June 15, 2000


VIA HAND DELIVERY

Edward Beslow, Esq., Acting Secretary
New Jersey Board of Public Utilities
Two Gateway Center
Newark, NJ 07102

Re:

I/M/O Establishment of the Universal Service Fund Pursuant to Section 12 of the Electric Discount and Energy Competition Act of 1999.
BPU Dkt. No. EX00020091

Dear Secretary Beslow:

Please accept this letter (original and 10 copies) of a letter Motion for Reconsideration filed pursuant to N.J.A.C. 14:1-8.6 on behalf the Division of the Ratepayer Advocate ("Ratepayer Advocate") in the above-captioned matter. Specifically , The Ratepayer Advocate seeks reconsideration of the Order entered by the Board of Public Utilities ("Board", "BPU") on June 7, 2000 and respectfully asks that the Board to:
  1. Extend the deadline for filing initial comments, from June 26 to July 7, 2000;
  2. Schedule evidentiary hearings so that witnesses may be cross-examined and provide for the filing of briefs;
  3. Schedule public hearings at convenient time at various locations throughout the State and specifically provide for public notice thereof; and
  4. Convene a scheduling conference to work out details.

Since the case schedule embodied therein requires that the parties file their initial comments by June 26, 200, the Ratepayer Advocate respectfully requests that the instant Motion be considered on an expedited basis at its Agenda Meeting scheduled for June 22, 2000.

An additional copy of this filing is also enclosed. Kindly date stamp the additional copy a return it in the enclosed stamped, self-addressed envelope.

INTRODUCTION

While carefully laying out the road map for the transition to a competitive energy marketplace, the Legislature also took great pains to see that the benefits of a competitive market flow to all New Jersey energy consumers, including the State's neediest residents. In its preamble to the Electric Rate Discount and Energy Competition Act ("EDECA"), (1) the Legislature declared that it is the policy of the State to "[e]nsure universal access to affordable and reliable electric power and natural gas service [emphasis added]." N.J.S.A. 48:3-50(a)(4).

Guided by these policy declarations, the Legislature established in the Board a non-lapsing "Universal Service Fund" ("USF") for social programs which provide public benefits, namely those energy-related programs which serve our State's low-income, elderly, and disabled residents. With these policy declarations a guide, the Legislature directed the Board to determine what will effectively constitute a blueprint for social programs which provide public benefit in the post-restructuring environment. N.J.S.A. 48:3-60(b).

This important endeavor deserves the Board's careful consideration, based on a complete record. Therefore, from the inception of this process the Ratepayer Advocate and other parties sought to establish a procedural format which provides for the filing of comprehensive proposals by utilities and other interested parties as well as the filing of rebuttal, the cross-examination of witnesses in evidentiary type hearings, and public hearings at locations throughout the State. (2)

The needs of the State's low-income, senior citizen, and disabled residents must be reexamined and addressed in the context of today's energy market. The Ratepayer Advocate respectfully submits that this proceeding, where service to the State's most vulnerable residents is at issue, is a critical and necessary step in the transition to a competitive energy market.

On June 7, 2000, the Board issued an Order ("Procedural Order") setting forth the schedule for and manner in which it will address the Universal Service Fund issues identified in the EDECA. (3) However, as set forth in more detail herein, the Ratepayer Advocate respectfully submits that the Board's Procedural Order establishes a process which is inadequate for the task at hand.

The Procedural Order sets an unreasonably short deadline for the filing of initial comments by the parties. The Procedural Order only provides for "public/legislative" type hearings, instead of more comprehensive evidentiary type hearings where witnesses may be formally presented and cross-examined by the parties. Finally, the Procedural Order does not specifically provide for public hearings at various location throughout the State or notice thereof, in order to allow many interested individuals and organizations to place their comments on the record.

I. THE SCHEDULE SET FORTH BY THE BOARD DOES NOT ALLOW ADEQUATE TIME FOR THE RATEPAYER ADVOCATE AND OTHER PARTIES TO PREPARE INITIAL COMMENTS.

