PSE&G Demand Side Adjustment Factor Rate Increase

REMARKS OF BLOSSOM A. PERETZ, ESQ.
DIRECTOR, DIVISION OF THE RATEPAYER ADVOCATE
PRESENTED BY BUD UBUSHIN
DEPUTY RATEPAYER ADVOCATE

BEFORE THE BOARD OF PUBLIC UTILITIES AND
THE OFFICE OF ADMINISTRATIVE LAW
PUBLIC HEARING ON PSE&G DEMAND SIDE ADJUSTMENT FACTOR
RATE INCREASE
BPU DOCKET NO. GR01040280
OAL DOCKET NO. PUCRA 3777-01N
Hackensack, NJ
August 7, 2001, 7:30 p.m.

Good evening, ladies and gentlemen. My name is Bud Ubushin and I am an attorney with the Division of the Ratepayer Advocate. Our office represents the interests of all utility ratepayers in proceedings before the Board of Public Utilities. We are investigating PSE&G's proposals for the recovery of costs for its demand side energy programs that are the subject of tonight=s public hearing. The purposes of the demand side energy programs are to promote energy conservation, to help reduce customers' usage and bills, to help improve our environment through more efficient use of natural gas and electricity and to replace the revenues the utility loses when its natural gas and electricity sales are reduced.

PSE&G proposes to increase the charges to its gas customers by an annual amount of $32.7 million for recovery of costs for the gas demand side programs which, if approved, would raise the monthly bill for an average residential gas customer using 100 therms by $1.30 or 1.3%. It proposes to include this amount in its gas DSAF rate and the Societal Benefits Charge beginning January 1, 2002. PSE&G has also requested the Board and the Administrative Law Judge to approve the costs related to its electric demand side energy efficiency programs expended from 1998 through 2000, but to defer to a later time the full recovery of these electric program costs from customers. The Electric Discount and Energy Competition Act of 1999 has prohibited any electric rate increases until August 2003, so PSE&G does not propose to raise its electric DSAF rate now.

Our office is analyzing PSE&G's request to determine whether the utility=s data supports its assertions and to weigh the benefits or detriments of its proposals to ratepayers. We have hired an expert to assist us in our review. We have also issued discovery requests concerning the costs of the utility's programs and have begun receiving the responses from PSE&G. The purpose of the current proceedings is to make sure that only appropriate amounts of these costs are included in rates.

The purpose of tonight=s public hearing is to allow the Board, the Administrative Law Judge and the parties in this case, including our office, to hear the concerns that you have about PSE&G=s proposals and to learn from the comments that you make today. I look forward to hearing your comments and urge all of you to make your feelings known so that we will all have more information to use in deciding what is best for the utility=s customers. You may also mail your concerns to the Division of the Ratepayer Advocate, P.O. Box 46005, Newark, NJ 07101 or fax them to us at (973) 624-1047 or call me at (973) 648-2690.

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