Lawmakers, Consumer Advocates Push State to Resolve JCP&L Rate Case

If decision goes against state’s second-largest utility, customers could see their bills cut by one-third

Credit: Amanda Brown
Ev Liebman, associate state director for advocacy for the AARP.
Angry that a pending rate case has dragged on for more than three years, legislators and consumer advocates yesterday called on state regulators to quickly make a decision on a proposal that could mean significant reductions in bills for customers of Jersey Central Power & Light.

The rate case, initiated by a petition from the state Division of Rate Counsel claiming JCP&L was earning too much from its customers, could reduce bills for ratepayers by up to one-third, if positions taken by the division and by the staff of the New Jersey Board of Public Utilities are upheld.

The case has not been decided yet, primarily because an administrative law court judge has repeatedly asked for delays following extensive hearings on the proposal. The court is expected to issue a decision by December 29, but then the matter will have to be reviewed by the BPU, which can reject, modify, or accept the judge’s decision. That ruling may not come before next spring.

Both Rate Counsel and the BPU’s staff have argued the revenues of the state’s second-largest utility should be reduced by at least $200 million. In its initial filing, JCP&L sought a rate increase of $31 million.

Part of the frustration expressed by lawmakers and members of AARP of New Jersey is that both state agencies agree the utility is earning far above what it is entitled to under regulations. At the least, they would like the BPU to approve a separate petition by Rate Counsel to establish provisional rates dating back to last August.

The effect would be to refund customers from that point if the five BPU commissioners agree the utility overcharged customers.

The delays in deciding the case concerned AARP.

“This is simply too much,’’ said Ev Liebman, associate director of NJ AARP. “It is actually worse that the BPU has failed to act on the petition to establish provisional rates.’’

Assemblywoman Caroline Casagrande (R-Monmouth) agreed. “Nobody is getting their money back,’’ she said. “It’s outrageous.’’

Sen. Linda Greenstein (D-Mercer) also questioned why the agency has yet to act on the issue. “JCP&L has been shamelessly collecting too much money (from customers) for too many years,’’ she said.

Among other things, Rate Counsel argued in its filings that the utility had cut back spending investments in its infrastructure as well on tree trimming — a major factor in power outages during storms. As a result, over a three year period the utility returned $170 million to its Akron-based parent, FirstEnergy, according to the filing.

Ron Morano, a spokesman for JCP&L, declined detailed comment on the case. “We’re awaiting the judge’s decision,’’ he said.

The BPU, which discussed the issue in a closed executive session before its monthly meeting, also said little about the issue. BPU President Richard Mroz noted there is a lot of interest in the case, but said the agency would not take any action on the issue at its meeting. He said a decision by the judge is expected soon.

For JCP&L customers, there are some positives in delays in deciding the rate case. Earlier this year, the BPU approved the utility to collect $736 million for storm restoration costs from a variety of extreme weather events in recent years, including Hurricane Sandy. Those costs will not be passed on to ratepayers until the current rate case is decided.