ACE Seeks Rate Increase to Recoup Costs of Modernizing Its Power Grid

Tom Johnson | June 18, 2018 | Energy & Environment
If BPU signs off on $99.7M filing, residential customers of Atlantic City Electric would see average monthly bill climb by about $11

Credit: Ace City Electric
grid upgrade transmission
Atlantic City Electric is asking state regulators to approve a new rate request in which the utility is seeking to recover $99.7 million in costs to modernize its electric power grid.

The request, filed to the New Jersey Board of Public Utilities on Friday, aims to recoup costs incurred repairing its system from major storms and other expenses related to increasing the reliability of its grid.

The filing is the latest among New Jersey’s electric utilities responding to directives from state regulators to modernize their delivery systems and reduce long outages experienced by customers, especially in the wake of damaging storms.

Atlantic City Electric already has pending before the BPU another rate filing, seeking to spend $340 million over four years to upgrade its power system. In September, the agency approved a $43 million rate increase that boosted typical residential customers’ bills by $5.52 per month.

If approved by the BPU, the latest rate filing would boost the average customer bill by about $10.65 a month, or 8.25 percent. The utility serves about 550,000 customers in southern New Jersey.

“We know that these increases may be challenging for our customers, but we also know that our customers expect that we provide reliable service and respond quickly when major storms hit,’’ said Susan Coan, region vice president for Atlantic City Electric.

The utility noted its investments in recent years have improved its reliability, with customers experiencing the lowest average number of electric outages in its history in 2017. In the past five years, outages have declined by more than 40 percent and outage length has been reduced by 18 percent, according to the utility.

The filing by ACE comes a week after Public Service Electric & Gas petitioned the BPU to spend $2.5 billion over the next five years as part of the utility’s ongoing effort to strengthen its power grid.

With new mandates to increase the state’s reliance on renewable energy, such as solar and offshore wind, utility customers face prospects of ever-rising bills in the next few years as the electric and gas sectors come under pressure to modernize aging infrastructure.

At the same time, electric customers could be hit with new subsidies of up to $300 million a year to prop up three nuclear power plants owned by Public Service Enterprise Group and Exelon, the parents of PSE&G and ACE. Those subsidies would have to be approved by the BPU.