the Stateemployee violated sections 23(e)(3) and (7) of the Conflicts Law. The Director entered into aconsent order with the Commission.STATE PROGRAMSIn Case No. 30-04, the Commission reviewed an allegation that an AssistantCommissioner, Department of Personnel (“DOP”), used her official position to attempt to placeher nephew in the Pilot Program of a course developed by the DOP’s Human ResourceDevelopment Institute (“HRDI”) to prepare individuals to take the Law EnforcementExamination. The Assistant Commissioner’s responsibilities included oversight of the HRDI.The Commission determined that there were indications that the Assistant Commissionerviolated sections 23(e)(3) and (7) of the Conflicts Law and authorized the drafting of acomplaint. The Assistant Commissioner entered into a consent order with the Commission andagreed to a civil penalty of $750.PRIVATE SECTOR SITUATIONSIn Advisory Opinion No. 33, issued September 17, 1975, the Commission determined thata Member of a County Board of Taxation must disqualify himself from hearing tax appeals whenthe assessor of the responding city is his second cousin or is more closely related to the BoardMember. Because Members of the County Boards of Taxation act in a quasi-judicial capacity,the Commission was guided by cases interpreting the Canons of Judicial Ethics as applied tofamily member situations. It was noted that the need for unquestionable integrity, objectivityand impartiality is just as great for quasi-judicial personnel as for judges.In Case No. 344-76, the Commission considered whether the Chief Engineer, CableTelevision Section, Department of Public Utilities, was permitted to become involved in achallenge to the award of a franchise by the cable television company of which his son wasPresident. If a company is denied a franchise in a municipality in favor of another company, it isthe duty of the Chief Engineer to pass upon the engineering qualifications of the successfulapplicant. The Commission determined that it would be an appearance of a conflict if the87

New Jersey Uniform Ethics Code, February 2011M-6engineer were to become involved in any way in the challenge of the subject franchise or anyfuture action with respect to the company that employed his son.In Case No. 651-78, a Member of the New Jersey State Council on the Arts, Departmentof State, requested advice from the Commission regarding actions affecting a grant recipient.The Member's husband was president of an advertising agency which performed public relationswork for the grant recipient. The Member asked if it was necessary for the advertising agencythat employed her husband to resign from the account. The Commission determined that it didnot have the authority to require the private public relations firm to relinquish the account andrecommended that the Member refrain from participation in discussion and voting on anymatters pertaining to the grant recipient.In Case No. 35-79, the Division of Youth and Family Services ("DYFS"), Department ofHuman Services, requested an opinion from the Commission as to whether there was a violationof the Conflicts Law for a DYFS employee to serve as Administrator of Management Operationswhile his brother was employed as a salesman for a company that sold equipment to DYFS. TheCommission determined that to avoid any potential conflict or appearance of a conflict, theAdministrator should in no way be involved in contracts negotiated or executed by DYFS orDHS with the company that employed his brother. Further, in his State capacity, theAdministrator should not solicit any State business for nor refer any State business to hisbrother's employer. Also, neither his brother nor any representatives of the company should callon the Administrator and the Administrator should have no involvement with matters pertainingto the company.In Case No. 941-80, the Commission determined that it would not violate the ConflictsLaw for the Director, Division of Hazard Management ("DHM"), Department of EnvironmentalProtection, to review and approve contracts with an environmental company which was asubsidiary of the company that employed the Director's father-in-law. The parent organizationhad more than 30 subsidiary companies segmented into 9 control groups. The control group withwhich the Director's father-in-law was affiliated had no direct relationship with theenvironmental company that contracted with DHM. The Commission determined that the nexuswas too remote to suggest that the Director was acting in his official capacity in a matter whereinhe had a direct or indirect personal financial interest that might reasonably be expected to impairhis objectivity or independence of judgment.In Case No. 1176-83, the Commission determined that no conflict would result from theaward of the Lottery Commission's advertising contract to the firm that employed the wife of theDeputy Chief of Staff, Office of the Governor, or by her assignment to perform work under thatcontract. The Commission noted the absence of any indication that the Deputy's spouse'sposition was offered to her for the purpose or with the intent of influencing him nor was thereany evidence that the Deputy had used his position to obtain employment for his spouse with thebidder or to secure her assignment under the proposed contract. There was also no indication ofany interest held by the Deputy in the bidder that would bar the contract under section 19, thecontracting section of the statute.88

