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Utilities Restore Power After Sandy, but Ratepayers Will Pick Up the Bill

Tom Johnson | November 5, 2012

Rather than quoting dollar amounts, utilities say they're concentrating on getting the power back on.

When the state’s utilities are finished restoring power to millions of customers in the wake of Sandy, the final bill will be passed on to ratepayers, who already face more than a quarter of billion dollars in increases from last year's two powerful storms.

Given the magnitude of damage caused by Sandy, those costs could double, especially since 2.7 million customers lost electricity this past week in what Gov. Chris Christie yesterday called “the biggest storm New Jersey’s ever had’’ in a press briefing in Hoboken.

Utility officials were reluctant to project what restoration costs could run, but echoed the governor’s remarks. “This is the most significant damage we’ve ever seen,’’ said Ron Morano, a spokesman for Jersey Central Power & Light, New Jersey’s second biggest utility.

The company, which serves 1.1 million customers in central New Jersey and along the devastated Shore, had more than 1.2 million power outages, a number that reflects repeated outages among customers, he said.

Morano, however, declined to talk about the price of getting the lights back on. “Right now, we’re focusing on restoring our customers to power,’’ he said, adding that the utility has been restoring service to between 100,000 and 125,000 customers a day.

JCP&L spent $164 million restoring power to its customers after Hurricane Irene last summer and in October after a rare fall snowstorm. Public Service Electric & Gas, the state's largest electric utility with nearly 2 million customers, spent about $111 million in restoration efforts after the two storms.

Both events, though historic in nature, are likely to be far overshadowed by Sandy. During Irene, 1.9 million customers lost power, at that time the largest outage in state history. In October, another 1 million customers were left in the dark, some for up to 10 days, a timeframe almost certain to be exceeded by Sandy.

JCP&L and PSE&G are not the only utilities facing steep restoration costs. Christie said New Jersey Natural Gas, which services the Jersey Shore area, could take six to eight months to replace its natural gas pipeline system on Long Beach Island. The utility said said a section of Long Beach Island, which serves 630 customers, appears to be in need of substantial infrastructure improvements, according to a press release issued by the Wall Township utility.

All of the utilities are entitled to seek recovery of those costs in future rate cases, provided those expenses are deemed prudent by the New Jersey Board of Public Utilities.

The storms in 2001 led to new recommendations from the agency to require utilities to prepare better response plans in the event of outages or face stiffer penalties for not restoring service quicker. Those penalties, however, have yet to be enacted into law, although bills have been introduced in the Legislature.

Christie, who has not been shy about criticizing the utility response to outages, sounded a more conciliatory note yesterday in his press briefing.

“As of today, I think they have done a pretty good job,’’ said the governor, who noted that out of the 2.7 million customers who were left without power after the huge storm, there were less than 1 million left without electricity six days later.

By the end of the week, Christie said he hoped everyone would have power and all of the state’s schools would be reopened. Christie said 75 percent of the customers of JCP&L and PSE&G have electric service, and more than 800 of 2,400 schools in New Jersey are expected to open tomorrow.

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