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JCP&L ordered to reduce rates, but storm costs offset decrease


After three years in the making, many electricity users in Sussex County will see a slight decrease in rates as a case involving one of New Jersey’s largest utility companies has finally come to an end.

The state Board of Public Utilities’ decision Wednesday is expected to save a typical Jersey Central Power & Light residential customer, who uses 1000 kilowatt-hours of electricity per month, an average of $1.68 off their monthly electric bill, according to a press release. That is a $20.16 cut per year.

The board initially ordered a reduction of more than 18 percent after it determined that JCP&L customers had been overcharged for electric service, according to a press release from the BPU.

However, due to the costs of recovery from major storms during 2011 and 2012, including Hurricane Sandy, the board has offset the overall rate decrease from $115 million to around $35 million, allowing JCP&L to recover around $80 million of lost revenue.

The press release states that BPU President Richard S. Mroz is aware of the length of time it took to process the case but assures customers that he has directed staff to provide recommendations to identify processes to ensure future rate cases will be resolved much quicker.

“Today’s order ensures that JCP&L is providing safe and proper service at just and reasonable rates, while also securing and being mindful of the company’s financial integrity now and into the future,” he said.

Though the company has taken a hit, JCP&L spokesman Ron Morano is confident the utility can recoup a loss of “$736 million following the devastating storms,” with “$580 million (lost) in 2012 alone.”

“Even with the recovery of the storm costs, JCP&L still has the lowest electric rates in the state,” he said. “The company will continue to implement its aggressive $267 million service reliability infrastructure enhancement program in 2015.”

According to Morano, the company had 17 percent fewer outages last year than in 2013, which it attributes to the infrastructure work that had been done to “maintain the strength of our system.”

This 2012 base rate case was initiated after New Jersey Division of Rate Counsel petitioned the board to order the utility company to make a base rate filing because of concerns that JCP&L was overcharging customers and that the company was not meeting appropriate levels of service.

The matter was referred to the Administrative Law Judge Richard McGill, but as the case proceeded, the BPU ruled on the prudence of cost associated with the preparation for, response to and recovery from major storms in 2011, and those costs were included in the base rate case.

With more major storms in 2012, including Superstorm Sandy, those costs were filed in a separate proceeding and approved by the board to have had an impact on rates. On Wednesday, a separate board order provided for a revenue requirement of $81 million in response to Superstorm Sandy.

Stefanie Brand, director of the Division of Rate Counsel expressed a bittersweet reaction to the board’s decision.

“I was happy the board upheld their rate decrease, but I was hoping for more. However, there is still a fair amount of substantial reduction. I wish the process and the decision had come three years earlier,” she said.

Early on, AARP New Jersey supported the Division of Rate Counsel when it started a petition that included thousands of signatures from its members for JCP&L to open its books. The online petition site JCP&L: Show Us the Money, http://jcplshowusthemoney.org, was created by the AARP in 2012 and was forwarded to the Board of Public Utilities.

After Wednesday’s decision, AARP is “pleased,” said Jeff Abramo, communications director at AARP New Jersey, and, although disappointed that the rates are not being lowered more, Abramo said that a rate cut is certainly better than a rate increase.