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BPU President Says New Jersey’s Utilities Have Improved Since Irene

10-10-12

Most natural gas customers in New Jersey will see their bills lowered with rate cuts ranging from 0.5 percent to 3.5 percent. The one exception is New Jersey Natural Gas, which will have a rate increase of 2.4 percent. The reason, according to officials, is because the company had lowered its rates last spring. President of New Jersey Board of Public Utilities (BPU) Bob Hanna told NJ Today Managing Editor Mike Schneider that supplies of natural gas have increased in the United States and customers are reaping the benefits. Hanna also said the state’s utilities have made improvements since their poor performance during Tropical Storm Irene and the October snowstorm last year.

While the BPU approved the rate changes for natural gas, Hanna said the future of the rates is unclear. He said with an abundant supply of natural gas, more uses will be found for it. “For example, one of the goals of Gov. Christie’s energy master plan is to develop new in-state generation of electric power and the most efficient and the most cost effective way to do that is through natural gas fired power plants,” Hanna explained. “So that would increase the demand and would presumably lead to somewhat higher prices.”

Customers were disappointed with utility companies’ responses after Tropical Storm Irene and the October snowstorm knocked out power last year, but Hanna said changes have been made since then. “There’s no doubt that improvements have been made since Hurricane Irene. The performance of our electric utilities was certainly not adequate,” he said, adding that he saw an improvement between Irene and the October snowstorm last year.

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Communication was the biggest issue for the utilities, according to Hanna. “People were out of power and they simply had no information whatsoever about when power would be restored,” he said. “That’s completely unacceptable and I will say that the electric utilities have made great strides in the area of communications, which is very important.”

The utilities now have about 140 mandates to make changes and Hanna said they have made “substantial progress.” Not all the utilities started on an equal playing field, however.

“I think the most serious criticisms and the most number of criticisms were directed at JCP&L [Jersey Central Power & Light],” Hanna said. “They have a longer way to go but they have made strides and we are working with them to make sure that they serve their customers in a much better fashion.”

Christie has proposed a fine of $25,000 per violation for utility companies, with a cap at $2 million for a series of related events. Hanna said the BPU can levy fines of $100 per day.

“That is just woefully inadequate to deter bad corporate conduct. We want these companies to be good corporate citizens and the governor and I recognize that we need to have a stick in place in the form of penalties,” he said. “We don’t want companies doing a cost-benefit analysis about whether to follow the law. They of course should be following the law and we need to have significant penalties in place in the event that they do not.”