New Jersey Uniform Ethics Code, February 2011M-7As for the appearance of impropriety, the Commission noted that the Deputy's spouse hadobtained employment with the bidder prior to their marriage and long before his appointment asDeputy and that the lack of involvement by him in bidding process matters involving the LotteryCommission, on the part of the Governor's Office, would substantially ameliorate anyappearance problems. The Commission based its advice on the assumption that he would haveno duties concerning this contract or the Lottery Commission in general, such as appointment ofmembers, which might raise impairment of objectivity issues due to his personal financialinterest in his spouse's employment. The Commission also cautioned the Deputy that willfuldisclosure or use of information not generally available to the public received or acquired in thecourse of or by reason of official duties is prohibited.In Case No. 25-84, the Commission considered whether it was a conflict of interest forthe Ombudsman, Department of Corrections, to handle inmate complaints concerningCorrections Officers represented by the union of which her husband was State President. TheOmbudsman was generally responsible for receiving, investigating and makingrecommendations concerning complaints received from persons incarcerated or on parole. TheCommission determined that the Ombudsman and the Department should be advised that it is notconsistent with the Conflicts Law for her to have involvement as Ombudsman in handlingcomplaints concerning Correction Officers represented by the Union while her husband served asPresident. The advice was based on considerations of indirect interest, impairment of objectivityand appearance of impropriety.In Case No. 14-85, the Commission approved the Department of Education's handling ofa matter wherein the Program Manager, Gifted Education Contracts, Division of GeneralAcademic Education, recommended that her husband be employed as a consultant to theDivision. The employee also recommended her husband as a consultant to a school districtwhich received funding from the Department for a project related to the education of giftedstudents. The Department determined that the manager's recommendation of her husband as aDivision consultant was violative of the Conflicts Law. She was also advised that she should notimplicitly or explicitly make recommendations to local districts as to consultants or programs forgifted and talented education with which she has a direct or indirect relationship.In Case No. 17-85, the Commission determined that the Medical Director, Division ofDisability Determinations ("DDD"), did not use her official position to advance her husband'sprivate medical practice. As a private practitioner in the field of internal medicine, her husbandworked in conjunction with the DDD as a Consultative Examining Physician ("CEP"). TheCommission based its determination on the fact that while the Medical Director's responsibilitiesplaced her in direct contact with CEPs, she recused herself from all involvement regarding herhusband and/or his specialty of internal medicine. The Medical Director had no direct controlover the scheduling of examinations between DDD clients and CEPs. In addition, while it wasthe Director's responsibility to review a physician's qualifications prior to acceptance as a CEP,her husband became a CEP four years before she became Medical Director.In Case No. 25-85, the Commission determined that the Chief, Bureau of ConstructionCode Enforcement ("BCCE"), Department of Community Affairs, violated the Conflicts Law by89

New Jersey Uniform Ethics Code, February 2011M-8soliciting and receiving, on behalf of his daughter, a scholarship award from an organizationwhose members were regulated by the BCCE. The Chief's daughter received the award foracademic year 1983. In 1984, she applied personally for the scholarship. The organization'sBoard of Directors questioned the propriety of awarding the scholarship to the daughter of theChief of the BCCE and advised the Chief that the award would not be granted until the conflictsissue was resolved. The Commission determined that the Conflicts Law was violated andordered the Chief to reimburse the organization for the amount of scholarship monies awarded tohis daughter.In Case No. 9-86, the Commission considered a request for advice as to whether anominee to the Racing Commission was in a conflict situation due to his son's businessrelationship, as an insurance broker, for an organization regulated by the Racing Commission.The Racing Commission does not regulate the selection of insurance brokers but does requirethat a surety bond be submitted by the track owner's insurance broker. The nominee's sonprovided this bond to the Racing Commission. The Commission determined that there was noconflict of interest per se; however, the nominee was cautioned to abstain from discussions andvoting on any insurance matters that came before the Racing Commission.In Case No. 27-89, the Commission considered whether a Casino Control CommissionMember was required to recuse herself on matters where one of the parties was represented by alaw firm for whom her father worked as an accountant. The Commissioner had been associatedwith the same law firm that employed her father prior to entering State service. TheCommissioner had recused herself on eight previous occasions. The Commission determinedthat the Commissioner should continue to recuse herself from all matters related to the law firmin order to support her ability to render independent decisions and to be so perceived.In Case No. 42-90, the Chairman of the Casino Control Commission ("CCC") requestedan opinion as to whether he was required, under the operation of the Casino Control Act, theCCC Code of Ethics or the Conflicts of Interest Law, to recuse himself from matters involvinghis brother-in-law, a credit executive with a casino hotel, and/or his brother-in-law's employer.The Commission determined that the Chairman should recuse himself from participation in anymatter involving his brother-in-law or the credit department of the casino hotel by which he wasemployed and advised him that his intention, in any matters involving his brother-in-law'semployer, to advise the interested parties on the record of his relationship and to provide theopportunity for any interested party to seek his recusal was an adequate measure to protect thepublic interest.In Case No. 245-93, the Commission reviewed an allegation that the Administrator,Office of Set-Aside and Certification, Department of Commerce, certified a business owned byhis son for eligibility to participate in a program administered by his office. The Commissiondetermined that the employee violated section 23(e)(3), the unwarranted privilege provision,section 23(e)(4), the prohibition against acting in one’s official capacity if one has a direct orindirect personal financial interest in a matter, and section 23(e)(7), the appearance provision, inregard to certifying a business owned by his son. The Administrator should have delegatedanother employee in the office to handle his son's application.90

