Annual Report 2008

NewNew JerseyJersey BoardBoard ofof PublicPublic UtilitiesUtilities 20082008 AnnualAnnual ReportReport Table of Contents

President’s Message 3

Mission Statement 4

Meet the Commissioners 5

Major Accomplishments of 2008 10

Division Functions 29

Office Functions 36

Points of Contact 45

President’s Message

Dear Governor Corzine:

On behalf of my fellow Commissioners and the staff of the New Jersey Board of Public Utilities, I’m pleased to present our 2008 Annual Report. The report presents an overview of the Board’s accomplishments for the year. In every division of the agency, we have worked to improve the efficiency of the programs we run and the effectiveness of the services we provide to the residents of New Jersey.

In October 2008 the state’s comprehensive Energy Master Plan (EMP) was released. It provides a blueprint for a clean energy future for New Jersey through aggressive energy conservation and renewable energy goals and the development of a 21st century utility infrastructure. The plan also focuses on creating green jobs through investments in emerging technology companies to grow New Jersey’s economy. Throughout the year the Board has been working to implement programs and policies to help achieve the goals laid out in the EMP.

During the course of the year, the New Jersey Clean Energy Program continued to build upon its growing national repu- tation as a leader in policies and programs to expand the state's renewable energy generation and improve our energy efficiency. Our new innovative Solar Renewable Energy Certificate, or SREC Program, was launched for the transition from rebate-based incentives to promote solar generation to more efficient, market-based incentives. Three meteoro- logical tower projects for offshore wind were approved, putting New Jersey in line to be one of the first, if not the first state with offshore generation. Energy efficiency programs for residents and businesses saved over 335,000 megawatt hours of energy, which resulted in a reduction of greenhouse gas emissions equivalent to removing more than 44,000 cars off the road for one year.

The Board has also worked to provide more efficient services for New Jersey ratepayers. The Division of Water has streamlined rate-related regulatory matters with a focus on minimizing the impact to customers. In conjunction with our State and Federal partners and private industry, the Division of Reliability & Security worked to improve our ability to quickly restore lifeline services after major disasters and partnered with the Domestic Security Preparedness Task Force’s (DSPTF) Water Security Working Group to create the capacity to detect contamination in our drinking water supply through online monitoring technology.

These examples represent just a few of the activities of the agency over the last year, which are detailed throughout this report. I want to commend the Board staff for these and many other achievements over the course of 2008.

We at the Board of Public Utilities look forward to building upon what has been accomplished in 2008 as we continually strive to provide our state and its people clean, reliable and efficient utility services.

Sincerely,

3 Mission Statement

We will ensure the provision of safe, adequate and proper utility and regulated service at reasonable rates, while effectively managing the transition from protected monopoly franchise markets to competitive markets for the betterment of ratepayers.

We will make decisions that enhance the quality of life for the citizens of New Jersey and will perform our public duties with integrity, efficiency and responsiveness.

4 Meet the Commissioners

Jeanne M. Fox President As President of the New Jersey Board standing Achievement Award, the of Public Utilities (NJBPU), Jeanne M. Solar Energy Industries Association’s Fox is a member of the Governor’s Solar Champion 2005, the NJ Clean Cabinet. She was appointed on Jan. Communities Appreciation Award, 15, 2002. AARP’s Leadership on Utility Con- sumer Issues Award, the National Ms. Fox is on the Board of Directors of the National Association of Regulatory Solar Industry Association’s Award Utility Commissioners (NARUC) and is for Outstanding Leadership in Policy a member of several of its commit- Development for Clean Energy, and tees, including Energy Resources and New Jersey Environmental Lobby’s the Environment and Critical Infra- Environmentalist of the Year 2001. structure. She chairs the National Ms. Fox was Regional Administrator of Council on Electricity Policy, National the U.S. EPA and Commissioner and Conference of State Legislatures, Na- Deputy Commissioner of the NJ Dept. of tional Association of Regulatory Utility Environmental Protection and Energy. Commissions, National Association of Ms. Fox received a Bachelor’s Degree State Energy Officials, the Dept. of from Douglass College, Rutgers and a BPU Commissioners Energy and the Environmental Protec- Juris Doctor from the Rutgers University tion Agency (EPA). As President of the School of Law. Mid-Atlantic Conference of Regulatory Utilities Commissioners (MACRUC), she is on the National Academy of Sci- ence Panel on Public Participation in • Jeanne M. Fox Environmental Assessment and Deci- sion Making, the National Leadership Group on Energy Efficiency; Harvard Electricity Policy Group; Consumer En- ergy Council of America’s Public Policy Initiative Fuels and Technologies Fo- • Frederick F. Butler rum; and the Advisory Council to the Board of Directors of the Electric Power Research Institute. Under President Fox’s leadership, NJBPU has led the nation both in en- • Joseph L. Fiordaliso ergy efficiency and clean energy policy. Accolades President Fox and NJBPU have received include the Golden Meter Award for Best State- wide Net Metering Program in the U.S., Network for New Energy • Nicholas V. Asselta Choices, the Sierra Club’s Out-

5 • Elizabeth Randall Meet the Commissioners

Frederick F. Butler Commissioner

Frederick F. Butler was first ap- uty Director of the NJ Depart- pointed to the Board of Public ment of Treasury’s Commission Utlities in 1999 for a four-year on Capital Budgeting & Plan- term and was re-appointed in ning, and Research Faculty 2003 to a full six-year term. Member of the Eagleton Insti- tute of Politics Center at Rut- Commissioner Butler currently gers, the State University. Com- represents New Jersey on the missioner Butler received a BA Board of the Organization of from Villanova University in PJM States, Inc.(OPSI). He was 1968 and a MA in International President of the Mid-Atlantic Relations from the Johns Hop- Conference of Regulatory Utili- kins University School of Ad- ties Commissioners (MACRUC) vanced International Studies and is a member of the National (SAIS) in 1973. He participated Association of Regulatory Utility in the PhD program at Rutgers BPU Commissioners Commissioners (NARUC). He from 1973 to 1979. currently serves as NARUC’s 1st Vice President and on its Execu- tive Committee. He chaired committees on international relations, water and climate • Jeanne M. Fox change. He is on the Board of Directors of the National Regu- latory Research Institute (NRRI). Commissioner Butler currently • Frederick F. Butler serves on the advisory boards of the Michigan State University Institute of Public Utilities and the New Mexico State University Center for Public Utilities’ Advi- sory Council and the advisory • Joseph L. Fiordaliso council to the University of Flor- ida’s Public Utilities Research Center. His previous work experience includes: Executive Director of the NJ General As- • Nicholas V. Asselta sembly Democratic office, Dep-

• Elizabeth Randall 6 Meet the Commissioners

Joseph L. Fiordaliso Commissioner

Born and raised in the Ironbound named Deputy Chief of Staff in section of Newark, Joseph L. Fior- Governor Codey's Administration daliso received a Bachelor of Arts on November 15, 2004. He was Degree in Business Education named “Citizen of the Year” by from Montclair State University the Livingston Chapter of Unico and completed graduate and National in 2003, and, in 2005, management courses at Mont- he was nominated by Governor clair State University, Rutgers Codey and confirmed by the Sen- University and American College. ate as a Commissioner on the Board of Public Utilities. Commissioner Fiordaliso served as the Director of Government In April 2006, he was appointed Relations for the Saint Barnabas to the NARUC Committee on Criti- Health Care System, the largest cal Infrastructure as well as the healthcare provider in the State Committee on Electricity. Fiordal- of New Jersey. From 1967 to iso has gained a statewide repu- 1986, he was an educator at tation as an expert in the transi- Vailsburg High School and Bloom- tion of New Jersey’s solar pro- field High School, respectively. gram from rebate to a market- He was also an adjunct professor based system, making it the BPU Commissioners of Accounting at County College nation’s first Solar Renewable of Morris for 12 years. Currently, Energy Certificate trading pro- he donates his time as an adjunct gram. professor in the Department of History and Political Science at Commissioner Fiordaliso mar- Caldwell College. In addition, he ried the former Marilyn Morey • Jeanne M. Fox serves on the Boards of Trustees in 1968 and they reside in for Essex County College, the Livingston, NJ. They have two West Essex YMCA and the First children, Joe and Dana, and Occupational Center of N.J. two granddaughters, Camilla and Rose. In 1988, Commissioner Fiordal- iso served on the Livingston • Frederick F. Butler Township Council for three terms, and as Mayor three times during his tenure. In 1990, he was appointed by the Essex County Ex- ecutive to serve as the Director of Planning and Economic Develop- • Joseph L. Fiordaliso ment. He has worked extensively with the New Jersey Democratic State Committee and served as District Director for Senate Presi- dent Richard Codey.

