Christie Plans Penalties For Utilities That Are Slow To Restore Service

Gov. Chris Christie announces proposed legislation to increase accountability for electric public utilities’ service delivery, preparedness and response to emergencies at the Statehouse in Trenton on Wednesday, Sept. 5. (Governor's Office/Tim Larsen)

Gov. Chris Christie announces proposed legislation to increase accountability for electric public utilities’ service delivery, preparedness and response to emergencies at the Statehouse in Trenton on Wednesday, Sept. 5. (Governor’s Office/Tim Larsen)

TRENTON – Gov. Chris Christie wants to penalize utility companies that are too slow to restore service after disruptions like last year’s Hurricane Irene and other major storms.

“The storms of 2011 posed serious, unprecedented challenges for our utility providers, infrastructure, and families and businesses who depend on their electricity service. While those storms brought out the courage and professionalism of public utility employees from inside and outside of our state, they also exposed the vulnerabilities of our utility infrastructure and avoidable mistakes,” Christie said.

The governor proposed legislation that would raise fines against utilities from a current maximum of $100 per day to $25,000, with a maximum of $2 million in penalties for any series of violations related to a particular event. Public utilities would be barred from passing on the cost of penalties to ratepayers.

The governor’s proposal also calls for public utilities to submit an annual plan for service reliability and strategic communications in an emergency. The Board of Public Utilities would be required to develop and enforce performance benchmarks for service reliability, service disruption preparedness, service restoration, and communications for electric distribution companies doing business in the state. The legislation also grants BPU investigative authority to review public utility performance during an outage and, if found to be failing in implementing its reliability plan, impose civil administrative penalties.

“With this legislation, we are doing what we need to ensure that history isn’t repeated and that our state’s ratepayers are protected from those mistakes in the future. I urge the legislature to act quickly to pass this bill and allow us to put in place these stronger accountability measures to protect the public,” Christie said.

The governor’s proposal stems from recommendations outlined in the Board of Public Utilities’ (BPU) performance review of public utilities in New Jersey during Hurricane Irene and the October 2011 snowstorm.

“In the end, this bill demonstrates that we have looked at and learned the lessons from last year’s historic storms. The changes we are pursuing will ensure that each company is better prepared to confront severe weather conditions that threaten service delivery, while also making them better positioned to coordinate and communicate their response with our residents who are affected by service outages and disruptions. At the same time, our regulators will be empowered with the ability to levy financial penalties with real teeth, and protect ratepayers from having the cost of those penalties passed on to them,” said Christie.

“Our goal is to encourage good corporate citizenship and compliance with the law by the utility companies,” said Bob Hanna, president of the NJ Board of Public Utilities. “Shareholders, not ratepayers, should bear the burden for bad corporate conduct. Any utility company foolish enough to engage in a cost-benefit analysis about whether to follow the law will know that a steep penalty will be imposed for choosing non-compliance.”

Republican state Senators Joe Pennacchio and Kevin O’Toole said that they will introduce the governor’s Reliability, Preparedness and Storm Response Act of 2012.

“This strict accountability measure protects the public from the dangers and hardships caused by deficiencies in New Jersey’s public utility infrastructure and utility communication protocols, which were exposed by last year’s storms,” Pennacchio said. “We need to hold utility companies to the fire to assure they do everything possible in preparation for future weather emergencies.”

Assembly Telecommunications and Utilities Chairman Upendra Chivukula noted that the governor’s proposal is similar to legislation he introduced in May.

“Extended service outages have long plagued New Jersey consumers, and I’m pleased to see Gov. Christie and his administration join us in this discussion,” said Chivukula (D-Somerset/Middlesex). “I look forward to reviewing what Gov. Christie has proposed and seeing how it fits with legislation I have already sponsored and determining what’s best for consumers. Hopefully everyone is willing to work together to reach a positive result that protects consumers.”

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