The Star-Ledger

N.J. Environmental Advocates Say PSEG Power Owes State $300M, Request Probe

The Star-Ledger — Wednesday, May 26, 2010

By Chris Megerian / Statehouse Bureau

TRENTON — Environmental and business groups today asked the state attorney general to investigate a major New Jersey energy company, saying a subsidiary's failure to pay state-mandated energy surcharges for the past decade is the "height of arrogance."

The controversy involves two subsidiaries of the Public Service Enterprise Group (PSEG). One subsidiary, the Public Service Electric and Gas Company (PSE&G), sells gas to another subsidiary, PSEG Power, which uses it to generate electricity.

Advocacy groups say the gas purchase makes PSEG Power a rate-paying customer, which requires the company to pay societal benefit charges, just like residents who heat their homes. The charges, a percentage of customers' utility bills, are used to fund clean energy initiatives and social programs.

"What we see in front of us is really outrageous," Sierra Club state director Jeff Tittel said. "When a company as large and as powerful as PSEG does not pay its fair share, everybody else does."

Today's press conference comes on the heels of a similar request for an investigation made by Sen. Bob Smith (D-Middlesex), chairman of the state Senate Environment and Energy Committee.

Ev Liebman, director of organizing and advocacy for New Jersey Citizen Action, estimated that the company owes at least $300 million.

"In essence it's providing what we believe is a wrongful, huge subsidy to this very profitable company on the backs of everyday ratepayers," she said. "The state of New Jersey can't sustain this kind of corporate behavior."

PSEG responded by saying the company has done nothing wrong and doesn't owe any money.

"We will cooperate with any investigation or any review," spokesman Paul Rosengren said. "We don't believe that there's a warrant to these arguments."

He said the contract between PSE&G and PSEG Power, which included an exemption to societal benefit charges, has already been approved by the state Board of Public Utilities.

"This is not new to anyone," Rosengren said. "This is an existing situation that goes back more than 10 years."

Paul Loriquet, spokesman for the attorney general, said he can't confirm or deny whether an investigation is underway.

The BPU did not immediately respond to a request for comment.

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