Commissioner Fiordaliso was • Nicholas V. Asselta

7 • Elizabeth Randall Meet the Commissioners NICHOLAS V. ASSELTA Commissioner

Born on August 17, 1951, Nicholas Jersey. Nicholas Asselta is most Asselta was raised in Vineland, New known for his advocacy of New Jer- Jersey. As the son of a Vineland Po- sey’s veterans. In honor of his late lice Officer, he graduated from Vine- brother who lost his life in the line of land High School, Cumberland duty, Asselta dedicated his entire County College and the Frederick public service career to fighting for Military Academy. He also attended veterans benefits in the State of New Rider College and the Glassboro Jersey. Those in Trenton regarded State College Management Institute. Asselta as a Senator who put his constituents first, often working After college, he worked for 23 years across party lines to ensure the inter- as Marketing and Production Man- ests of the residents of the First Dis- ager for Times Graphic, Inc., a Gan- trict. nett Company subsidiary. From 1978 until 1981, he dedicated his energy Numerous community and civic as head basketball coach at Atlantic groups have recognized his work on County Community College. He con- behalf of his constituents. The An- tinued coaching at Vineland High nual Governor’s Conference on Tour- School until 1987. In 1980 he mar- ism awarded him the Legislative BPU Commissioners ried Nancy Small. The couple make Leadership Award three times. The their home in Vineland where Nancy Southern New Jersey Arts & Business owns and operates an interior design Partnership honored Asselta with the company. Encore Award for his work designat- ing the A.J. Meerwald New Jersey’s As an educator and coach, he en- official tall ship, and the Downtown tered public service with his 1993 New Jersey Association honored him • Jeanne M. Fox election to the Vineland Board of for his leading efforts on downtown Education. Less than two years later revitalization projects across the in January 1995, he was sworn into state. The New Jersey Conference of the General Assembly to fill an unex- Mayors honored the Senator with the pired term. In November 1995 he Legislator’s Award. The New Jersey won his first of four terms represent- Hospital Association recognized him • Frederick F. Butler ing New Jersey’s First District in the as Legislator of the Year, the South- General Assembly. He then became ern New Jersey Development Council one of New Jersey’s few full-time honored him with the Outstanding legislators, dedicating his career to New Jersey Legislator Award and the public service and the constituents New Jersey Department of Health he represented. In 2003 he won and Senior Services awarded him the • Joseph L. Fiordaliso election to the New Jersey Senate Friends of Public Health Award. and served as State Senator until 2008. Today Nicholas Asselta serves as a Commissioner on the New Jersey During his time in the Legislature, he Board of Public Utilities where he fought to create a better life for the residents of New Jersey, not by creat- promises to be a voice for South Jer- • Nicholas V. Asselta ing more laws, but by improving the sey and continue his fight to improve laws and services that exist in New quality of life for all New Jerseyans.

• Elizabeth Randall 8 Meet the Commissioners Elizabeth Randall Commissioner

Elizabeth (Lisa) Randall was nomi- In 2001, she was also appointed by nated as Commissioner of the New Acting-Governor Donald DiFrancesco Jersey Board of Public Utilities by to the Congressional Redistricting Governor Jon Corzine on February 26, Commission. 2008 and confirmed by the New Jer- sey Senate on May 22, 2008. In 2003, Commissioner Randall was elected to the Bergen County Board Immediately prior to serving on the of Chosen Freeholders, where she BPU, Randall was a partner at the served through 2006. As a Free- law firm of Randall & Randall, LLP in holder, Randall worked to reduce the Westwood, New Jersey, where she county debt, enact campaign finance also resides. In addition, she was a reform in Bergen County, keep the Visiting Associate Faculty Member of Continental Airlines Arena open, help the Eagleton Institute of Politics at assure feasible transportation and Rutgers University during the 2007- protect Bergen County from over- 2008 academic year. Randall also development. served on the Board of Directors of the Westwood Senior Housing Corpo- In addition to public service, Randall ration and the New Jersey Women’s has enjoyed a distinguished law ca- Political Caucus. reer, serving as a law clerk for Ber- gen County Assignment Judge Theo- Randall has long been a leader in dore Trautwein from 1978-1979 and New Jersey county and state govern- then as an assistant prosecutor in ment. From 1982 to 1984, she was Essex County from 1979-1981. From BPU Commissioners assistant counsel to the Governor 1984-1991, she was a member of the and then deputy attorney general in Law Offices of Randall, Randall & the administration of Governor Tho- Stevens, during which time she mas Kean. In 1985, she was elected served as attorney to the Borough of to the New Jersey General Assembly, Hillsdale and municipal prosecutor to where she served until 1991. the Boroughs of Emerson, Dumont, Park Ridge and Woodcliff Lake. • Jeanne M. Fox In 1994, Randall was appointed Com- missioner of Banking and Insurance Randall has also been an active by Governor Christine Todd Whitman, leader in community service through- a position which Randall held until out her career. She served on the 1998. As Commissioner of Banking Advisory Boards of the Rutgers Busi- and Insurance, she served as Chair- ness School and Women United in man of the New Jersey Commission Philanthropy. She has served on the • Frederick F. Butler on Ethical Standards, Chairman of the Board of Directors of the Bergen the Board of Mutual Benefit Life, Community College Foundation, the Director of the New Jersey Economic Community Resources Council, the Development Authority and Director United Way of Bergen County and of the New Jersey Housing and Mort- Women Executives in State Govern- gage Financing Authority. ment. She has also served as a Youth Coach for the Westwood Recreation • Joseph L. Fiordaliso From 1998 to 1999, Randall served Center. as vice-president of the New Jersey Sports and Exposition Authority, Randall earned her undergraduate which manages the Meadowlands degree in government at Smith Col- Sports Complex. From 1999-2002 lege in 1975 and her law degree from and 1991-1994, Randall served as Wake Forest University School of Law Bergen County counsel where she in 1978. • Nicholas V. Asselta spearheaded important initiatives, such as the downsizing of county government, and the preservation of thousands of acres of open space.

• Elizabeth Randall 9

Major Accomplishments

In 2008, the Board of Public Utilities Ensured Safe, Ade- quate and Proper Utility and Regulated Service and Worked to Maintain Competition in Evolving Markets.

* Continued implementation of the Gover- inspections. nor’s draft Energy Master Plan and his greenhouse gas reduction plan. * Commitment to Prevent Service * Due to rate cases with the two Disruptions through Vegetation largest cable operators, subscribers Management will benefit with credits, and foregone rate increases and reduced rates this year alone totaling $5.48 million. * Streamlined telephone rules to enhance

competition. * Saved ratepayers millions of dollars * Educated business community on best through advocacy, complaint resolution, energy purchasing practices. monitoring of utilities and conservation incentives. * Advocated for New Jersey ratepayers before federal regulators and before PJM, the * Strengthened protection of New Jersey’s operator of the regional electric grid. critical infrastructure.

* Implemented/enacted strategies to help * Awarded millions in grants for security of New Jersey conserve water. natural gas & water supplies.

* Conducted overview audits to ensure * Enhanced competition in the telecommu- proper management and financial practices nications and energy markets. of utilities.

* Conducted hundreds of pipeline safety

10 Major Accomplishments

New Jersey’s Clean Energy Program Energy Efficiency, experienced another year of growth and change in 2008. Through the leadership of Governor Jon S. Corzine Greenhouse Gas and the tireless efforts of the Board of Public Utilities Commissioners and Reduction and staff and our partners, the Clean En- ergy Program gave New Jersey’s residents, business owners, and local government officials the necessary tools ated 577,091 MWh of renewable energy, to reduce overall energy use and increase which saved $81,388,242 and avoided the use of clean, renewable sources of 418,463 tons of CO2 emissions. energy.

With the launch of Governor Corzine’s En- ergy Master Plan in October 2008, we have established aggressive energy efficiency and renewable energy goals to lead the state and our residents in a cleaner, safer environment.

