New
Jersey Public Interest Research Group (NJPIRG) joined citizens,
consumer groups and New Jersey Public Advocate Commissioner Ronald Chen
at a public hearing before an administrative law judge this morning to
urge the court and the New Jersey Board of Public Utilities to reject
PSE&G’s request for a $132.8 million gas rate increase. Based on
expert testimony submitted by the Public Advocate, the company’s
request is unjustified. In fact, the testimony shows that instead of
paying more on their utility bills, customers should receive $70.3
million in rate reductions.
“PSE&G’s
effort to overcharge their customers comes at a time when New Jerseyans
are already struggling with high energy prices,” said Suzanne Leta,
NJPIRG’s Energy Advocate.
If
PSE&G’s request is approved, customers would be required to pay an
average of nearly $100 more a year. The company’s rate request is not
connected to the price of natural gas since the increases fall solely
in the category of so-called distribution costs.
Expert
testimony submitted by the Public Advocate makes it clear that
PSE&G is attempting to charge ratepayers for costs that are
obviously outside the scope of providing safe, adequate and reliable
service to customers.
Hidden within the company’s rate increase request is:
• $3.4 million in bonuses for executives and top management;
• $1.2 million in costs related to a merger with Exelon that was
proposed more than a year and a half ago and may not ever get approved;
• $525,000 for institutional and promotional advertising and public relations;
• $89,000 for PSEG Enterprise expenses that include a bowling tournament, continental arena tickets and season tickets to NJPAC;
• $662,000 for charitable contribution expenses; and
• $498,000 in “miscellaneous” expenses used primarily for PSE&G’s lobbying efforts.
“It
is particularly ironic that PSE&G is asking ratepayers to pick up
the half million dollar tab for lobbyists who support legislation that
benefits the company’s bottom line but typically harms ratepayers in
return. If ratepayers have to pay for PSE&G’s hired guns they will
be shooting themselves in the foot,” said Leta.
Based
on the Public Advocate’s expert testimony, PSE&G also used every
trick of the trade to distort the numbers to create $200 million in
unnecessary rate increases. The company conducted a flawed analysis,
miscalculated the number of customer accounts, double counted the
interest tax and skirted the established guidelines and BPU policies.
For example, by not following the established federal guidelines for
accounting for depreciation, PSE&G attempted to hoodwink consumers
out of nearly $83 million.
“The
evidence clearly speaks for itself. The Board of Public Utilities
should reject PSE&G’s request and grant ratepayers $70.3 million in
rate reductions they duly deserve,” said Leta.
