Can New BPU President, Commissioners Brace Agency for Change?

Tom Johnson | September 23, 2014 | Energy & Environment
With the energy sectors that it oversees in flux, can the Board of Public Utilities deal effectively with tough new challenges?

Assemblyman Upendra Chivukula (D-Somerset).
The New Jersey Board of Public Utilities is getting a major makeover. The question is: Will it make a difference?

With no debate, the Senate yesterday overwhelmingly voted to confirm Richard Mroz, a lobbyist with clients in the energy sector who also has extensive experience in state government, as new president of the agency. It also approved Assemblyman Upendra Chivukula (D-Somerset), the chairman of the Assembly Telecommunications and Utilities Committee, to the BPU.

The appointments occur at a juncture when the agency is facing huge challenges in the rapidly evolving energy and telecom industries — changes that could disrupt traditional ways of regulating these companies, which were mostly monopolies until the state deregulated the sectors.

Part of that transformation includes an increased reliance on renewable energy and efforts to reduce energy usage, as well as using more localized power plants to provide power to customers. All of these changes hurt a utility’s bottom line when delivering gas, electricity, and traditional phone service to ratepayers, which is where they earned most of their profits in the past.

There is a lot of disagreement over these issues, particularly over how much extra utility customers should pay on their bills to subsidize these effort and what role utilities have in meeting some of these goals, especially in the energy sector. It is an issue that came up when the Senate Judiciary Committee considered the nominations earlier in the day. How utilities will cope with those changes — a problem readily acknowledged by the industry — did not come up at the hearing.

For the most part, virtually all committee members lauded the nomination, although Mroz was treated more gingerly than Chivukula — one of the Legislature’s leading proponents of renewable energy.

That raised concerns from Sen. Michael Doherty (R-Warren), who voted against the nomination in the committee and in the Senate, questioning why the nominee has supported many initiatives to promote clean-energy alternatives.

“A lot of us are concerned that New Jersey has some of the highest energy costs ,’’ Doherty said, blaming much of it on subsidies ratepayers pay to promote renewable energy.

His views were reflected by Michael Proto, communications director of the New Jersey chapter of Americans for Prosperity. “This is an agenda that is not pro-ratepayer,’’ he told the committee.

Chivukula disputed that argument, saying the BPU can be a great stimulator of the economy, creating jobs if it continues to promote clean-energy projects.

Mroz, a former chief counsel to then Gov. Christie Whitman, faced much less criticism, although Sen. Bob Smith (D-Middlesex) questioned how he would handle potential conflict-of-interest problems if former clients came before the BPU.

Mroz said he would recuse himself in that event.

For some clean-energy advocates, the more important questions revolve around how the state moves on renewable energy and other initiatives that steer New Jersey away from increased use of fossil fuels.

“We hope that he will move the BPU in a new direction that will finally set rules due on offshore wind, develop an energy efficiency portfolio standard (which would require greater efforts to reduce energy use), and makes sure our solar industry continues to rebound,’’ said Jeff Tittel, director of the New Jersey Sierra Club, who praised the appointment.

When both men take seats on the agency, it will bring the number of commissioners to their full complement of five. (BPU Commissioner Joseph Fiordaliso has been serving even though his term expired, but he, too, was nominated for another term, although not yet confirmed.) There had been one longstanding vacancy on the Republican side and long-time BPU Commissioner Jeanne Fox retired from the agency earlier this month.