In 2008, over $112 million was spent directly on incentives paid to customers or on measures installed in customers’ homes. New Jersey’s Clean Energy Pro- gram saved New Jersey ratepayers 335,001 megawatt hours (MWh) and cre-

11 Major Accomplishments

2008 NJCEP Program Participation Highlights: Energy Efficiency,

• Over 9,000 residential customers received rebates for the purchase of high efficiency Greenhouse Gas cooling equipment through the Cool Advantage Program and 15,047 residential customers received rebates for the purchase of high effi- Reduction and ciency heating equipment through the Warm Advantage Program which will reduce their energy usage and costs. • 14,456 customers participated in the • 4,012 new homes were built and certified CleanPower Choice Program contributing a few to New Jersey Energy Star Home standards rep- dollars per month to the purchase of clean, resenting over 21 percent of all new homes renewable sources of electricity built in New Jersey • Over 4.3 million compact fluorescent • 7,239 low-income homes received energy bulbs and 48,392 high efficiency lighting fix- efficiency improvements at no cost to the cus- tures were sold to New Jersey consumers at tomer thus ensuring continued savings and discounted costs through the Energy Efficient greater affordability Products Program

• Rebates were paid for 1,401 commercial • Rebates were paid to 13,691 customers energy efficiency projects helping businesses that purchased Energy Star window air condi- reduce their energy costs while improving prof- tioners, 22,761 customers that purchased itability Energy Star clothes washers and 5,380 customers that purchased Energy Star dehumidifiers • 827 schools, businesses and residents installed renewable energy systems that will • 13,464 utilized the free on-line tool to generate clean, emission free electricity and perform an energy audit of their home reduce energy costs for years to come

• 57 solar PV installations totaling 8 MW of capacity were completed without an NJCEP rebate through the SREC-only Pilot Program established as part of the Board’s transition to market-based incentives.

• 8,982 trees were planted through the Cool Cities program managed by the NJ Department of Environmental Protection. Shading from these trees will reduce cooling loads in cities by reducing the “heat island” effect

12 Major Accomplishments

The Board has been working Conservation, Efficiency, with a number of public and private entities throughout the Greenhouse Gas Reduction State to encourage the development of combined heat and power (CHP) to achieve the Energy Master Plan goal of 1,500 megawatts by 2020. From hospi- lition meeting; the NJ Association of tals in Camden and Princeton to Atlan- Energy Engineers; the NJ Clean Energy tic City casinos; from universities like Conference and numerous other events Rutgers and Montclair State to aviation throughout the state. complexes in South Jersey, the opportu- nities for CHP keep expanding. The Board has also been providing input and The Board has been working with Rut- expertise to legislative efforts that gers’ Center for Advanced Energy Sys- would create financial incentives for tems on a series of Best Practices CHP development. Manuals for ten industry sectors. The first of the manuals – focusing on supermarkets and convenience stores – will In addition to the initiative described be ready for distribution shortly. Work above, staff also coordinated the will then begin on a manual for local Board’s directive to have each of the government, as directed by the Energy state’s four electric distribution compa- Master Plan. nies submit proposals for demand response programs aimed at all classes of customers. The programs are currently The Board has also coordinated with the being reviewed by Staff and Rate Coun- NJ Economic Development Authority and sel. the Governor’s Office of Economic Growth on a number of projects aimed at bringing new businesses into the The Boards outreach efforts to the State, or helping existing businesses State’s business community have in- finance energy projects cluded presentations to and/or participation in the Mid-Atlantic Building and Facilities Management Show; the New Jersey Business & Industry Associa- tion’s Energy Forum and Issues Break- fast; NJ League of Municipalities’ annual conference; the Governor’s Confer- ence on Economic and Workforce Devel- opment; the NJ Large Energy Users Coa-

13 Major Accomplishments

The Regional Greenhouse Gas Initiative ("RGGI") be- Major Role in NJ Efforts to came a reality in 2008. RGGI caps emissions of car- bon dioxide from power Address Climate Change plants in 10 states throughout the Northeast and Mid-Atlantic, by power plant owners received the allow- requiring each plant to use emissions ances for free or had to pay for them. credits (known as "allowances") to com- pensate for their emissions of CO2. Plants that reduce their emissions can sell unneeded allowances to other plants On December 17, 2008, New Jersey par- that have had less success in reducing ticipated in an auction of RGGI allow- emissions. ances. The auction yielded about $15 million. The Board decided in December to use its portion of the allowance revenues to help those New Jersey electricity Although "cap-and-trade" programs such customers who had suffered the most as RGGI have been implemented before, serious blows from the worldwide finan- previous programs gave away allowances cial crisis. The Economic Development to power plant owners for free. BPU Authority will use much of its portion of President Jeanne Fox led the building of a the revenues to provide financing for the consensus among RGGI states to take a construction of energy-efficiency com- different approach, selling the allowances bined heat and power projects, which will and using the proceeds to benefit energy also receive performance-based grants consumers rather than the owners of from the Board. power plants. President Fox had realized that wholesale prices of electricity would be unaffected regardless of whether

In 2008 Board received 46 requests for Smart Growth exemptions to the main extension rules. Twenty five agricultural exemptions were granted to farmers in fifteen counties, for BPU staff also promoted interagency varying agricultural purposes and three coordination of smart growth policy and public good exemptions were granted. planning by participating on various The main extension rules were imple- statewide planning committees located mented to assist in the state’s smart in DCA and DEP. In October Smart growth goals of slowing and preventing Growth Advisor Eric Wilkinson left the development in areas not designated for BPU and legal specialist Bethany Roc- growth by the NJ State Plan. The rules que-Romaine became the Smart Growth provide a quicker return of utility com- Advisor. pany deposits to customers for service requests to new structures located in areas designated for growth.

14 Major Accomplishments

DTV Transition

The OCTV staff Consumers and Businesses worked with all seven cable companies monitoring and testing the mandatory Emergency Alert the first quarter of the New Year. System to ensure that all cable systems have tested and perfected the digital transmission of With the remaining two incumbents overbuilt by these signals to each subscriber in the state. Verizon, US Cable and Cablevision, Verizon The OCTV also had and continues to monitor made a business decision to replicate a PEG federal activities in order to assist non-cable access network of its own by committing to consumers especially seniors and low income build return lines to guarantee the same flow of residents who may lose broadcast channels in PEG programming any interconnection would February if not properly equipped technologi- provide. cally. On-going monitoring of these agreements and The OCTV also negotiated a settlement resolutions continues with members of Jersey Access Group (JAG) and the League of Municipalities and Rate Counsel Long Term Planning contesting Cablevision migration of PEG channels to the digital tier. A free PEG-enabled digi- The Divison of Water has worked to incorpo- tal box was offered to subscribers for an addi- rate the results of conservation and long-term tional 10 weeks through December 2008 so that planning studies in rate case matters (through subscribers could access these channels pro- conservation initiatives, a precious natural re- gramming without any additional cost to them. source is preserved, while long-term planning can lead towards goals getting accomplished at Rate Regulation and Rate Relief the least cost option).

Due to rate cases with the two largest STREAMLINING TELEPHONE RULES cable operators, subscribers will benefit with DUE TO INCREASING COMPETITION IN THE TELE- credits, and foregone rate increases and reduced rates this year alone totaling $5.48 mil- PHONE MARKET lion. The Board significantly streamlined Customer Complaint Resolutions/Refunds telecommunications rules in 2007 in response to the evolving telecommunications market- OCTV staff had direct contact with place. In 2008, the Board continued to review more than 22,000 consumers over telephone, and modify its rules. One substantive change email and walk-in complaints. Staff was able was proposed in response to the industry’s de- too obtain more than $254,000 in service cred- sire to have flexibility in notifying their custom- its or refunds solely related to these complaints ers on rate changes for competitive services. about items such as billing complaints.. The commenters suggested, and the Board Interconnection Actions agreed, in the current environment carriers should have more options on how the communi- To ensure that cable customers, regardless of cate rate changes to their consumers, particu- their provider, would be able to receive local larly those consumers that are receiving elec- access programming in their communities, the tronic bills. This change is designed to balance Board initiated and concluded a dispute resolu- the need for consumers to have adequate no- tion process that resulted in settlement with tice, while at the same time allow the compa- Verizon and two incumbent cable operators nies the ability to communicate with their cus- Time Warner and Comcast. tomers in the most efficient manner.

Time Warner’s interconnection with Verizon was fully functional by summer and Comcast’s interconnection is expected to be fully completed by

15 Major Accomplishments

Interconnection Actions Competition and Markets

To ensure that cable customers, regardless counted service, known as Lifeline service. of their provider, would be able to receive The agreement also recognizes that Verizon local access programming in their communi- had not received a rate increase for residen- ties, the Board initiated and concluded a tial basic exchange service since 1985. dispute resolution process that resulted in settlement with Verizon and two incumbent The statewide price of residential cable operators Time Warner and Comcast. basic exchange service at the time was $8.95 per month – with taxes and fees, the Time Warner’s interconnection with Verizon total cost was $18.45. If the $8.95 were was fully functional by summer and Com- adjusted for inflation under the Consumer cast’s interconnection is expected to be Price Index Inflation Adjuster, from 1985 to fully completed by the first quarter of the 2008, the price of the service would be New Year. $18.22 per month. When you add the current taxes and fees, the inflation-adjusted With the remaining two incumbents over- cost would be $29.43. Additional rate in- built by Verizon, US Cable and Cablevision, creases will be phased in annually during Verizon made a business decision to repli- the following two years until 2011. Within cate a PEG access network of its own by 90 days after the third anniversary of the committing to build return lines to guaran- first year increases, the NJBPU will initiate a tee the same flow of PEG programming any proceeding to re-evaluate the competitive- interconnection would provide. ness of the services. The rate caps will re- main in effect until the conclusion of that On-going monitoring of these agreements proceeding. and resolutions continues. The national trend and the evolu- tion of the telecommunications markets are all moving toward reducing and/or eliminat- BASIC TELEPONE SERVICE STIPULATION ing regulation. The stipulated agreement PRESERVES NJBPU OVERSIGHT reached between Board Staff, Rate Counsel and Verizon allows Verizon to compete. At WHILE GIVING VERIZON LATITUDE ON COM- the same time, under the agreement the PETITION AND INVESTMENT Board retains its ability to protect the work- The Board in July, 2008, approved ing people of New Jersey, as well as our a stipulated agreement between Board most vulnerable citizens – including the Staff, Rate Counsel and Verizon New Jersey elderly and poor. A similar agreement was that gives the company an additional level reached with Embarq in August, 2008, for of flexibility to compete and invest in New customers in its service territory. Jersey, while allowing the Board to retain its authority and regulation over basic telephone service.

