Atlantic City Electric Files with BPU to Boost Revenue By Almost $80 Million

Tom Johnson | March 23, 2016 | Energy & Environment
If state agency approves increase, utility's typical customer bills could climb by $12 a month

ACE linemen
Atlantic City Electric yesterday filed a request with the state Board of Public Utilities to increase its revenue by $78.9 million, a rate boost that could increase the typical residential bill by as much as $11.73 a month.

The filing is the latest by a New Jersey utility to ramp up investments in its power grid, systems that have been severely tested and compromised during extreme storms in the past few years.

The company also said it will seek approval of a grid-resiliency plan, dubbed PowerAhead. If approved by the commission, Atlantic City plans to invest $176 million over five years to modernize its system and make it more resilient to storms like Hurricane Sandy.

Atlantic City Electric also could learn today whether a proposed $6.8 billion merger between its parent, Pepco Holdings, Inc., and Exelon, clears its final regulatory hurdle when the D.C. Public Service Commission is scheduled to vote on the deal. It has been held up by a dispute on how to allocate Exelon funds and benefits among Pepco’s utilities if the merger is approved.

Those benefits could include rate credits to ACE customers. If the merger is not approved, customers also will lose out on those benefits as well as others stemming from efficiencies made possible by the merger but not included in the rate filing, the utility said.

As for the rate filing in New Jersey, it has been two years since the utility requested a rate adjustment for its half million customers. The rate impact for typical customers will vary depending on how much electricity they use. For a residential customer using 500 kilowatt-hours per month, it could boost a monthly bill by $6.81; one using 1,000 kilowatt hours per month could see an increase of $11.73.

“In order to further improve our electric system and continue providing quality service, it’s important that we invest in new infrastructure and upgrade our existing electrical systems,’’ said Vince Maione, region president of Atlantic City Electric.

It is an investment that the BPU has strongly encouraged in the wake of powerful storms that left millions of customers without power, some for as long as two weeks. The agency has generally approved rate increases supporting projects to increase reliability, not only by the electric utilities but also by gas companies.

Those investments, along with increased spending on transmission lines, are having an impact on utility customers’ bills.

Over the past five years, ACE has invested approximately $716 million in its system. The company said customers are seeing the benefits of that investment, with the utility achieving its best reliability performance in more than a decade. Customers experienced 41 percent fewer outages and, when they did occur, service was restored about 25 percent faster compared with 2011, the utility said.

To further bolster resiliency, PowerAhead’s planned projects include selectively shifting existing distribution circuits underground; building system ties to the barrier islands from the mainland; increasing storm and flood prevention at substations; and boosting system automation and remote control for faster restoration.