Last week's announcement by JCP&L that it would seek a rate hike to help it harden its infrastructure as a result of a devastating storm was perhaps not a surprise, considering the amount of damage wrecked upon the state.
The only problem: The devastating storm it's referring to is Irene, not Sandy, and the utility's performance in this year's hurricane hasn't left many in New Jersey confident that it's learned its lesson.
According to the base-rate case it filed with the Board of Public Utilities, JCP&L wants to raise its rates roughly 1.4 percent, to generate an additional $30 million each year. The extra money would be directed to repair and hardening projects required because of Irene and the October 2011 snowstorm. The utility has acknowledged the rate increase will go up as soon as a better picture of Sandy's financial impact on its infrastructure is available.
We're sympathetic with the countless residents who had their businesses and homes damaged or destroyed, and JCP&L — which lost plenty of its poles and other power infrastructure during Sandy — is no exception. And we've used this space in the past to discourage knee-jerk reactions, like spending billions putting the whole system underground, or kicking the company out of towns.
But looking to pass these costs on to ratepayers right now, when Shore homes remain inaccessible and uninhabitable, and businesses in especially hard-hit areas remain unable to reopen, is heartless. And that's even more true when you consider the accusations from regulators that JCP&L is overearning. A consultant for the Division of Rate Council found the utility's 2010 profits of nearly 12.5 percent to be far above the 8.75 percent allowed by the BPU, and found the company may have collected $90 million more from New Jersey customers than it should have. And its parent company, FirstEnergy, last month reported quarterly profit of $425 million, though it narrowed its outlook for 2013.
Going to ratepayers to fix an antiquated system that's long past its expiration date is the punchline to a bad joke. JCP&L and its parent must find a solution that treats its customers respectably, or those knee-jerk, nuclear options — pun intended — are going to sound a lot more credible.