Following an extensive formal review of the level of competition in the retail telephone market, Board Staff, Rate Counsel and Verizon came to an agreement that will allow Verizon to meet the chal- lenges of the competitive marketplace, while at the same time protecting New Jer- sey’s most vulnerable residents-including low-income consumers who receive dis- Continued

16 Major Accomplishments

Competition and Markets BPU’s Efforts to Extend by Sev- eral Years the Exhaust Date of New Jersey’s Telephone Area Codes. The BPU has received a federal grant for $50,000 for Water Contamination Detection and has partnered with the DSPTF’s Water Security Working Group to Staff’s collaboration with NANPA and create a program to be able to detect the industry has resulted in the cumula- contamination to NJ’s drinking water tive return to date of 9,135 thousands- through online monitoring technology. blocks of telephone numbers (i.e. 9,135,000, with nearly one half million in 2008) to available number pools. These codes were also placed in area code re- In an effort to provide additional pro- serves. The most significant impact of tections to NJ from major natural gas this effort has been its effect on the pro- explosions, Staff revised the pipeline jected exhaust of the 609, 908 and 856 safety rules in N.J.A.C. 14:7 which govern area codes. At the start of 2008: 609 the construction, operation, maintenance, was projected to exhaust in 2012; the and inspection of natural gas pipelines. projection now is 2013; 908 was pro- This effort enhanced the safe and reliable jected to exhaust in 2015, it is now 2018; operation of gas pipelines in the state and and, 856 was projected to exhaust in represented an effort to set standards 2018, it is now 2021. In effect, since the above the minimum required under fed- beginning of 2008 the lives for these 3 eral code. area codes have been extended another seven years.

Reliability & Security

Broadened the scope of the One Call and Underground Damage Prevention program through increased outreach and public awareness and expanded stakeholder participation in the regulatory process. BPU worked with USDOT to implement the Federal PIPES Act as part of the State’s overall effort to reduce underground damages and increase the per- centage of federal funding for States.

Staff continued to perform ongoing inspections for Best Security Practices compliance and assessment of the vulner- abilities of critical utility infrastructure for gas, electric, water, wastewater, telecommunications, wireless and undersea cable landings across New Jersey.

Continued

17 Major Accomplishments

Outreach and Advocacy to Help Commercial Ratepayers. The Competition and Markets Office of Business Energy OBEO has coordinated with the NJ Ombudsperson (OBEO) took the lead in Economic Development Authority and the the BPU’s efforts to achieve the demand Governor’s Office of Economic Growth on response goals outlined in the Energy a number of projects aimed at bringing Master Plan (900 megawatts by 2020). new businesses into the State, or helping Working with the Energy Division, OBEO existing businesses finance energy pro- reconvened and chaired a working group jects. which presented a plan to the Board for jump-starting demand response in New Jersey by offering premium payments for capacity registered for the 2009 energy year. The Board approved the plan at its December 8, 2008 agenda meeting.

OBEO has been working with Rut- gers’ Center for Advanced Energy Systems on a series of Best Practices Manuals for ten industry sectors. The first of the manuals – focusing on supermarkets and convenience stores – will be ready for distribution shortly. Work will then begin on a manual for local government, as directed by the Energy Master Plan.

Outreach efforts to the State’s business community have included presentations to and/or participation in the Mid- Atlantic Building and Facilities Manage- ment Show; the New Jersey Business & Industry Association’s Energy Forum and Issues Breakfast; NJ League of Municipali- ties’ annual conference; the Governor’s Conference on Economic and Workforce Development; the NJ Large Energy Users Coalition meeting; the NJ Association of Energy Engineers; the NJ Clean Energy Conference and numerous other events throughout the state.

Continued

18 Major Accomplishments

In 2008, NJ utilities sold $9.8 billion worth of debt securities, up Competition and Markets from $6.2 billion in 2007. Most of this was in the form of long term debt. Be- cause utilities are such capital intensive enterprises, close monitoring of their financ- • Commenced and/or completed field ing activity is vital to assure that funds are work on the following audits in 2008: obtained in the least cost manner possible due to the direct impact of the charges to • Elizabethtown Gas Company Remedia- ratepayers. The Office closely reviewed tion Adjustment Clause these debt financings for fiscal worthiness and anticipates 2009 will be another busy • Public Service Electric and Gas Company year Remediation Adjustment Clause

• Jersey Central Power & Light Company Basic Generation Service Charge During the year, The Bureau of Financial Au- dits: • Audit of the Retail Margin Fund relative to all Electric Distribution Companies With the assistance of the Board’s Uni- versal Service Fund (USF) staff, completed the RFP procurement process for the performance of an audit of the USF Administra- Assisted the Board’s Universal Service tive Expenses charged by the Department of Fund Program Staff by overseeing the USF Human Services for the State Fiscal Years collections and reimbursement of 2004 through 2006 and the first quarter of $173,492,039.47 in USF monies through the State Fiscal Year 2007. The field work on Board’s office of budget and fiscal and as- this audit has started and the audit is ex- sisted with the review of the Department of pected to be completed in the second quarter Community Affairs USF administrative fee of 2009. budgetary matters.

Processed One Call Systems, Inc.’s filing which resulted in a $0.07 decrease in the tariff rate per outgoing notification from $1.17 to $1.10. This tariff charge is the charge to underground facility operators for notification of excavation activity. The decrease represents a reduction of approximately $305,000 over the remainder of the One Call Systems, Inc. contract. Audit staff has also provided assistance to the Division of Reliability & Security relative to an RFP which will need to be released early in 2009 to solicit bids and select the next operator of the system before the expiration of the current contract in November of 2009.

19 Major Accomplishments

Counsel’s Office was active in Energy mat- the areas where ters, working cooperatively with the Energy the DOE has Division and the E Team on a number of im- identified Advocacy portant issues, in addition to rate cases and that critical congestion exists because such Office of Clean Energy matters. designation favors transmission from areas where coal plants are likely to be built. Specifically, Counsel’s Office was instrumen- tal in assisting the Board in challenging a Petition for a Declaratory Order to the Federal Energy Regulatory Commission, in the Cross Counsel’s Office assisted the Telco Division in Hudson – Bergen 2 matter, FERC Docket resolving a proceeding commenced by the Number EL08-35, requesting certain determi- Board, to investigate the competitiveness of nations for a transmission line designed to retail mass market services provided by In- bring the output of a 550 megawatt com- cumbent Local Exchange Carriers in New bined-cycle electric generating unit that went Jersey, I/M/O the Boards Investigation Re- into service in 2002 into New York (Cross garding the Reclassification of Incumbent Hudson). The petition requested the FERC to Local Exchange Services (ILEC) as Competi- declare that negotiated, non-cost based com- tive Order Dkt No. TX07110873. In addition, pensation is appropriate for Cross Hudson’s Embarq, in a related case, filed a petition for delivery services, that the FERC will never Alternative Regulation, I/M/O the Application order the Cross Hudson line to interconnect of United Telephone Company d/b/a Embarq with PJM under Federal Power Act section for Approval of a Plan for an Alternative Form sec. 202(b) because such an interconnection of Regulation Dkt. No. TO08060451. The would be an “undue burden” and contrary to cases settled and an order was crafted with the public interest, and to declare that Peti- Counsel’s Office assistance, setting out who tioners’ firm use of the capacity of the line participated in the cases, the evidence on the could never be displaced by third-party re- record, summaries of the testimony submit- quests for Firm Point-to-Point Transmission ted and of the public hearings, the statutory Service. Ultimately, the New York Power Au- criteria for deeming a service competitive, thority selected a different generating unit the terms and conditions of the stipulations under the RFP that it issued, which gave rise in these matters and the criteria for a Plan for to the need for the petition. Alternative Regulation and a summary of Embarq’s Plan and Stipulation.

