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Rockland seeks 9.7% rate hike

By: Dave Sheingold |

Electricity customers in 22 northern Bergen and Passaic county municipalities would see their rates jump by an average of 9.7 percent next year under a proposal filed Wednesday with utility regulators.

The request, submitted by Rockland Electric Company to the state Board of Public Utilities, would hike the bill for the average residence using 925 kilowatt hours per month from about $164 to $180, the company said.

The increase, which would take effect next September, is needed largely to recoup the cost of recovering from Superstorm Sandy and two other major storms in the past three years, and help pay for upgrades designed to withstand future storms, according to company spokesman Mike Donovan.

“These aren’t costs that we planned. These were costs associated with three extraordinary events,” Donovan said. “Now comes the time for us to sit down and look at those costs and reach an agreement about how they should be addressed.”

Rockland Electric serves 72,000 customers in all or parts of 20 Bergen municipalities and two in Passaic, stretching from Alpine to West Milford, as well three in Sussex County.

The company is a subsidiary of Orange and Rockland Utilities, Inc., which also serves areas of southern New York and northeast Pennsylvania. It last received a rate increase for its New Jersey coverage area in 2010, when the average residential rate rose 3.7 percent, although bills have actually decreased since then because of declines in the cost of energy.

An office that advocates for consumers in utility matters had no immediate comment on whether the new rate proposal was reasonable.

“We will do what we do in all cases, which is to get our experts to take a look at it,” said Stefanie Brand, director of the state Division of Rate Counsel. “We will talk to the company and determine if there is a reasonable settlement that can be reached.”

The request comes at a time when electricity distribution is high on the minds of regulators as they review rate-hike proposals from North Jersey’s other main power suppliers and try to develop strategies for securing the power grid against major weather events, while limiting the cost borne by users. New Jersey has some of the highest electricity rates in the nation.

The other proposals include requests by Jersey Central Power & Light for rate increases to help cover costs stemming from the recent storms. The BPU also is considering a proposal by Public Service Electric & Gas for a 10-year, $3.9 billion program of upgrades to bolster the power system .

The latter plan was filed in response to a BPU order for utilities to develop plans for improving the power system and avoiding recurrences of weather-related outages that in recent years knocked out electricity service for up to two weeks.

Under the Rockland Electric proposal, the company would see revenues increase $19.3 million per year, which would generate a 10.25 percent profit for the company, Donovan said.

Roughly $8 million would cover costs related to Sandy, Hurricane Irene and a freak snowstorm in October 2011. Another $3.2 million would go toward raising the company’s reserve fund for future storm-related costs as well as upgrades to its distribution system. Those would include installing stronger, storm-resistant power lines and utility poles and burying power lines where multiple overhead lines now exist or where circuits cross major roadways. Other measures include modernized equipment that would allow problems with circuits to be detected and resolved faster.

The rest of the revenue would fund increases in general operating expenses, Donovan said.

The company also said that it intended to seek approval next July for a special surcharge to pay for additional weather-proofing projects in the future.

While the BPU and Rate Counsel study the proposal, it will be referred to an administrative law judge who will set a schedule of public hearings if a settlement is not reached with regulators.