What’s this all about?
Jersey Central Power & Light is allowed to charge its one million New Jersey customers rates that are based on the cost of providing reliable electric service and an opportunity to earn a reasonable profit (or a rate of return on its used and useful property). The New Jersey Board of Public Utilities (BPU) regulates JCP&L, reviews it operations and is required by law to set rates that are just and reasonable. The BPU must balance the interests of utility investors and ratepayers.
Right now, JCP&L is allowed to earn up to an 8.5% rate of return. However, based on its research, the New Jersey Division of Rate Counsel (the state agency charged with representing residential utility customers) believes that JCP&L is earning a 12.37% rate of return, far in excess of what is allowed to be collected from ratepayers. As a result, JCP&L has over-earned (and overcharged customers) up to $90 million a year, according to the Division of Rate Counsel.
The Division of Rate Counsel has petitioned the BPU to require JCP&L to file a “base rate case” so its books can be fully examined, to determine if it is over-earning and to set just and reasonable rates. The BPU is deciding if it is going to require JCP&L to file a base rate case.
JCP&L’s rates have not been examined for six years. AARP believes that it is time to examine JCP&L’s rates to see if they are just and reasonable. The BPU must do its duty to protect ratepayers, order a base rate case and examine JCP&L’s operations. If the BPU finds its rates are too high, rates should be permanently reduced. AARP has petitioned to participate in this case at the BPU.
Why is AARP involved in this fight?
JCP&L has some of the highest electric rates in the region and country. With many still reeling in this tough economy, high electricity prices cause consumers to cut back on usage and other necessary spending. The inability to afford energy bills can have negative, even life-threatening, consequences to the health and safety of older residents and everyone on a low or moderate fixed income.
We are speaking up for the hundreds of thousands of AARP Garden State members and ratepayers who have a right to expect that the BPU will protect consumers and ensure that we are not paying rates that are one penny higher than necessary. Hundreds of thousands of AARP members are JCP&L customers, as are many other New Jerseyans — young and old.
What has JCP&L said on this issue?
As of now, JCP&L has not opened its books and has not indicated a willingness to lower its rates.
How can we get involved?
To be heard, you must sign the petition, and we will forward it to the BPU. We will keep you posted by email on how to support this fight for fairness.
What else is AARP doing?
AARP is launching a full-scale campaign to make this right. You will see a website, ads, news stories and mailers. All are part of a steady drumbeat that we want the BPU and JCP&L to hear loud and clear.
