BPU defers action on JCPL rates

Jersey Central Power & Light won’t have to justify its rates before the Board of Public Utilities for at least another month, but the state’s second-largest utility already is defending itself in the court of public opinion.

Jersey Central Power & Light won’t have to justify its rates before the Board of Public Utilities for at least another month, but the state’s second-largest utility already is defending itself in the court of public opinion.

The Board of Public Utilities on Monday deferred a decision on whether to require JCP&L to file a base rate case. Such a case would give the BPU the chance to review whether JCP&L’s rates are reasonable and in line with state regulations.

The issue came up in September, when Stefanie Brand, director of the state Division of Rate Counsel, filed a petition with the board alleging that JCP&L may be earning a rate of return in excess of the 8.5 percent allowed by the BPU.

Brand’s office hired Robert Henkes, a Connecticut-based utility regulation consultant, who examined publicly available information to conclude that JCP&L actually received a 12.37 rate of return in 2010. Henkes estimated that could have amounted to as much as $90 million in excess charges.

In the filing, Brand said a rate case also would give the board a chance to see whether the utility was skimping on infrastructure costs to boost profits.

“Furthermore, a base rate case would also provide an opportunity to examine the company’s earnings in the context of its investment in its rate base, the plant and equipment needed to provide service to its customers,” Brand said.

JCP&L spokesman Ron Morano said the rate counsel’s petition is “based on stale data, and is flawed.” He said his utility has the lowest rates of all four of the state’s electric utilities, and noted the company is spending $165 million in system upgrades related to last year’s storms, in addition to hundreds of millions of dollars in normal maintenance, upgrades and transmission projects.

It’s been six years since JCP&L has had a base rate case. The state’s other three electric utilities all had their rates reviewed in 2010.

The earliest the board could now act on the Rate Counsel’s request is July. In the meantime, AARP’s New Jersey chapter has launched a petition drive, reportedly gathering thousands of signatures from concerned JCP&L customers on the website JCPLShowUsTheMoney.org. In a statement Monday following the board’s deferral, AARP New Jersey President Dave Mollen urged the BPU to act quickly.

“If it is determined that the company is overcharging customers, this base rate case filing would establish a process whereby the BPU can provide relief to customers and lower what are some of the highest electricity prices in the nation,” he said.