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JCP&L FILES REQUEST FOR INCREASE IN BASE RATES

 JCP&L FILES REQUEST FOR INCREASE IN BASE RATES
 MORRISTOWN, Dec., 20 /PRNewswire/ -- Jersey Central Power & Light


Company today filed a request with the New Jersey Board of Regulatory Commissioners (BRC) for a change in its base rates which will increase annual revenues by $221 million, or 13 percent.
 Today's request is the second of two rate filings the company has made before the BRC. Earlier this month, the company filed a request for an increase in the other major component of rates, its Levelized Energy Adjustment Clause (LEAC), of about 3 percent.
 Several factors contributed to the need for today's filing. Among them are capital additions to the company's electrical system and increases in operations and maintenance expenses.
 Dennis Baldassari, vice president - Rates and Materials & Services explained: "While customer growth has slowed over the last two years, its considerable increase beginning in 1983 placed greater demands on the company's infrastructure. As a result, we have had an ambitious construction program that has seen an addition of about $350 million of new plant in just the last two years. And, on average, we are projecting construction of at least $250 million annually for the foreseeable future. These projects run the gamut of facilities necessary for electric service reliability from generation to transmission and distribution.
 Since 1989, the company has consolidated numerous operations, reduced its workforce by more than 300 positions, and achieved new efficiencies through changes in hundreds of work practices. These efforts have gone a long way toward reducing the costs of serving our customers, and thus the costs the company needs to recover through electric rates. At the same time, we realized that, despite our continuing efforts, increases in rates would become necessary."
 Also contributing to the need for today's filing are increased expenses resulting from changes in regulatory requirements for the provision of post-employment benefits and acceleration of the payment schedule for state taxes. Those costs account for $70 million of the total, or nearly one-third of the company's increase in revenue requirements.
 All utilities in the state collect Gross Receipts and Franchise Taxes through rates. The taxes are paid to the state which, in turn, distributes the tax to New Jersey municipalities. Recently, the tax was changed by the state legislature from a fixed percentage to a tax for units of electricity used as well as to provide for an accelerated payment schedule. Although this one-time change in the payment schedule results in an increase in current revenue requirements, it is believed that the unit tax will stabilize tax liability and protect customer rates from future tax increases based on inflation in energy prices. These taxes currently comprise about 13 percent of the average electric bill.
 As to the post-employment benefits issue, beginning in January 1993, the company will be required to provide for its retirees' health benefits by establishing and pre-funding a trust similar to pensions. Its existing practice is to pay for such benefits on a current basis.
 The effect of the base rate request would be to increase rates by a total of $221 million, or 13 percent, to become effective as follows:
 -- 11 percent of the requested amount would become effective in late 1992;
 -- 1 percent would become effective in 1993; and
 -- 1 percent would become effective in 1994.
 "Our rates for electric service change frequently, for a number of reasons. However, since the mid-1980s, the net changes to our rates were not only well below the general rate of inflation, but have resulted in today's charges to customers actually being lower than those in effect in 1985.
 "We will continue to explore the development or purchase of economical electricity and we will continue the process of cost- containment wherever possible within the company," Baldassari said.
 Under the company's request, a residential JCP&L customer using 500 kilowatt-hours of electricity and paying an average of $54.97 monthly would pay $62.65, an increase of $7.68, or 14 percent.
 -0- 12/20/91
 /CONTACT: George R. Koodray of JCP&L Company, 201-455-8594/
 (GPU) CO: Jersey Central Power & Light Company ST: New Jersey IN: UTI SU:


KD-KW -- NY053 -- 4418 12/20/91 14:01 EST
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Date:Dec 20, 1991
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