New Jersey Uniform Ethics Code, February 2011M-9In Case No. 1202-93, the Commission reviewed an allegation that the Director, Divisionof Administration, Department of Education, used his position to influence the award of grantsand contracts to a school district employing his son. The Commission noted that most of theState funding to local school districts was awarded based on a statutorily mandated formula.Discretionary grants decisions are made by Program Division Heads with the Commissioner.The Division of Administration monitors and verifies the fiscal and statutory accuracy of grantsand contracts after award decisions are made. The Commission voted to dismiss the complaint;however, the Director was advised to abstain from involvement in any matter which directlyimpacted his son's employment.In Case No. 23-97, the Chief Planner, Hackensack Meadowlands DevelopmentCommission (“HMDC”), requested an opinion regarding her involvement on projects thatdirectly or indirectly involve her husband's new employer. Her husband's employer was theenvironmental and engineering consultant on a project for which the Planner had beencoordinator for ten years. Her husband had no involvement with the project. The Commissiondetermined that the Planner could have no official involvement with projects that directly orindirectly involved her husband's employer regardless of whether her husband actually workedon the project.In Case No. 23-98, the Senior Staff Engineer, HMDC, requested an opinion regarding herinvolvement on projects that directly or indirectly involve her husband. Her husband operated aconsulting company and had been retained as a subcontractor to conduct an alternative siteanalysis required the Army Corp. of Engineers. The State employee had been asked to assist inthe review of the hydrology and hydraulics for the project in question. Her involvement wouldinclude the writing of a scope of work document to hire a consultant to review the hydraulics andhydrology prepared by the consultant and to act as a liaison. The Commission noted that eventhough the two tasks, the State employee’s involvement with the hydraulics and hydrologysegment of the project and her husband’s involvement in the alternate site analysis, are unrelated,due to the high profile nature of the project and the controversy surrounding it, it wasconceivable that the participation of family members on the project could become an issue. TheCommission determined that, because the HMDC could easily assign another engineer toperform the hydraulics and hydrology review, there appeared to be no reason, under these facts,to grant an exception to the existing HMDC policy, affirmed by the Commission in Case No. 23-97.In Case No. 17-01, the Acting Chief Engineer, HMDC, requested that the Commissionreview its decision in Case No. 23-98 because her husband had not been involved with theproject in question since July 1999. The Commission advised the Acting Chief Engineer thatbecause her husband was no longer employed by the subcontractor and was not involved in theproject, she was not precluded from having official involvement in the project.In Case No. 14-01, the Acting Chief Engineer, HMDC, requested an opinion regardingher involvement in a project that was being performed by a firm that recently hired her brotherin-law.The Commission determined that the Acting Chief Engineer should recuse herself from91

