utilities – Hank Kalet

Sometimes I think we are reliving the Carter years, when an economic malaise and spiking energy costs led to a political revolt that put Ronald Reagan in the White House.

Consider the similarities — rising fuel costs and consumer prices, a crisis in Iran, shrinking international prestige, etc.

Add to this the news announced yesterday by the “state’s four natural gas utilities” that they plan to “boost rates for residential customers by as much as 22 percent, or an average of $32 a month, under plans filed … with the state Board of Public Utilities. The rates would take effect Oct. 1.”

The companies are blaming the increase “on rising international demand for natural gas, a significant drop in imports of liquefied natural gas and lower supplies in the U.S.”

Those factors have combined to double the price utilities pay for the fuel since
last August. Utilities such as Public Service Electric & Gas make no profit
on the sale of natural gas, passing the costs through to customers.

Not exactly good news for already cash-strapped for consumers. The state ratepayer counsel — the person responsible for protecting consumers in the utilities regulatory process — says she plans to take a close look at the rate requests, but does not expect there to be much that can be done.

Because the rate request is the result of higher commodity costs, approval from the BPU is likely, although regulators could grant the increase in multiple steps. Under state law, utilities make no money on the gas itself, but they are entitled to pass along their costs to customers.

“We’ll take a look at it, but because it’s commodity based, it’s unlikely we’ll be able to do anything to keep the prices down,” said Stephanie Brand, the state’s rate counsel, in a telephone interview.

“It’s a trend we’re seeing everywhere,” Brand said. “We’re getting a lot of phone calls and e-mails from consumers having trouble paying their bills. There’s not a whole lot people can do but use less,” she said.

Translation: Keeping the house colder. Isn’t that what Jimmy Carter recommended way back when?

Read this lead sentence from Tom Johnson’s piece in today’s Star-Ledger and tell me that New Jersey’s energy deregulation program is operating as advertised:

For the second consecutive year, New Jersey consumers will see double-digit increases in their electricity bills come June.

The numbers look like this:

Jersey Central Power & Light customers will see their bills jump by 14 percent, or $13.30 a month, pushing the average monthly bill to $106.72. Customers of Public Service Electric & Gas, the state’s largest utility, will be hit with an 11.7 percent increase, or $10.86 more a month, increasing the average monthly tab to $103.65.

The Asbury Park Press reports that the increase will fall under the microscope of state Public Advocate Ronald Chen:

State Public Advocate Ronald K. Chen said his office is commited to examining
the state’s system for buying electricity.

The “announcement by the Board of Public Utilities that there is yet another substantial increase in the cost of electricity in New Jersey is going to hit families and business hard,” Chen said in a statement.

The issue, at base, is whether the deregulation plan crafted several years ago is the boon to consumers that its sponsors claimed at the time.

That was the question I raised nearly four years ago in a Dispatches column, and it remains the questions today. My utility bills have jumped by about 50 percent over the last half dozen years, driven partly by the steep increase in natural gas, but also by the end of electricty rate caps.

New Jersey’s approach has been a disaster for the collective pocketbook of consumers. The debate needs to be reopened and reregulation placed back on the table. A deregulated marketplace might be the best approach — though I doubt it — but the system we are working with now certainly is not.

South Brunswick Post , The Cranbury Press
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Tag: utilities

Getting heated

The failure of energy deregulation