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NJ’s Atlantic City Electric (ACE) Requests to Raise Distribution Rates

New Jersey’s Atlantic City Electric (ACE) has submitted a formal filing with the state’s Board of Public Utilities (BPU) to raise electric distribution rates for residential electric customers. If approved, the rate hike will increase the average customer’s bills by about $12.69 a month, from $182 to $194.69.

If the rate hike is approved, it will generate about $70 million for ACE, which will be used to fund infrastructure improvements, build new facilities, and improve the reliability of electric delivery. Roughly $16 million will go toward restoration costs associated with Superstorm Sandy and other recent major storms.

ACE provides electric distribution services to nearly 550,000 customers in southern New Jersey. The utility’s service area includes nearly all South New Jersey, starting just southwest of Camden in Gloucester County and runs east to the Atlantic Ocean.

Public Outcry on ACE’s Rate Increase

Last week, about 40 concerned citizens attended the public hearing on the utility’s rate increase. Senior citizens made up the majority of attendees, with many concerned that they won’t be able to afford the increase due to their already tight fixed incomes.

“They need to think twice, if not three times, about raising the rates so everybody can afford it. There’s no joke. There are people who can’t afford it,” Burgess Hammer, resident of Cape May Court House and Presented f the Middle Township AARP stated as he and others advised the BPU to reject the hike.

Thursday’s hearing was the result of the BPU’s established process in dealing with rate increases, whereby the public gets a chance to voice their opinions on public utility rate increases in the state. Most citizens understand that rate hikes are necessary in order to maintain or improve the reliability of service as well as to keep from recovery costs from major storms and natural disasters.

Yet, critics of such rate increases raise important considerations. One of the biggest concerns is that the utilities will not use the revenue to actually improve anything, and that shareholders will be the biggest winners of rate hikes. Furthermore, there has been an influx of criticism for many utilities on the east coast in regards to requesting rate increases for recovery costs associated with major storms. The argument is that the utilities could have better prepared themselves in the past and could have better planned for such major storms. Instead, critics claim that the utilities will continue to do little preparation work and pass the costs onto customers when natural disasters occur.

ACE’s electric customers cannot avoid the rate hikes if approved. They can, however, continue to shop around for a retail electricity provider for the supply-side of the electric service. Many providers offer significantly lower rates than ACE, and can help make up for the increase in distribution costs.

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