We know how utility bills can press people’s budgets in the best of times and how onerous they have become for so many during the pandemic. As of May, more than 350,000 households in New Jersey were estimated to be in arrears on their utility bills, about half with bills more than five months overdue. Now comes news of a very small savings in the offing for customers. The New Jersey Board of Public Utilities has reached a settlement agreement with the Division of Rate Counsel and a major utility that would cut the typical residential customer’s utility bill by $36 per year, saving about $140 million overall in the first year.
Part of the formula used to determine what transmission owners can charge customers involves something called the transmission services ROE (return on equity). Under the agreement, PSE&G will reduce its base transmission ROE from 11.18% to 9.9%, leading to the projected savings. In exchange for the utility’s lowering of the rate, the BPU and Division of Rate Counsel agreed not to request further reductions for three years. “Additionally, the Board and Rate Counsel avoid the expense, lengthy delay, and risks of litigation,” a BPU press release noted.
It’s now up to the Federal Energy Regulatory Commission to approve the agreement; if it does, the new rate could take effect in September.