In Unexpected Move, BPU Holds off Advancing Two Controversial Rules

Agency decides not to move on regulations that would ease oversight of utility infrastructure investments, speed rate collection from customers

Richard Mroz, president of the state Board of Public Utilities
A state agency yesterday unexpectedly held off advancing a pair of controversial new rules that ease scrutiny over how New Jersey utilities make infrastructure investments and collect rates from customers.

In an otherwise routine monthly meeting, the state Board of Public Utilities decided to withhold action that would have allowed the rules to be published in the “New Jersey Register,” an important step in adopting new regulations in a lengthy administrative process.

That the agency already was moving the rules forward came as a surprise to consumer advocates, who only learned of the proposals at the BPU’s last meeting in April. They fear the proposed changes will weaken consumer protections and agency oversight.

The proposals, backed by the trade association representing the state’s utilities and some companies, expedite investments in upgrades to power grids. They stem from a couple of broadly written straw proposals drafted by the BPU staff and only circulating for a few weeks.

From out of nowhere

“It came out of nowhere. It was on the fast train express,’’ said Steven Goldenberg, an energy lawyer who follows the BPU closely.

The regulations reflect various proposals floated in recent months to overhaul how utilities are regulated given the fundamental changes underway in the energy sector. They also respond to pressure from regulators to make their delivery systems more reliable and resilient to extreme storms.

Nevertheless, that the straw proposals emerged as draft regulations so quickly came as a shock to those who also follow the agency, not widely regarded as acting swiftly on any issue.

For instance, clean-energy advocates have waited more than six years for the BPU to adopt a financing mechanism to promote offshore wind. No such rule is pending.

“It’s extremely quick,’’ noted the director of the Division of Rate Counsel Stefanie Brand, who opposes the two rules. “I don’t think it’s needed. We are not sure what problem they are trying to solve.’’

At the beginning of the meeting, BPU president Richard Mroz, as is his custom, announced action on the two rule proposals — the last two items on the agency’s monthly agenda — would be deferred. He said the commissioners were still reviewing the proposals.

An important delay

The delay is important to critics of the rules. Adopting a new regulation is generally a lengthy process, requiring the publication of the rule in the “New Jersey Register,” a public hearing on the proposal, and a response from the agency to any comments it receives on the issue.

With a little more than seven months remaining in the Christie administration, it raises serious questions about whether the board can push the two proposals through the administrative process before a new governor takes office, according to foes.

“It’s good news for consumers because apparently some commissioners took our concerns seriously,’’ said Ev Liebman, associate director for AARP of New Jersey, which also opposed the proposals in comments submitted to the board.

The New Jersey Utilities Association supports the two proposals, but like others, has yet to see the draft rules.

“We’re pleased the board is still considering these reforms,’’ said Andrew Hendry, president and CEO of the association. “President Mroz indicated the commissioners need some more time to review the comments that were submitted. Given how much support the proposal received at the May hearing, we’re hopeful the commissioners will start the formal process at their next meeting.’’

In other matters, the commissioners approved a $79 million program to make the power grid more resilient over the next five years. Once completed, it is expected to reduce restoration time for customers when their lights go out.