Consumer Protection In The News

Thank goodness, in the face of the non-stop march of merger mania that has so overtaken this country, that at least one public entity in New Jersey has decided to put up its hand and say "halt," or, at least, "hold on just a minute."

Late last week the state's Board of Public Utilities took a gallant stand for New Jersey taxpayers. By a unanimous vote, the board had the gumption to stare into the eye-blurring blitz of a public relations barrage and just say "no", or at least "not just yet."

That was the board's response to the much-publicized mega-utility merger plan that would combine Exelon Corp. of Chicago, with Public Service Enterprise Group. The proposal, valued at roughly $16 billion, would have created the nation's largest electric utility and would no doubt change the climate for the way New Jerseyans secure their power needs.

The board's reluctance to give in to the utilities' heavy-handed media campaign, or at least to do so by an artificial deadline imposed by the corporations of last Friday, was keyed around the ambiguous language in the pending merger's so-called "market power" arrangement. That is, BPU members wanted more assurance than they were getting about market dominance and whether the newly created power behemoth might obliterate all competition ... and thereby be free to raise rates or manipulate prices whenever it felt the urge.

Victor Fortiewicz, the BPU's executive director, told the utilities' representatives that the current proposal "lacks clarity on several essential issues."

"Possible market dominance and the ability to set power prices which could lead to higher bills is a subject that needs to be discussed in depth," the board said in a statement Friday. Afterwards, the utilities issued a statement in which they offered to keep up negotiations with the BPU at least until Aug. 21.

Let's be clear: New Jersey residents already pay among the highest rates in the nation for their energy needs. They certainly don't need to pay any higher rates, especially to some super conglomerate that's based way out in Chicago.

The BPU acted in the best interests of all the citizens of this state in rejecting an offer that was plainly inadequate, an offer that did not meet the standard set under New Jersey law: To provide benefits to the state in terms of rates, competition and jobs, along with safe, adequate and proper service.

Despite what the utilities describe as $1.5 billion in incentives and potential consumer benefits, and despite a U.S. Justice Department consent degree that called for the would-be energy giant to sell off six power plants in New Jersey and Pennsylvania, neither state Public Advocate Ronald Chen nor the utilities board was convinced.

It remains unclear whether this merger would be good for New Jersey's ratepayers -- much less its unionized electrical workers, its chemical industry employees or its environment.

Until the board gets real assurances from the utilities on the "market power" issues, it should stand firm in rejecting this deal. The board, after all, acts as consumer advocate for everyone who pays a power bill in New Jersey. It should be rightly skeptical of any plan that would promise better rates, while at the same time eliminating competition.

Despite the "anything goes" climate in the Justice Department these days regarding corporate mergers, numerous examples come to mind in recent years to prove the old saw that "bigger is not necessarily better."