Court reverses BPU approval of utility’s land sale

TRENTON – The N.J. Superior Court appellate division has reversed a Board of Public Utilities’ decision that allowed a utility to sell property for residential development.

The court remanded for further action a BPU decision to allow Atlantic City Electric Co. to sell property in Cumberland County for development of residential homes.

The state Division of Rate Counsel and four environmental groups had intervened in the matter.

The court today ordered further proceedings in the case, even though the parties reached agreement on a sale price in 2010, criticizing the way BPU oversaw the matter.

What’s involved is more than 1,346 acres in Maurice River and Millville in the vicinity of routes 49 and 55. The site had seen prior development over the years and is designated as habitat for two endangered species, the corn snake and pine barrens tree frog, as well as some other species listed as threatened.

The utility had obtained an appraisal for $3,900,000 in 1998.

The court said that at one point, developers Millville 1350, L.L.C. and R.W.V. Land & C.M. Livestock, L.L.C. submitted an offer of $3,000,000, which was raised to $4,000,000 on Dec. 11, 2000.

The state offered $2,553,000 under the Green Acres program but the utility rejected it as a low bid.

Atlantic City Electric and the developers eventually entered into an agreement for $4 million.

Developers planned to construct an age-restricted residential development of approximately 950 detached homes, an eighteen-hole golf course and club house on 170 acres, and they planned to leave 930 acres undeveloped open space and permanently preserved.

The utility projected an increase of approximately $5.8 million in new tax ratables, while environmentalists criticized the impact on wetlands and the risk to endangered species.

Among other things, Citizen’s United, New Jersey Conservation Foundation, New Jersey Audubon Society, and Association of New Jersey Environmental Commissions argued that BPU ignored its duty to ensure that a proposed sale price is in fact the best price obtainable.

Rate Counsel also argued that BPU did not exercise independent judgment over a regulated utility, and relied on older financial data that was no longer the best data available.

The sale price was agreed on in 2010 but the court denied the developers’ motion to dismiss the appeal as moot, stating the matter is of such public interest it warrants the court’s attention.

The court said that “The Legislature has authorized us expressly to ‘review any order of the board and to set aside such order in whole or in part when it clearly appears that there was no evidence before the board to support the same reasonably or that the same was without jurisdiction of the board.’ “

“Rate Counsel and the environmental groups claim the BPU’s review based upon economic conditions as of 2002, not as of 2009, resulted in the BPU’s failure ‘to consider substantial, material evidence in the record’ and an erroneous conclusion that developers’ offer represented the best price obtainable for the property,’” the court said.

Court reverses BPU approval of utility’s land sale