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JCP&L Seeks Rate Hike To Pay For Two Storms [AUDIO]

If you’re a Jersey Central Power & Light customer, you could be paying more soon. The state’s second-largest utility had filed for a rate increase request with the state Board of Public Utilities to raise rates by $31 million a year.

JCP&L Staging Area
JCP&L Staging Area (FirstEnergy Corp., Flickr)

Company spokesman Ron Morano says the rate hike would be used to cover costs for Hurricane Irene and last year’s October snowstorm as well as pay for infrastructure upgrades.

“We are going to be working on technology designs to improve storm response, we are going to be working with the state BPU to talk about how we can harden the infrastructure…as well as some other improvements along the system.”

He says the average residential customer would see their monthly bill increase by 1.4 percent, which would equal $1.51 for a customer who uses 650 kilowatts of electricity.

However, Morano cautions that number could rise as Superstorm Sandy totals are received by year’s end.

“We will have those figures by the end of the year, but we are talking about at least a half billion dollars worth of damage to our First Energy system, most of that in New Jersey, so that will have to be factored in.”

The rate hike request is part of a base rate case, mandated by the state BPU, after the company came under fire for poor performance in the wake of last year’s storm and questions about the utility’s earnings.

Lawmakers Against The Proposed Rate Increase

Senator Barbara Buono urged the state Board of Public Utilities to withhold approval of any pending rate increases for Jersey Central Power & Light until it determines whether the utility has overcharged its New Jersey customers by tens of millions of dollars while failing to invest adequately in the infrastructure and staffing needed to restore service quickly after major storms.

“There is no way that the BPU should consider JCP&L’s pending request for a rate increase to cover the $164 million cost of Hurricane Irene and the October ice storm in 2011 until after it resolves the serious charges brought by the Division of Rate Counsel against the company,” Buono said.

Buono noted that Robert Henkes, the Division of Rate Counsel’s outside expert, found that JCP&L’s 12.37% profit far exceeded the “zone of reasonableness,” compared to the 8.21% earned by PSE&G, the state’s largest utility with almost 2 million electricity customers; the 8.21% profit earned by Rockland Electric in North Jersey; and the 8.69% rate of return for Atlantic City Electric Company.

“But just as troubling are the allegations that JCP&L’s failure to adequately restore service after Hurricane Irene and the major ice storm was a result of a failure to invest adequately in infrastructure, of staffing cuts made after JCP&L’s acquisition by FirstEnergy, and of the inability of the Ohio-based company to plan for a multi-state crisis like the one we just experienced,” Buono said.

Senator Kevin O’Toole (R-Bergen, Essex, Passaic and Morris) urged New Jersey Board of Public Utilities President Robert Hanna to immediately deny JCP&L’s request to raise rates by nearly $31.5 million per year.

“The state’s second-largest utility has no shame,” O’Toole said. “Its parent company has raked in a $149 million increase in net income over last year, as the utility failed to adequately serve ratepayers in the aftermaths of Hurricane Irene and Sandy. Their application to suck more out of our residents’ pockets is utterly offensive.”

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