Top Court’s Gain May Strain BPU at Crucial Time

Tom Johnson | December 11, 2012 | Energy & Environment
Nomination for chief justice will leave agency without leader as it deals with Sandy aftermath, solar-energy woes

Credit: Governor's Office/Tim Larsen
Robert Hanna, Gov. Chris Christie's nominee to NJ Supreme Court and current president of the BPU.
For the third time in a little more than a year, there will be a new head of the state Board of Public Utilities, an agency facing immense challenges as it tries to fortify the electric power grid in the wake of Hurricane Sandy and revive the state’s flagging solar-energy sector.

Gov. Chris Christie yesterday nominated BPU President Robert Hanna to the state Supreme Court. The 54-year-old Madison lawyer, if confirmed by the Senate, will depart the agency after a little more than a year at the helm of the BPU, an agency with broad powers over some of the biggest sectors in the state’s economy.

Christie also nominated state Superior Court Judge David Bauman to be associate justice. Bauman would be the first Asian-American to serve on the state’s highest court.

The revolving door at the agency has drawn criticism from clean-energy advocates and lawmakers, as well as more private grumbling from those in the energy sector, many of whom have long been frustrated by the BPU’s slow pace in making major decisions.

Some say frustration in dealing with the BPU has led utilities to seek legislative fixes instead of going through full-blown rate cases or seeking BPU approval.

The agency regulates the state’s electric, gas and water utilities and, to a lesser extent, the cable television and telecommunications sectors in a state where high energy costs typically rank as a top concern of business.

The BPU’s Office of Clean Energy helps promote development of renewable energy and energy-efficiency projects in New Jersey, a priority established under the state’s energy master plan.

Beyond the turnover at the top of the agency, the BPU also has suffered from an exodus of top staff, having recently appointed a new chief counsel and a new chief of staff. Yet to be filled is a months-long vacancy in the executive director position.

“The turnover is difficult because there is a need for change in policies,” said Lyle Rawlings, president of Advanced Solar Products, Inc., a developer of solar-energy systems. “We’re at the point where there is a need for the overhaul of the solar sector.’’

The governor signed a new law aimed at stabilizing the solar-energy sector, but many industry observers say it is too early to assess whether it is achieving its goal. With the price falling for the electricity their solar-energy systems produce, the number of installations of new arrays has slowed dramatically in the past couple of months.

In the meantime, Senate President Stephen Sweeney (D-Gloucester) has stepped up criticism of the BPU recently for its failure to come up with a mechanism to help fund the development of wind projects off the New Jersey coast. The state’s energy master plan calls for the development of 1,100 megawatts of offshore wind power; the target appears increasingly elusive.

Asked whether he hesitated to make a change at the BPU at such a sensitive and busy time, Christie said at the press conference in the Statehouse: “You’re always making choices. It depends on how quickly his confirmation process happens,” adding that his staff is already working to find replacements for both Hanna and Bauman.

Later in the day, Hanna, when asked essentially the same question, said all questions about the nomination ought to be answered by the governor’s office.

Those questions may surface again during the confirmation hearings before the Senate Judiciary Committee.

“It is a time when clean-energy efforts are falling behind,’’ said Jeff Tittel, director of the New Jersey Sierra Club. “This is bad for the rebuilding efforts after Sandy, bad for the environment and bad for clean energy. This can hurt our economy and set us back.’’

Assemblyman Upendra Chivukula (D-Somerset), chairman of the Assembly Telecommunications and Utilities Committee, agreed.

“It puts the agency at risk,’’ said Chivukula, who has long criticized what he has called a lack of qualified people at the BPU. “And New Jersey has many, many challenges,’’ he said.

Others were less certain about the impact.

“We’ve seen this before,’’ said Paul Patterson, an energy analyst at Glenrock Associates, referring to when Hanna replaced Lee Solomon as president of the BPU in December 2011. Ironically, Solomon, who returned to being a Superior Court judge, had been frequently mentioned in media speculation as a candidate for the high court.

“Hanna will be a loss to the BPU, but a gain for the Supreme Court,’’ said Fred DeSanti, an energy lobbyist who has frequents dealings with the regulatory agency. “It’s not going to be easy to replace him. They (BPU) have a tremendous amount of issues facing them.’’

In addition to the clean-energy issues, the administration is locked in a court battle with incumbent power suppliers over an effort to spur construction of new power plants in New Jersey, financed by ratepayer subsidies.

Many of the issues tackled by the board are fraught with complexities, particularly pertaining to the recovery of investments by utilities, making it all the more important that the agency is led by someone with a background in energy policy, said industry observers.

Late yesterday, the BPU began considering one of the major issues facing the agency: What steps to take to improve reliability of the power grid in the wake of a storm that left 7 million people in New Jersey without electricity. The agency also has started a series of hearings about how the four public utilities responded to the challenges of Hurricane Sandy.

On another front, Christie’s nomination of Hanna and Bauman aims to resolve a lingering controversy between the administration and Democratic-controlled Legislature over the make-up of the state’s highest court. Christie’s last two nominees were rejected by the state Senate because of concerns about their qualifications and the partisan make-up of the court.

Andrew Kitchenman, the healthcare writer for NJ Spotlight, contributed to this story.