May 2013 – Public Utilities Improvements Needed
Public utilities need to demonstrate better planning and preparation for and much better response to large scale power outages. Even before Super Storm Sandy, Mayors expressed concerns with the performance of electric and gas power utilities before, during and after severe weather events. These concerns led to meetings by the League with utility company executives and BPU officials, as well as public hearings, organized and facilitated by the Board of Public Utilities (BPU). A BPU study and order has been released, and a number of bills introduced regarding utility operations. The high importance to Mayors led the League to establish a special committee to review proposals and develop positions.
Needed improvement and enhancements to infrastructure, systems and communications must be front and center, as the Administration and NJ Legislature consider bills and the NJ Board of Public Utilities reviews requests for rate increases and needed actions to better ensure uninterrupted dependable power to homes and businesses and priority and emergency facilities within our communities.
The League supports Senate Bill S-26 and Assembly Bill A-3671, known as "The Reliability, Preparedness, and Storm Response Act,” which would require the BPU to develop and enforce electric utility performance benchmarks. In addition, it would require electric public utilities to provide periodic reliability performance reporting, at least annual. Importantly, the plan must include the designation of public utility staff to communicate with local officials and relevant regulatory agencies.
The violation of any law, rule, regulation, or BPU order would subject an offending utility to a civil administrative penalty not to exceed $25,000 for each violation. Each day during which the violation continues would constitute an additional violation, up to a $2,000,000 maximum for any related series of events.
The fine proceeds would be deposited in a special revenue fund, the “Board of Public Utilities Civil Penalty Fund”. The fund monies must be used for the improvement of public utility, service quality and reliability. Any fines imposed by this act cannot be recoverable from ratepayers. We will ask for assurances that this funding will not be diverted to other uses.
Aside from that concern, we support Senate Bill S-26, which has been referred to the Senate Economic Growth Committee, and A-3671, which awaits action in the Assembly Telecommunications and Utilities Committee.
The League also supports Assembly Bill A-2760, which mirrors several of the provisions of S-26/A-3671. A-2760 requires the BPU to establish uniform State-wide reliability standards for electric and gas public utilities. Notable differences between the two initiatives relate to the specificity of plan requirements. Also, while Senate Bill S-26/Assembly Bill A-3671 would apply to both investor-owned public utilities and municipal utilities authorities, the standards proposed in A-2760 would apply to an investor-owned public utility, under the jurisdiction of BPU that is investor-owned and transmits and distributes either electricity or natural gas to end users within the State.
The increased penalty provisions are the same in both initiatives. So, again, we will ask for assurances that this funding will not be diverted to other uses. Aside from that concern, we support A-2760, which was reported out of Committee on October 18, 2012, and awaits action on the Assembly Floor.
There are other measures and legislation supported by the League and we will keep you posted. Please follow our alerts and add your voice to the need for action. As Mayors, we need to see improvements to the operations of our vital power utilities.