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Assembly Panel Wants to Establish New Reliability Standards for Utilities

Proposed measure would require power companies to restore service rapidly in wake of extreme weather

Assemblyman Upendra Chivukula (D-Somerset)
Assemblyman Upendra Chivukula (D-Somerset)

A day after a half-million people in the mid-Atlantic region were left without power -- including 60,000 in New Jersey because of an ice storm -- a legislative committee voted yesterday to require the state to adopt new reliability standards for utilities in restoring service.

The Assembly Telecommunications and Utilities Committee approved the bill, A-1412), a measure that was first drafted in 2012 in the wake of Hurricane Irene, according to Assemblyman Upendra Chivukula (D-Somerset), the chairman of the panel and the bill’s sponsor.

Since then the state has been battered a number of times by extreme weather, most notably Hurricane Sandy in the fall of 2012, which left more than seven million people without power. Many had to wait up to two weeks or more to have service restored.

The extensive outages spurred widespread criticism from utility customers, local officials, and lastly, state regulators, who have convened their own proceedings to determine how to prevent such massive service disruptions in the future. The primary focus is what needs to be done -- and at what cost -- to make the power grid more resilient when extreme storms occur.

Chivukula noted the state Board of Public Utilities, which oversees utilities in New Jersey, already has established reliability standards, but said those rules lack key elements that require utilities to provide reliable service and quick restoration in the event of extreme storms -- or face civil penalties if they fail to do so.

The issue is significant because the state’s utilities have filed petitions with the BPU to spend more than $4 billion on upgrades to make their gas and electric power grids more resilient. Those costs would be borne by utility customers, already saddled with some of the highest energy bills in the nation, according to consumer advocates.

Each utility would be required to submit a reliability plan to the state, but it would differ depending on the service territory a company serves.

Public Service Electric & Gas, the state’s largest utility, for instance, serves 2.2 million electric customers, many of whom are located in the state’s most urban areas.

In contrast, Jersey Central Power & Light , the state’s second-largest electric utility with more than 1 million customers, operates in largely suburban areas, many lined with towering trees with branches that may break off ice storms, hurricanes, and other extreme weather.

“We want to make sure each of the utilities comes up with their own reliability plans,’’ Chivikula said, while emphasizing the bill gives the BPU wide latitude in setting reliability standards for each company.

None of the state’s electric or gas utilities offered any testimony on the bill yesterday, nor did their trade organization, the New Jersey Utilities Association, a Trenton-based lobbyist.

If the utilities fail to submit reliability plants, they could be subject to stiff penalties under amendments adopted to the bill. Those could increase from $1,000 a day to up to $25,000 for each violation, not to exceed $2 million. The costs could not be passed onto ratepayers, according to the bill.

“While we cannot ensure there will be no outages during storms and natural disasters,’’ Chivukula said, “the measure will encourage utilities to bolster their emergency preparedness.’’

Others agreed with that assessment, saying more needs to be done to prevent utility customers from losing their service.

“These power outages that we see are unacceptable,’’ Jeff Tittel, director of the New Jersey Sierra Club told the committee. “A plan that is put on the back of ratepayers is also a concern.’’

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