JCP&L could be fined only $100 a day for storm response that left thousands in the dark

Gov. Phil Murphy's administration launched an investigation Monday into Jersey Central Power & Light’s much-criticized response to recent snowstorms that left thousands in the dark for almost a week.

But if Murphy looks to penalize the electric provider, he may be able to issue fines of only $100 to $250 a day under current law.

A bill that would increase fines against poorly performing utilities to $25,000 a day has languished for years in the Legislature.

Supported by former Gov. Chris Christie, the state's leading ratepayer advocate and others, the Reliability, Preparedness, and Storm Response Act of 2012 was written to ensure ratepayers of an adequate response by utilities in the wake of a major weather event like Hurricane Irene and Superstorm Sandy, which saw a similarly sluggish response.

“It's absurd that it’s that low,” state Sen. Joe Pennacchio, R-Montville, a primary sponsor of the bill, said of the current fine range. “If you had a $500 parking ticket versus a $5 parking ticket, which one would make you more inclined not to illegally park?”

Some lawmakers are now calling for its passage in light of the slow recovery by JCP&L from the March 2 nor'easter, whose high wind gusts brought down utility poles and trees across North Jersey and left 220,000 JCP&L customers without electricity.

About 17,000 JCP&L customers were still without power when a second storm on March 7 brought heavy, wet snow that also caused power outages. and left more than 350,000 without power statewide, including about 117,000 JCP&L customers.

As of late Monday afternoon, JCP&L still had 1,741 customers without power, including 883 in Morris County and 429 in Union County, with another snowstorm expected to dump 2 to 4 inches beginning early Tuesday.

“Service restoration to our customers still experiencing an outage is our top priority right now,” Scott Surgeoner, a spokesman for FirstEnergy, the parent company of JCP&L, said in an email Monday. “However, we will work with the Board of Public Utilities, and others, once restoration is completed to assess our performance and look for any improvements we may be able to make going forward.”

The investigation by the Board of Public Utilities will examine whether JCP&L followed more than 100 protocols the board put in place after Hurricane Irene in 2011 and Superstorm Sandy in 2012.

The board also will hold five public hearings on the matter, including one each in Morris, Sussex and Hunterdon counties. The other two hearings will likely be held in Bergen County and the Atlantic City region. Dates and locations have not yet been finalized.

"We're going to have to do a pretty tough postmortem on this,” Murphy said Monday during an interview on New Jersey 101.5 FM. "It took too long, and it’s unacceptable."

Former BPU President Jeanne Fox said Murphy has a few options other than fines in dealing with JCP&L including docking some of the money the utility gets from ratepayers. Under Fox, the BPU cut JCP&L's "rate of return" in 2003 when tens of thousands of Jersey Shore residents and vacationers were without electric power over the busy Fourth of July weekend.

"JCP&L historically has not had good operations," she said Monday.

The Reliability, Preparedness, and Storm Response Act of 2012 was written months after Hurricane Irene left thousands in North Jersey without power in 2011.

It would require electric utilities to submit a service reliability plan and an emergency communications strategic plan. If the BPU finds that a utility failed to follow its plans, it could increase the fine from $100 to $25,000 a day for a maximum penalty of $2 million.

But the bill went nowhere even after it was championed by Christie following Superstorm Sandy. Its sponsors, a group of Republican lawmakers, have reintroduced it each legislative session including the current one, but it has not been acted upon in either the Democratic-controlled Senate or Assembly.

"If it was passed six years ago, maybe we wouldn't be in this situation," said Assemblyman Greg McGuckin, R-Toms River. "The lack of infrastructure improvements by JCP&L were clearly obvious during Irene, exacerbated by Sandy, and here we are now seeing the same thing. It's incredible."

BPU spokesman Peter Peretzman would not comment Monday on his agency's penalty structure.

"It’s premature to discuss potential fines until we have completed our investigation and determined if protocols were violated," he said.

The Division of Rate Counsel, which acts as a consumer advocate before the BPU, has also supported the $25,000 penalty, saying current penalties do not provide a deterrent for substandard performance.

"The potential $25,000 penalty for each violation and $2 million total potential penalty will send an important message to the utilities that reliability is an essential part of their duty to ratepayers," Stefanie Brand, the division's director, wrote to legislators in 2013.

Brand was unavailable for comment Monday.

PSE&G still had 1,181 without power, including 435 in Essex County, late Monday afternoon. Orange & Rockland had 572 customers without power in North Jersey, nearly all of them in Bergen County. The company estimated power would be restored by late Monday night.

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It is possible to prepare for storms, “but not all utilities have the manpower, time and funds allocated,” said Rich Cummings, president of Level Four Solutions Group, an Arizona-based company that helps utility companies prepare for and manage their response to storms.

“The other major challenge for utilities is the high degree of retirements happening, and the most talented and experienced response experts have been and continue to leave the industry,” Cummings said. “This makes training and preparedness even more important.”