Agency: NJ utilities didn't communicate post-Sandy

TRENTON, N.J. (AP) -- New Jersey's electricity providers did a good job bringing in thousands of out-of-state linemen and tree trimmers before Superstorm Sandy struck, but they failed at communicating with customers and mayors after that storm and a subsequent nor'easter, which darkened 2.7 million homes and businesses for up to 13 days.

That assessment from Bob Hanna, president of the Board of Public Utilities, the agency that regulates the energy companies, came Wednesday during the third Senate Budget Committee hearing on the storm, this one focused on the utilities' response and what improvements might be made.

Sen. Paul Sarlo, the committee chairman, said the panel hopes to determine where money could be allocated to rebuild a more dependable power grid to guard against future storm-related outages.

Suggestions included elevating, moving or waterproofing energy substations and installing smart meters that automatically signal the supplier when the power goes out. Broader solutions seemed easier to identify: create stronger systems by building redundancies into the power grid, consistently manage tree trimming near power lines and implement better ways of communicating with people who lose power.

Stefanie Brand, the state's ratepayer advocate, cautioned lawmakers and utility executives against the inclination to spend lots of money before the next natural disaster hits.

"It's only after we've looked at 'What are we already spending?' and 'Is it being spent in the right way?' and 'Are there ways to enhance what we have on the books already?' that we should start looking at all the new things everybody wants to spend money on," she said. "The worst thing we could possibly do is victimize ratepayers twice by doubling their rates and having a system that will still go out if we have another storm like Sandy."

Ralph LaRossa, CEO of Public Service Electric & Gas Co., the state's largest utility, said Sandy's storm surge into Newark Bay was several feet higher than the worst-case storm models had predicted, overwhelming the utility's low-lying substations and switching stations and causing 1 million of the utility's 1.7 million outages. Downed trees that toppled power lines were responsible for the rest of the outages, and he said that could be lessened if more aggressive tree trimming was allowed throughout the state. Trimming rules typically vary by town.

Although the utility had placed sandbags around 11 vulnerable power stations before the storm, "those were not the right 11," he said. "The storm hit in a way we just didn't expect, to be blunt."

LaRossa said it cost $250 million to $300 million just to restore power — so-called bandages, he said — at least some of which is expected to be passed on to customers. It would cost about $2 million to rebuild a substation and more than $100 million to rebuild a switching station, but he said the utility would look to private investors to make such capital improvements.

He said the utility has already begun strengthening the power grid but acknowledged that the system has been weakened by the intake of saltwater from the surge and fuel from a 350,000 diesel spill just afterward.

That will result in more outages until permanent repairs can be made.

For example, a minor storm Tuesday night temporarily knocked out power to 9,000 customers, three times the number that would normally be affected by a weather system of that magnitude, he said.

Later, the head of Jersey Central Power & Light, the state's second-largest utility, was grilled by the panel over how his utility handled the superstorm, which left 1.3 million of its customers without power, some of whom got their power back briefly after the hurricane but lost it again during the nor'easter.

CEO Donald Lynch acknowledged there was confusion managing out-of-state line crews and tree cutters, but he said he was pleased that all customers were back online 13 days after such a huge storm.

The company on Dec. 1 asked for permission to boost its rates by at least 1.4 percent to improve infrastructure and cope with losses from prior storms.

Sen. Kevin O'Toole was incensed at the timing of the rate hike request. During one heated exchange, the North Jersey Republican said, "It's a real stick in the eye, Mr. President, to have to sit here and field calls from my constituents that your folks are asking for a $31 million increase when some of them are barely getting their lights up. It's insulting."

Hanna of the BPU said JCP&L was ordered to file a base-rate case because of allegations that it is taking money from New Jersey and sending it to its parent company, First Energy Corp., in Ohio. The utility chose to ask for a rate increase as part of that filing.

Hanna criticized the utilities' communications with customers and lawmakers after the storm.

Though there had been improvements since last year's Hurricane Irene, "the grade is still F," Hanna said. He said the BPU is doing its own audit of the utilities' communications systems to determine how they can improve.

At each stage of the storm, the utilities are generating information internally, he said. In the future, the utilities must be able to pass information about power restoration in real time to the public, he said.