PSE&G Files to Keep Large Energy Users from Intervening in $2.6B Case

Tom Johnson | October 16, 2013 | Energy & Environment
State's largest utility wants to storm-proof vulnerable switching stations and substations flooded during Sandy

switching station
Public Service Electric & Gas is trying to prevent some of the state’s largest energy users from participating in a pending rate case in which the utility seeks to spend billions of dollars of customers’ money to make its power grid more resilient to extreme weather.

The filing with the Board of Public Utilities underscores just how contentious the state’s largest utility’s case has become, with environmentalists, big corporations, and AARP questioning the Newark company’s proposal to spend up to $3.9 billion over the next decade to avert widespread outages during intense storms.

The current case before the agency, however, deals with plans to spend $2.6 billion over the next five years, most of which would be invested in preventing utility switching stations and substations from being flooded during superstorms. Flooding at dozens of those stations left tens of thousands of customers without power.

Businesses, labor groups, and a number of towns insist the expenditures are needed to prevent the kind of economic disruptions that occurred during Hurricane Sandy, which left many of New Jersey’s homes and businesses without any power, some for a week or more.

The case comes at a time when state officials are wrestling with a difficult dilemma: how to prevent the widespread outages that left up to seven million people without power during extreme weather while not imposing new costs on utility ratepayers already saddled with some of the highest energy bills in the nation.

For its part, PSE&G has argued customers’ bills will remain relatively flat — even with the expenditures, primarily because of historically low natural gas prices and the fact that surcharges stemming from energy deregulation in 1999 will disappear from utility bills in the next year. BPU President Bob Hanna, however, said his staff’s analysis projected the proposal could boost rates by as much as 8 percent.

In its filing, PSE&G is seeking to prevent the New Jersey Large Energy Users Coalition, an organization with a long and prickly relationship with the utility (and vice versa) from participating in the case, which is expected to stretch into early next year.

The utility argued in its brief that the coalition is not a person or an entity, and therefore should not be allowed to intervene in the case, a status already granted to the organization by the BPU in this and earlier cases to come before the regulatory agency.

If the coalition is allowed to intervene, PSE&G is seeking to obtain detailed information about its members’ energy usage and efforts to prevent outages, presumably in an effort to decide where the utility needs to focus its expenditures under the so-called Energy Strong program. Coalition members include such large corporations as Merck and Anheuser-Busch, among others.

In its own brief, the coalition described the utility’s effort to quash its intervention as “irrelevant, unduly burdensome, and harassing.’’ It argued that companies have a significant interest in the outcome of the case.

“The companies’ very significant energy spend does, however, explain why these large energy users wish to ensure that whatever Energy Strong investments are permitted, if any, are reasonable and prudent, as they will shoulder the multibillion costs associated with the investment,’’ according to the coalition’s filing brief in reply to PSE&G.

PSE&G also has sought to block other interveners in the case, most notably the New Jersey Sierra Club and New Jersey Environmental Federation, both of which sought to argue more of the utility’s investment ought to be targeted to energy efficiency and renewable energy projects. Both environmental groups were allowed only to be participants, a status that gives them less involvement in the case.