Bill Would Delay JCP&L Rate Increase Until BPU Wraps Up Probe

Tom Johnson | January 30, 2013 | Energy & Environment
Other GOP-backed legislation would hold up rate increases for all utilities until substations protected from flooding

Jersey Central Power & Light isn’t losing its dubious distinction as the utility that everyone seems to love to hate.

The state’s second largest-utility, with approximately 1 million customers, should not be granted a rate increase until the New Jersey Board of Utilities resolves allegations that the company earned $90 million more than it should have in 2011, according to a bill introduced by a trio of Republican lawmakers.

Other bills introduced would prevent any utility from being granted a rate increase until steps are taken to prevent substations from being flooded, a major cause of outages during Hurricane Sandy last fall and one of the reasons why many homeowners and businesses were left without power for up to 13 days.

JCP&L, pummeled by local officials and state regulators over its sluggish response to restoring service to customers in a series of major storms during the past two years, is seeking a $31millon rate increase from the BPU. The state Division of Rate Counsel first raised allegations about the utility’s earnings last year, leading the BPU to initiate a rate case to look into the issue.

“JCP&L customers hold their collective breath every time the rains fall and the winds blow, based on previous disastrous performances, they fear prolonged loss of their power,’’ said Sen. Jim Holzapfel (R-Ocean), who is sponsoring the Senate version of the bill (S-2537).

In the past, JCP&L said it is confident it can justify its current rates, which officials say are the lowest among all four electric utilities.

JCP&L spokesman Ron Morano had no comment.

During the October storm, which left 2.7 million customers without power at one point, the flooding knocked out 58 utility substations, in each instance leaving tens of thousands of customers in the dark.

“While nature is unpredictable, it doesn’t take an advanced engineering degree to figure out what will happen to an electrical substation located on the Shark River just a few feet above tide levels,’’ said Assemblyman Dave Rible (R-Monmouth), a sponsor of the bill (A-3698). “We are going to hold them accountable and make them have a plan in place to protect against flooding.’’

The legislative efforts to improve utilities response to major storm events, such as Sandy, are also being reflected in recommendations adopted by the BPU last week to reduce lengthy outages for utility customers.

The order spells out more than 100 recommendations the state’s four electric utilities need to take to improve preparedness and restoration for major storms.

These include giving customers an estimated time for restoration of power within 24 hours of a major storm and improving communication between utilities and local officials about weather-related outages. Lack of communication about the status of electric services emerged as one of the biggest complains stemming from both Sandy and Hurricane Irene, the previous year.

The order also requires utilities to develop emergency plans for restoring service when a minimum of 75 percent of customers are left without power and conduct annual training exercises simulating responses to such events. During Sandy, up to 90 percent of JCP&L customers lost power.