JCP&L Rate Case Sidelined Again, Could Delay Cuts to Customers’ Bills

Tom Johnson | November 25, 2014 | Energy & Environment
BPU gives administrative law judge until end of year to reach decision in case that could reduce customer charges by one-third

Stefanie Brand, director of the Office of Rate Counsel
For the third time, an administrative law court asked and was granted an extension in deciding a highly contested rate case involving Jersey Central Power & Light, a delay that could hold up big reduction in bills for its more than 1 million customers.

In approving the requested extension, the state Board of Public Utilities gave the judge until December 29, 2014 to issue a decision in the case, which makes it unlikely the agency will end up deciding before next spring.

The extensions in the more than three-year-old rate case have frustrated consumer advocates, who note that both the staff of the BPU and the New Jersey Division of Rate Counsel argued that the utility’s rates should be rolled back by more than $200 million. If their position is upheld, utility bills could drop by one-third, according to some projections.

Rate counsel has sought to convince the BPU to set JCP&L’s rates on a provisional basis, subject to a refund, as of August 1, 2014. “The extraordinary length of time it has taken for this matter to be decided is unreasonable and grossly unfair to JCP&L’s ratepayers,’’ the division argued in a letter delivered to the BPU last week before the agency granted the extension.

In requesting the extension, Judge Richard McGill based the delay on his “heavy workload.’’

JCP&L had little to say about the latest extension. “There is nothing new in the case at this time; JCP&L is awaiting the judge’s decision,’’ said Ron Morano, a spokesman for the state’s second-largest electric utility.

The BPU failed to respond to a message for comment on why the agency has not acted on rate counsel’s petition, initially filed last July, to set provisional rates so customers could get refunds if the state decides the utility was earning more than it should have.

“All we are trying to do is to prevent further harm to ratepayers,’’ said Division of Rate Counsel Director Stefanie Brand.

“The delay in this case has been unreasonable and, as Rate Counsel is confident the record demonstrates, has allowed JCP&L to continue to collect excessive rates from its customers,’’ the letter to the BPU asserted. “Unless the relief sought by Rate Counsel in its motion is granted, there will be no ability for JCP&L customers to obtain refunds of these over-collections.’’

In an interview, Brand argued utilities have the right to set provisional rates for customers while awaiting a decision from the BPU in a rate case. It should not be any different in this instance, she argued, noting if the administrative law judge and the BPU ultimately decide to reject rate counsel’s arguments, JCP&L would suffer no harm.

Initially, JCP&L sought a $31 million increase in revenues from customers. At its hearing last week, rate counsel’s letter was mentioned, but not its substantive points.

The case is under close scrutiny from towns and residents served by the utility, because it has faced much criticism from local officials, customers, and the Christie administration over delays in restoring power when widespread outages occur during extreme storms. After Hurricane Sandy, 90 percent of JCP&L’s customers lost power — some for up to 12 days or longer.

In its letter to the board, rate counsel argued it has a statutory obligation to ensure that ratepayers are paying just and reasonable rates.

“And yet, almost three years after Rate Counsel first raised concerns that JCP&L was substantially overearning, JCP&L ratepayers are still paying these excessive rates,” the letter said.