BPU chief: Utilities failed to communicate

TRENTON - New Jersey's electricity providers did a good job of bringing in thousands of out-of-state linemen and tree trimmers before Sandy struck, but they failed at communicating with customers and mayors after that storm and a subsequent nor'easter, which darkened 2.7 million homes and businesses for up to 13 days.

That assessment from Bob Hanna, president of the Board of Public Utilities, the agency that regulates the energy companies, came Wednesday during the third Senate Budget Committee hearing on the storm, this one focused on the utilities' response and what improvements might be made.

Sen. Paul Sarlo (D., Bergen), the committee chairman, said the panel hoped to determine where money could be allocated to rebuild a more dependable power grid to guard against future storm-related outages.

Suggestions included elevating, moving or waterproofing energy substations, and installing smart meters that automatically signal the supplier when the power goes out. Broader solutions seemed easier to identify: create stronger systems by building redundancies into the power grid, consistently manage tree trimming near power lines, and find better ways of communicating with people who lose power.

Stefanie Brand, the state's ratepayer advocate, cautioned lawmakers and utility executives against the inclination to spend lots of money before the next natural disaster hits.

"It's only after we've looked at 'What are we already spending?' and 'Is it being spent in the right way?' and 'Are there ways to enhance what we have on the books already?' that we should start looking at all the new things everybody wants to spend money on," she said. "The worst thing we could possibly do is victimize ratepayers twice by doubling their rates and having a system that will still go out if we have another storm like Sandy."

Ralph LaRossa, chief executive of Public Service Electric & Gas Co., the state's largest utility, said Sandy's storm surge into Newark Bay was several feet higher than the worst-case storm models had predicted, overwhelming the utility's low-lying substations and switching stations and causing one million of the utility's 1.7 million outages. Downed trees that toppled power lines were responsible for the rest of the outages. He said that could be lessened if more aggressive tree trimming was allowed throughout the state. Trimming rules vary by town.

Although the utility had placed sandbags around 11 vulnerable power stations before the storm, "those were not the right 11," he said. "The storm hit in a way we just didn't expect, to be blunt."

LaRossa said it cost from $250 million to $300 million just to restore power - so-called bandages, he said - at least some of which is expected to be passed on to customers. It would cost about $2 million to rebuild a substation and more than $100 million to rebuild a switching station, but he said the utility would look to investors for funds to make such capital improvements.

He said the utility had begun strengthening the power grid but acknowledged that the system had been weakened by the intake of saltwater from the surge and fuel from a 350,000-gallon diesel spill just afterward. That will result in more outages until permanent repairs can be made.