My
name is Suzanne Leta and I am an energy advocate with New Jersey Public
Interest Research Group. NJPIRG is a statewide, non-profit,
non-partisan public interest advocacy organization with over 25,000
citizen members who are also residential ratepayers.
For
more than 30 years, NJPIRG has been working to ensure New Jersey
consumers get the cleanest, safest, most affordable and most reliable
energy possible. So when we heard about Exelon’s plants to takeover
PSEG in December 2004, we quickly became very concerned.
More
than a dozen other consumer, labor and business groups, the Board of
Public Utilities staff and the Ratepayer Advocate agreed. In fact, the
President and Commissioners at the Board of Public Utilities was so
concerned that they established a positive benefits standard—requiring
the companies to prove that this takeover would provide positive
benefits to the state in terms of rates, competition and the provision
of safe, adequate and proper service.
After
a year of discovery, testimony and evidentiary hearings, the facts are
in: Exelon’s takeover of PSEG unequivocally fails to meet New Jersey’s
positive benefits standard and should be rejected. Additionally, the
New Jersey Public Advocate and the New Jersey Board of Public Utilities
staff have concluded that the takeover could cause serious, long-term
harm to ratepayers.
It
is time for Governor Corzine to take a hard look at his agency staff’s
findings, and put his leadership behind the only decision that will
truly protect ratepayers -- the rejection of this takeover. Moreover,
this takeover is in no way “on track”, contrary to what PSEG CEO Jim
Ferland has told investors and the press.
On
Tuesday, PSEG CEO Jim Ferland said that Exelon and PSEG expect to reach
a settlement agreement by the end of the month, saying, “We’re reaching
the end of that process…I expect by the time we get to the end of this
month, we should have sorted out what the outcome is going to look like
in the state.” Ferland’s comments echo a statement made last week by
PSEG spokesman Paul Rosengren who said, “We fully expect to come to a
settlement with the opposition, but we'll do it in small,
issue-specific groups behind closed doors.”
PSEG’s
statements contradict a dozen briefs from opposing parties, including
the NJ BPU staff, the New Jersey Public Advocate, NJPIRG, New Jersey
Citizen Action and the New Jersey Large Energy Users Coalition, filed
last week. The briefs repeatedly affirm that the takeover does not meet
New Jersey’s standard of review.
The
opposing parties are on opposite ends of the table from Exelon and PSEG
on a range of issues, but especially on market power and its impact on
electric rates in New Jersey. If this takeover is approved, Exelon
would be the largest, most powerful utility entity in the nation,
dominating the regional market, getting a stranglehold over rates with
a history of poor reliability, quality of service, and safety. An
expert hired by the BPU staff estimate that the takeover could cost all
New Jersey ratepayers $2.3 billion annually and indefinitely. If this
amount was shared between residential ratepayers in the state, it would
be an increase of $45 a month. The same expert also stated that in
order to meet the positive benefits standard, the company would need to
give up ownership and control of 8-10,000 megawatts, about a dozen
mid-sized power plants, of electricity generation in the regional grid.
Either
Exelon and PSEG are blowing smoke, or the companies’ leaders are privy
to meetings with decision-makers that the public is not. We hope it’s
the former, because so far, this process has proceeded in a public and
transparent manner.
Any statement asserting that the Exelon deal will be wrapped up in a
bow by the end of the month is baseless. There are too many fundamental
concerns that Exelon has not addressed. We can’t imagine a scenario
where this deal goes forward, and it is time for Governor Corzine to
agree with us that this deal is dead.
