REMARKS OF SEEMA M. SINGH, ESQ.
ACTING DIRECTOR AND RATEPAYER ADVOCATE
PRESENTED BY DEBRA ROBINSON, ESQ.
DEPUTY RATEPAYER ADVOCATE
DIVISION OF THE RATEPAYER ADVOCATE

I/M/O the Petition of Public Service Electric and Gas Company's
Deferral Filing including Proposals for Changes in its Rates for its Non-Utility Transition Charge (NTC) and its Societal Benefits Charge (SBC)
OAL Docket No. PUC 7893-02
BPU Docket No. ER02080604

And

I/M/O the Public Service Electric and Gas Company's
Proposal for an Increase in its Residential BGSS Commodity Charges (formerly LGAC) and for Changes in the Gas Tariff Pursuant to N.J.S.A. 48:2-21 and 48:2-21.1
BPU Docket No. GR02090702

PUBLIC HEARING
Mount Holly, New Jersey
December 10, 2002

Public Service Electric and Gas Company (Public Service or Company) has filed a petition with the New Jersey Board of Public Utilities (Board, BPU) asking approval to re-set the rates for recovering the deferred balances for its Non-Utility Generation Transition Charge (NTC) and its Societal Benefits Charge (SBC) to become effective at the same time as the previously requested increase in electric distribution base rates. The proposed effective date for these rate changes would be August 1, 2003. There have been previous public hearings for the rate increase in electric distribution rates. Tonight's public hearing is for the deferred balances case and other matters I will describe later.

Public Service's deferred balances petition would decrease rates paid by the Company's electric customers, reducing the Company's NTC and SBC revenues by $122.4 million for the twelve months beginning on August 1, 2003 and ending July 31, 2004. This would have the effect of offsetting the Company's requested electric base rate revenue increase of $250 million by $122.4 million to approximately $127.6 million during that year. PSE&G states that this would reduce the requested average percentage increase for the Company's electric customer classes from approximately 12.8% to approximately 9.5% for that year.

For a typical residential electric customer using 6,600 kilowatt-hours per year, which translates into 550 kilowatt-hours per month, the Company's proposal for its deferred balances rates alone would decrease your annual electric bill from about $694 to about $674, or 2.9%. However, combining the deferred balances rate decrease with the base rate increase would cause your annual electric bill to increase by about $76, or about 11%.

Public Service also filed a petition with the Board of Public Utilities requesting that the Board permit Public Service to increase its Basic Gas Supply Service (BGSS) rates to Residential Service Gas (RSG) customers. Approval of the Company's request would increase the Company's annual revenues by approximately $89 million or an average increase of approximately 7.4% for the class average residential heating customer. The requested increase for BGSS-RSG Commodity Service is from the current 59.7827 cents per therm (including New Jersey Sales and Use Tax, or SUT) to 66.7257 cents per therm (including SUT) and the increase for BGSS-RSGM residential multiple family Commodity Service is from 56.0727 cents per therm (including SUT) to 63.0157 cents per therm (including SUT) effective for service rendered on and after January 1, 2003.

For a typical residential gas-heating customer buying 1,252 therms of gas supply from Public Service per year, including an average of 200 therms per winter month, the Company's proposal for its gas BGSS rates would increase your annual gas bill by about $87, from about $1,182 to about $1,269 per year, or 7.4%.

Public Service also proposes additional flexibility beginning September 1, 2003 to increase BGSS rates to minimize the build up of large under/over recovery deferred gas cost balances while still maintaining a sufficient degree of regulatory review over price changes. Public Service requests that, in addition to an annual BGSS rate change effective September 1^st of each year, the Board should give the utility authority to implement additional BGSS rate increases, if needed, on November 1^st and the following February 1^st on a self-implementing basis subject to a maximum rate increase of 10% for each rate change based on a typical 100 therms per month residential bill. Public Service also seeks discretion to reduce its BGSS rates, without limitation, on a self-implementing basis at any time.

Our office is conducting a complete and thorough investigation and evaluation of the Company's gas and electric rate requests based upon the information that is being supplied and updated by the Company. We have retained the services of experts, including utility accounting experts and economists, to assist us in our review of these cases.

The Ratepayer Advocate will cross-examine the utility's witnesses and submit evidence at upcoming evidentiary hearings. Our experts will offer testimony in opposition to various portions of Public Service's proposals to change your rates. However, the New Jersey Board of Public Utilities, with legal submissions from the parties, including the Ratepayer Advocate, will make the final decision regarding the utility's' requests for rate changes.

The purpose of this hearing is for you, the customer, to voice your opinion, relate your experiences and offer comments about your Company's rates and any service problems you may be experiencing. It is important that you express your views so they may become part of the record on which the Administrative Law Judge and the Board of Public Utilities make their decisions. The Ratepayer Advocate also needs to hear your views. Your active participation is strongly encouraged to help in our evaluation of the Company's proposals and our preparations for the evidentiary hearings.

This hearing is being transcribed and your comments will become part of the record. I would like to reiterate the importance of your participation so that the Ratepayer Advocate can have a clear record of your concerns and interests.

On behalf of the Ratepayer Advocate, I would like to thank you for attending tonight's hearing.