***Achieves 62% Reduction in Cost of Infrastructure Upgrades as part of Energy Strong Program***
Working as a strong intervener over the past many months in objecting to PSE&G’s $2.6 billion dollar “blank check” Energy Strong proposal before the Board of Public Utilities, AARP is pleased to be part of the agreement in principle reached today that will achieve a 62% reduction in the rate increase being sought by PSE&G for its Energy Strong program.
AARP applauds the efforts of all of the consumer representatives in this very important case, and especially recognizes the efforts of the NJ Division of Rate Counsel and Board of Public Utilities for gaining the agreement in principle which will fund needed PSE&G infrastructure improvements without a rate increase this year and with much lower utility bill impacts from Energy Strong over the coming years.
The settlement agreement supports a program that has gone from a virtual multi-billion dollar PSE&G blank check to a significantly lower cost and tighter work order process, requiring utility infrastructure that flooded in recent major storms to be upgraded together with strong independent oversight and critical consumer protections against unfair prices.
Under the settlement agreement reached by AARP and the other parties in the case, the original PSE&G-requested $2.6 billion program is now set at $1 billion. The company’s request for contemporaneous cost recovery has been rejected. There will be no rate increases associated with the Energy Strong program in 2014. Beginning in 2015, rates will be adjusted provisionally and will be subject to refund should any aspect of the program be found to be imprudent in the Company’s subsequent base rate case. Because the settlement significantly lowers the cost of the program, consumers should be able to expect not only needed infrastructure improvements, but also the scheduled rate decreases expected over the next several years as deregulation charges roll off the bill.
The entire Energy Strong program will be overseen by an independent project monitor selected after consultation with the Board of Public Utilities and the NJ Division of Rate Counsel. Unlike the original proposal, the project now includes measurable performance standards and real consequences should PSE&G fail to meet these standards.
“We are particularly pleased that this agreement requires PSE&G to file a base rate case by November 1, 2017,” said AARP New Jersey State Director Dieterle. “The Company has not filed a base rate case since 2009 and it is time to take a look at this company’s books to ensure that all of the rates we are paying are fair and reasonable,” he added.
In 2013, PSE&G proposed a $3.9 billion 10-year program to harden its electric and gas systems following Superstorm Sandy. In the present case the utility requested an initial $2.6 billion for the first five years.
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