Page 4 - 2023 Summer BPU Connection-WQR FINAL v10 PDF

2023 Electric Rate Proposal

BPU: Fiscal Responsibility
Background: • BPU continues working to reduce spending, increase
efficiencies, and improve overall customer service
• BPU is required to complete a Cost of Service (COS) – without impacts on reliability or future growth
Rate Study to determine if existing rates will support requirements.
future operating and capital needs, as well as reserve
requirements over the next 5 years.
• A public hearing process has been initiated to
determine what, if any, electric rate adjustments should
be implemented.
• Meetings and the hearing process will provide
opportunities to discuss rate adjustments, billing
processes, capital improvement projects, reserve
requirements, and other matters required to meet the
future energy needs of our community.

What’s Being Proposed:

• An external study recommends an overall 2.5% increase
in electric base rates beginning July 1, 2023 and 2.5% on
July 1, 2024.
• Creation of a Green Rider that allows Large Commercial
and Industrial customers to purchase energy with
environmental attributes to meet renewable energy BPU: A Community Asset
goals. • One of the top-ranked publicly owned utilities in the
• Modifying the ERC Rider to allow for additional recovery country, BPU has provided affordable and reliable energy
to build and maintain the new ERC reserve fund. to the community for over 100 years.
• Nationally recognized for community service, social
Why This Is Necessary: responsibility, and volunteerism – including the Summer

• BPU’s electrical system needs more than $180 million in Youth Program, providing millions in utility assistance,
capital improvements to maintain the integrity of the the Annual BPU Charity Golf Tournament, and more.
utility’s electrical system, ensuring dependable service • Servicing 65,000 electric customers – with two power
and meeting future demand requirements. stations, 29 substations, 16,500 transformers,
• BPU hasn’t adjusted electric rates since 2018. 3,000 miles of electrical lines, 19,000 streetlights,
• Postponing a rate adjustment may cause service and 5,300 traffic signal heads.
disruptions and cost even more. Critical Capital Improvement Projects:
• Inflationary pressure on costs of outside services, (2023-27) = $180 million
materials, and labor have increased.
• The COS study recommends BPU increasing operating • Electric Transmission – $15.8 million
reserve funds to 120 days of cash-on-hand. • Electric Substations – $20.4 million
• BPU won’t be able to finance future capital projects and • Electric Overhead Distribution – $52.8 million
meet reserve and debt service requirements without • Electric Underground Distribution – $14.5 million
additional revenue.
• Electric General Construction - $8.8 million
• Without a strong credit rating, BPU won’t be able to
borrow money for capital improvements at a reasonable • Electric Transformers - $14.5 million
interest rate. • Nearman Power Plant Unit 1 – $29.3 million

Based on governance procedures, BPU has set advance notice of public rate hearings on June 14-15, 2023 to discuss and
4 | SUMMER 2023 review potential adjustments to meet future needs of the utility and community. For more information, go to BPU.com