State Street: Powering up Sandy bills before hurricane season

January 21. 2013 3:00AM


Much of Trenton's focus in recent weeks has been getting the Jersey Shore up and running by Memorial Day. But another key date looms close behind.

Sen. Raymond Lesniak does not think the state's electrical grid can be storm-proof by hurricane season. – AARON HOUSTON

The 2013 Atlantic Hurricane Season begins June 1. Sen. Raymond Lesniak (D-Union) says there's no way the state's electrical grid will be Sandy-proof by then.

"None of this can be fast enough, because it involves massive infrastructure improvements that haven't been undertaken for decades," he said. "It's just impossible to move fast enough on something that should have been done decades ago."

Utility crews have been out repairing power lines, removing problematic vegetation and working to harden existing infrastructure, but the companies have yet to receive clear direction about what size of storm the state wants the grid to be able to withstand.

Lesniak is sponsoring legislation requiring utilities to file infrastructure improvement plans with the Board of Public Utilities, and another bill directing the BPU to adopt best practices for disaster response.

Also being watched is Assemblyman Upendra Chivukula's (D-Somerset) bill to add long-term capacity and infrastructure planning into the state's Energy Master Plan.

Chivukula's bill was actually introduced months before Sandy hit, but was only voted out of committee in December.

Neither of Lesniak's bills has been taken up in committee, but the senator said that will soon change.

The plan, Lesniak said, is to take his legislation and other Sandy-related utility proposals and devise a comprehensive committee substitute with the goal of preventing future large-scale outages.

Andrew Hendry, president of the New Jersey Utilities Association, said he also expects movement in February, but he said behind-the-scenes work is already taking place between power companies and the Board of Public Utilities.

"The companies are working with the board and looking at sort of the cost-benefit analysis of what some of the changes to infrastructure might be and what are the benefits to consumers versus cost," Hendry said.

In the meantime, Hendry said he hopes the current spirit of cooperation persists.

"What I will say is that everybody continues to be, by and large, very constructive about this and not pointing fingers but rather talking about how we work together to try and avoid this in the future," he said.

Sen. Smith to offer 3 bills
to replenish open space fund

Sen. Bob Smith (D-Piscataway) is taking a multiple choice approach to finding revenue for the state's zeroed-out open space fund.

The senator tells State Street he'll bring a trio of open space bills to the Feb. 4 meeting of his Environment and Energy Committee. One would create water consumption and diversion fees of 40 cents per thousand gallons, using the revenue for open space and farmland preservation. The second proposal calls for an open space bond issue referendum. The third would dedicate a portion of sales tax revenue to open space.

Any of the three would need approval at the ballot box. The water fee and the sales tax would be written as constitutional amendments.

"I'll put three different methods in queue so the Legislature can decide which way it wants to go," he said.

Smith said he'll be fine with whichever proposal Christie and the Legislature approve, though he's partial to the water fee.

"I do think it's the best way because there's no bonding and no decrease in revenues to general treasury," he said. "New Jersey's broke."

Michael Egenton, senior vice president at the New Jersey Chamber of Commerce, isn't enthused about what he calls a "water tax."

"We would oppose it because obviously it would hit some of our companies that use water in their production and processes," he said.

Egenton said the hit would also be ill-timed, since the economy is still in recovery. He said at least one of the chamber's members has indicated a water tax could prompt it to consider relocating out of state.

Smith said the water fee would be capped at $50,000 per year. He said it wouldn't have a major impact on most businesses, and all companies would benefit from cleaner water.

Sara Bluhm, vice president of energy and environmental affairs at the New Jersey Business and Industry Association, noted that water bills for some ratepayers are already going up now that the BPU has allowed utilities to levy a "Distribution Service Improvement Charge" on customers to fund infrastructure improvements.

"So you're increasing your rates twice," she said. "…It's one thing to make the case for infrastructure improvements. It's another for open space funding that doesn't necessarily have anything to do with water."

Smith is confident the public will support whichever measure makes it to the ballot, perhaps this November. He noted an open space bond issue passed by a wide margin in 2009, the same year Gov. Chris Christie soundly defeated former Gov. Jon S. Corzine.

Internet gaming proponents
working to woo Christie

The clock is ticking for Christie to sign or veto the Internet gaming bill approved by the Legislature Dec. 20.

Dale J. Florio, at Princeton Public Affairs Group, thinks the bill has a shot.

"There are some hurdles," he said. "They're not insurmountable."

One of those hurdles is that Christie previously vetoed an Internet gaming bill in March 2011, citing concerns it could lead to the expansion of gaming outside of Atlantic City.

Since then, legislators and lobbyists have been working to address the governor's concerns. Florio said proponents have also been working the phones.

"I think there are a lot of different interests that would like to see the governor sign it," he said. "We've encouraged everybody to certainly make their opinions known."

Adding to the intrigue was the announcement last week by Rational Group, the parent company of the online poker sites PokerStars and Full Tilt Poker, that it has applied to purchase the Atlantic Club Casino Hotel in Atlantic City.

All of this comes against the backdrop of the ongoing legal battle surrounding sports betting. A judge ruled last month that a lawsuit challenging New Jersey's legalization of sports betting could move forward.

Given all the legal uncertainty, Florio said Internet gaming provides New Jersey a faster avenue to increased revenue.

"Sports betting will take longer to implement just because of the legal gymnastics," he said. "Internet gaming is really just a function of passing the bill and making investments."

Editor's Note: No need to wait a week for the next State Street update. Now you can find similar news items and the latest from Trenton in the new State Street blog at njbiz.com.


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