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I/M/O the Joint Petition of Public Service Electric
and Gas Company BPU Docket No. EM05020106 EVIDENTIARY HEARING Good morning. I am Seema Singh, the New Jersey Ratepayer Advocate, and I am here to provide your honor and the board of public utilities with an overview of the position of the Ratepayer Advocate on the proposed merger of PSE&G with Exelon. As filed the merger should not be approved, if your honor and the board determine to approve the merger it should only be done with the implementation of conditions and guarantees to protect the ratepayers, citizens and economy of New Jersey. If approved the merger will result in the largest utility company in the united states, but more importantly it will result in New Jersey losing its largest utility, a company that has been an integral part and an engine of the New Jersey state economy since the beginning of the last century. It will leave New Jersey with no local electric company and will complete a series of mergers that have seen some of the state’s largest businesses taken over by out of state entities. While these facts are important to our economy, the most important issue in this proceeding is the impact of the proposed merger on ratepayers now and in the future. This impact must not be examined only in dollar terms but also in safety and reliability. The merger is to be examined and reviewed by your honor and the board based upon the statutory criteria, that is, the merger’s impact on ratepayers, the merger’s impact on competition, the merger’s impact on PSE&G’s employees, and the merger’s impact on gas and electric service. In examining these impacts your honor and the board must examine the proposed merger under the “positive benefits” standard of review set by the board. The board said:
As filed it is the unanimous conclusion of these experts, and of my staff and me, that the merger should not be approved. Simply put the risks are too great and the rewards too small, for the proposed merger, as filed, to meet all four statutory criteria with positive benefits. For example, the petition contains no proposed rate freeze or rate reductions; the market power mitigation proposal is undefined and lacking; there is no commitment to low income ratepayers; and there are no guarantees of continued levels of service reliability. Notwithstanding thousands of pages of testimony and discovery, and input and specific recommendations from my office, board staff, and over 20 intervenors the companies have maintained their position that benefits will accrue in the future but not now, and that future promises are all they have to offer. This is unacceptable for ratepayers and the state, particularly in light of the skyrocketing gas prices and the overall rise in the cost of all forms of energy. Although the Ratepayer Advocate opposes the merger as filed, we have
also provided recommendations for your honor and the board if you should
determine that the proposed merger should be approved. Among our recommendations
are specific service quality matrices that should be implemented; protections
for one call mark outs, additional requirements for the money pool, market
power mitigation requirements, accounting treatments, protections for
low income ratepayers, synergy savings sharing and rate reductions that
will allow the ratepayers to get their fair share of the benefits of the
merger. I urge your honor and the board to protect the ratepayers of New Jersey, all ratepayers, and to ensure that they are positive beneficiaries if you decide to approve this merger. Thank you. |
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