PSE&G, Green Groups at Odds over Intervention in $3.9 Billion Rate Case

Tom Johnson | July 26, 2013
Utility argues concerns aren’t relevant to proposal to harden grid to cope with future storms

Jeff Tittel, director of the New Jersey Sierra Club
Public Service Electric & Gas is seeking to block two of the state’s most prominent environmental groups from intervening in its $3.9 billion rate case, a proposal that aims to make its electric and gas systems more resilient in the event of future extreme weather.

In a filing with the state earlier this month, the Newark-based utility argued that the organizations’ intervention should not be granted, primarily because the issues they have raised — the need to increase investments in energy efficiency, the impact of global change, and renewable energy generation – have nothing to do with what the rate case is about.

The filing underscores the controversy underlying the rate request, which has been supported by many business interests and municipalities but has drawn opposition and prompted questions from consumer advocates and the two environmental groups—the New Jersey Sierra Club and New Jersey Environmental Federation.

The case is amounting to a test case on how the state should respond to the likelihood of extreme storm events, such as Hurricane Sandy, a prospect most officials concede is part of the new “normal.’’

Besides the two environmental groups, the AARP chapter in New Jersey and the New Jersey Large Energy Users Coalition both have sought to intervene in the case.

“Notwithstanding, PSE&G’s commitment to energy efficiency, demand side management, climate change and renewable generation, these are not what the dockets are about,’’ the state’s largest gas and electric utility said in its filing to the New Jersey Board of Public Utilities.

“Instead the Energy Strong (the name the program has been dubbed by the utility) proceeding addresses hardening and making more resilient the infrastructure to deliver electricity and gas customers in extreme storm conditions,’’ according to the filing.

If the groups are allowed to intervene in the case, the utility argued, it would only create confusion and delay efforts to harden the power grid. In the past, PSE&G has sought to block the intervention of groups, such as the Sierra Club, in its cases — most notably in the filing dealing with a highly controversial high-voltage power line through three sections of the national park system, a project eventually approved by the BPU.

PSE&G declined to comment on its filing, saying the proposal speaks for itself.

But Jeff Tittel, director of the New Jersey Sierra Club, had plenty to say, as is his wont.

“First and foremost, if you do not do energy efficiency, distributed generation and smart grid, then you are doing Energy Weak, not Energy Strong,’’ he said.

In its original filing with the BPU, PSE&G argued rates would remain flat for most customers because of historically low natural gas prices, which tend to drive down electricity prices, and the winding down of surcharges on customers’ bills stemming from the deregulation of the energy sector more than a decade ago.

That view was disputed by BPU President Bob Hanna, who said his staff’s assessment of the proposal is that it would boost rates by at least 8 percent.

More than 1.9 million of the utility’s customers lost power during Hurricane Sandy last October.

The filing aims to address many of the problems that surfaced during the storm, including the flooding of dozens of substations and switching stations, which knocked out power to hundreds of thousands of customers.

Among other things, the utility proposes to spend $1.7 billion to raise, protect and erect floodwalls around 31 substations that were flooded during Hurricane Sandy, a move the BPU has tentatively endorsed.

Tittel argued otherwise.

“With the record heat wave last week, we saw efficiency and distributed generation is working and is an important part of any plan to make our grid more resilient to the next storm,’’ he said. “They (PSE&G) just want to do whatever they want, even if they waste ratepayer money.”