Ratepayer Advocate Seema M. Singh Says Ratepayers Should Share
In the Proceeds from the Sale of Verizon Assets

Newark, NJ -- Ratepayer Advocate Seema M. Singh has applauded the state Board of Public Utilities for initiating an investigation to determine whether ratepayers should share in the proceeds from the sale of Verizon New Jersey assets.

“There is a substantial amount of money involved in the sale of Verizon New Jersey assets,” said Ratepayer Advocate Singh. “There are millions of dollars at stake for ratepayers.”

Ms. Singh said, “The assets that Verizon is now selling were originally put into service when Verizon was under rate of return regulation. The cost of these assets were recovered through rates charged to ratepayers. These assets were paid for by the ratepayers. With the sale of these assets, the Ratepayer Advocate maintains that ratepayers should share in the proceeds.”

The Ratepayer Advocate said she supports the Board’s decision to conduct a prudency review of the improvements made to Verizon’s Elizabeth property as part of its investigation of whether ratepayers should share in the proceeds from the sale of utility assets. Verizon’s Elizabeth property is the first of Verizon’s property to undergo this review.

In comments filed with the BPU late yesterday afternoon, the Ratepayer Advocate made the following recommendations to the Board:

• The Board requires the sharing of proceeds from the sale of telecommunication utility assets with ratepayers.

• The Board adopts the Ratepayer Advocates recommendation for 50/50 sharing of proceeds from the sale of non-depreciable assets and for depreciable assets, 100% of the proceeds going to ratepayers until the previously taken depreciation is recaptured and thereafter any excess proceeds are shared 50/50.
• The Board address sale of assets on a case-by-case basis and decline to net losses against gains, but increase the proceeds available for sharing by sharing the tax benefit received from a loss on a 50/50 basis with ratepayers.

• The Board conducts a prudency review of the improvements made to Verizon NJ’s property in the City of Elizabeth and other similar transactions, but conduct such proceeding in a separate proceeding from this investigation as a contested case with evidentiary hearings.

• As part of the prudency proceeding, the Board conduct a full and complete review of earnings sharing under PAR-1 to ensure the proper accounting of revenues, expenses, rate base adjustments, and other matters that affect earning sharing under PAR-1.

Additionally, the Ratepayer Advocate is urging that ratepayers receive nearly $13 million from the proceeds from sales of other Verizon NJ property totaling nearly $19 million previously approved by the Board.

There is another estimated $20 million in proceeds to be shared with ratepayers from future planned sales by Verizon NJ of its assets in the state that have not yet been approved by the BPU.

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The Division of the Ratepayer Advocate is an independent state agency that represents the interests of utility consumers and serves as an active participant in every case where New Jersey utilities seek changes in their rates or services. The Ratepayer Advocate also gives consumers a voice in setting long-range energy, water, and telecommunications policy that will affect the delivery of utility services well into the future.

Additional information on this and other matters can be found at the Division of Ratepayer Advocate’s website at http://www.rpa.state.nj.us

I/M/O The Board’s Investigation as to Whether Ratepayers Should Share in the Proceeds Arising From the Sale and conveyance of Real Property by Verizon New Jersey, Inc. BPU Docket No. TX04080749

Verizon NJ - Properties Sold or for Sale

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