In addition, the Telco Rule adoption, NJAC Along with several other State Commissions 14:10, was successfully updated and re- and other parties, the BPU successfully chal- adopted, which was the culmination of sev- lenged a filing by PJM Interconnection LLC eral years of work between carriers, board (PJM) to the Federal Energy Regulatory Com- staff and OAL, and was completed with the mission (FERC) to increase the “Cost of New aide of Legal Specialists. Entry” or “CONE” used to develop the VRR Curve that determines the participation of demand in RPM auctions. The CONE is a major component that determines the price of Gas Hedging Audit. Continued its ad- capacity in PJM. ministrative oversight of the review of the hedging practices of New Jersey’s four Gas Distribution Companies. Audit and Energy Division Staff are currently reviewing com- The NJBPU has also attempted to protect ments relative to the draft report. The report New Jersey’s environmental and long term should be before the Board during the 1st energy interests, by submitting comments to quarter of 2009. the Department of Energy, opposing the continued designation of national interest electric transmission corridors (NIETCs) beyond Continued

20 Major Accomplishments

From a personnel perspective, the has finalized late part of 2008 proved to be difficult its recommen- for the Audits Division with the retire- dations related Advocacy ment of three staff members including a to the Consult- Bureau Chief, with over 90 years of com- ant’s report in the matter of the Manage- bined public service for those three indi- ment Audit and the Focused Audit of the viduals, as a result of the State’s early affiliated transactions of New Jersey retirement incentive package. Natural Gas Company and its affiliates. Staff will move those recommendations to the Board in January of 2009 and follow-up on the implementation plan for During the year, the Bureau of Manage- those recommendations. ment Audits:

Completed the RFP procurement process for the performance of a man- Continued to monitor the planned agement audit and affiliate transaction implementation of 37 specific recom- audit of Atlantic City Electric Company. mendations for improvement in the man- Field work should be completed in Janu- agement and operations of United Water ary of 2009 with the goal of having a fi- New Jersey and United Water Toms River nal audit report submitted to the Board resulting from the management audit during the first quarter of 2009. conducted in 2007.

Completed the RFP procurement process for the performance of a management audit and affiliate transaction audit of Elizabethtown Gas Company. Field work has commenced with the goal of having a final audit report submitted to the Board during 2009.

Started the RFP procurement process for the performance of a management audit and affiliate transaction audit of Rockland Electric Company. The RFP has been released to the Board-approved pool of management consultants with bids expected in the month of January 2009. Staff anticipates that the audit will be under way early in the second quarter of 2009.

Working with the Energy Division, Continued

21 Major Accomplishments

The Office of the Economist has reviewed numerous electric, gas, water and Mergers and Acquisitions telecommunication mergers over the past few years. Some recent examples follow. On 4/23/08, American Water Works had an initial public offering of 58 million The most recent merger was the acquisi- shares at $21.50. This $1.25 billion deal, tion by New Jersey American Water Co. of which created the largest publicly-held the water system owned by the City of water utility in the U.S., came about from Trenton which serves various surrounding the analytical efforts of the Office of the towns. All parties benefited from the Economist working closely with the staff transaction; the City of Trenton received of N.J. American Water Co., Thames Water and RWE Aktiengesellshaft. The Company needed cash and relief from future capital established its corporate headquarters in expenditures; the surrounding towns will Voorhees, NJ and approximately 100 new now be served by a nationally recognized employees were added to the payroll. utility; NJAWC will be able to add 39,000 new customers in the state where its na-

tional headquarters is located; and New On 6/16/08, United Water New Jer- Jersey benefits from the creation of an sey and Gaz de France (GdF) received additional thirty private sector jobs. Board approval for their proposed merger of GdF with Suez. Under the transaction, Suez was merged into GdF, to create GDF Suez. Concurrent with this merger, Suez will spin-off 65% of Suez Environment in an Initial Public Offering. This new publicly traded company, Suez Environment, is the ultimate parent company of UWR Company. The Company agreed to maintain its corporate headquarters in Harring- ton Park, NJ.

22 Major Accomplishments

Relief to Thousands of New Jersey Residents. USF Help for Low-income benefits cover income eligible households’ energy Residents costs beyond a certain per- centage of household income up to a and productivity. cap of $1,800 per year. This way, USF provides the highest benefits to those with the greatest need. USF benefits Current Projects: Staff of the Board, must be applied for annually. Benefits DCA and the Department of Human appear as a monthly credit on the Services have initiated several working household electric and/or gas bill. groups to address the day to day chal- Estimated annual enrollment for USF lenges associated with providing one- is approximately 153,000 households stop shopping energy assistance to statewide. An increase in enrollment is the public. The working groups, which anticipated for the 2008-2009 heating include representatives from utility season due to the current economic companies, consumer interest groups climate. and state agencies, are working together to streamline the application USF program highlights include: process so that households in need can qualify for multiple assistance One-Stop Shopping: USF is linked with benefits as efficiently as possible. the federal Low Income Home Energy Assistance Program (LIHEAP), a heat- Looking Forward: The Board and DCA ing and cooling assistance program. will be working throughout 2009 to There are now three entry points to the more fully address the needs of USF USF program for qualified households: households through energy efficiency. 1) Submission of a joint USF/LIHEAP A public process will help the Board to application to a county application determine the best methods for provid- agency; 2) Participation in the Food ing home energy audits and energy Stamps program; and 3) Participation efficiency measures to USF house- in the Lifeline program (new enroll- holds. The Board’s Office of Clean En- ment process began in November ergy Comfort Partners Program, DCA’s 2008). federal Weatherization Assistance Pro- gram and the USF program will work together to assist New Jersey households keep their energy costs down. Customer Service. For the 2007-2008 program year, the Board contributed to General Information: Joint USF/ funding for a state-of-the-art interac- LIHEAP applications, a list of county tive, voice-response telephone system application agencies and eligibility for the USF and LIHEAP hotlines. This requirements are available to the pub- new lic at: 1-866-240-1347, or at: technology is meant to streamline and www.energyassistance.nj.gov. reduce the time it takes for the aver- age call at the Call Center, which handles more than 3,500 calls each week. The new phone system also has reporting capabilities to enhance services

23 Major Accomplishments

Comfort Partners: Help for Low-income The Program: In 2008, 7,239 low-income households were served by the Clean Energy Residents Program’s Comfort Partners Program. Comfort Partners provides: 1) A free home energy audit to identify how much a household can save on for employing a “Whole House Approach” using energy costs through the implementation of advanced building science diagnostics to ad- weatherization and energy efficiency meas- dress all aspects of energy conservation and ures; and 2) Free installation of weatherization affordability in a single integrated approach. and energy efficiency measures, as well as energy conservation education.

2008 Program Enhancements: Included 1) A pilot program to include a more comprehensive Eligibility: Electric and natural gas customers home energy audit inspection process includ- with high electric or natural gas usage and ing verifying contractor blower door, pressure income at or below 225% of the Federal Pov- diagnostics, and combustion safety testing erty Level are eligible. Households that receive results; benefits from Universal Service Fund (USF), Lifeline and/or Pharmaceutical Assistance to 2) Development of a consistent approach the Aged and Disabled (PAAD) are also eligible. among contractors for sizing of furnaces, boil- ers and central air conditioning units; 3) Com-

bustion safety testing procedure was revised to Targeted Outreach: Households that receive more closely match the Building Performance USF benefits are targeted for outreach by Com- Institute (BPI) certification procedures; and 4) fort Partners in order to help USF customers Refrigerator/freezer thresholds were revised to become less dependent on energy assistance. allow for more replacements. As a result of this targeted outreach, approximately 65% of Comfort Partners households were USF recipients in 2008. Partnering with the federal Weatherization Assistance Program (WAP): In 2008 Comfort

Partners utility representatives established Energy Savings: This program is part of a con- relationships with county WAP agencies, certed state-wide effort to achieve the primary (overseen by the Department of Community goal of Governor Corzine’s Energy Master Plan, Affairs), by visiting those agencies and provid- which is to reduce energy consumption 20 ing an overview of the Comfort Partners data- percent by 2020. During 2008, estimated aver- base system. Now county WAP agencies can age savings per customer were 8,778 mega- use the Comfort Partners database system to watt hours for electric and 73,535 dekatherms search for potential weatherization customers for natural gas. before scheduling appointments in order to avoid duplication of services.

