In
light of Exelon and PSEG’s most recent bullying tactics and media spin,
summed up in a letter issued by the companies yesterday telling state
regulators to take or leave their proposed merger terms—terms that
would still give the companies’ enough market power to control and
manipulate prices—the state’s leading consumer and business advocates
called on state regulators to call the companies’ bluff and let them
walk away from the deal.
“We’re
looking to the BPU staff and board, the Governor and the Public
Advocate to stand up for consumers and insist that the companies put a
proposal on the table that would alleviate market power concerns. If
the companies stay their course and refuse to address market power,
then its time for our regulators to say “so long” to Exelon,” said Dena
Mottola, Executive Director for New Jersey Public Interest Research
Group.
A
year and a half of discovery, hearings and evidentiary testimony make
it strikingly clear that if Exelon’s takeover of PSEG is approved
without requiring the companies to fully mitigate market power
concerns, New Jersey ratepayers will have to pay what could be billions
more in higher electricity prices into the indefinite future. Testimony
by BPU staff expert Judah Rose estimates that market power could cost
all New Jersey ratepayers $2.3 billion annually, a $45 a month/$540 a
year increase on average. In comparison, the companies’ estimated $600
million rate credit offer, which is actually $486 million with a
disputed $114 market transition charge removed, amounts to a $1.33 a
month/$32 a year credit for PSE&G consumers.
"Consumers
know that what is on the table should be left there -- the company is
offering ratepayers one dollar and change a month on one hand and
taking $45/month away on the other hand -- anyone can do the math and
figure out that this is a giant ratepayer ripoff. And to add insult to
injury, while the company rips off ratepayers it wants to walk away
with billions of dollars in windfall profits for its shareholders and
executives. NJ needs to thanks but no thanks," said Ev Liebman, New
Jersey Citizen Action Program Director.
“New
Jersey’s electricity bills are among the highest in the nation.
Currently, industrial electricity rates are the 4th highest in the US,
71% above the national average,” said Hal Bozarth, executive director
of the Chemistry Council of New Jersey, representing more than 85
chemistry manufacturing companies, “a merger of this magnitude would
continue the trend of rising energy costs, which will negatively impact
industry. Their proposal will create a ‘super monopoly’ that if
approved can possibly force manufacturers to close shop and leave the
state, resulting in the loss of high-paying jobs for New Jerseyans.”
"Tenants
in New Jersey pay nearly the highest rents in the nation," said Matt
Shapiro, President of the New Jersey Tenants Organization, "and this
energy monopoly deal will cause tenants' rent and utility bills to rise
even further. It should be turned down."
The
companies’ current proposal relies on the Department of Justice (DOJ)
consent decree, in addition to a few minor and unenforceable behavioral
remedies regarding market power. A recent BPU-requested report from the
Market Monitoring Unit of the PJM regional electricity grid makes it
clear that the DOJ decree fails to mitigate market power adequately. On
Tuesday, PJM sent a letter to Exelon and PSEG refusing to endorse the
companies’ terms.
