BPU hears from S. Jersey concerning PSEG post-Sandy rate hike request

CHERRY HILL – The five-year, $3.9 billion-dollar infrastructure upgrade PSEG is pursuing received its third public airing Monday at the municipal building here, with witnesses focusing on the particular damage Superstorm Sandy inflicted on South Jersey.

Public officials and others pointed out that had the storm tracked differently, damage in the region would have been more devastating, and they urged the state not to forget the needs of South Jersey when considering whether to OK PSEG’s massive infrastructure program.

Supporters told the Board of Public Utilities – as they have at previous hearings in other regions of the state – that the rate hike is necessitated because of the protections it will afford customers and the jobs it will create.

Opponents likewise stressed the burden that will be placed on some ratepayers least able to afford it: senior citizens.  In addition, environmentalists said the improvements PSEG is seeking will not go far enough if they do not include more in the way of renewables, distributive energy and efficiencies.

The opposing viewpoints were on display at the hearing. Seniors wearing yellow jerseys proclaiming Affordable Utilities Now were out in force while labor supporters sported orange stickers stating  “I support Energy Strong,’’ the name for PSEG’s infrastructure program.

But the message was clear for BPU: Don’t forget about South Jersey, public officials said.

Camden County Freeholder Ian Leonard said infrastructure improvement is a proven way to stimulate jobs and help pull the region out of the worst economic downturn in decades while simultaneously improving its post-Sandy systems.

He talked of a substation 100 yards from the river and said that had Sandy turned one way instead of the other, then the Camden region could have been underwater as other parts of the state were. He urged BPU to take Southern New Jersey into consideration when weighing the rate application.

Camden Mayor Dana Redd followed up by saying PSEG should consider adding more South Jersey substations to protect against future potential interruptions.

She cautioned, however, that Camden’s residents would have a difficult time absorbing a rate hike, and urged PSEG to harden its infrastructure without unduly burdening her constituents.

Debra DiLorenzo, president and CEO of the Chamber of Commerce of Southern New Jersey, wholeheartedly supported the PSEG filing.

“No one knows when or where the next storm will hit.  South Jersey was relatively lucky this time,’’ she said, but absent PSEG upgrades, the region might not be as lucky next time.

“My life was turned upside down after Sandy,’’ said DiLorenzo, an Atlantic County resident.

PSE&G is seeking approval for approximately $2.609 billion in electric and gas service investments over 60 months.

If the request is approved, electric rates would increase initially effective Jan. 1 by $16.411 million annually and gas rates would initially increase by $12.970 million annually, according to the Division of Rate Counsel and BPU.

According to those two, a typical residential electric customer using 780 kilowatt hours per summer month and 7,360 kilowatt hours on an annual basis would see an initial increase from $1,349.08 to $1,353.60, or $4.52, or approximately 0.34 percent.

As for gas usage, under the company’s proposal, a residential gas heating customer using 100 therms per month during the winter months and 660 therms on an annual basis would see an initial increase in the annual bill from $731.27 to $736.07, or $4.80 or approximately 0.66 percent.

Vaughn McCoy, of PSEG, said that had the improvements being sought now been in place during Sandy, a substantial number of customers would have had power restored more quickly or not have experienced outages at all.

“Energy Strong goes above and beyond PSEG’s current commitment to reliability,’’ he said.

He said ratepayers will not pay for the improvements at once but over the life of the assets, and claimed they are affordable and necessary in light of the benefits.

In addition, he defended a projected 10 percent return on the investment as competitive in the industry, attractive for investors, and in line with previous rate applications,

He was countered by Division of Rate Counsel Director Stefanie Brand who said that unlike previous situations in which PSEG would go out and either borrow money or raise it from shareholders, in this program PSEG wants ratepayers to pay for the work as it progresses, a windfall that ratepayers should not have to fund.

“We will not support a program that simply throws money at the problem,’’ she said, and has the public financing work the utility should be paying for.

And the state director of AARP, James Dieterle, said the PSEG rate hike request is a problem for seniors who are particularly vulnerable to high utility costs because they spend a larger percentage of their fixed income on energy than others do. He said the proposal is top-heavy on capital projects that will allow PSEG to make a profit at ratepayers’ expense.

Jeff Tittel of the N.J. Sierra Club said Monday at the hearing that “This plan would take ratepayer money, not to fix the grid, but to waste it on projects that will not work since the proposal ignores the fiscal impacts of climate change.”

“This is going to direct future energy policy in New Jersey for decades,” he said.

However, Assemblyman Wayne DeAngelo, (D-14), Hamilton, speaking on behalf of the International Brotherhood of Electrical Workers, championed the PSEG application as providing the jobs IBEW members rely on, and said those workers are on the front lines and saw firsthand during Sandy the vulnerabilities of the utility infrastructure.

“If we want fewer and shorter electrical outages,’’ he said, then Energy Strong is important to attaining that goal.

BPU Commissioner Joseph Fiordaliso said he expected evidentiary hearings concerning the request to be held in January, with a decision being rendered sometime in the first quarter of 2014.

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BPU hears from S. Jersey concerning PSEG post-Sandy rate hike request