Accomplishments: Comfort Partners won the 2008 Regional ENERGY STAR Award for Excel- lence in Energy Efficient Affordable Housing for promoting the use of ENERGY STAR qualified lighting and appliances in the retrofitting of low-income homes. Recognition was received

24 Major Accomplishments

Strengthened Protection of New Jer- sey’s Critical Infrastructure. Safety and Security In conjunction with State and Fed- eral partners and the private industry, the Division of Reliability & Security have engaged in a large scale effort to expand the preparedness of utilities for recovery of lifeline services after a major Federal Grants Enhance NJ Homeland disaster including Severe Weather, Hurri- Security. canes, Pandemic, or Nuclear events. The BPU has received a total of $1.35 Full Partnership Presence at State’s million in Homeland Security fundingfor Emergency Management Command Cen- the development of strategy and plan- ter. ning activities related to interdependen- cies of essential services and utility in- Emergency Management staff has frastructure, as well as strengthening met the challenge of integrating staff security measures and into State Police Headquarters in West Trenton to facilitate comprehensive planning, information sharing, and coordination of statewide emergency management functions as well as revision of the State Emergency Operations Plan (EOP).

Staff has successfully spearheaded the creation of a BPU PEOSH / Safety Committee and has worked diligently to update the BPU’s safety program on a continued basis throughout the year for the protection of our employees and field staff.

Staff successfully continues the Pipeline Integrity Management program that will ensure that transmission pipelines are in accordance with State and Federal guidelines and worked to continue to earn a high performance rating by the US Department of Transportation

Continued

25 Major Accomplishments

Vegetation Management.

• On April 7, 2006, in a separate pro- Safety and Security ceeding, the US Department of Energy, through the National Electric Reliability • On June 4, 2008, the BPU published Council (NERC) adopted transmission line notice in the New Jersey Register, 40 N.JR. vegetation management standards for 3958 of the rulemaking on vegetation man- lines that were rated above 200kV. agement practices, specific to the rules listed under N.J.A.C. 14:5-9. A formal • These generic standards were directed stakeholder hearing was held on Thursday, at electric utilities and set requirements August 21, 2008 at the BPU Hearing Room for ROW inspections as well as addressing in Newark, NJ. Subsequently, board staff clearances between transmission lines and gathered additional comments which were potential ground faults. The IEEE Standard presented to the board. Upon review, the 516-2003 titled, “Guide for Maintenance board asked for a second more concise Methods on Energized Transmission Lines” stakeholder meeting to be arranged. Staff was adopted by reference. composed an agenda outline in preparation for the public meeting and it was posted on the vegetation management webpage fea- In February 2008, the Board’s Chapter • tured on the official BPU website. The sec- 5, “Electric Service Rules” came up for re- ond meeting was conducted on Wednes- adoption and ultimately, the board re- day, December 3, 2008 at 1:00pm in the adopted the vegetation standards as part Board Hearing Room in Newark, NJ. of an overall readoption of Chapter 5. Dur- ing the re-adoption process, staff received Other important dates : an abundance of feedback from the public and the regulated utilities. Some of the Ø April 3rd 2009 Board initial concerns raised by these groups agenda meeting and vote included: clearing of vegetation in the bor- der zone, removal of vegetation in the wire Ø May 18th 2009 Proposal zone, and proper notice to homeowners published in NJ Register regarding trimming. Ø July 21st: 2009 Public Hear- • Then, on May 8, 2008, at the regularly ing scheduled meeting, the BPU announced its Ø July 22nd 2009: Comment intention to undertake a review of N.J.A.C. Period closes 14:5-9, the rules governing vegetation management by Electric Distribution Com- Ø November/Dec 2009: Adop- panies (EDC’s). The Board moved to action tion by BPU Commissioners in an effort to ensure that the Vegetation Management Rules were facilitating reli- Ø Dec./Jan.2009-2010: NJ able service while preserving an enhanced Register publication quality of life for New Jersey residents. The Board urged staff to begin a review of Subchapter 9, Vegetation Management. Specifically, staff was charged with analyzing the impact of the vegetation requirements on agricultural crops and determining if modifications were needed as it per- tains to the maintenance of transmission line right of ways (ROW).

Continued

26 Division Functions

Division of Administration • Administration Chicqueta Britton-Nutt, Director • Audits

The Division of Administration is comprised assment and Hostile Envi- • Customer Assistance of six units that provide services to BPU ronments in the Work- Staff. place; investigates alle- gations of discrimination; • Energy The Office of Human Resources is responsi- and develops and imple- ble for human resource management. Addi- ments the annual Work- tionally, the Office manages all benefits ac- force Plan. • Reliability & tivities, including health, dental, vision and prescription plans for employees. The Nursing Services provides Security Americans with Disabilities Act Coordinator first aid and immediate is also located within the Office of Human medical care. The Staff Resources. The Unit also assists manage- Nurse arranges for all • Telecommunications ment in Performance Assessment Review health-related programs. activity. The Training Unit coordinates all training The Employee Relations Unit oversees coun- initiatives, which include training sites and seling, labor relations, incentive programs, equipment, negotiating contracts, and ad- security issues, civil service regulations and ministering the tuition reimbursement pro- contractual matters. gram and employee awards efforts.

The Office Services Unit provides facility support to the BPU. Responsibilities include print shop operation, mailroom, message and courier service, office supplies and stock room. The Unit also manages the BPU assigned vehicles, parking passes, installation and relocation of telephone equipment, inter-office moves and space allocations. The Office Services Unit is also responsible for procurement and receipt of cash.

The Equal Employment Opportunity and Af- firmative Action Program (EEO/AA) is admin- istered by the EEO/AA Officer, who reports to the Division Director and is responsible for matters related to the State of New Jer- sey Policy Prohibiting Discrimination, Har-

27 Division Functions

Division of Audits • Administration Dennis Moran, Director • Audits Pursuant to statute, the Division of Audits to improve the future opera- is empowered by the Board to examine tions and management of • Customer Assistance and audit duly designated public utilities each utility. Bureau Staff and other regulated entities subject to has investigated and recom- the Board’s jurisdiction. The Division con- mended courses of action • Energy sists of two Bureaus, which report di- to the Board on restructur- rectly to the Director. ing, electric outages, gas • Reliability & explosions, “Y2K,” compli- The Bureau of Financial Audits performs ance reviews, reliability of audits of utilities and other regulated en- service, generation, One Security tities subject to the Board’s jurisdiction. Call, competitive services, Examples of financial audits performed affiliate relations and tele- • Telecommunications included utility construction programs, phone finance integrity. gas contracts, tariff compliance and envi- Under the Electric Discount ronmental remediation expenditures, as and Energy Competition Act of 1999, well as audits of other regulated entities both Bureaus participate in competitive subject to the Board’s jurisdiction such service compliance reviews. These are as New Jersey One Call. performed by an independent consulting firm under the supervision of Board Staff. The Bureau assists other agencies in investigations of public utilities and other regulated entities. The Bureau maintains and reviews annual reports filed by all New Jersey public utilities; manages the Board’s Annual Assessment program, and is responsible for the licensing of third- party energy suppliers, energy agents and private aggregators and for issuing authority for Competitive Local Exchange Carriers (CLECs) for inter-exchange telecommunications services. .

The Bureau of Management Audits reviews the operations and management of energy utilities during a specific time- frame, with the goal of seeking efficiency and accountability of actions in order to assure safe, adequate and proper service. The goal of efficiency reflects endeavors

28 Division Functions

Division of Customer Assistance • Administration Eric Hartsfield, Director • Audits The Bureau of Customer Relations mediates c. 82. This legislation disputes between utilities and customers over required the State to • Customer such matters as service complaints, high “opt-in” to the Federal bills, payment arrangements and discontinu- Communications Com- ance of service, deposit requests and incor- missions’ State Referral Assistance rect rates. The Bureau’s verbal complaint unit Program; as such, the is responsible for handling thousands of Bureau handles all New • Energy phone calls annually. These include emer- Jersey slamming com- gency calls concerning gas leaks, fallen wires plaints that were previ- and water main breaks, lack-of-service com- ously referred to the Fed- • Reliability & plaints, service delays, appliance repairs, dis- eral Communications continuance of service and payment arrange- Commission (FCC). The Security ment mediation. The Bureau also conducts Bureau also imposes many office interviews with utility customers fines upon carriers that who prefer to deal with BPU Customer Repre- are found to have vio- sentatives in person. lated the slamming regulations. In order to identify chronic abusers, some of these com- Additionally, the Bureau contains a letter- plaints are handled in conjunction with the writing unit, which investigates billing and Division of Consumer Affairs. The Bureau also service complaints. The unit issues an infor- handles alleged slamming complaints for mal decision. The Bureau is also responsible energy suppliers and other investigations as for tracking the number of complaints re- assigned. ceived to identify areas of concern; in turn, the Division recommends necessary correc- tive action to the Board.

