NJ Spotlight

Proposed Law Would Require BPU To Shed Light On Its Decisions

According to a proposed measure, the BPU must follow up decisions with a written statement in two weeks — or the order is void

NJ Spotlight — Wednesday, November 10, 2010

By Tom Johnson

In early June, the New Jersey Board of Public Utilities (BPU) disposed of a three-year-old case in a matter of minutes, apparently ending a dispute involving $3 billion in special surcharges collected from customers of Public Service Electric & Gas (PSE&G) stemming from the deregulation of the energy industry.

Five months later, the board has yet to issue a written order in the case, a fact that leaves the issue unsettled. The original decision came after only a few minutes of summary from a staff attorney. The five commissioners voted to dismiss the case without any further comment, leaving the rationale behind their action murky.

If a bill making its way through the legislature becomes law, that would no longer happen. The bill (A-2849) requires the BPU to issue every order in written form and post it on the Internet. If an order is not issued within 14 days, it would be void and of no effect.

Revamping the Bureaucracy

The measure is part of a package of bills being pushed by Assembly Democrats to revamp the bureaucracy, which they argue is adversely affecting the state's business climate.

"This is a sensible bill that will go a long way toward making our state more business friendly," said Assemblyman John Burzichelli (D-Gloucester), a sponsor and chair of the Assembly Regulatory Oversight and Gaming Committee, which released the bill on Monday.

"We've heard time and again from our businesses on how it would be helpful to them get clearer guidelines from the state, and a written order should help provide the clarity needed to ensure everyone is on the same page,'' said Assemblywoman Annette Quijano (D-Union), another sponsor.

Assemblyman Wayne DeAngelo (D-Mercer) called the bill commonsense legislation that helps improve the business environment and create jobs for hard-working New Jersey families.

"BPU orders can be among the most important yet complex directives for our businesses, and it's important to make sure they're clear so our businesses can spend more time creating jobs and less time cutting through red tape," added Assemblywoman Celeste Riley (D-Cumberland).

Null and Void

Under the bill, any board order issued orally may be made effective immediately, but if it is not issued in written form within 14 days, the order will be voided.

In the PSE&G case, consumer advocates who followed the issue and believed ratepayers were due a refund from the utility have been waiting for the state agency to issue a written order for months.

"It's very frustrating to have to wait for very long periods of time to read what the board's rationale was," said Ev Liebman, program director for New Jersey Citizen Action. That is especially true in cases such as the PSE&G dispute, because the commissioners were not very forthcoming about the reasons for dismissing the case, Liebman said.

The dispute revolved around a provision in the 1999 law that broke up the gas and electric monopolies. PSE&G sold off its fleet of power plants to a subsidiary, but convinced regulators and lawmakers its generating stations would not be as lucrative in a new competitive environment. The utility was allowed to recover $3 billion in monthly surcharges on customers bills to recover so-called stranded costs.

Fictitious Costs

Since then, however, few new power plants have been built in the region, which has made the Newark company's fleet of plants more lucrative. That led an Oradell resident to contend the company should not be allowed to recover fictitious stranded costs.

In deciding the case in June, the agency's staff recommended the petition be dismissed, saying other statutes specifically prohibit the state from revisiting issues dealing with stranded costs related to bonding. This was a mechanism used by the utility to initially recover $2.5 billion in stranded costs. The utility was fronted the money by investors, who are being repaid by payments from utility ratepayers on the debt.

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