AARP and Our Watchdogs Fight Back – PSE&G Rate Hike Request Cut by 59%

Earlier this year PSE&G unveiled a new Gas Modernization Program – a proposed 5 year program to replace and upgrade aging gas utility infrastructure that came with an almost $1.6 billion price tag.
While, recognizing that this kind of work done is necessary for safety and reliability, (some of these old, sometimes leaky pipes are more than 75 years old), AARP, the NJ Division of Rate Counsel, the NJ Board of Public Utility Staff and other parties examined the company proposal to determine if their plan made sense – is it the right work for the right amount of money for NJ’s 1.8 million PSE&G gas customers.

We learned it is not.  Thanks to our examination and the hard work of AARP volunteers and staff, and the other parties, what the company agreed to is a vastly scaled back program.   In September, we reached an agreement in principle to cut the cost of the program by 59% - slashing $944 million from the original proposal, establishing a cost cap for the work and scaling back the program’s scope by 50%, targeting the most at risk infrastructure.  The agreement also requires provisional rates subject to a full review of the program and refund if the work is not done according to the agreement.  The agreement also now requires the company to achieve a 20% reduction in methane gas leaks per year.

The agreement must still go before the Board of Public Utilities.  If it is approved, work on the project will begin later this year.

If you are interested in joining AARP – NJ’s Utility Watchdog Team contact ELiebman@aarp.org.