Debt Consolidation And Credit Some of Public Service Electric & Gas' biggest energy customers are screaming mad. In papers filed with the state Board of Public Utilities, the businesses are decrying a tentative settlement PSE&G reached with other customers on a tentative $170 million rate increase when a cap on electric rates is lifted Aug. 1.
Progressive officials testified they only applied this model to new customers, not to renewing customers. This apparently meant that if you were initially covered by Progressive when you had a good credit rating, it would not hurt your renewal rate if your credit score went down. But if the opposite were true — you signed up when you had a bad credit rating but had since improved it — you were stuck at the less favorable rate, rated.
Check Credit Rating The utility reached the agreement earlier this month with NJ Transit, a big steel maker and independent energy producers around the state. PSE&G, the state's largest utility, heralded the settlement as a good deal for consumers because the $170 million increase is substantially less than the $250 million it initially sought.
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Improve Credit Rating But critics of the deal, including the New Jersey Large Energy Users Coalition -- a group of large industrial customers -- call the settlement a "giveaway." They insist the utility will get 95 percent of what it had originally sought after a temporary credit that is part of the deal expires in 2006.
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Credit Online Rating Report Here's how it would work: Because of litigation and renegotiation of power supply contracts, the utility overcollected $155 million from ratepayers during the past four years. As part of the settlement, the utility would return the money to ratepayers over the next 29 months in the form of a credit, which amounts to $64 million annually.
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Credit Score Rating Scale When the credit expires in 2006, however, the coalition says ratepayers will be hit with an automatic $64 million rate hike, which brings the real rate increase to $234 million, not $170 million.
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Bad Card Credit Credit People Mark Sperduto, director of corporate issues at PSE&G, said the $64 million increase is not all that much, considering inflation. "It amounts to about 1.5 percent 2 1/2 years from now," he said. "It's a minor increase."
Free Credit Rating Report The tentative settlement is before the state BPU, which is expected to rule on it sometime next month.
Credit Rating Scale Tom Johnson
Star-Ledger - 6/26/2003
Topic: Energy
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