Op-Ed: Time for BPU to Move Ahead With JCP&L Rate Case

Evelyn Liebman | September 18, 2014 | Opinion
Every day the agency doesn’t act is costing seniors and other consumers money that could go to necessities like healthcare

Credit: Amanda Brown
Ev Liebman, associate state director for advocacy for the AARP.
Come on. What is taking so long?

Way back in September of 2011 New Jersey’s very capable director at the Division of Rate Counsel went to the powerful NJ Board of Public Utilities — that agency whose mission is to ensure fair and reasonable utility rates — with very troubling evidence that our second-largest electric utility, Jersey Central Power & Light, was overcharging their over one million customers with unfair and excessive rates. Bottom line: the company was over-earning.

We were glad Rate Counsel went to bat for JCP&L’s customers. Thousands of New Jerseyans clicked on AARP’s “JCP&L Show Us the Money” website and signed and delivered petitions urging the BPU to take this evidence seriously and require the company to open its books so all the facts could be examined. And to its credit, the BPU ordered the company to file a base-rate case on or before November 1, 2012. It had been more than eight years since anyone had seen the utility’s full set of books.

What we found was not pretty.

Despite the company’s request for a rate increase of $31 million, we learned once the books were open that JCP&L has indeed been over-earning and that customers are entitled to a rate decrease of over $200 million.

And it is not just Rate Counsel that sees the evidence this way — so do the BPU staff, AARP, and others involved in the case.

Also not pretty was evidence that while JCP&L was granted additional funds from customers back in 2005 to address ongoing reliability concerns, it took the money while cutting spending to improve reliability. Between 2008 and 2010 JCP&L reduced its reliability spending, cut back its tree-trimming budget significantly, and according to Rate Counsel’s experts, sent 170 percent of its earnings to its sole shareholder and parent corporation, FirstEnergy of Ohio. No wonder some residents living in JCP&L territory described living in third-world country conditions, whether or not a severe weather event was raging.

So why is this case still not resolved?

The BPU is mandated by law to ensure safe, adequate, and proper service for New Jersey ratepayers at rates that are just and reasonable. Because the law prohibits retroactive ratemaking, customers can never get back the money we spent on JCP&L electricity that was likely overpriced — perhaps for years. The BPU can only set rates prospectively. And while we know that examining the books can take some time, three years is simply too long. Customers should not now be penalized for delays that resulted in large part from company requests for extensions to file documents or produce required studies.

JCP&L customers, to put it mildly, have every right to be frustrated. This frustration has led to Rate Counsel’s most recent and somewhat unprecedented step in this case, calling on the BPU to establish JCP&L rates that are provisional, subject to refund as of August 1, 2014. AARP believes this is the right thing to do — and the least we can do if more time is really needed. We urge the BPU to grant Rate Counsel’s request.

Every foot-dragging day that goes by without a decision by the BPU means more than a million residents are paying unfair prices, taking away money that hard-pressed seniors and other residents could be spending on necessities like food, healthcare, and housing.