No Settlement Expected in JCP&L Rate Case at Least Until March, Maybe Later

Tom Johnson | January 29, 2015 | Energy & Environment
Case has dragged on for more than three years, angering consumer advocates, BPU president

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It now appears likely that the earliest the Jersey Central Power & Light rate case can be settled is sometime in March and more likely in April or later in the spring.

In setting up a procedural schedule for the rate case, the New Jersey Board of Public Utilities all but conceded the issue is not likely to be settled prior to its regular scheduled monthly meeting to be held on February 11.

The case, which could result in reduced electric bills for the utility’s 1 million customers, has dragged on for more than three years, angering consumer advocates and even the president of the BPU.

At its last meeting, BPU President Richard Mroz expressed his “displeasure over how long this matter took to get to us.’’ Division of Rate Counsel Stefanie Brand also is unhappy with the way the case has dragged on. She filed a petition with the board last summer asking it to roll back rates to August 1, 2014 if the state determined to roll them back at all. The board never acted on the petition.

Nevertheless, the board earlier this month extended the timeframe for various filings and rebuttals related to the decision by an administrative law court judge to mid-February. The court ruled the utility’s rates be cut by $107 million.

The original case stemmed from a filing made by Rate Counsel, which argued the utility was earning more than approved by state regulators, seeking a rate case to determine if that were so.

In its own filing, JCP&L sought an increase in its rate base of $37.1 million. Typically, utilities win approval for about half the rate increase they seek in filings, but rarely, if ever, are rates lowered.

Even with the administrative law court’s decision, the parties in the case remain far apart. At the end of the hearings before the judge, the BPU sought a $170 million reduction in revenue while Rate Counsel requested a $190 million cut.

The judge found that JCP&L is spending adequately to maintain its system; it has frequently come under criticism from both state regulators and local officials for the extended power outages it has suffered in recent years.

The decision also left up in the air when JCP&L will be able to recover $85 million in storm restoration costs, which the BPU already has approved. Those costs will eventually be passed on to customers, although when and how has yet to be determined.