REMARKS OF BLOSSOM A. PERETZ, ESQ.
DIRECTOR, DIVISION OF THE RATEPAYER ADVOCATE

PRESENTED BY KURT LEWANDOWSKI
ASSISTANT DEPUTY RATEPAYER ADVOCATE

BEFORE THE BOARD OF PUBLIC UTILITIES
PUBLIC HEARING ON CONSUMER EDUCATION PROGRAM COST RECOVERY

Monroe Township (Williamstown), Gloucester County, NJ
January 18, 2001
1:00 p.m.

Good afternoon, ladies and gentlemen. My name is Kurt Lewandowski 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 the cost recovery proposals for consumer education program costs filed by all the gas and electric utilities, including South Jersey Gas Company, whose filing is the subject of today’s public hearing.

South Jersey Gas Company proposes to charge its customers $580,000, plus interest, for its gas consumer education efforts. It proposes to include this amount in its Societal Benefits Charge, which will be included in your gas bill. When the rate increase goes into effect for the past year’s electric consumer education costs, the bill increase proposed by South Jersey Gas for a residential customer who uses 200 therms per month would be approximately about $0.34 or 0.17% per month.

Our office will analyze the filings to determine whether the utility’s data supports their assertions and to weigh the benefits or detriments of their proposals to ratepayers. We have hired an accounting expert to assist us in our review. We will examine the utilities’ calculations of their individual shares of the consumer education costs to make sure that their calculations are accurate.

You should be aware that, under State law, the Board of Public Utilities has required the utilities to fund the consumer education programs so that customers are better informed about their choices in the restructuring of the natural gas and electric industries in New Jersey. The Board has also permitted the utilities to recover reasonable amounts of these costs from ratepayers. The purpose of the current proceedings is to make sure that only appropriate amounts of these costs are included in rates.

With the passage of the New Jersey Electric Discount and Energy Competition Act in February, 1999, the Board of Public Utilities ordered the consumer education programs so that customers would have sufficient information about their choices for electricity and natural gas suppliers to make informed decisions about who their suppliers will be and how much they will pay. Customers should use this information to look for the new competitive natural gas and electricity suppliers who will meet their needs, including lower costs, environmental concerns, and other terms of service. The Ratepayer Advocate recommends that the consumer education campaigns also include information about programs to help low income customers afford their energy bills and other universal service programs that are available to assist customers in keeping their gas and electric service on.

The purpose of today’s public hearing is to allow the Board and the parties in this case, including our office, to hear the concerns that you have about South Jersey Gas Company’s proposal and to learn from the comments that you make today. Restructuring and formation of competitive retail markets for natural gas have brought new options for consumers. Residential and other Gas customers in New Jersey now have the option to switch their gas supplier. The ability to choose has brought some factors into the forefront of the decision making process. Do you know the answers to some questions that switching poses? How many therms do you use in month? What is the "price to compare"? As a result of the current consumer education programs, can you recognize a good bargain or evaluate other offers? It is hoped that because of consumer education, these decisions will be as routine as supermarket price shopping. During this transition period consumer education plays an important role in helping consumers make the right energy choices.

We would like to hear your thoughts on the effectiveness of the current consumer education program, and what you believe could be done to improve it. We would like to know whether you now have enough information to decide whether or not to switch your gas supplier. If not, what more information would you need? If you have switched or have considered switching your gas supplier, tell us about your experience. Furthermore, in this time of rising gas costs, we would like to know whether you feel that more effort is needed to inform consumers of current gas bill assistance and conservation programs.

We 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 help utilities’ customers. You may also mail your concerns and comments to me, Kurt Lewandowski, at 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. Thank you again for attending today’s hearing.

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