Opinion: How to Tell the Ratepayer Advocate From the Tea Party

R. William Potter | February 12, 2013 | Opinion
Is there really a difference between "no rate increases for utilities" and "no new taxes"?

What does the Ratepayer Advocate — aka, Rate Counsel — have in common with tea party Republicans in Congress? On the surface, nothing at all.

The advocate is statutory attorney to represent consumers in public utility rate cases at the Board of Public Utilities (BPU). In fact, like its predecessor, the Department of the Public Advocate — which Gov. Chris Christie abolished as one of his first acts in office — the Ratepayer Advocate (RPA) has often been maligned as a taxpayer-financed left-wing law firm.

But take a closer look and you will find a striking similarity. Right-wing Republicans in Congress typically oppose any and all tax increases, even those to pay for needed infrastructure investment or to support job retention and economic growth.

Similarly, the modern RPA reflexively opposes even modest utility rate-increases, no matter how necessary they are to promote and sustain some of our most important energy infrastructure developments. Especially troubling, this pattern holds even for investments in renewable energy, notably solar photovoltaic systems, but also including wind power, energy efficiency, and other sources of green energy.

The societal benefits of solar are too well known to dispute. Among them: reduced reliance on carbon-emitting fossil fuels, notably coal. That, in turn, helps stave off global climate change, which contributes to extreme weather — such as superstorm Sandy — and to the rise in sea level that threatens coastal residents everywhere, including New Jersey.

Renewable power is also a major jobs creator and a source of nearly 1,000 megawatts — equal to a large nuclear unit of local distributed power generation, which balances reliance on distant power plants.

In short, the RPA’s “no rate increases” policy is comparable to the “no new taxes” mantra of many Republicans in the House of Representatives. Both too rigidly ignore the important benefits of paying slightly more to invest in our collective future.

Rate increases are the price to pay for hardening power-delivery systems — those vulnerable wires dangling over local streets and under trees that came tumbling down in Sandy. Only by paying slightly higher electric rates can the system be improved before — and after — the next superstorm.

The RPA apparently assumes that its clients — those millions of consumers — solidly oppose all rate increases, even if needed to fix the power grid or to fund more solar projects or to bring offshore wind power to New Jersey.

But where is the evidence to support this assumption?

My guess is that consumers are far more reasonable than the RPA thinks. But in one public opinion survey after another, sizable majorities support a transition to green energy. Simply put, the public is more than willing to pay modestly higher rates in their utility bills to fund increased use of solar energy.

And although I have not seen any polling data on the subject, I’m sure the same attitude holds true for rate increases tied to improving the reliability of electric service, which may prevent more costly — and deeply traumatic — power outages.

It was not always like this. In the 1970s and 1980s, the advocate was among the leading proponents of an emerging technology, cogeneration –also called combined heat and power (CHP) because of its demonstrated energy efficiency. Another benefit is that CHP units can be built by independent power producers (IPPs), bringing much-needed competition to energy sector.

Back then the advocate’s support for CHP was more than rhetorical. It included regulatory efforts (eventually successful) to persuade the BPU to require public utilities to pay a 10 percent premium on their purchases of cogenerated electricity to compensate investors for the societal benefits conferred by this greener technology.

(Full disclosure: I was a senior attorney with the advocate during those years in which it supported alternative power, and I have continued to work for renewable energy development ever since in proceedings before the BPU.)

It’s worth noting that the no rate increase stance of today’s Rate Counsel is often an opening gambit that eventually yields — after discussions with the renewable power industry and utilities, notably PSE&G (easily the greenest utility in the region if not the nation) – to “stipulations of settlement.” These are agreements to allow some rate increases to finance the greater public good. In contrast, tea party congressmen are not known to compromise, no matter how much the public supports higher taxes to revive jobs and the economy.

And that willingness to compromise for the public good reveals the essential difference between today’s RPA and tea party congressmen — despite their surprising similarity.