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A New Jersey energy consumer advocate

Consumers Helping Affect Regulation of Gas & Electric

“Those who cannot learn from history are doomed to repeat it.” – George Santayana

October 15, 2018

Public Hearings - JCP&L Reliability Plus Petition

 

October 15, 2018 –With some fanfare, JCP&L announced in the summer that they filed a petition for a 4-year $387 million investment plan for their distribution system (“Reliability Plus”).  Now, almost completely under the radar, they have scheduled two public hearings for this petition.

 

In an unusual move, the two public hearings are scheduled on the same day: Tuesday, November 13th.  The first one will be in Freehold at 1:30 PM, followed by a second one in Morristown at 5:30 PM later that same day.  So, if you are traveling or otherwise not available on that date, you will miss both hearings.  However, written comments are typically welcome (be sure to include Docket No. EO18070728 in your comments).

 

Public hearings are meant to gather input from the general public.  Many people are at work during the day.  A start time of 1:30 PM is not conducive for the general public to attend and provide input regarding the petition.  The question that has to be asked: Is this by design?

 

The second meeting in Morristown starts at 5:30 PM.  While this start time is better, it still does not allow sufficient time for commuters to attend the public hearing to provide input; especially anyone working in New York.

 

CHARGE is opposed to this petition!

 

Why, you might ask?  In many areas including Monmouth County, the electric distribution system is in a state of disrepair.  Anecdotal stories abound from out-of-state utility workers that came to New Jersey to help restore power after storms that they can’t believe how old and dated our infrastructure is.  Residents experience frequent power outages; often when the wind isn’t blowing and the snow isn’t falling.

 

The reasons are as follows:

  1. Most of the “investments” are normal maintenance and upgrade we want JCP&L to perform.  For examples: $108 million is allocated to tree trimming (aka vegetation management), $20 million is for replacing lateral fuses, $37 million for substation equipment replacement, etc.  As a side note, JCP&L included a $9 million “investment” for new fences because of theft of equipment at some of their substations.

  2. In December 2016, there was a base rate settlement whereby the BPU approved an $80 million rate increase for JCP&L.  In their own press release, JCP&L stated that the rate increase will be used to continue tree trimming, inspection of lines, poles and substations, and maintenance for newly-installed equipment.  However, once this rate increase was approved, JCP&L’s operating and maintenance expense in 2017 actually decreased by about $96 million!

  3. This appears to be “déjà vu all over again”.  JCP&L was awarded additional money in a 2005 rate case to allow it to improve reliability.  However, according to a brief submitted by the NJ Division of Rate Counsel as part of the 2012 rate case, “ … after making initial repairs, it is unclear whether the Company continued to use the funds collected for continued reliability investment.  Instead, it appears that excess funds went to shareholder dividends”.

  4. After the 2005 rate case was approved, almost 10 years elapsed before the next rate case was finally settled in March 2015.  JCP&L was found to have “over-earned” and was ordered to reduce its rates by more than $100 million per year.  Translation: Customers overpaid and, according to one calculation, by as much as $1,000 per customer on a cumulative basis!

  5. JCP&L is proposing for the investments under newly adopted rules and seeks “accelerated cost recovery” outside of the normal rate filing process.  Essentially, this means rate increases can be filed as frequently as every six months for the next 4 years and JCP&L only needs to document that the investments were made and are in service.

  6. It appears that after JCP&L was granted a rate increase in 2016, it did not spend the money collected for the intended investments. Will customers be paying twice for routine maintenance and upkeep it is supposed to do when it was granted a franchise to operate as monopoly with public interest?

  7. Under this proposed plan, JCP&L will not be required to submit a rate filing until January 2024.  It may be seven full years from the 2016 base rate filing before the next rate case is filed.  Will history (i.e., the 2005 rate case) repeat itself?

 

CHARGE plans to hold a community information meeting on Monday, October 29, 2018, 7:30 PM at Holmdel Library, Bell Works, located at 101 Crawfords Corner Rd, Holmdel, NJ 07733 to provide more details on this.

 

We encourage JCP&L customers to attend the community information meeting and, if possible, to attend the public hears and speak out against this petition.

 

 

 

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