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Advocacy groups unite to fight higher energy bills

By: Jared Kaltwasser |

Standing in front of a row of retirees in yellow AARP T-shirts today, New Jersey Chemistry Council Executive Director Hal Bozarth couldn’t help but remark on the diversity of the group he’s now a part of.

“It’s a rare press event and a rare coalition that brings together the manufacturing and commercial communities with (New Jersey) Citizen Action, New Jersey PIRG (Public Interest Research Group) and AARP all on the same side of a single issue,” Bozarth said.The “single issue” that united the group, which also includes the New Jersey Large Energy Users Coalition and the New Jersey Main Street Alliance, is the cost of electricity, and the fear that power rates could skyrocket post-Hurricane Sandy if the Board of Public Utilities isn’t vigilant.

The groups on Wednesday formally launched the New Jersey Coalition for Affordable Power. They say power companies in the state currently have $8 billion worth of rate increase proposals before the BPU, some Sandy-related, some not. The lion’s share of that money is being requested by the state’s largest utility, Newark-based Public Service Electric & Gas. That includes PSE&G’s $3.9 billion “Energy Strong” proposal, a massive effort to build resiliency and redundancy in the utility’s electric and gas infrastructure, with the goal of preventing mass outages in future storms.

Ev Liebman, AARP New Jersey’s associate state director for advocacy, said the coalition isn’t against the idea of infrastructure investment.

“As you will hear, not the Coalition for Affordable Power nor any of our members are opposed to improving our energy infrastructure or paying fair rates for what works,” she said. “But that’s the key: Fair rates for what works.”

All of the members of the coalition have one thing in common: Their members are acutely affected when rates go up. That includes corporations that find it hard to do business in a state with the eighth-highest electricity rates in the nation, as well as seniors, many of whom live on fixed incomes and already struggle to pay their bills.

Dena Mottola Jaborska, of New Jersey Citizen Action, noted many seniors and low-income residents were hit hard by Sandy.

“It’s ironic that the same reason that utilities are using to justify an $8 billion rate hike is also the problem that’s making our members struggle even more,” she said.

She said the problem isn’t just the dollar amount, but also the means by which utilities are seeking to receive the money. The utilities are seeking special proposal-specific approvals from the BPU, rather than asking for the money as part of a normal base rate case. The latter involves a comprehensive look at how a utility is spending its money.

While the coalition represents a broad swath of industries and advocacy groups, other business associations — including the New Jersey State Chamber of Commerce and the Chamber of Commerce Southern New Jersey — support Energy Strong. They argue the upgrades will improve the business climate and attract companies that depend on reliable electricity. The plan also has the support of more than 30 municipalities.

For its part, PSE&G says its $3.9 billion Energy Strong proposal would simply offset already expiring deregulation-era surcharges. Thus, they say, ratepayers’ bills will look the same in 2018 as they did in 2008, even if the added charges are approved.

Michael Jennings, a PSE&G spokesman, said the reason the utility is seeking a special rate case from the BPU is because the upgrades included in Energy Strong are for a higher level of resiliency than the standards governing standard base rate cases.

“These investments are beyond normal investments that are needed for reliability,” he said. “We spend $400 million a year on improvements in our distribution system to maintain reliability.”

He rebuffed the notion that the utility hasn’t invested enough in its infrastructure, noting that the industry benchmarking group PA Consulting has named PSE&G America’s most reliable electric utility five of the last eight years.

Another point of contention is the rate of return PSE&G is seeking on part of its investment.

Bozarth said PSE&G’s 10.3 percent return-on-investment request is too steep.

“Each of the member companies that I represent would literally have a field day if they could guarantee their stockholders a guaranteed 10.3 percent return,” he said.

Jennings said the 10.3 percent figure applies only to the equity portion of PSE&G’s investment, which is about 51.5 percent of the total cost. For the debt portion, PSE&G will simply pass its financing costs directly through to ratepayers.

Marilyn Askin, chief legislative advocate at AARP New Jersey, said the utilities need to share in the sacrifice they’re asking ratepayers to make.

“We would ask that they dip into corporate profits and to maybe make their shareholders not receive as much in dividends,” she said, rather than to “look at us, the bill-payers, as ATM machines, which we will end up being if the BPU approves this $8 billion increase in costs for taxpayers.”

Steve Goldenberg, of the New Jersey Large Energy Users Coalition, said his the coalition will support needed investment, but they won’t underwrite opportunism.

“We are not the ‘Just Say No’ coalition,” he said. “What we also don’t want to see is abuse of ratepayers.”