Ratepayer Advocate Seema M. Singh
statement to
New Jersey Board of Public Utilities
Public Hearing on JCP&L Power Outages
Tuesday, August 26, 2003, Seaside Heights, NJ

President Fox, Mr. Winka, Mr. Downes, Mr. Lynch, distinguished public officials, and fellow ratepayers, my name is Seema Singh and I am the Ratepayer Advocate for the State of New Jersey. 

The Ratepayer Advocate is an independent, autonomous state agency that represents the interests of all utility customers in matters before the Board of Public Utilities.   It is my job to work with the Commissioners of the BPU to make sure that utilities provide ratepayers with safe, affordable and reliable service.   Simply put, I am here for you.

First, I want to make sure that you are being properly and promptly compensated by JCP&L for the damages you suffered during the very costly Fourth of July power outage.   If you are having a problem, this hearing is your opportunity to let us know.  We are here to hear from you.

As I said during the first public hearing here back in July, my message to company executives in New Jersey and back at corporate headquarters in Ohio is that your customers in New Jersey deserve at least restitution.   They deserve much more, but it’s a good place to start.   How JCP&L and its parent First Energy handle restitution is a good barometer of the company’s commitment to New Jersey.

Second, I believe that the blackout here at the shore and the blackout August 14^th in the eastern United States and Canada disproves that old adage “If it ain’t broke, don’t fix it.”

My friends, when it comes to electricity, if the transmission and distribution systems are not constantly fixed while they are working, then they will break – and they will break in a very big way.

That appears to be what happened here at the Shore over the Fourth of July and that is what appears to have caused the worst power outage in our nation’s history two weeks ago.

It is my personal view, and perhaps some of you share this opinion, that the big blackout proves what many suspect is the cause of your blackout – the system is not being properly maintained – even though you pay for its maintenance every month in your utility bills.

I am hopeful that the BPU’s investigation, which was ordered by Governor McGreevey, will determine not only the cause of the blackout here, but whether your money is being properly spent to maintain the distribution system.

I hope the U.S. Department of Energy’s federal investigation will also report whether utilities across America are wisely spending ratepayers’ money to maintain their systems – or giving it to stockholders.

Shortly after the blackout here, I called for permanent performance standards and automatic penalties if JCP&L fails to live up to them. 

Governor McGreevey quickly endorsed the proposal and the BPU is now in the process of reviewing implementation of performance standards and penalties.   Shortly after the outage earlier this month, President Bush issued a similar call nationwide.

With the Governor's appointment of Pat Downes as the Special Reliability Master, we are hopeful that he will concur with our assessment that performance standards with automatic penalties must be put in place to improve the company's maintenance practices.  

If the company fails to live up to these standards, then it will be assessed automatic penalties out of corporate profits.   That means shareholders will pay for management’s failure to deliver reliable service.

JCP&L is operating under an interim performance benchmark standard that has failed to produce a permanent solution to the power outages that continue to plague the company’s customers.

The utility has failed to meet even these interim benchmark standards.  And there are no automatic repercussions for the utility – or its shareholders -- while ratepayers suffer outages.   Right now, ratepayers are bearing the risk of JCP&L’s failure to provide reliable service.   We have to shift the risk from the ratepayers to the shareholders.  

Rates are set to enable a utility to provide safe, proper and reliable service.   Ratepayers are not getting the service they are paying for.   Making shareholders shoulder responsibility for poor performance is the best way to ensure that JCP&L’s service improves. 

Thank you.