Officials Oppose PSE&G Rate Increase

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Local officials are opposing a proposed rate increase from PSE&G which they said will subsidize the cost of new solar panels required by state law for the utility.

The town councils of Hillsdale, Washington Township and Westwood all passed resolutions to formally object to the rate increase during recent meetings. Officials said they would appeal to the state Board of Public Utilities to not allow the increase.

The board has the final say in rates and determines the rate of return utilities will see on their investments.

Westwood officials said that area residents reducing the amount of power they use has eaten away at PSE&G's profits. Westwood Administrator Robert Hoffmann said the utility wants the state to mandate a higher rate of return to make up the difference.

"They're basically asking for a rate increase beause people have heeded the call to reduce energy consumption and because they've become more efficient," Hoffmann said. "And they are making a profit, but they're not making the rate of profit that they want to."

Westwood Mayor John Birkner said the increase, combined with a state law which limits municipalities to a 2 percent tax levy increase each year, will put a crunch on towns' budgets.

"We've got a serious mandate to maintain our budgets, and unfortunately increases coming from utilities are over 2 percent," Birkner said.

The state also has requirements for utilities to meet. An amended law signed by Governor Chris Christie last month requires electricity providers to use an increasing amount of power from renewable sources, such as solar energy, each year. By 2014, 1.832 percent of electricity should come from renewable sources, according to the law.

Mike Jennings, a PSE&G spokesman, said the company is investing $883 million in its solar program expansion. The average customer will see an increase of about $.84 per year, Jennings said.

Hillsdale Mayor Max Arnowitz said he did not believe PSE&G's customers should foot the bill for the new panels.

"I don't think we should have to," Arnowitz said. "It's a state mandate, let the state do it."

The expansion will create 300 jobs per year for the next five years in addition to environmental advantages, according to Jennings. Their customers could also benefit from the increasing amount of solar energy, he said. PSE&G has dedicated $193 million to finance businesses and residents who want to put up solar panels, which could help lower their future bills.

Washington Township Mayor Janet Sobkowicz noted that the utility will both make more money and meet their state requirements. She said PSE&G had originally promised to pay for the expansion themselves.

"PSE&G gets a lot of benefits from it because they're meeting their obligations from New Jersey to have a certain percentage of their power be solar," Sobkowicz said. "They're using this program to meet that goal and they're charging their customers to do it."

Correction: Mike Jennings said the increase would be $.84 per year for the average customer, not $.84 per bill.

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