Legislators Asked To Probe BPU Sweetheart Deal For BL England Power Plant

BPU Exempted Politically Connected Plant From Societal Benefits Charge

Another “Chairman’s” Deal?

I’ve asked the Chairs of the Senate Environment and Legislative Oversight Committees to look into how and why BPU exempted the BL England power plant from the Societal Benefits Charge (SBC).

SBC revenues fund important energy programs:

The two biggest chunks of the program involve efforts to finance clean energy programs ($309 million in the 2012 budget) and efforts to help low-income families pay their utility bills (at least $292 million), according to numbers provided by the New Jersey Board of Public Utilities. The low-income program has grown dramatically since the state passed a law ensuring that those families do not pay more than 6 percent of their household income on energy bills.

The BPU exemption was worth millions of dollars over the life of the plant. It included other surcharges as well, such as RGGI (the Gov. had announced NJ’s exit from RGGI) and other surcharges with which I am not familiar.

RC Cape May (owner of the BL England plant) was represented at the time by the politically connected law firm Wolff & Samson, the notorious “Chairman’s” firm. So, this could be another in a long list of corrupt deals.

Some questions I have:

Does the BPU have the authority to grant such exemptions? What is the public policy rationale for such exemptions? How widespread is the practice? Was this a special deal or is the practice common? How much revenue was lost as  a result?

See letter below:

Dear Chairmen:

As you may know, a BPU Order of April 29, 2013 exempted the BL England power plant (owned by RC Cape May) from Societal Benefits Charges. see:

https://web.mail.comcast.net/service/home/~/?auth=co&loc=en_US&id=606201&part=3

Here is the exemptions from the BPU Order:

I am not an expert on BPU or their authorities under the Statute that authorizes the Societal Benefits Charge (SBC) but I find it highly unusual administrative practice to see an administrative agency waiving what I assume are statutorily imposed and mandatory surcharges.

I also find the BPU action in this matter poor public policy and not in the public interest.

From what I can tell in reviewing the various documents, it seems that South Jersey Gas Company and RC Cape May privately negotiated a contract that exempted RC Cape May from the SBC.

It appears that BPU’s subsequent Order of April 29, 2013 incorporated this privately negotiated contract provision.

I urge you to conduct legislative oversight of this matter.

Was this exemption case specific or does BPU broadly engage in granting such exemptions from SBC?

Respectfully

[PS – The BPU order not only addresses exemptions for BL England and it does not apply to only BL England.