New Jersey Uniform Ethics Code, February 2011M-10any involvement in matters involving the firm as long as her brother-in-law was employed by thefirm.Dating Relationships. In Case No. 16-99, the Ombudsman for the Institutionalized Elderly,Division of Senior Affairs, Department of Health and Senior Services, developed a datingrelationship with a vendor to the Division. The vendor initially contracted with another Stateagency and later contracted with the State employee’s division to develop a software program.The development and implementation of the software program was a multi-phase project.During the period of the project, the Ombudsman began a social and personal relationship withthe vendor and worked on and signed licensing and maintenance agreements on behalf of theDivision with the vendor. Shortly thereafter, the Ombudsman sought additional funding for thevendor to supply additional services.The Commission determined that there were indications that the Ombudsman violatedsections 23(e)(3), (4) and (7) of the Conflicts Law. The Commission determined that under theapplicable sections of the statute and the Commission’s precedent, the State employee shouldhave recused herself from any official involvement with the vendor after her social and personalrelationship began. The Commission entered into a consent order with the employee.In Case No. 43-98, the Commission determined that the Assistant Executive Director ofNew Jersey Transit (“NJT”) used his official position to secure an unwarranted advantage for hisfiancé, an Account Executive at an insurance company. The insurance company was invited toprovide additional insurance to NJT employees. NJT sent out letters to employees on NJTstationery, produced posters, and made insurance company sales representatives available onNJT premises. The Assistant Executive Director’s fiancé received commissions on sales to NJTemployees. The Assistant Executive Director entered into a consent order with the Commission.Agency Contracts. In Case No. 38-01, the Commission determined that the Director, JuvenileSex Offender Treatment Services, Juvenile Justice Commission (“JJC”), was prohibited fromacting as a co-trainer with his wife as long as he was employed in his current position at the JJC.The Director’s wife began contracting with the JJC in 1997, prior to his being hired by theagency. The Director had been assisting as a co-trainer since 1997. The Director’s wife waspaid the same fee as all other trainers. The Director was not compensated for his participation.The Commission determined that the Director’s involvement as a co-trainer raised appearanceconcerns because of the financial interdependence of the parties.In Case No. 25-00, the Commission determined that the Executive Director of theCommunications Institute at Rowan University violated the Conflicts Law by awarding asubcontract to a firm in which he and his adult children had a financial interest. The Directorentered into a consent order with the Commission.92

New Jersey Uniform Ethics Code, February 2011M-11CASINO-RELATED PROHIBITIONSN.J.S.A. 52:13D-17.2(b) provides:No State officer or employee, nor any person, nor any member ofthe immediate family of any State officer or employee, or person,nor any partnership, firm or corporation with which any such Stateofficer or employee or person is associated or in which he has aninterest, nor any partner, officer, director or employee while he isassociated with such partnership, firm, or corporation, shall hold,directly or indirectly, an interest in, or hold employment with, orrepresent, appear for, or negotiate on behalf of, any holder of, orapplicant for, a casino license, or any holding or intermediarycompany with respect thereto, in connection with any cause,application, or matter, … except that (1) a State officer oremployee other than a State officer or employee included in thedefinition of person, and (2) a member of the immediate family ofa State officer or employee, or of a person, may hold employmentwith the holder of, or applicant for, a casino license if, in thejudgment of the State Ethics Commission, the Joint LegislativeCommittee on Ethical Standards, or the Supreme Court, asappropriate, such employment will not interfere with theresponsibilities of the State officer or employee, or person, and willnot create a conflict of interest, or reasonable risk of the publicperception of a conflict of interest, on the part of the State officeror employee, or person....Section 17.2(b) addresses the issue of concurrent employment. Prior to 1993, section17.2(b) prohibited all State officers and employees and members of their immediate familiesfrom holding an interest in, holding employment with, representing, appearing for, or negotiatingon behalf of the holder of or applicant for a casino license or any holding or intermediarycompany with respect thereto. In December 1993, the Legislature amended the statute to providethat a State officer or employee, other than a State officer or employee included in the definitionof "person" set forth in section 17.2(a), or a member of the immediate family of a State officer oremployee, or of a person, may hold employment with the holder of or applicant for a casinolicense if, in the judgment of the State Ethics Commission, such employment will not interferewith the responsibilities of the State officer or employee or person, and will not create a conflictof interest, or reasonable risk of the public perception of a conflict of interest on the part of theState officer or employee, or person. Since 1994, the Commission has granted numerouswaivers pursuant to the authority granted to it under the amendment.N.J.S.A. 52:13D-17.2(c) and (d) address casino-related post employment restrictions. Seeappendix H for a discussion of these restrictions.93

