Bill Would Hold Utilities to Double Standard: Greater Reliability, Shorter Outages

Lawmakers' effort mirrors BPU investigation into last summer's long blackouts and slow comebacks

The legislature once again seems poised to establish tougher standards for New Jersey’s utilities to improve the reliability of their systems and more quickly return service during outages.

In the wake of a series of storms last year that left hundreds of thousands of customers without electricity, some for up to a week or more, the chairman of the Assembly Telecommunications and Utilities Committee introduced a bill (A-2760) that would hold utilities more accountable for restoring service to ratepayers.

The possibility of lawmakers moving to overhaul how utilities respond to widespread blackouts comes at a time when the New Jersey Board of Public Utilities already is conducting a wide-ranging investigation of the storm outages and what steps need to be taken to improve reliability.

Nevertheless, Assemblyman Upendra Chivukula (D-Middlesex) is proposing a bill that would impose fines on utilities if they fail to implement service restoration plans, which would be required to be submitted to the BPU each May under the bill.

The bill is the second introduced in the legislature since widespread power outages last year, such as those that occurred last summer when a hurricane made landfall in the state, leaving nearly 2 million customers without electricity.

The power outages triggered angry protests from customers, local officials, and even Gov. Chris Christie. The governor, whose home in Mendham was among hundreds of thousands to lose power during a rare October snowstorm, ordered the BPU to assess the utilities’ performance.

The move also led to legislative scrutiny. In January, the Senate Economic Growth Committee held a bill (S-467) at the request of the New Jersey Utilities Association, which noted the BPU was already looking into the issue.

The legislation would have required the agency to establish procedures that are intended to serve as minimum best practices to restore power during outages. It also carried with it a big stick: failure to meet the standards could lead to fines of up to $10,000 per day.

In a preliminary report issued last December, the agency recommended immediate action by the four utilities to improve communications, including the addition of staff during storms to handle expected calls, the use of social media to inform affected customers, and the creation of a full communications plan approved by the agency in advance.

The utilities’ association told Chivukula during a legislative hearing on reliability that it would like to explain to his committee what its members are doing to improve the reliability of a system of gas and electric pipelines that extend over 100,000 miles in New Jersey.

“On the whole, the systems work well,’’ said Karen Alexander, president and chief executive of the association, which represents the electric, gas, and water utilities regulated by the BPU.

Chivukula seemed unconvinced. “When you really look at the issue, the infrastructure is not up to date,’’ he said.

How to modernize that system, some of it more than 100 years old, is subject to debate.

The BPU earlier this month approved a mechanism to allow water utilities to more quickly recover infrastructure improvements to the systems serving more than 4.5 million customers. The state’s four gas utilities are seeking a similar mechanism to recoup expenditures on an aging gas infrastructure.

“Clearly, we have to upgrade and replace the older systems,’’ said Alexander, who noted the mechanism approved for the water utilities should accelerate infrastructure improvements by those companies.

So far, the BPU seems willing to approve such mechanisms. At its most recent meeting, several commissioners said it made sense to approve an accelerated schedule of improvements, particularly for gas systems, since the price of the fuel has fallen to a near 10-year low.