The predecessor of the BPU, the Department ot Public Utilities, was established in 1911 to address the provision of essential services in this State, which at the time included railroads and interstate commerce in addition to those services under current jurisdiction. From inception, the Board was given broad authority to perform management audits and initiate investigations (based on its own initiative or on consumer complaints), appraise and value the property of utilities and approve rates and institute fees. Its wide-ranging authority was intended to mitigate the effects of monopoly enterprises and avoid disruption of economic activity.

Throughout periodic reorganizations, the BPU has alternately emphasized its consumer protection and business advocacy functions. In 1977 the BPU was organizationally placed in the Department of Environmental Protection and Energy. In 1994 the BPU was moved to the Department of Treasury (where it currently remains.)

Pursuant to the 1994 Reorganization Plan (Executive Order No. 001-94), the Board of Regulatory Commissioners (BRC) was redesignated as the Board of Public Utilities (BPU) and reconstituted "in but not of" the Department of the Treasury. As part of the 1994 reorganization, the Department of the Public Advocate was also eliminated and the Division of the Ratepayer Advocate was transferred to the BPU. However, despite its placement, the Ratepayer Advocate, which represents the interest of ratepayers before the BPU and other decision- making bodies, is not subject to Board control or supervision.