JCP&L Ordered To Justify Profits and Performance
In a decision that might reflect on ratepayer costs, Jersey Central Power and Light has been ordered to detail its earnings and reliability since 2005. The New Jersey Board of Public Utilities issued the unanimous decision today.
The company is being required to file a base rate case following BPU consideration of concerns raised by the state Division of Rate Counsel over JCP&L's profit margin and the lack of a rate filing since its last one was approved in 2005.
BPU President Bob Hanna, in a statement, said that the filing will "allow the Board, Rate Counsel and other interested parties to evaluate whether the Company is providing safe, adequate and proper service at just and reasonable rates."
Rate Counsel contends that all other major electric, water, and natural gas providers in New Jersey have filed rate base cases in the past two years, and that ratepayers have no current gauge to determine how much is profit and how much is being plowed back into maintenance and improvements.
Rate Counsel also points to outages during Hurricane and Tropical Storm Irene nearly a year ago, and last October's snow storm, in its concerns over service reliability. Board members heard similar complaints in public hearings following Irene and after recent underground explosions and fires in Morristown.
Company officials, according to BPU, cite inaccuracies in the Rate Counsel petition and an improper focus on overall rate of return instead of returns on equity - quality spending versus quantity spending.
JCP&L also holds that its return on equity meets expectations of the financial community.
Board members now map out a schedule for proceedings.