New Jersey Governor Christine Todd Whitman signed an energyderegulation bill last week, clearing the way for statewideelectric unbundling to occur by Aug. 1 and statewide, residentialgas unbundling to be in place by Dec. 31. The bill was passed bythe state’s legislature late last month (See NGI, Feb. 1).

Demonstrating the need for quick decisions in the short timeframe allowed by the bill, the New Jersey Board of Public Utilities(BPU) set deadlines last Friday for each of New Jersey’s four majorelectric utilities to settle deregulation issues. If the utilitiesdo not settle the issues before the dates set by the BPU, the BPUwill settle the issues itself. Gas utilities have not been set to aschedule yet because, as one New Jersey Natural Resources spokesmansaid, the commercial and industrial gas markets deregulated in 1994and many of the key issues are not as wide open as the electricside. “Right now, the bill has more of an effect on the electricindustry,” he said.

“The fact is consumer choice equals customer savings,” saidWhitman. “Lower energy costs will help make life in New Jersey moreaffordable. Hospitals, for example will save millions in loweroperating costs. At the same time, lower energy rates will alsoencourage companies to relocate to our state and create new jobs.”

Friday’s BPU order is the first step in formulating an exactplan of attack. Although the bill sets a rigorous timeline forderegulation, it also leaves many undecided issues open for theBPU, including measures to protect and educate customers, airemission guidelines, codes of conduct for utility affiliates, andmetering and billing matters.

As a result, the BPU is allowing PSE&ampG, GPU, Connectiv, andRockland Electric a limited time to submit their own solutions toproblems such as stranded cost levels, rate discount amounts, andrestructuring filings. Friday’s order requires the electricutilities to submit their plans as follows: PSE&ampG on March 31,GPU on April 14, Connectiv on April 28, and Rockland Electric onMay 12.

“Basically, the BPU is saying to the utilities ‘you have acertain amount of time to settle these issues yourselves. If youdon’t do it by the date we’ve given you, we’ll settle themourselves.’ Now, I think there is a good and a bad way to look atit,” said Enron’s Steve Montovano, who has been heavily involvedwith the situation. “The bad way is obviously that the scheduledoes not give the utilities enough time. I tend to think of it theother way. If the utilities can’t settle the issues, then we’llknow sooner rather than later. Either way, a decision will be made,and maybe the tight time schedule will make everyone cut to thechase. There is no room for posturing.”

One issue that could cause problems is the requirement of ashopping credit. Like the other issues, the BPU is in charge ofdefining its value. This credit, which will appear as a reductionon switching customers’ bills, is the first to be included inderegulation legislation, and is intended to jump-start theprocess. “Moving forward, we feel very strongly that establishing areasonable shopping credit will be the foundation for achieving acompetitive environment and maximum savings for residents andbusinesses,” said Myles Meehan, an Exelon Energy spokesman. Exelonis a PECO subsidiary and provides electricity to both Pennsylvaniaand New Jersey customers.

John Norris

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