The Research and Planning Unit is responsible for research and planning functions within the Division. It provides analytical and administrative support to the Division Director in conducting special projects, surveys and studies. Staff also processes formal complaints for Board agenda consideration and participates in rule making, rate case issues and tariff revisions and provides assistance and consultation to other Divisions of the Board.

The Bureau of Investigations handles telephone slamming complaints, as per P.L. 1998

29 Division Functions

Division of Energy • Administration Nusha Wyner, Director • Audits The Division of Energy is responsible for development of EDECA- traditional regulatory responsibilities in mandated energy standards, • Customer Assistance addition to evolutionary facets of de- environmental disclosure re- regulation and retail competition. With quirements and federal/PJM changes in the law, the Division’s re- Interconnection and regional • Energy sponsibilities have increased as it fos- transmission matters. Market ters electric and natural gas retail com- development includes basic petition in New Jersey. generation supply, basic gas • Reliability & supply service, customer ac- The Bureau of Revenue Requirements count services and the moni- Security performs traditional rate-related func- toring of customers changing tions, determining revenue require- energy suppliers. Another • Telecommunications ments, setting rates and addressing tax major role of the Bureau is to and financing issues, encompassing coordinate the efforts of work- base rate cases, adjustment clauses ing groups to facilitate utility and depreciation matters. Since de- transition to open competition. System regulation, these functions are chang- Reliability includes regulatory oversight ing and can include areas such as so- associated with the provision of safe, cietal benefits charges and market adequate and reliable electric and natu- transition costs. ral gas service. The Bureau of Rates and Tariffs com- prises functions associated with cost of service studies, unbundling of tariffs, alternate plans of regulation, rate and tariff design, mergers and acquisitions, competitive services, stranded costs, appliance service offerings and affiliate relations. The Bureau also addresses changes in the electric and gas industries, ongoing review of unbundled rates, deferred balances for electric utilities and cost of service studies for all seven energy utilities.

The Bureau of Market Development and System Reliability oversees industry restructuring issues, policy design, the

30 Division Functions

Division of Reliability & Security • Administration James Giuliano, Director • Audits

The Division’s Bureaus: committee involvement • Customer and providing support and Bureau of Emergency Management handles data for Divisional policy emergency response matters for water, matters and related en- Assistance sewer, electric and gas utilities. It is tasked forcement. with oversight of each utility industry sector’s security obligations according to law. The Bureau of Meter • Energy The Division remains integrated into the Tests and One Call admin- Office of Emergency Management and the isters the Underground • Reliability & Office of Homeland Security and Prepared- Facility Protection Act ness. The BPU is a member of and President (One Call Law), a safety Security Fox is an active participant in the OHSP Do- and enforcement pro- mestic Security Preparedness Task Force gram.The One Call en- (DSPTF), which continues to achieve secu- forcement program con- rity objectives. Bureau Staff participates tinues to experience an increase in the use fully in the Task Force Planning Group, the of the one-call system by excavators (with a Weapons of Mass Destruction (WMD) Advi- decrease in the occurrences of hits to un- sory Committee, and other planning groups. derground facilities). Strong efforts are di- Staff works with utility companies to refine rected toward public outreach and educa- utility security best practices that include tion, which include an Excavator Handbook detection, preparation, prevention, re- for Damage Prevention. sponse, mitigation and recovery. Staff participates in exercises and training programs on preparedness and reliability.

The Bureau of Pipeline Safety (BPS) administers a safety and enforcement program for natural gas pipeline systems within the State. The BPS oversees the State’s natural gas pipeline safety program in accordance with State and federal guidelines, as well as the U.S. Department of Transportation/ Office of Pipeline Safety (OPS) certification requirements. This includes a comprehensive inspection and compliance review of all intrastate gas pipeline systems. The Bureau is responsible for accident investigations, effective rulemaking, national regulatory

31 Division Functions

Division of Telecommunications • Administration Anthony Centrella, Director • Audits The Division of Telecommunications over- support systems; property sees the performance of the telephone com- sales; exchange boundary • Customer panies under the Board’s jurisdiction. It is revisions; competitive ser- comprised of the bureaus of Market Struc- vices monitoring; investiga- ture and Engineering and Rates. tion into the service out- Assistance ages; administration of the The Bureau of Market Structure implements telecommunications relay • Energy and oversees local competition issues. It system; initial and revised evaluates and implements plans for alterna- tariffs for regulated and tive regulation and handles utility applica- competitive services; whole- • Reliability & tions for mergers, divestitures, transfers of sale unbundled network control and acquisitions. The Bureau re- element rates; payphone- Security views carrier-to-carrier arrangements and related issues; reseller and interconnection agreements for facilities- facilities-based providers’ based, resale and wireless carriers. It con- bankruptcies; rulemakings; ducts inter-carrier coordination activities verbal and written complaints, both simple through arbitration, mediation and admini- and complex; and the Bureau interfaces stration of performance measurements to with the numbering conservation expert resolve issues that arise between compet- regarding area code relief, pooling conser- ing telephone carriers. The Bureau also vation and reclamation of unused numbers. monitors telephone assistance programs such as Lifeline and Link-Up and Federal universal service funding issues. It assists the Division of Audits with the annual assessment of financial reporting implementation and certification of carriers. It also assists the Office of the Economist with evaluation of financing petitions.

The Bureau of Engineering and Rates exam- ines facilities deployment of telephone companies and ensures that the companies provide reliable, safe and high-quality service at reasonable rates, terms and conditions. The Bureau analyzes and recommends the following areas: accelerated network deployment, to schools and libraries; retail service quality standards; operations

32 Division Functions

Division of Water • Administration Maria Moran, Director • Audits The Division of Water is responsible for being imposed under the Safe ensuring that safe, adequate and reli- Drinking Water Act and the able water and wastewater service is Department of Environmental • Customer Assistance available at reasonable costs to the Protection rules, water and customers of New Jersey’s 47 investor- wastewater treatment costs • Energy owned water companies, 20 sewer are increasing, which in turn companies and 10 municipal water increases the cost of provid- companies. The Division evaluates fi- ing service to customers. This • Reliability & nancial implications and impacts of is a challenge for the Division health and environmental regulations since compliance with these Security on rates, and the economic viability of rules and regulations is man- the investor-owned water and wastewa- datory. The Division must ter utilities under BPU’s jurisdiction. balance these compliance The Division regularly deals with: water costs with fair and reasonable rates to and wastewater rates; assessing water customers. and wastewater infrastructure needs and operating costs; assuring safe, reliable water supply; droughts; smart growth impacts on water and wastewater costs and availability of supply; water reuse; depletion of aquifers; service interruptions; terms and conditions of water and wastewater service and overall management; and conservation initiatives.

The historically quiet water industry exists now in significantly changing markets, which require a strategic regulatory response under law. A significant number of the State’s municipal water systems are being privatized by subsidi- aries of water purveyors regulated by the Board. The Division’s role is to ensure that these privatized efforts result in fair and equitable rates for the privatized municipal systems. Also, given more stringent water quality limitations

33 Office Functions

Office of the Chief of Staff • Chief of Staff Janeen Lawlor, Chief of Staff • Chief Counsel • Executive Director The Chief of Staff assists the BPU sioners at meetings with members President with the day-to-day man- of the public or with representa- • Secretary agement of the agency. The admin- tives of various governmental and istrative, planning, fiscal, communi- industry groups. • Office of Policy and cations, legislative, clean energy Planning and information technology units report directly to the Chief of Staff. • Chief Economist The Chief of Staff reviews all activities and work products of the • Cable Television above-noted units to ensure that • Clean Energy they are correct and in compliance with existing regulatory require- • Communications ments and established Board policy. The Chief of Staff also serves • Information as a chief policy advisor to the Technology Board and frequently represents the President and other Commis-

34 Office Functions

Office of Chief Counsel • Chief of Staff Sam Wolfe, Chief Counsel • Chief Counsel

The Office of the Chief Counsel is utes and regulations covering • Executive Director staffed by legal specialists and ad- the responsibilities of the BPU. ministrative support employees. The Chief Counsel also leads • Secretary Legal specialists provide regulatory the BPU’s team working on fed- and administrative expertise regard- eral and regional electricity pol- • Office of Policy and ing matters brought before the icy issues. The office also in- Planning Board. They provide support to the cludes the BPU’s ethics liaison Board, to BPU technical staff, and to officer, who provides guidance • Chief Economist the Attorney General’s office. Exam- and training to Commissioners ples of this support include drafting and staff regarding ethics is- • Cable Television regulations, legislation, and Board sues. • Clean Energy orders; assisting technical staff in drafting those documents, in accor- • Communications dance with the Board’s policy objectives; assisting in discovery and in • Information preparation for trial-type hearings in Technology contested cases and facilitating settlement discussions in those cases; leading or facilitating stakeholder meetings as needed; and serving as hearing officers in public hearings. The legal specialists also provide guidance to the public and to technical staff as to the nature and substance of the various stat-

35 Office Functions

Office of the Executive Director • Chief of Staff Victor Fortkiewicz, Executive Director • Chief Counsel

The Executive Director oversees the as a spokesperson for the BPU • Executive Director activities of the Office of Cable Tele- in responding to press inquiries vision and the Divisions of Audits, and in meetings with editorial • Secretary Energy, Telecommunications, Reli- boards. ability & Security and Water, as well • Office of Policy and as the Office of the Chief Economist Planning and the newly formed Office of the Business Energy Ombudsperson. • Chief Economist The Executive Director reviews all activities and work products of the • Cable Television above noted Divisions to ensure that • Clean Energy they are technically correct and in compliance with the existing regula- • Communications tory criteria and established BPU policy. The Executive Director is • Information ultimately responsible for all techni- Technology cal staff policy recommendations to the BPU.

