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BPU orders JCP&L to justify its rates

By Jared Kaltwasser
July 18. 2012 1:51PM

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The state's second-largest electric utility has been ordered to open its books and justify its rates to the Board of Public Utilities.


The BPU voted Wednesday to require Jersey Central Power & Light to file a base rate case, the result of a petition filed in September by State Division of Rate Counsel Director Stefanie Brand. In her petition, Brand said her office had reason to believe JCP&L was receiving an unreasonable rate of return from ratepayers, a charge the utility denies.

The filing "will allow the board, rate counsel and other interested parties to evaluate whether the company is providing safe, adequate and proper service at just and reasonable rates," BPU President Bob Hanna said in a press release.

The board delayed action on Brand's request last month. This month, the vote to order the rate case was unanimous, 4-0. Commissioner Joseph Fiordaliso is on vacation.

The state's regulated utilities are required to charge rates that are "just and reasonable," balancing the need to invest in the state's electrical infrastructure with the needs of consumers to pay fair rates.

Brand said a rate case would not only give the BPU a chance to see if JCP&L's rates are fair, but would also give the board the opportunity to ensure JCP&L is properly maintaining its infrastructure. This will be JCP&L's first base rate case since 2005.

JCP&L disputes the rate counsel's findings, arguing in its brief that the rate counsel didn't offer enough evidence to justify a rate case, and maintaining that its rates are "clearly reasonable."

"I would say overall, while we're currently reviewing the order, we're confident that we can justify our current rates, which are the lowest in the state among the regulated utilities," said utility spokesman Ron Morano.

Morano said JCP&L has spent $1.6 billion in the past decade to improve its infrastructure, including $200 million for maintenance and upgrades this year, and $163 million last year in response to damage from storms, including Hurricane Irene.

AARP, a vocal critic of JCP&L, applauded the BPU's move.

In a statement, AARP New Jersey President Dave Mollen said many seniors have been hit hard by the recession, causing them to make tough choices between paying their utility bills and paying for things like food or medicine.


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