New Jersey Uniform Ethics Code, February 2011M-12CODES OF ETHICSCodes of Ethics specific to a particular agency may also contain provisions applicable tofamily members. State officers and employees should review their agency's code of ethics orconsult with their agency Ethics Liaison Officer to determine whether the Code contains anyprovisions applicable to family members.OTHER STATUTORY PROVISIONSStatutory provisions and/or administrative regulations specific to a particular agency mayalso contain prohibitions applicable to family members. In Case No. 21-72, the Commissionreceived a request for advice regarding whether an appointee to the Board of Trustees of theCommission for the Blind could hold that position in light of the fact that the appointee'shusband was an employee of the Commission for the Blind. The Commission sought an opinionfrom the Attorney General's Office because the determination turned on the interpretation ofN.J.S.A. 30:40-1 which provides that at least two members of the Board of Trustees of theCommission for the Blind shall themselves be legally blind but shall not be employees or relatedby blood, marriage or adoption to any employee of the Commission for the Blind. The appointeein question was legally blind; however, the Attorney General's Office advised that N.J.S.A. 30:4-1 precluded the appointee from serving in such capacity because she was married to an employeeof the Commission.State officers and employees should consult with their agency Ethics Liaison Officer todetermine whether there is any statutory provision or regulation that prohibits the agency'semployment of or other contractual relationship with family members. The Commission doesnot have jurisdiction to interpret these provisions and refers such inquiries to the AttorneyGeneral's Office.SUMMARY2006 Nepotism Amendment. The Conflicts Law was amended, effective March 15, 2006, toprohibit certain relatives of certain State officials from holding particular governmental positionsand also to prohibit State officials from supervising, or exercising authority with regard topersonnel actions over, a relative of the State official.Commission Precedent. In the case of spouses who work for the same agency, the Commissionhas determined that supervisor/subordinate relationships are not permitted because one spousehas a direct financial interest in the salary and continued employment of the other spouse andthus should not directly supervise or take personnel actions in regard to the spouse. This policyis also applicable to non-related individuals who share the same household with the samefinancial interdependence that the Commission views as creating a conflict in spousal situations.In regard to other family members working for the same State agency, the cases are factsensitive. The Commission considers such factors as whether the individuals reside in the samehousehold; the degree of the relationship; whether there is financial interdependence; the size of94

New Jersey Uniform Ethics Code, February 2011M-13the work unit in question; whether there is direct supervision; and whether one family member isresponsible for taking personnel actions that affect the other family member.With respect to the hiring of family members, the Commission looks at the totality ofcircumstances surrounding the hiring to determine whether any unwarranted privilege has beenafforded the family member.As to interactions with family members or their private sector employers, theCommission generally recommends recusal from matters involving the relative and/or therelative's employer in order to eliminate any appearance of impropriety.In the case of individuals involved in a dating relationship, the Commission has foundviolations of the unwarranted privilege and appearance sections of the statute in situations wherethe State employee had official involvement in a matter affecting the individual with whomhe/she had a dating relationship.In regard to the family-member casino-related prohibitions of sections 17.2(b) and17.2(c), waivers may be requested by contacting the State Ethics Commission. Waivers will begranted if, in the judgment of the Commission, such employment will not interfere with theresponsibilities of the State officer or employee and will not create a conflict of interest orreasonable risk of the public perception of a conflict of interest.95

NEW JERSEY STATE BAR ASSOCIATIONPUBLIC UTILITY LAW SECTION CLEAPRIL 26, 2011REAL LIFE ETHICAL SITUATIONS IN A BOARD OF PUBLIC UTILITIESPROCEEDINGPanelists and Actors:Moderator, Scriptwriter, and NarratorPanelist:Panelist:Panelist:Utility CEO GoforitDiv. of Rate Counsel Director Steve BrandtGov. N.O. FrillsBruce SpringsteenMartin C. Rothfelder, Esq.Managing Member, Rothfelder Stern,L.L.C.Eve Moran, Former Administrative LawJudge, Illinois Commerce Commission,Regular Contributor to Attorney EthicsPrograms in Utility RegulationJames H. Laskey, Esq.Shareholder, Norris McLaughlin &Marcus, P.ABethany Rocque-Romaine, Esq.Policy Advisor to BPU CommissionerJeanne M. FoxSuzanne Patnaude, Esq.Director, Governmental AffairsSolyndra, Inc.Ira G. Megdal, Esq.Member, Cozen O'ConnorA Pennsylvania Professional CorporationStephen B. Genzer, Esq.Partner, Saul Ewing, LLPBradford M. Stern, Esq.Member, Rothfelder Stern, L.L.C.Utility OI’s in-house attorneyOAL Judge WithitChristopher A. White, Esq.Deputy Rate Counsel, Division of RateCounselVictor Fortkiewicz, Esq.1

