At
evidentiary hearings before Office of Administrative Law Judge Richard
McGill, it is becoming clearer by the day that Exelon’s proposed
takeover of PSEG will only benefit shareholders and corporate
executives, leaving New Jersey ratepayers to suffer the consequences of
higher rates and diminished service.
According
to New Jersey Board of Public Utilities’ staff, the takeover could cost
ratepayers as much as $2.3 billion annually due to increased electric
supply costs. Assuming that there are approximately 4.25 million
electric customer accounts in New Jersey (one customer account for
every two New Jersey residents), the average ratepayer could be forced
to pay a $45 increase on their monthly electricity bill.
New
Jersey consumers have already been hit hard due to a steep rise in
natural gas prices—this winter, ratepayers will pay an average increase
of $28 a month on their utility bills. If Exelon’s takeover of PSEG is
approved, and natural gas prices stay at current rates, the average
ratepayer could see their utility bill increase by $876 a year.
“New
Jersey families are already struggling to heat their homes. If Exelon
is allowed to takeover PSEG, they will have a stranglehold over
electricity rates—hitting consumers with a one-two punch on their
utility bills,” said Suzanne Leta, Advocate for New Jersey Public
Interest Research Group.
During
his opening statement before Judge McGill, Exelon CEO John Rowe
committed to giving a $120 million rate credit to PSE&G customers
over 3-4 years. PSE&G has a total of $2.1 million customer
accounts, including business and industrial accounts. Assuming that
$120 million is shared over three years, Rowe’s credit shakes out to a
paltry $1.60 a month for the average PSE&G ratepayer.
“Exelon’s
proposed takeover of PSEG is highway robbery. Rowe’s rate credit will
provide next to no relief on utility bills, and does nothing to address
the larger problem of rate hikes as a result of Exelon’s market power
in the regional electricity grid,” said Leta.
Attorneys
representing the Board of Public Utilities staff and the Ratepayer
Advocate have made it quite clear that Exelon’s proposal to takeover
PSEG should be rejected, and are doing their due diligence in cross
examining Exelon and PSEG witnesses before Judge McGill.
On
Monday, in cross-examination by Ratepayer Advocate, Ms. Bridget Reidy,
Exelon Senior VP of Customer and Marketing Services, revealed that
prior to 2000, ComEd, Exelon’s transmission and distribution subsidiary
in Illinois, had twenty-three walk-in centers. After 2000, ComEd’s
twenty-three customer service centers were reduced to nine, and in
2002, the nine remaining centers were closed.
Since
2002, ComEd has outsourced these centers to “authorized” and
“unauthorized” operators. “Unauthorized” centers, some of which are
located at check-cashing stores, likely cause ratepayers to incur late
fees as a result of lag time in delivering the payment to ComEd. None
of the Exelon-owned or Exelon-outsourced customer service walk-in
centers provide customers with the opportunity to ask about their
bill—the centers are only used for bill payment. To ask questions about
their bills, customers must use the telephone or the internet, even
though low-income ratepayers often do not have internet service and
sometimes lack telephone service.
In
stark contrast, PSE&G has retained 16 walk-in customer service
centers, allowing ratepayers to discuss and pay their bills, serving
approximately 2.5 million New Jerseyans. Reidy would not promise that
Exelon would continue to operate these walk-in centers if allowed to
takeover PSEG.
“Exelon
must prove to Judge McGill and the BPU Commissioners that the takeover
of PSEG will provide positive benefits to New Jersey regarding safe,
adequate and reliable service at just and reasonable rates. The company
has failed that test,” concluded Leta.
Evidentiary Hearings Location:
9:00 am, Hilton Gateway Hotel, Essex Room, Gateway Center, Newark
Evidentiary Hearings Schedule of Witnesses:
Tuesday, January 10th
LaRossa (Exelon/PSEG—service quality)
O’Brien (Exelon/PSEG--reliability)
Brockway (RPA—service quality and reliability)
Colton (RPA—low-income issues)
DiPalma (BPU—reliability)
Wednesday, January 11th
Sidak (Exelon/PSEG—non-regulated synergies)
Arndt (Exelon/PSEG—regulated synergies)
Peterson (BPU—synergies and golden parachutes to executives)
Thursday, January 12th
Kalt (PPL—market power)
Steffen (BPU—synergies, costs to achieve)
Leta (NJPIRG—overall policy, including market power, reliability/service quality, nuclear safety, BPU regulation)
Anderson (Exelon/PSEG—utility employees)
Schnitzer (Exelon/PSEG—rates, pension)
Lesser (BPU—overall economic benefit analysis relative to PSEG status quo)
Friday, January 13th
Gills (Exelon/PSEG—cost allocation, BPU regulation)
McLaughlin (Exelon/PSEG—cost allocation)
Welchlin (BPU—cost allocation)
Pinney (NJDEP—nuclear safety)
Tosch (NJDEP—nuclear safety)
Crane (Exelon/PSEG—nuclear safety)
Levis (Exelon/PSEG—nuclear safety)
Tuesday, January 17th
Frame (Exelon/PSEG—market power)
Biewald (RPA—market power)
Henderson (Exelon/PSEG—virtual divestiture)
Hogan (Exelon/PSEG—BGS auction and market power)
Wednesday, January 18th
Morris (Exelon/PSEG—market power)
Carpenter (PPL—market power)
Briden (Direct Energy—market power)
Moss (NJPIRG—market power)
Thursday, January 19th
Sorenson (Exelon/PSEG—PJM market and PJM oversight)
Cornew (Exelon/PSEG—market power)
Cassidy (Exelon/PSEG—market power)
MacDonald (Gerdau Ameristeel—market power)
Pollock (NJ LEUC—market power)
Rose (BPU—market power)
Friday, January 20th
Bowring (PJM—market power)
Brockway (RPA—overall policy)
Lubow (BPU—overall policy)
Izzo (Exelon/PSEG—overall policy)