The Executive Director often represents the BPU in meetings with other State departments, the Gover- nor’s Office staff and the legislature, which may include the delivery of formal testimony at legislative hearings. The Executive Director can act

36 Office Functions

Office of the Secretary • Chief of Staff Kristi Izzo, Secretary • Chief Counsel

The Secretary of the BPU is respon- • Executive Director sible for managing the Board’s agenda process and serves as the • Secretary BPU’s Records Custodian to ensure compliance with the Open Public • Office of Policy and Records Act. In accordance with Planning N.J.S.A. 48:2-4, the Secretary of the BPU is charged with the duty to • Chief Economist “keep full correct minutes of all transactions and proceedings of the • Cable Television Board” and to be “the official re- • Clean Energy porter of said proceedings.” The Secretary also oversees all record • Communications management activities and the handling of all constituent inquiries. To • Information aid the Secretary in performing Technology these functions, the office includes the Bureau of Case Management and the Division of Customer Assis- tance. The Secretary is also charged with managing the Univer- sal Service Fund, the Board’s energy assistance program for low-income households.

37 Office Functions

Office of Policy and Planning • Chief of Staff Lance Miller, Chief • Chief Counsel

The Chief of Policy and Planning • Executive Director oversees the Clean Energy Program, managing program development • Secretary and evaluation. The office led the development of the State Energy • Office of Policy and Master Plan (EMP) through coordi- Planning nation of multi-agency Energy Mas- ter Plan Committee and adminis- • Chief Economist tered the stakeholder process during the drafting of the plan. The Of- • Cable Television fice of Policy and Planning is lead in • Clean Energy policy development towards the achievement of the goals outlined in • Communications the EMP. • Information Technology

38 Office Functions

Office of the Chief Economist • Chief of Staff Mark Beyer, Chief Economist • Chief Counsel

The Office of the Economist advises availability of credit di- • Executive Director the Board on economic and financial mat- rectly impacts ratepayers. ters as well as policy issues. It is respon- This includes innovative • Secretary sible for analyzing and recommending ac- capital recovery mecha- tion on cost of capital issues in rate cases, nisms to spur employment • Office of Policy and evaluating utility requests to sell securi- especially for needed util- ties and assessing utility merger and ac- ity and environmental in- Planning quisition proposals. frastructure. • Chief Economist

• Cable Television It analyzes the financial performance of regulated utilities, advising the Board • Clean Energy on capital and earnings requirements to assure the financial integrity of the utili- • Communications ties is sufficient to provide reasonably priced utility service. The Office evaluates how proposed alternatives to rate of re- • Information turn regulation would impact ratepayers Technology including replacing traditional cost based regulatory structures with market based incentive mechanisms in order to improve efficiency and minimize costs.

The Office is working to ameliorate the impact of problems in the macro- economy (rising unemployment) and financial markets (increasing cost and limited availability of credit) on both ratepayers and shareholders. Given the capital inten- sity of the utility business, the cost and

39 Office Functions

Office of Cable Television • Chief of Staff Celeste Fasone, Director • Chief Counsel The Office of Cable Television (OCTV) nections and property restora- • Executive Director regulates basic cable television rates tion. and other cable services supplied by • Secretary 39 cable TV systems to over 2.5 mil- The State and Local Planning lion subscribers throughout New Jer- Unit, which oversees franchis- • Office of Policy and sey. The OCTV also includes a Bureau ing and re-franchising for New Planning of Accounts and a Bureau of Inspec- Jersey’s 562 municipalities, tion & Enforcement. completes the OCTV’s structure. • Chief Economist The Bureau of Accounts reviews sales, • Cable Television transfers, mergers and consolidations proposed by the various cable compa- • Clean Energy nies that operate in New Jersey. Pur- suant to the Federal Cable Act of • Communications 1992, the Bureau may only regulate the rates charged for basic service • Information and equipment by four multi-system Technology owners offering service within the State.

The Bureau of Inspection & Enforce- ment reviews operational and technical plans submitted by the companies and assures that they are in compliance with State and Federal law and the terms and conditions set forth in their Certificates of Approval. Bureau Staff also handles customer relations and rule enforcement in such matters as billing, service complaints, discon-

40 Office Functions

Office of Clean Energy • Chief of Staff Mike Winka, Director • Chief Counsel

The Office of Clean Energy (OCE) has the Commercial Clean Energy • Executive Director responsibility of implementing energy Programs efficiency and renewable energy pro- • Secretary New Jersey SmartStart grams, as well as the programs’ design, Buildings® • Office of Policy and administration, monitoring and evaluation. The OCE administers a grid supply Combined Heat and Power Planning renewable energy program and an infra- (CHP) • Chief Economist structure development program. Addi- Renewable Energy Pro- tionally, the OCE administers federally grams • Cable Television funded energy conservation loans and grants, renewable energy demonstration Customer On-Site Renew- • Clean Energy projects, alternative fuels programs, able Energy (CORE) Rebate emerging technologies and public aware- Solar Renewable Energy • Communications ness programs. Certificate (SREC) • Information The NJBPU Clean Energy Program is a CleanPower Choice SM signature initiative of the Board. The Pro- Technology Renewable Energy Project gram, created as part of the New Jersey Grants & Financing and Re- Electric Discount and Energy Competition newable Energy Business Act (EDECA), offers a comprehensive Venture Assistance (both suite of programs that makes clean en- offered in partnership with ergy technologies affordable and accessi- the New Jersey Economic ble to all New Jerseyans, including resi- Development Authority) dential customers, businesses, schools and local governments:

Residential Energy Efficiency & Assistance Programs

Home Performance for ENERGY STAR

NJ ENERGY STAR® Homes

NJ ENERGY STAR® NJComfort Partners Home Energy Analysis COOLAdvantage/WARMAdvantage

41 Office Functions

Office of Communications • Chief of Staff Tim O’Donovan, Director • Chief Counsel • Executive Director The Office of Communications is designing, and monitoring the responsible for informing the public Board’s website. • Secretary of Board decisions, meetings and activities. It culls information from • Office of Policy and various Divisions in order to respond Planning to the media, general public, utility customers, the Legislature and lo- • Chief Economist cal, State and Federal government officials and agencies. The Office of • Cable Television Communications also coordinates the Board’s participation with vari- • Clean Energy ous consumer groups, neighborhood associations and private and public • Communications organizations to help educate the public about saving energy and other • Information matters related to their utilities. The Technology Office is responsible for updating,

42 Office Functions

Office of Information Technology • Chief of Staff Wilma Hoggard, Director • Chief Counsel • Executive Director The Office of Information Technology’s (IT) among wired, wireless responsibility is to keep the Board at the and voice mail systems. • Secretary cutting edge of technology. This requires The BPU is at the fore- analysis of each Division’s specific com- front in implementing • Office of Policy and puter hardware and software require- these state-of-art tech- Planning ments and any accompanying design, nologies. development, procurement and imple- • Chief Economist mentation. IT provides Word & data proc- essing solutions, data communications, • Cable Television database applications, networking solutions and WEB interfacing applications. • Clean Energy A key goal of IT is to develop and imple- • Communications ment procedures and guidelines in order to enhance data integrity, system mainte- • Information nance, reliability and security for the Technology Board. As such, the Division is responsible for establishing and administering a contingency plan to ensure continuity of operation. A Help Desk was formed in order to maintain this goal by providing support and assistance to the Board’s end-users in the use of computer systems.

IT is responsible for the hardware and software integration necessary to promote anytime, anywhere communication, which is facilitated through data sharing

43 New Jersey Board of Public Utili-

Points of Contact:

Utility Consumer Complaints 1.800.624.0241 Cable Television Complaints 1.800.624.0331 Media Inquiries 973.648.6135 Inquiries from Legislative Offices 973.648.2716 On the Web www.nj.gov/bpu www.njcleanenergy.com