Assemblyman Greg McGuckin, a member of the Telecommunications and Utilities Committee, feels Jersey Central Power & Light Company (JCP&L) should withdraw their recently submitted request to the Board of Public Utilities (BPU) for a $31.5 million rate hike in order to cover the costs of Hurricane Irene in September, 2011 and the snowstorm which followed in October that same year.

Bruce Bennett, Getty Images
Bruce Bennett, Getty Images
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The proposed increase would go into effect in August, 2013. McGuckin is now sponsoring a bill to ban utilities from asking for a rate increase under certain circumstances and JCP&L would fall into the category.

"JCP&L is using the order by the BPU to file a base rate case as an opportunity to increase their customers' electric bill. Their timing couldn't be worse and I'm not sure it's justified," says McGuckin, (R-Ocean.) "The reason the order was issued was because the state Division Rate Counsel was suspicious that JCP&L was earning an excessive profit."

According to a consultant hired by the rate counsel's office, JCP&L exceeded its approved rate of return of 8.5 percent by nearly 3.9 percent in 2010. The order would have required the utility to open its books to determine its actual return.

"Before any question is raised about whether they should get more money we should first determine if they've already exceeded their rate of return," explains McGuckin. "The BPU should not consider rate increases while they're attempting to determine if they've already made excess profits."

McGuckin's bill prohibits the Board of Public Utilities (board) from considering, reviewing, or approving, and prohibits a public utility from being permitted to file, a request for a rate increase during any period of time when:

  1. The board has directed the public utility to file a base rate case to determine whether the public utility exceeded its authorized rate of return.
  2. The public utility has been notified by the board that the board is investigating whether the public utility exceeded its authorized rate of return.

This prohibition shall continue until such time as the board shall determine that the base rate case proceeding or the investigation has been concluded.

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