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Need Utility Accountability at Committee Hearing

Date : Thu, 6 Dec 2012 12:58:14 -0500

For Immediate Release
December 5, 2012 Contact: Jeff Tittel, Director, NJ Sierra Club, 609-558-9100

Need Utility Accountability at Committee Hearing

Today utility industry representatives will be before the Senate Budget and Appropriations Committee testifying on their response to Hurricane Sandy and how we can improve the system to prevent such failures in the future.The Committee must not let the hearing become a dog and pony show.We need an oversight hearing with accountability, not a cover up.In the days following Sandy we saw a major failure of our grid and utilities to handle the aftermath of Hurricane Sandy.We need the Committee to ask the tough questions today because following the storm the BPU spent more time on public relations than they actually did on public policy or real oversight on what happened.Over 2.5 million residents lost power following Hurricane Sandy and the BPU was virtually invisible during the recovery.Their response was an outrageous failure of government and we need more oversight of the utilities.Hopefully this Committee meeting is the first step in getting those policy changes in place.

"We need this Committee to hold utilities accountable with legislative oversight.With storms happening more frequently changing the oversight and regulatory systembecomes more critical.Otherwise people will continue to suffer, employers will continue to lay people off from impacted jobs, we will continue to see our economy impacted and long gas lines with each storm," said Jeff Tittel, Director, NJ Sierra Club. Some families were left in the dark for two weeks following the storm.We need to make changes to the regulatory system to prevent disasters like this from happening to our grid again.The utilities failed to protect the power lines and electrical infrastructure in the first place and are now rebuilding key infrastructure in the same vulnerable areas.We have a system that is broken and we need this Committee to take action and provide incentives for the utilities to better protect our grid instead of rewarding poor planning with guaranteed rates of return and rate hikes. In the days following Hurricane Sandy the BPU had a power failure itself; they are more concerned about the utilities than the consumers.The only information it provided to the public on its storm emergency website was links to the websites of the utilities without any independent verification or actions they were taking.There was no call for adequate timelines for when power will return to certain areas.The last two heads of the BPU have had no background in energy policy or utility law and that could be part of the reason the agency has been so unprepared. We should have an independent investigation and establish a panel to examine into the response of the BPU and the utilities in the storm and what oversight, transparency, and regulatory changes should be made.Governor Cuomo has called for such a panel in New York state and we should have one here as well. We need better oversight of the utilities by the BPU as we are now seeing the consequences of energy deregulation.Passed by the Legislature in 1998, deregulation allows the utilities to sell off different parts of their companies and enter new businesses.What we have seen since energy deregulation is not the competition between providers we were promised, but monopolies raising rates, cutting services, and failing to maintain their grid, while investing in industrial parks and other things that have nothing to do with energy production or distribution.

"Deregulation has been an utter failure that has raised rates, cut services, and has helped lead to catastrophic failures of the grid," said Jeff Tittel. We need to make regulatory changes as well.After a storm when the utilities are fixing the power lines and infrastructure they should not be allowed to bill ratepayers at their 12% rate of return.Instead the work should be done at cost.Additionally, utilities should not be allowed to come in and ask for rate increases after a storm because of additional costs or due to loss of revenue from people not buying power.Instead there should be compensation to rate payers and consumers for loss of food, appliances, and other property resulting during power outages.

"The utilities make more money repairing the lines and substations over and over again then by protecting the infrastructure from future storms.We reward disaster.The utilities could use this as an excuse to gauge the ratepayers even more going for rate increases for loss of revenue from not selling power and then earning a 12% rate of return on fixing the lines they should have maintained in the first place.They are going to hit us in our homes and in our wallets," said Jeff Tittel. We need better planning to move key infrastructure out of harm's way instead of locating it flood prone or sensitive areas again and again.Some lines and substations have been replaced 3 times in last 13 months with the utilities making money off of other people's misery each time. We need additional oversight by the BPU during preparation before a storm event and when the utilities do the repairs afterwards.During the storm utilities should be monitored by the BPU to ensure they are taking the correct steps.The BPU needs to require the utilities to do a better job preventing problems in the first place by replacing older and vulnerable lines including putting lines underground. The Legislature and BPU held hearings after Hurricane Irene and everyone said things would be better and patted themselves on the back. Now things are worse, it is going to take even longer to get power to businesses and homes, having a devastating economic impact to the state along with the impact it is already having on families and lives. During Hurricane Irene JCP&L said they were caught off guard and what happened there would never happen again.They were right, under Irene 60% of customers lost power but under Sandy it was closer to 90%.We opposed the takeover of Jersey Central by First Energy saying distance corporate owners would not care about people in New Jersey as they would in Illinois were they are based and that seems to be the case yet again.

Kate Millsaps
Conservation Program Coordinator
NJ Chapter of the Sierra Club
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Received on 2012-12-06 09:58:14

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