Atlantic City Electric Rate Increase Settled; PowerAhead Funding Deferred to Phase II

by | Aug 29, 2016

The New Jersey Board of Public Utilities (BPU) approved a settlement (Docket No. ER16030252) on August 24 among the parties in a base rate case first filed last March 22 by Atlantic City Electric (ACE). The terms of the agreement reduces the company’s requested increase of 6.3 percent (or $78.9 million) to 3.89 percent.

For the average residential customer, the settlement reduces the requested increase from $11.73 to $7.05 on a monthly bill.

The Stipulation of Settlement – agreed upon by New Jersey Division of Rate Counsel, ACE, BPU Staff, and Unimin – includes costs associated with recent major storm events.

“The negotiated settlement is equitable and provides Atlantic City Electric Company with the necessary funds to recover storm related expenses, while keeping increases for the customer in check,” commented New Jersey Board of Public Utilities President Richard Mroz.

Key elements of the settlement include:

  •  Certain operations and maintenance costs related to two major storm events, the Bow Echo storm and Winter Storm Jonas, of $17,913,941, will be recovered in base rates via a three-year amortization with no base rate treatment of the unamortized balance.
  • Based on an increase in base revenues of $45 million, inclusive of major storm event costs, the monthly bill for an average residential customer using 1,000 kilowatt hours per month will increase approximately $7.05 or 3.9 percent.
  • The monthly customer charge for Rate Schedule: RS (residential service) will increase from $4 to $4.44.

The company’s initial filing included ACE’s proposed storm resiliency investment program, PowerAhead. As part of the settlement, PowerAhead will be bifurcated and retained by the BPU to be determined in Phase II of the case.

ACE argues the program is designed to modernize the electric grid through energy efficiency, increased distribution generation and resiliency. The company’s stated goal is to improve the distribution system’s ability to withstand major storm events. The proposed initiative is projected to enable the company to recover $176 million in capital investment over five years.

For the phase II review of the rate case, the board designated Upendra Chivukula as the presiding Commissioner for the Phase II, PowerAhead program.

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