Independent Utilities ProfessionalBPU President BigpictureHesser G. McBride, Esq.Wilentz, Goldman & Spitzer P.A.2

SCENE 1Narrator: On For You, Inc. (“OI”), a large electric utility, has decided to pursue a 20% rateincrease, which will include a 15% return on equity. A large part of its capital structure andcosts are debt which is at 10% and above the current 5% market cost for debt. It is now April2011. They anticipate filing in July 2011. The CEO, Ms. Goforit, a former utility attorney and alicensed New Jersey attorney, plans to refinance the company’s debt at around 5% immediatelyafter the rate case is completed. He has privately discussed this with investment bankers whohave assured him such a refinancing would be in the utility’s and its ratepayers’ best interests.The CEO has privately discussed this with the members of his Board of Directors and CFO, buthas no contracts or other items in place to carry out such activity. There are no documents orwritten analysis of this plan.OI sets up a meeting with each commissioner. Here is the meeting with BPU PresidentGetit at the BPU offices:BPU President Bigpicture: Good morning Ms. Goforiot. I’m so glad that you could come bytoday. I hope you like our new offices here.Ms. CEO Goforit:Good morning Chairman Getit. You have great offices. Mr. President,our Company, OI, needs a rate increase so that we can be attractive to investors. We plan to filenext month. In addition, the Board should provide rate relief by January 1, 2012 not onlybecause my company needs it but to show that the state is open for business and businessfriendly. Our labor costs, our health insurance costs, and the costs of many other items, donothing but go up – especially our health insurance costs.3

______________________________Is this discussion ex parte? What governs?Is the answer different for the scheduling concerns versus the facts involved?What, if any, of these answers are different after the case is filed?Are any of these actions reportable as lobbying?Does the CEO have any ethical obligations even though he is not acting as a lawyer?SCENE 2Narrator: The case gets filed and the Governor, N. O. Frills, who opposes the National HealthCare Reform, calls CFO CEO Goforit.Gov. N.O. Frills:CEO Goforit:Good morning. How’s the electric distribution business?Good morning to you governor. Business is good except for some of theterrible things government does.Gov. N.O. Frills:Well, I’m working on that. I would like you to join me in a pressconference in Trenton, NJ and talk about health care. I plan to state that half of your proposedrate increase and all of your increased health care costs are due to the health care reformpackage.CEO Goforit: Well, Governor, that may be stretching it a bit, but I’m not going to quibble onthe details, so if you want to say that, I will nod affirmatively and smile alongside you. In fact, Iwill quote you at my meeting with newspaper editors at the Newark Moon Sketcher and I willhave my rate case lawyers quote you in their motion for expedited treatment at the BPU. Would4

you mind making sure the Commissioners each receive a copy of the information you arepresenting? Can you also urge them to finish the case by Dec., 2010?Gov. N.O. Frills: No problem.CEO Goforit: I will have our rate case attorneys call the BPU Chief of Staff and e-mail theGovernors statement to the Chief and other BPU staffers.Gov. N.O. Frills: OK, that’s your business_____________________________What issues are there, if any, in:Allowing the Governor to present inaccurate information?Using the Governor’s quote of inaccurate information with the press?Would the answer be different if the Governor’s statements were accurate?What issues, if any, are involved in the Governor calling the BPU President? Are they anydifferent if the Governor talked to the BPU’s Chief of Staff?What issues, if any, are there in OI providing the Governor’s statement to BPU staff?What issues, if any, are there in OI offering the Governor’s statement in an evidentiaryhearing?Which of these communications, if any, are potentially reportable as lobbying?SCENE 3Narrator: CEO Goforit and Gov. N.O. Frills see each other at a conference on clean energy andfind Bruce Springsteen tickets to be the topic of the moment.Gov. N.O. Frills:Hey there Goforit.5

