The Board of Public Utilities Keeping the Lights (and Everything Else) On

The Board of Public Utilities

The Board of Public Utilities (BPU) is a regulatory authority in New Jersey with a statutory mandate to ensure safe, adequate, and proper utility services at reasonable rates for state residents. The BPU has jurisdiction to regulate the rates and facilities of electric, gas, water, wastewater, telephone, and cable television companies throughout New Jersey.

The board also addresses current issues of energy reform, the deregulation of energy and telecommunications services, and utility rate restructuring to encourage energy conservation. In addition, the BPU is responsible for monitoring utility service and responding to consumer complaints and is working to foster competitive pricing, innovation and consumer choice in the telecommunications and energy industries.

A Long History of Service

The Department of Public Utilities, the predecessor to the BPU, was created in 1911 to address issues of essential services in the state of New Jersey—specifically railroads and interstate commerce. Since its inception, the BPU has been given broad authority to perform management audits, investigate utility companies with questionable practices, appraise and value utilities' property, approve rates, and institute fees. One of the initial reasons for the board's extensive authority was to moderate the effects of monopoly enterprises within the industry.

Since its creation, the BPU has undergone various restructurings. In 1977, the board was placed within the Department of Environmental Protection and Energy, and in 1994, it was moved to the Department of Treasury and officially renamed the Board of Public Utilities (BPU), replacing the previous title the Board of Regulatory Commissioners (BRC). As part of the 1994 reorganization, the Department of the Public Advocate was eliminated and the Division of the Ratepayer Advocate—which represents the interest of ratepayers before decision-making bodies—was transferred to the BPU, although it remains independent of board control or supervision.

BPU Programs

The programs offered to New Jersey residents by the BPU include electric, gas, water, wastewater, telephone, and cable television, though at the present time, the board is focusing more on energy assistance and conservation programs. The Low Income Home Energy Assistance Program (www.acf.dhhs .gov/programs/liheap) is a federally funded program that provides subsidies every winter to help low-income families pay heating costs, such as home oil, natural gas, electric heating, propane and kerosene. Another program is the New Jersey Statewide Heating Assistance and Referral Energy Service, Inc. ( NJShares is a non-profit corporation that provides assistance to New Jersey residents who are in financial crisis and need temporary help in paying their energy bills.

In March 2001, the BPU approved an array of statewide energy efficiency programs and strategies for promoting compact, clean and renewable sources of energy, such as fuel cells, solar electric systems and wind generators. The BPU has also created a program called the Universal Service Fund to help low- and fixed-income residents pay for electric and natural gas service.

Current Leadership of the BPU

Jeanne M. Fox was named president to the BPU by Governor James McGreevey in January 2002. In addition to her board duties, Fox serves on various committees for the National Association of Regulatory Commissioners and is also a member of the Advisory Council for the Electric Power Research Institute (EPRI). She also was appointed chair of the National Council on Electricity Policy, and named as one of three state officials to the U.S.-Canada Joint Task Force on the August 14th power outage.

Three other commissioners comprise the remaining BPU leadership: Frederick F. Butler, Connie O. Hughes and Jack Alter.

Recently, The New Jersey Cooperator had the opportunity to chat with Fox about her group's current activities, goals, and challenges.

How did the BPU come into being?

"Woodrow Wilson, then governor of New Jersey, created the BPU in 1911. The movement started in Chicago, where many different competing electric companies were providing service on the same streets, cluttering them with wiring that was extremely unsafe - not to mention ugly. The governor of Illinois at the time created a regulating board, but the state was still mainly responsible for utilities regulation throughout the early 1900s. At the time, New Jersey also regulated railroads and other forms of transportation, so creating a board to regulate utilities seemed reasonable and necessary."

What is the NJBPU's mission?

"The BPU's overriding theme is to provide safe, adequate and proper service at reasonable rates."

What are some of the organization's main programs for the general community?

"Two of the BPU's major concerns are the conservation of energy and water. The New Jersey Clean Energy Program is one of our main focuses at the moment. The BPU also works in the local telephone arena to encourage competition among local service providers in an attempt to lower the costs of service.

"In addition, the BPU has been active in helping to regulate cable service in New Jersey in the past year. Previously, customers had to be available for the entire block of time [during] AM or PM to receive service installations or repairs on their cable lines, but now the BPU has lobbied for scheduling a maximum of a 4-hour window that cable companies must assure so that customers don't have to wait as long. As well, customer service hotlines must guarantee that they will answer a call within 30 seconds of receiving it to ensure that the customer is attended to in a time-efficient manner."

Where is the organization directing its collective energy these days?

"Today, the board is focused mainly on the energy arena, and recently deregulated and restructured the system of providing service for New Jersey utilities customers. In 1999, major legislation was passed regulating generating stations. Today, New Jersey customers can shop around for their energy providers and choose the company that best fits their needs.

"In September, the BPU is starting a lighting initiative that offers rebates and discounts to customers who buy energy efficient products, such as lighting fixtures and light bulbs, or products designated with the Energy Star emblem. The BPU provided similar programs during the summer months, in which customers who buy energy efficient air conditioners are eligible to receive rebates directly from the manufacturer. Homeowners can apply for these programs, benefiting by saving money as well as saving energy and keeping costs down."

What are the NJBPU's main goals for next year?

"In the next few years, the BPU will continue working hard on renewable energy and the use of energy efficient products. We are also working with legislation to better improve customer service standards and reliability, which must be enforced."

What are some of the NJBPU's past successes?

"It's hard to name just one, since there are so many, but an important success that comes to mind occurred within the last year. In this instance, the BPU got Verizon to agree to provide discounted local service with an automatic enrollment plan, which worked out wonderfully for taxpayers because they did not have to pay excessive charges for local service, which were transferred on to Verizon and the local government.

"Another success would be the Universal Service Fund established by the BPU, which was created to help low- and fixed-income residents pay for electric and natural gas service. The program matches household income with utilities usage for those New Jersey residents at 75 percent of the federal poverty level or less, enabling customers of lesser means to pay appropriate rates for their utilities usage. The program has been rated by the AARP as one of the best in the country."

What is the organization's role in approving rate increases?

"There are two steps to the BPU's involvement in rate increases: The first part states that utilities companies are entitled to earn a reasonable rate of return on their investments, which are in turn passed on to the shareholders. Utilities first have to prove that they have reasonable and prudent expenses for actual purposes, and the customer will pay the appropriate amount for those expenses. Tariffs are then established, dividing up how much each customer pays for what services."

How are those increases passed on to customers, specifically homeowner's associations?

"For utilities, condo or homeowners associations usually have one meter per building, which is measured and then the costs are divided up among the number of units in the building. But the ideal would be for each unit to have its own meter so that individual meter readings could be taken, which would influence customers to monitor their own usage and attempt to conserve."

Heather Higle is a freelance writer based in New Rochelle, New York.