Herald News

Groups Say PSEG Owes NJ $300M, Demand Probe Of Energy Surcharges

Herald News — Wednesday, May 26, 2010

BY CHRIS MEGERIAN
STATE HOUSE BUREAU

TRENTON — Calling it the "height of arrogance," a handful of environmental and business groups Wednesday asked the state attorney general to investigate a major New Jersey energy company, saying a subsidiary has failed to pay at least $300 million in state-mandated energy surcharges for the past decade.

The utility company says there has been no wrongdoing.

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

Advocacy groups say that purchase makes PSEG Power a ratepaying customer, which requires the company to pay "societal benefits" 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."

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

"We need to find out what the truth is," Smith said, saying other companies may have been improperly exempted from paying the surcharges.

Ev Liebman, director of organizing and advocacy for New Jersey Citizen Action, estimated 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."

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

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."

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