CEO Goforit: Hey gov.Governor N.O. Frills: Bruce Springsteen is going to be singing at the Concrete Donkey downon the shore tonight. I can’t go, but here are 8 tickets someone gave me with a face value of$100 each. I think it’s a fundraiser for those who can’t pay their water bills. Here they are.They are yours. I just hope you can find people to use them. Employees like those folks at theBPU and Rate Counsel have been working so hard it would be great if they could go – especiallysince they won’t see a pay increase in our lifetime.CEO Goforit: I will inquire into what restrictions there are in giving them to those -- um -- hardworking folks.______________________________What advice should counsel provide CEO Goforit regarding the ethical issues in providingthe tickets to BPU staffers?What, if anything, should Governor N.O. Frills have done differently if he wanted to getthe tickets to the BPU staffers?SCENE 4Narrator: The site is now the Concrete Donkey and Bruce Springsteen has been performing for3 hours. He takes a break from music and talks to the audience, which includes OAL JudgeWithit.Bruce: Well, usually I talk to my audiences about peace, the great work our armed forces do,and stuff like that. However, today, I want to talk about the need to reform health care reform. Ijust talked to my neighbor CEO Goforit of On For You, Inc. and he tells me the health reform6

law, by itself, is going to increase our electric rates by 5%. He tells me that that’s the cost and bylaw, the BPU has to pass it along. That cost level is astounding. While I want everyone to getheath care, I appeal to everyone out there to write your Congressman, tell them this fact, and askthem to reform health care reform to see if we can cover everyone at less cost.______________________________Has anyone violated any ethical rules here? Do these facts impose any duties on anyone?What if Goforit suspected or knew OAL Judge Withit would be in the audience and askedBruce to present these facts?SCENE 5Narrator: The rate case is now at the Office of Administrative Law and counsel for the partiesare at a pre-hearing conference. The Office of Rate Counsel is prepared and brings its initialdiscovery questions right to the conference. Here is the conversation.Rate Counsel Director Label: Here are the 3000 data requests that our staff and consultantshave drafted. You can take three or four days to answer these, but please answer first, if you canthe following data request: What plans, discussions, or analysis does the company have torefinance its debt?OI’s in-house attorney: Yes, no problem. You will have comprehensive answers on time,perhaps with extra information just for the fun of it.______________________________SCENE 5ANarrator: OI’s in-house attorney sends an e-mail around the company and no one indicatesthere are plans in the works. Thus, he answers the question about the refinancing with: “none”,7

i.e. there are no plans to refinance. Then two months later the following transpires in thecompany elevator:OI’s in-house attorney: Good morning.CEO Goforit: Good morning. I met with Investment house Goldfinger Bags and they providedme a study and have assured me we can refinance all our debt in January 2012 and cut our costsof debt in half – and we haven’t even hired them yet. I have instructed our outside counsel Route21, French, LLP to prepare the contract with Goldfinger Bags so we can go ahead. Please keepthis to yourself, as for SEC reasons, Route 21, French, LLP advised me that it’s ok to work onand further analyze this, but we can’t disclose this information without making a proper filing atthe SEC. But mark my word, this will happen and it will be why we will do great and get superbonuses in 2012.______________________________What duty, if any, does the attorney have to revise the discovery response? If the responseis in evidence, does that change the answer? What if the case is fully briefed and pending?What if the case was decided and the Decision specifically mentions the lack of refinancingplans as a reason the decision is reasonable?SCENE 6Narrator: Good Morning. We are now in a hearing room at the Office of Administrative Law,with OAL Judge Withit presiding.OAL Judge Withit: We now proceed with the hearing in the general rate case of On For You,Inc. I understand that CEO Goforit is the first witness.8

OI’s in-house attorney: Ms. Goforit’s direct testimony has been marked and all parties haveagreed it is admissible, so he is available for cross-examination.Rate Counsel Director Label: My first question is: please tell us what plans or analysis doesyou or your company have to refinance its existing debt?CEO Goforit: None.______________________________What actions, if any, must OI’s in-house attorney take due to the false statement of his witness?If actions are required, when is he required to act?SCENE 7Narrator:It’s November 15, the hearings are over, the briefs are in and the case is pending.OAL Judge Withit is in his office and receives a phone call on the case. Lets listen.OI’s in-house attorney (on-phone): Good morning, your honor.OAL Judge Withit (on-phone): Good morning Counselor. What’s on you mind – other thanThanksgiving.OI’s in-house attorney (on-phone): It is almost Thanksgiving and I’m so thankful this case isabout done. Your honor, I know the order is a lot of work, but this case has been briefed sinceNov. 1 and we were wondering if you can issue an order by December 1? Considering theBPU’s agenda schedule, the December 1 date is really important to the BPU addressing this byJanuary 1. Maybe it would help if you received a draft order.OAL Judge Withit (on-phone): Yes, a draft order would help.OI’s in-house attorney (on-phone): Do I have to send it to the other parties?9

