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Jersey Central Power & Light has reached a tentative settlement with New Jersey to recover more than $700 million it spent on repair costs from Hurricane Sandy, Tropical Storm Irene and two other major storms. In photo above, a repair crew cleared fallen trees from Chester Township after Hurricane Sandy.

(Star-Ledger file photo)

The damage from Hurricane Sandy and Tropical Storm Irene and two other storms was so severe that Jersey Central Power & Light said it spent nearly $750 million to restore service to its customers and repair the devastation. Tens of thousands of trees were cut and cleared, thousands of utility poles were replaced and hundreds of miles of new wire was rolled out after the storms, the utility said.

State regulators say the repair bill was justified and Wednesday announced a tentative deal had been reached that would reimburse JCP&L the $736 million it spent in the wake of Sandy, Irene, an October 2011 snowstorm and a November 2012 nor’easter.

If approved, the total amount spent on storm repair will be passed on to JCP&L customers, raising homeowners’ rates about 4.5 percent — or more than $53 a year — the company said at the time of its filing last year.

JCP&L, the state’s second largest utility, serves about 1.1 million customers, mostly in northern and central New Jersey.

After Irene and then most notably Sandy, JCP&L endured withering criticism from state and local officials and its customers over its inability to update customers about power outages and its slow response time in dealing with those power failures.

In the months that followed, JCP&L overhauled much of its communication system, adding field managers, a new chief executive and making it easier to report and track outages.

The stipulation of settlement, reached between JCP&L, the state Division of Rate Counsel — the ratepayer advocate — and staff of the state Board of Public Utilities, still requires approval by the full board. In general, though, the BPU follows the recommendations of board staff and the Rate Counsel.

JCP&L spokesman Ron Morano called the deal “a significant step in recovering the hundreds of millions of dollars that were spent by JCP&L to restore customers to service as quickly and safely as possible after the devastating storms that affected New Jersey in 2011 and 2012.”

The settlement comes less than a month after the utility was rebuked by the same BPU staff in response to a separate request for a rate increase.

In late January, board staff said JCP&L had been earning a profit above its state-approved amount and should cut customer rates by more than $200 million. The utility had initially sought permission from the board to assess a $31 million rate increase on its customers.

Rate Counsel Director Stefanie Brand, whose office had alleged JCP&L was overcharging customers, said Wednesday there was little dispute the utility spent hundreds of millions of dollars in storm repair.

“What they paid for in out-of-state crews, new poles, wires, overtime, that type of stuff, we just look at to make sure it’s all in order,” Brand said. But an investigation by her office found JCP&L had not performed adequate tree trimming in the years that preceded the storms. Brand claimed that inaction led to more downed power lines when the storms hit.

JCP&L said it cut and cleared tens of thousands of trees to restore power following Sandy and Irene. Two days after Sandy struck, JCP&L workers and local authorities haul away fallen trees in Chester Township.

“Obviously, it’s not that much, but it’s a symbolic victory and sends an important message,” Brand said. “We expect the utilities to do the tree trimming they’re supposed to do.”

The settlement took that into account, and cut JCP&L's request by $7 million.

"Obviously, it's not that much, but it's a symbolic victory and sends an important message," Brand said. "We expect the utilities to do the tree trimming they're supposed to do."

While the settlement is expected to be approved, other groups that were party to the rate case did not sign on. Among them are AARP New Jersey and several storm-hit towns, including Wayne, Marlboro and Robbinsville, whose mayor, David Fried. has been an outspoken critic of the utility’s performance.

“JCP&L has to take some responsibiltiy for its past failures, and passing those failures onto ratepayers isn’t fair,” Fried said last night, noting the utility’s substation in his township flooded during Irene and Sandy.

While the mayor acknowledged that JCP&L has improved its communication and hired a better leadership team, he said he was also “disappointed that the BPU doesn’t hold these companies accountable. At some point, they have to be accountable.”

The state’s largest utility, Public Service Electric & Gas, has yet to file for its storm recovery cost, which the company has estimated at up to $300 million. In response to Sandy, PSE&G last February filed a separate $3.9 billion grid-hardening plan called “Energy Strong,” which the BPU is still reviewing and nearing a decision.

RELATED COVERAGE

• Blasted for slow Sandy response, JCP&L announces communication upgrades

• A powerful year: JCP&L spends 2013 repairing Sandy-related damage to network, image

• In a switch, BPU staff recommends JCP&L reduce electric rates by $200 million

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