Jersey Central Power & Light is coming under scrutiny from state regulators once again, this time to assess the transactions between the state’s second-largest electric utility’s affiliates and its parent, FirstEnergy Corp.
The New Jersey Board of Public Utilities Wednesday hired a consultant to conduct a comprehensive audit of JCP&L, including a detailed examination of its management operations, by the Liberty Consulting Group. The $1.47 million to be paid to the consultant was the highest of the six proposals received.
“This audit is extremely important,’’ said BPU President Joseph Fiordaliso. “We really want to do a deep dive here because of the difficulties that have going on with FirstEnergy in Ohio.’’
JCP&L, which serves more than 1 million customers, has come under frequent and seething criticism from the board, customers and local officials in New Jersey for its performance during severe storms, including the latest last August when a tropical storm left 1.4 million customers without power.
Poor communication still an issue
As in the past, much of the criticism focused on JCP&L concerns complaints from customers and local officials about poor communication with the utility, particularly over so-called estimated restoration times and ineffective vegetation management, a problem that causes falling trees and limbs to knock out power.
By the time of the August storm and its lengthy outages, BPU officials had already become concerned with a controversy emerging in Ohio where Akron-based FirstEnergy was enmeshed in a bribery scandal involving a prominent lawmaker and the award subsidies for nuclear power plants then owned by FE.
The controversy eventually prompted Ohio lawmakers to repeal ratepayer subsidies that were designed to avert the plants, no longer a part of FE, from closing.
Audits like the one approved Wednesday are routinely used to monitor utility operations by the BPU to ensure revenue from utility customers is not mixed with operations of nonregulated operations of affiliates of the utility.
“JCP&L is committed to working with the New Jersey Board of Public Utilities throughout the audit process,’’ said Chris Hoenig, a senior communications representative for JCP&L/First Energy.
Last October, JCP&L won approval of a rate increase of about $4 per month, roughly equal to collecting $94 million from ratepayers, but the increase will not show up on utility bills until the beginning of November. The state agency wanted to avoid increasing customer bills in the middle of a pandemic.
In its approval, however, the BPU commissioners attached several conditions, including directives to the company to step up its programs to reduce power outages caused by falling trees during storms.