Small Price Blip for ACE Customers as BPU Eyes $12B in Rate Increases All Told

Garden State utilities are modernizing the power grid, boosting energy efficiency, looking to roll out electric vehicles — and racking up a sizable tab for their customers

Consumer advocates, small businesses, and others fear pending rate cases will cripple economy and customers' ability to pay.
Atlantic City Electric customers will see typical residential bills rise by about $7 per month in April, but that is only a pittance to what utility customers can expect to pay over the next few years.

The Board of Public Utilities, the agency that approved the rate increase for the utility yesterday, is sitting on requests by New Jersey’s electric and gas utilities to boost rates by an “eye-popping’’ $12 billion or more, according to Evelyn Liebman, director of advocacy for AARP New Jersey.

The filings reflect the mounting costs utilities project for modernizing and making aging power grids more resilient, complying with state mandates to shift to cleaner sources of energy, and having ratepayers subsidize New Jersey’s three nuclear power plants to prevent their closing. That’s just for starters.

Wind turbines not included

The projections also include costs for electrifying the transportation sector and reducing gas and electricity use by utility customers but do not factor in Gov. Phil Murphy’s goal of developing 3,500 megawatts of offshore wind by 2030. Three developers are vying to build the wind farms; although their applications are not yet public, they’re expected to cost billions of dollars.

The projected costs also exclude obligations ratepayers already have absorbed as a result of the state’s subsidies to promote solar and will continue to pay for legacy solar projects. The current system of subsidizing solar has put ratepayers on the tab for $5 billion, according to some estimates, part of which they already have paid.

“Right now, many residents are struggling with the high costs of utility services,’’ said Liebman, noting New Jersey residential rates for electricity are the ninth-highest in the contiguous United States. While natural gas rates have dropped, “more New Jerseyans are finding it harder to keep the lights on, maintain their heat in winter and cooling needs in the summer,’’ she added.

Postcard petitions

Her organization and allies yesterday delivered 23,000 postcard petitions from AARP members throughout the state to Gov. Phil Murphy’s office. “These residents want Gov. Murphy and the BPU to put consumers first — not the interests of energy corporations,’’ she said.

Clean Water Action’s David Pringle agreed. “Corporations aren’t going to say no to lining their own pockets with a public handout,’’ he said. “That’s government’s job, and just as Gov. Murphy is saying no to undeserved profit from corporate tax incentives, he needs to apply the same fiscal discipline and fairness here.’’

The BPU takes seriously its mission to ensure safe and adequate utility services are provided to customers at reasonable rates, according to Peter Peretzman, a spokesman for the agency. “We seek and appreciate public and stakeholder input and take the impact on ratepayers into account when making decisions,’’ he said.

Typically, the board pares down proposed rate increases, sometimes by more than half. In yesterday’s Atlantic City Electric case, the utility asked for $116.5 million in new revenue to strengthen its system, and eventually settled for $70 million, according to the board order on the case.

Putting pressure on utilities

Since New Jersey experienced extreme storms — like Hurricane Sandy, which knocked out power to nearly 3 million people — the regulatory agency has stepped up pressure on utilities to reduce outages and respond more quickly when they occur. That has accelerated spending by both gas and electric utilities.

For instance, both Elizabethtown Gas and New Jersey Natural Gas have filings seeking to spend more than $500 million each before the BPU. Both Atlantic City Electric and Public Service Electric & Gas have filings seeking to spend close to $400 million on installing electric-vehicle charging stations.

PSE&G, however, has the most ambitious investment program before the agency. It wants to spend another $2.5 billion upgrading its electric and gas system, as well as a $2.8 billion clean-energy initiative that would invest in energy-efficiency programs and smart meters, among other things.

PSEG Nuclear, a sister company that is unregulated, also expects to learn next month whether it will be awarded $300 million a year in ratepayer subsidies to prevent its three power plants in South Jersey from closing.

The board is expected to decide whether to give the plants subsidies as early as next month.

“The BPU needs to do its job and not rubber stamp PSEG’s nuclear subsidies,’’ said Jeff Tittel of the New Jersey Sierra Club. “It needs to put a stop on this blank check for massive subsidies for PSEG.’’

In ‘best interests’ of customers

PSEG’s proposals support Gov. Murphy’s clean-energy goals and are in the best interests of customers, said Karen Johnson, a spokeswoman for the company.

“The proposed investments will improve reliability in the wake of more frequent and damaging storms as a result of climate change and enable all customers to take advantage of energy efficiency measures that will save energy and money,’’ Johnson said.

But Tony Sandkamp, owner of Sandkamp Woodworks in Jersey City, said increasing utility rates for small business owners and working families are bound to have a negative impact. “New Jersey’s small business owners cannot continue to be asked to subsidize large corporations who are being given an advantage,’’ he said.