Great find in the PolitickerNJ – thanks Star Ledger for bringing this to our attention – except it’s worthy of front page news..
Residential and commercial electric customers join forces to pull the plug on a billion buck boondoggle by NJ’s largest utility company. And why isn’t this front page news?
That’s the real point of Wednesday’s Star Ledger story about a Public Advocate-led ratepayer complaint against PSE&G for surcharges on electric customers to pay – again – for the utility giant’s decades old power plants. Only problem is the story was buried inside the Business section, below the fold, and a mere three column inches.
There’s a much bigger story here.Residential electric customer will be paying, on average, $60 a year to PSE&G until 2017 to pay for power plants that supposedly should be gathering cob webs as new competitors flock to NJ’s energy industry. It’s called Stranded Cost Recovery and it’s part of the State’s “Electric Discount & Energy Competition Act.” PSE&G and the other NJ utilities whined to the Legislature that electric competition would cause power plants they previously built (and you and I paid for) to be shuttered for lack of customers.
The utilities wanted their shareholders to be made whole for earlier investments in generating facilities. Instead they’re getting fat.
As the Ledger’s Tom Johnson wrote: “. . . the plants, since spun off to an unregulated unit of PSE&G’s parent company, have become hugely lucrative.”
Heck, PSE&G’s power plants are now selling electricity to the other NJ utilities too!
Here’s the rundown:
Number of residential electric competitors vying for PSE&G customers: 0
Number of PSE&G electric customers at the beginning of electric competition in 1999: 1.9 million
Number of PSE&G electric customers today: 2.1 million
PSE&G stock price in 1999: $40
PSE&G stock price today: $100
PSE&G’s ratepayer-financed Stranded Cost Recovery windfall: $1 billion
Credit the Ledger for at least covering the story and Johnson for clarity in reporting on a complicated issue. But give the story the placement it merits – – right up there with the costly proposed toll hikes.
Oh yeah, and it’s also not a bad idea to make the story more visible to “everyday” readers who are paying the PSE&G surcharge, not just the biz types who scan the financial sections of the newspaper.
Psst…tip to NJ media on another missed front page story: You may want to look at the hit to electric ratepayers of another of PSE&G’s Energy Competition Act financial shell game. It’s called a “securitization transition charge” on customers’ bills for the interest hedge from PSE&G’s bond sale back in 1999 to cover the costs of the transition to deregulation. PSE&G made a bet to get paid by it’s bond company if interest rates rose and made its borrowing costs too expensive. PSE&G’s customers, not its investors, would foot the bill on the bond debt if interest rates went down. So guess who’s paying now?