Newark, N.J. — Public Advocate Ronald K. Chen announced the department’s Division of Rate Counsel today filed a motion to intervene with the Federal Energy Regulatory Commission (FERC) to stop PSEG Corp. from taking electricity supplied by its Bergen County New Jersey power plant off the region’s power grid and moving it to the New York power grid.

“With the cost of electricity going up and energy supplies harder to find in New Jersey, the consequences of PSEG diverting a prime Jersey-based power source to another state could have devastating consequences for New Jersey ratepayers,” said Stefanie Brand, Director of the Division of Rate Counsel.  “It is just not fair for New Jersey ratepayers to subsidize the profits of PSEG and the electric bills of New York residents with no benefits coming back in return.”

The motion was filed following the petition by PSEG Energy Resources and Trade, PSEG Fossil LLC and Cross Hudson LLC requesting that the Bergen 2 generation unit located in Ridgefield, N.J., be connected for exclusive use for Con Edison’s 49^th Street Station in New York City. To connect the plant to New York, PSEG and its partners also seek approval from FERC to build a dedicated transmission line capable of carrying 600 MW of power across the Hudson.  PSEG responded to a request for proposals sent out by the New York Power Authority to service the 49^th Street Station. A decision on the winning proposal is expected by April 2008.  PSEG has asked for a decision from FERC by mid-March.

If the FERC grants the petition, PSEG would disconnect the plant from the New Jersey regional PJM transmission system and join the NYISO system effective 2011. Rate Counsel’s consultant analyzed the impact on New Jersey ratepayers if PSEG is allowed to take the Bergen County power plant off line and found several potential negative impacts, including:

• Higher rates for New Jersey ratepayers if prices go up due to reduced supply for New Jersey or if the 550 MW from Bergen 2 are replaced by more expensive power from less efficient plants. Rate Counsel urges the FERC to examine not only the positive impact for New York, which was stressed by PSEG, but the potential negative impact on New Jersey.
  
  
• Reliability concerns for the PJM system if the plant is taken off the PJM grid. Rate Counsel urges the FERC not to approve the disconnection until continued reliability for New Jersey and PJM can be assured.
  
  
• Concerns that the proposed transmission line may be used as a merchant facility, carrying other power from PJM to New York in the future.  Rate Counsel argues that PSEG’s request to build the line must take this into account.

Rate Counsel’s filing asks the FERC to deny PSEG’s request or, in the alternative, to schedule full hearings to address Rate Counsel’s concerns.

“The FERC should not let this project go forward until all of the issues are fully examined,” said Chen.  “The potential impact on New Jersey consumers is simply too great and must be addressed with safeguards that will protect New Jersey ratepayers.”

For the full filling, go to:
http://www.state.nj.us/rpa/

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The Division of Rate Counsel is a division within the Department of the Public Advocate and represents the interests of consumers of electric, natural gas, water/sewer and telecommunications and cable TV service. Additional information on this and other utility matters can be found at the Division’s website at www.state.nj.us/publicadvocate/utility. The Department of the Public Advocate website is http://www.njpublicadvocate.gov.