NEWARK, N.J., June 7 /PRNewswire-FirstCall/ -- Public Service Electric and Gas Company (PSE&G) announced that its customer electric rates will change slightly as a result of a decision today by the New Jersey Board of Public Utilities (BPU).
The rates reflect the net effect of the BPU's approval for PSE&G to implement a modest increase in base electric distribution rates offset by a customer refund that will be effective during the next two years.
On a related front, the Board deferred action on the company's request to increase gas distribution revenues by $26.5 million until a future agenda meeting.
In today's action on the company's first rate request in nearly four years, the BPU approved provisions in two separate agreements PSE&G had reached recently with the BPU staff, the Public Advocate and the NJ Large Energy Users Group.
- The company will receive $73.5 million in additional electric revenue, which would increase the average residential customer's bill for 7,360 kilowatthours of electricity usage by about $12 per year, or 0.9 percent. This customer's monthly summer electric bill for 780 kilowatthours would increase by about $3, or 2.4 percent.
- The company agreed to refund $122 million to customers during the next two years to resolve a long-standing issue regarding the Market Transition Charge (MTC) which was part of the state's deregulation law implemented in 1999. When the refund is factored in, the average residential customer's electric bill will only increase about $1 per year for the next two years.
Commenting on the Board's actions today, Ralph LaRossa, PSE&G president and COO, said:
"PSE&G is extremely proud of its excellent safety and reliability record. Since our last rate case in 2006, we have made substantial investments in our electric and gas delivery systems to keep those commitments to the people of the New Jersey. We recognize, however, that we need to strike a balance between the need for additional revenue and today's tough economic realities. We will take whatever steps are necessary to operate our business within the parameters of this decision."
LaRossa added that resolving the outstanding issues regarding the collection of the MTC will offset the rate increase for customers during the next two years.
"The issue of whether we still owed customers money from these charges has been lingering for the past few years," he said. "We believe it is in the best interests of the company to finally put these issues behind us." The company had already returned $225 million in MTC charges a number of years ago.
When the rate increase request was filed in May 2009, the company had asked the BPU to approve $230.6 million in additional electric and gas distribution revenue. During the course of the year-long review, the request had been modified to $204 million. The final settlement agreement included an increase of $100 million in additional electric and gas revenues with a return on equity of 10.3 percent.
Public Service Electric and Gas Company (PSE&G) is New Jersey's oldest and largest regulated gas and electric delivery utility, serving nearly three-quarters of the state's population. PSE&G is the winner of the ReliabilityOne National Achievement Award for superior electric system reliability. PSE&G is a subsidiary of Public Service Enterprise Group Incorporated (PSEG) (NYSE: PEG), a diversified energy company (www.pseg.com).
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SOURCE Public Service Electric & Gas Company (PSE&G)