NJPIRG
applauds the Public Advocate for taking a principled stand against the
proposed Exelon-PSEG merger. In no uncertain terms, Public Advocate Ron
Chen clearly explained that this merger would be a bad deal for
consumers. In his first major announcement as Public Advocate, he
tackled the most pervasive consumer problem in the state: a potential
energy merger that would hit ratepayers with increases when they’re
already burdened with utility costs.
The
Public Advocate announcement gave a strong argument Exelon’s claim that
this would be a good deal for consumers, detailing how consumers would
be hurt by less competition, worse service and less reliable
electricity.
The
Public Advocate adds credence to the chorus of opposition to the plan,
which includes staff attorney testimony from the Board of Public
Utilities, the Ratepayer’s Counsel, the New Jersey Large Energy Users,
the New Jersey Chemistry Council, NJPIRG, New Jersey Citizen Action and
others.
This
merger has attracted strong opposition because it would create an
energy behemoth that would dominate the regional electricity market by
controlling the lion’s share of electricity supply. The same company
would also have incredible control over the regional natural gas
markets. New Jersey’s consumers would get a raw deal because they will
get worse service at higher prices, and New Jersey would have less
power to protect its residents from skyrocketing prices.
According
to expert consultants hired by the New Jersey Board of Public
Utilities, 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, the average ratepayer could be forced to pay a $45 increase on
their monthly electricity bill.
The
Public Advocate’s concern of creating an energy behemoth is
well-founded. Combining the two companies operations and assets would
create the single largest utility entity in business today, with more
than 7 million electric customers and 2 million natural gas customers
in a service territory comprising of 18 percent of the entire
population in the PJM region, $79 billion in assets, a gross annual
revenue of $27 billion and a net annual profit of $3.2 billion.
New
Jersey families are already struggling to heat and cool 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 when they can afford it least.