OAL Judge Withit (on-phone): Yes. I’ll send out a letter today asking for such orders and willask for them in 72 hours.OI’s in-house attorney (on-phone): Could you make it 96 hours?OAL Judge Withit (on-phone):No problem. I guess I will just look forward to theDecember holidays as I will be writing over Thanksgiving.______________________________What issues are there, if any, in the initial inquiry to the OAL judge?What issues are there, if any, in suggesting and providing a draft order?What issues are there, if any, in asking the judge if one must send it to the other parties?______________________________General Questions:Are the duties for OAL Judge Withit that we have discussed also the same forCommissioners?Do the Commissioner duties vary depending on whether the Commissioner is an attorney?In attempting to get this case done by January 1, what types of requests of theCommissioners can one do?Can one make different requests of lead staff, such as Commissioner aides, the ExecutiveDirector, the advisory Deputy Attorney General or Legal Advisors?10

PULS SPRING CLE PROGRAM – APRIL 26, 2011 AT THE LAW CENTERProgram Chairs: Matthew Weissman, William MoscaI. MORNING PLENARY SESSIONSHealth, Safety, and Economic Policy -- Public Utility and Energy InfrastructureInvestment Issues (9:15 am – 10:30 am)Matthew M. Weissman, Esq., PSEG Services Company – Moderator1. New Jersey’s Aging Water Infrastructure and the Distribution System InvestmentCharge – Michael A. Sgro, Esq., New Jersey American Water Company2. Energy Utility Infrastructure Investment and Energy Efficiency Programs --Tracey Thayer, Esq., New Jersey Natural Gas Company3. Electric Capacity “Stimulus” – The Long-term Capacity Agreement PilotProgram Statute -- Robert Chilton, Gabel AssociatesCOFFEE BREAK (10:30 am – 10:45 am)Customer Choice Issues (10:45 am – 12 noon)Phyllis Kessler, Esq., Duane Morris, LLP – Moderator1. The Evolution and Emergence of Electric Choice in New Jersey – Jay L. Kooper,Esq., Hess Corporation2. Current Challenges To Maintaining and Expanding Electric Choice in New Jersey– Murray Bevan, Esq., Bevan, Mosca Giuditta and Zarillo, P.C.3. Free Choice in Telecommunications? The Impacts of Proposed New JerseyDeregulation Legislation and the FCC's National Broadband Policy -- Hesser G.McBride, Jr., Esq., Wilentz, Goldman & SpitzerLUNCH BREAKII.AFTERNOON PLENARY SESSIONSRenewable Energy Issues (1 pm – 2:15 pm)James C. Meyer, Esq., Riker Danzig Scherer Hyland & Peretti – Moderator1. Overview of the NJ Regulatory Scheme Governing Renewables – James C.Meyer, Esq.2. Solar Applications -- Mike Perna, Con Edison Solutions

3. Offshore Wind – Robert Gibbs, PSEG Global, LLC and Garden State OffshoreEnergy, LLC4. The Rest -- Unsung Class I Renewables -- Joe Sullivan, New Jersey Board ofPublic Utilities (Invited)Ethics Credit – Real Life Ethical Situations in a Board of Public Utilities Proceeding(2:30 pm – 4:30 pm)Martin C. Rothfelder, Esq., Rothfelder Stern, L.L.C. – Moderator and NarratorA graphic enactment of a series of fraught – and all-too-familiar – situations in thecontext of a major rate case, asking and answering difficult questions about attorneys’obligations regarding full disclosure, ex parte communications, the proper use of“free” Bruce Springsteen tickets, and more. Presented by a Who’s Who of NewJersey’s Public Utility Bar, including:Panelists:Eve Moran, Esq., Former Administrative Law Judge, Illinois CommerceCommission, Regular Contributor to Ethics CLEs in Utility RegulationBethany Rocque-Romaine, Esq., New Jersey Board of Public UtilitiesJames H. Laskey, Esq.., Norris McLaughlin & Marcus, P.A.Actors:Victor Fortkiewicz, Esq., Independent Utilities ProfessionalStephen B. Genzer, Esq., Saul Ewing, LLPHesser G. McBride, Esq., Wilentz, Goldman & Spitzer P.A.Ira G. Megdal, Esq., Cozen O’ConnorSuzanne Patnaude, Esq., Solyndra, Inc.Bradford M. Stern, Esq., Rothfelder Stern, L.L.C.Christopher A. White, Esq., Division of Rate Counsel2