The Board initiated this proceeding by letter dated February 29, 2000, over 3 months ago. Meetings of potentially interested parties were scheduled by the Board and held on March 9 and March 27, 2000. On March 23 and again on April 12, 2000, the Ratepayer Advocate submitted letters to the Board asking the Board to set a procedural schedule for the USF proceeding. In the interim, little progress was made. For example, as late as May 2, 2000, only one public utility had provided the necessary NJ Shares data that Board Staff directed be submitted by April 17, 2000. Now, nearly two months later, the Board set a schedule calling for the filing of initial comments on June 26, 2000, less than three weeks from the date it issued its Procedural Order. Given the magnitude of the task at hand and in light of the time period which had transpired since the initiation of the USF discussions, the deadline for the filing of initial comments is unreasonably short.

The truncated time frame for the filing of initial proposals leaves little time for the interested parties to consider the important policy issues and gather the necessary data needed to support their proposals. In its Procedural Order, the Board recited the five areas which are to be addressed in the proceeding and, presumably, the filed comments. Procedural Order, p. 2. Additionally, the Board directed the parties to submit proposals for an interim implementation of programs as well as proposals for final program implementation.

Therefore, the Ratepayer Advocate respectfully requests that the Board should extend the deadline for filing initial comments, until July 7, 2000. An extension of the filing date for initial comments would provide interested parties more time in which to prepare detailed comments.

II. THE BOARD IS REQUIRED TO HOLD EVIDENTIARY HEARINGS IN THIS CONTESTED CASE PURSUANT TO THE COMPETITION ACT AND THE ADMINISTRATIVE PROCEDURE ACT.

The Board rejected evidentiary hearings in favor of "public/legislative type hearings." Procedural Order, p. 1. The Ratepayer Advocate, as the statutory representative of New Jersey's ratepayers, respectfully asks the Board to conduct evidentiary hearings in this case. Such hearings are necessary to protect the interests of New Jersey's ratepayers so that they may obtain the benefits of a competitive marketplace in accordance with the provisions and legislative intent of the EDECA. Only through the submission of comprehensive written testimony, exhibits, and cross-examination of witnesses, together with the submission of briefs, can a comprehensive evidentiary record be developed in complex matters such as this.

There are compelling legal and policy reasons why the Board should conduct evidentiary hearings in this matter. The Board should consider this matter a contested case in which, pursuant to the Administrative Procedure Act ("APA"), the Board must conduct a hearing. N.J.S.A. 52:14B-9(a). This matter clearly falls within the definition of a contested case, defined as "a proceeding ... in which the legal rights, duties, obligations, privileges, benefits or other legal relations of specific parties [here, utilities, energy suppliers, as well as service organizations and consumers] are required by constitutional right or by statute [here, Title 48 and the EDECA] to be determined by an agency." N.J.S.A. 52:14B-2(b). The EDECA directed the Board to make certain determinations related to the Universal Service Fund and utility social programs. N.J.S.A. 48:3-60(b). Since the costs of social programs are presently recovered through utility rates, and whether new charges should be assessed to fund new or expanded programs, the rights and obligations of the State's utility ratepayers are at issue in this proceeding. Furthermore, the determinations made by the Board in this proceeding will impact the many individuals receiving benefits from current utility social programs.

Even if the Board does not find that this is a contested case, evidentiary hearings should nonetheless be conducted. A evidentiary hearing may be required even when not mandated by the APA. New Jersey Div. Of Youth & Family Services v. M.R., 314 N.J.Super. 390 (A.D. 1998). As enumerated in the pertinent section of the EDECA cited above and the Procedural Order, it is clear that there are many factual issues in dispute which the Board will be asked to decide. For example, issues likely to be raised include the number of low-income customers served, the adequacy of present programs, and the efficacy of alternative programs. It is not unreasonable to anticipate that many of these issues will be contested by the parties. Furthermore, the Board's determinations will undoubtedly turn on the testimony of experts, and the parties must have some way to contest the bases of the positions taken by the witnesses sponsored by the various parties. See High Horizons Dev. Co. v. Dept. of Transp., 120 N.J. 40, 51 (1990); N.J.S.A. 52:14B-10(a), (b).

Furthermore, there is ample opportunity for the Board to conduct evidentiary hearings in this matter. Hearings could be conducted during the July 31 through August 18 time frame which the Board had already identified as the time window for a public/legislative type hearing in its Procedural Order. The Ratepayer Advocate respectfully submits that given the importance of the issues involved, as well as the impact that the Board's decisions here will have on the State's neediest ratepayers, evidentiary hearings should be conducted.

