COMMENTS: DECEMBER 28, 1999
PUBLIC SERVICE GAS & ELECTRIC COMPANY
PUBLIC HEARING - REMEDIATION ADJUSTMENT CLAUSE

My name is Judith Appel. I am an attorney representing the New Jersey Division of the Ratepayer Advocate. The Division of the Ratepayer Advocate ("Ratepayer Advocate") represents the interests of all utility customers, including residential, small business, commercial and industrial ratepayers. The Ratepayer Advocate is a party in every case where New Jersey utilities seek changes in their rates or services. The Ratepayer Advocate also gives customers a voice in setting long-range energy, water and telecommunications policy that will affect utility services well into the next century.

Public Service Electric & Gas ("PSE&G") has filed a petition with the Board of Public Utilities to recover $9.717 million expended in its Manufactured Gas Plant ("MGP") remediation program. This program was developed to clean up the Company’s 38 former manufactured gas plant sites under the direction of the New Jersey Department of Environmental Protection and with oversight by the Board of Public Utilities and the Division of the Ratepayer Advocate. Pursuant to Board Order, program costs are allocated to PSE&G’s Gas and Electric Units on a 60/40 percent basis and are recovered over a rolling seven-year period. This filing includes one-seventh of the costs for the current recovery period and one-seventh of the costs for each of the prior six remediation periods.

Approval of the requested amount would result in a small increase in customers’ natural gas and electric rates. The rate for gas customers would be increased from $0.1606 per therm to $0.1702 per therm, an increase of $0.0096 per therm (0.02%), and would be reflected in the Levelized Gas Adjustment Clause rates. The rate for electric customers would be increased to $0.0108 per kilowatt hour, an increase of $0.0092 per kilowatt hour, and would be reflected pursuant to the Board’s recent electric unbundling order.

Our office represents the public in utility rate cases, and reviews all proposed changes in rates as they affect the various customer classes. As necessary, we work with a team of accountants, economists and lawyers to analyze the cases, especially where there are requests for rate increases. We are currently conducting a complete and thorough investigation of PSE&G’s request to evaluate the filing. For that purpose, we will request and review detailed information from the Company about its remediation program and the costs incurred therefor.

In our investigation of this case, the Ratepayer Advocate has focused on the following issues:

1. The reasonableness of the Company’s expenditures for remediation of its contaminated manufactured gas plants;

2. The reasonableness of the Company’s remediation program, reviewed in relation to existing DEP directives;

3. The status of the Company’s efforts to obtain reimbursement from other legally responsible parties and insurance carriers.

At evidentiary hearings, we will cross-examine PSE&G’s witnesses and submit evidence through the testimony of our witnesses. However, it is important that you be aware that the ultimate decision regarding all rate modifications in New Jersey is made by the Board of Public Utilities.

We currently have a team of attorneys and consultants analyzing data from the Company. As appropriate, these consultants will offer testimony regarding PSE&G’s proposal to increase your rates. We are in the process of discovery now.

The purpose of this public hearing tonight is for you, the customer, to voice your opinion, relate your experiences and offer comments about PSE&G’s rates and any service problems you may be experiencing. It is important that you express your views, as they become part of the record on which the Board of Public Utilities makes its decisions. The Ratepayer Advocate also wants to hear your views. We strongly encourage your participation, which will help us evaluate the Company’s proposal and prepare for the hearings.

This hearing is being transcribed and your comments will become part of the record. Judge Gural of the Office of Administrative Law will instruct you to give your name and address before you speak. I would like to reiterate the importance of this so that there will be a clear record of your concerns and interests.

On behalf of the Ratepayer Advocate, I would like to thank you for attending this evening.

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