To cover expenses incurred after Hurricane Irene and last year's surprise October ice storm and to pay for infrastructure upgrades, Jersey Central Power and Light (JCP&L) is requesting a $31 million a year rate increase.

Statehouse (NJSenateRepublicans.com)

The Board of Public Utilities would have to approve the hike, but the BPU's president tells the State Senate Budget Committee no decision has been made yet.

During his testimony before the panel, JCP&L president Don Lynch admitted it is bad timing for the rate hike but says he was asked to file base rate case with the BPU.

"Jersey Central Power and Light was ordered this summer, in July to file a base rate case," explains BPU president Bob Hanna. "There are multiple reasons why Jersey central was ordered to file a rate case. The first one I suppose was that Stephanie Brand, ratepayer counsel filed a petition alleging that Jersey Central Power and Light was over-earning on its rates and that goes to the point that there is a concern that Jersey Central is essentially taking money from New Jersey and sending it to its parent (company) in Akron, Ohio, First Energy. In essence that Jersey Central is being used as a cash cow for even more troubled operations of First Energy."

While JCP&L is asking for the rate hike in part to cover the costs of Irene and the October storm, Hanna says the company's work during those instances is another reason it was ordered to file the rate case. He explains it was, "Their absolutely woeful performance during Hurricane Irene and that October snowstorm. I'm not sure you could do worse."

Hanna says no determination has been made on the allegations against JCP&L and the company didn't have to ask for a rate hike as part of its base rate case but, "That rate increase request is just that, it's a request. When you see that as a request, don't think the Board of Public Utilities or rate council is simply going to say, 'Hey, that's fine.' That's not what we do."

JCP&L spokesman Ron Morano says it the rate increase is approved, 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.