The Ratepayer Advocate, as the statutory representative of all New Jersey utility customers, and other interested parties should have a reasonable opportunity to cross-examine witnesses on their proposals and calculations. Moreover, given the importance of the issues at bar, and the resultant impact on New Jersey consumers, the Board itself should be interested in developing and examining a thorough evidentiary record prior to issuing its decision. Furthermore, absent an evidentiary hearing, the Board would be left without a comprehensive record upon which to make the required determinations set forth in the EDECA. N.J.S.A. 48:3-60(b). Accordingly, the Ratepayer Advocate respectfully requests that the Board modify its Procedural Order and schedule evidentiary hearings in this matter.

III. PUBLIC HEARINGS SHOULD BE CONDUCTED IN VARIOUS PARTS OF THE STATE SO THAT INTERESTED PARTIES MAY HAVE A REASONABLE OPPORTUNITY TO COMMENT.

The USF issues facing the Board in this proceeding will impact the energy consumers who are in most need: low-income, senior citizen, and disabled individuals. While undoubtedly, the filed comments and testimony of the various parties will focus largely on conceptual policy issues and quantitative data, there is a need for a record of the human side of the issues, as expressed in the public comments of affected individuals and the organizations which serve them. Nowhere is this need for public comment more acute than in the area of USF.

The Procedural Order appears to only provide for public/legislative type hearings at the Board's offices in Newark. A hearing in Newark affords little opportunity to comment for energy customers living other areas in the State, who might be hindered by poverty or physical disabilities from traveling to Newark. Furthermore, the formal setting of a public/legislative type hearing or evidentiary hearing might be intimidating to the lay person. The Ratepayer Advocate submits that the Board should provide a forum so that affected and interested individuals and organizations may have the opportunity to voice their concerns.

Conveniently scheduled public hearings would provide an opportunity for lay persons and smaller organizations to voice their concerns. It is likely that the individuals and organizations who would be most affected by the Board's actions in this area would be the least able to travel great distances or incur expenses in order to have their voices heard. Public hearings in this proceeding are essential, given the subject matter, so that the Board may have a record of the concerns of affected individuals. Filed comments, no matter how persuasive or comprehensive they might be, might not fully capture the concerns of affected individuals and the many agencies which serve them. The comments of individuals and organizations state in very personal terms the problems faced by consumers and may bring to light factors and problems which might otherwise go unnoticed.

The determinations made by the Board in this proceeding also have the potential to increase (or decrease) rates. Prior to granting any increase, the Board is required to conduct a public hearing pursuant to N.J.S.A. 48:2-32.4.

The Ratepayer Advocate, therefore, respectfully requests that the Board schedule public hearings, to be conducted a various locations throughout the State, at convenient times and locations, so that interested individuals and organizations may have the opportunity to comment. Furthermore, the Procedural Order does not provide for notice of the scheduled hearings. The Board should also specifically provide for newspaper notice of the scheduled hearings.

CONCLUSION

For all the reasons set forth hereinabove, the Ratepayer Advocate respectfully submits that the Board should :

  1. Extend the deadline for filing initial comments, from June 26 to July 7, 2000;
  2. Schedule evidentiary hearings so that witnesses may be cross-examined and provide for the filing of briefs; and
  3. Schedule public hearings at convenient time at various locations throughout the State and specifically provide for public notice thereof; and
  4. Convene a scheduling conference to work out details.

 

Respectfully submitted,

BLOSSOM A. PERETZ, ESQ.
RATEPAYER ADVOCATE

By: _________________________
Kurt S. Lewandowski
Assistant Deputy Ratepayer Advocate


cc: President Herbert H. Tate (by hand delivery)
Commissioner Carmen J. Armenti (by hand delivery)
Commissioner Frederick F. Butler (by hand delivery)
George Riepe, BPU (by hand delivery)
Kent Papsun, BPU (by hand delivery)
Larry Gentieu, BPU (by hand delivery

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1. N.J.S.A. 48:3-49 et seq. back

2. In a letter to the Board dated March 23, 200, the Ratepayer Advocate called for evidentiary hearings, as well as public hearings. By letter dated March 24, 2000, AARP - New Jersey supported full administrative hearings and urged the Board to adopt a procedural schedule similar to that advocated by the Ratepayer Advocate. back

3. See Order Establishing Procedural Schedule and Issues to be Addressed ("Procedural Order"), June 7, 2000. back