CSG Law Alert: The Nuclear Option – Power NJ Act Signals Shift in State Energy Policy
On July 13, 2026, Governor Mikie Sherrill signed the “Powering Opportunity, Workforce, and Energy Reliability for New Jersey Act” (“Power NJ Act”) into law as P.L.2026, c.42. The legislation establishes a State-led procurement process for new advanced nuclear generation and represents one of New Jersey’s most significant energy policy initiatives in decades.
The law focuses on development of advanced nuclear reactors, a newer generation of nuclear technology that differs from traditional large light-water reactors. Many advanced reactor concepts are small (50 – 300 MW) and modular, allowing developers to add generating capacity incrementally as demand grows. The legislation identifies these technologies as potentially capable of providing nearly continuous, carbon-free electricity that supports grid reliability and energy security.
The financial cornerstone of the law is the creation of a Reliable Capacity Certificate (“RCC”) program designed to support at least 1,100 MW of new qualifying nuclear capacity. Under this framework, approved projects will earn certificates based on electricity generation, and electric suppliers serving New Jersey customers will be required to purchase RCCs. The approval process will be administered by the New Jersey Board of Public Utilities (“BPU”) in consultation with the New Jersey Economic Development Authority (“NJEDA”). Before approving any project, the BPU must find that it provides a net benefit to ratepayers, that costs are not unreasonable or excessive, and that the project will result in a meaningful increase in nuclear capacity available to the PJM market. The statute also requires the return of certain wholesale market revenues and other project revenues to New Jersey ratepayers. According to Governor Sherrill’s office, the legislation is intended to ensure that ratepayers bear no costs until a facility is generating electricity while creating a pathway for deployment of next-generation nuclear resources capable of serving New Jersey’s long-term electricity needs.
The BPU is expected to grant provisional qualification to one or more projects within a year, followed by a lengthy negotiation and review process before construction can begin. The BPU and NJEDA will negotiate project-specific terms including construction costs, financing arrangements, development milestones, workforce commitments, and an RCC price structure. If negotiations are successful, the parties will execute a stipulation that must be subject to public comment, including a public hearing in the host municipality, prior to final approval. Although the statute does not establish a mandatory construction deadline, it requires each approved project to commit to a target commercial operation date and a schedule of development milestones. Importantly, no RCC payments may be made until a project is constructed, operational, and delivering electricity to the grid, and project developers—not ratepayers—remain responsible for construction cost overruns and other non-performance costs.
The law follows closely on the heels of Governor Sherrill’s April 8, 2026 signing of separate legislation that removed a key permitting restriction under the Coastal Area Facility Review Act (“CAFRA”) and ended New Jersey’s de facto moratorium on new nuclear power development. That moratorium had effectively been in place since the 1970s because CAFRA prohibited permits for new nuclear facilities unless the Nuclear Regulatory Commission had approved a permanent method for disposal of high-level radioactive waste, a condition that was never satisfied. By eliminating the CAFRA obstacle and enacting the Power NJ Act, New Jersey has moved from merely allowing consideration of new nuclear projects to creating a formal regulatory and financial framework for their development.
For more information or updates, please contact the authors of this post or the CSG Law Environmental Group.