PSE&G head wants to get rid of electric bills? Not quite, company says

Don't get too wired about headlines you've seen suggesting the outgoing head of PSE&G wants to do away with electric bills.

Outgoing President and CEO Ralph LaRossa is indeed proposing a pretty drastic change to the way customers are billed — but not one that lets them off the hook for all the electricity they use, the company told New Jersey 101.5.

According to a story on NJBiz.com, when LaRossa spoke at a conference last month, he discussed how better efficiency in energy production has changed the industry and said providers could improve the way customers pay for their services.

"We need to figure out the whole model for the electric side of the business," LaRossa was quoted as saying in the story. "We need to figure out whether customers should be paying rent for the size of the wires they are using, or pay volumetric-based power bills. In my opinion, you should be paying a flat fee for whatever size of wire you're using."

Wait, what would that mean, exactly?

"There are two parts to a customer’s bill," PSE&G spokesperson Karen Johnson told New Jersey 101.5. There's "PSE&G’s cost of delivering the electricity, and the electricity itself – known as the supply portion, which is a pass through."

Right now, both parts of the bill reflect how much electricity a customer uses.

But under the idea LaRossa floated, a only the charge for the "electricity itself" would vary with the amount used. The other charge, for delivering it, would be a flat fee, whether the customer uses a lot or a little, whether the wires delivering it are big or small.

Johnson said the company doesn't know how much of a cost savings that could have — and some customers could even wind up paying more.The goal, she said, would be seeking fair and equitable bills for as many customers as possible.

"The money that we need to maintain and upgrade our system would be collected equitably from all customers," Johnson.

But there is no set plan in place at this time. Johnson said the company is considering "a lot of different models," to see which would work best.

"Someone with a two-bedroom house could pay less than someone with a McMansion," she said. "There's always going to be a supply portion of the bill and that is variable."

With more than two million customers, Johnson said, the company is constantly working to replace older equipment and take other steps to try and reduce the number of outages and minimize how long outages that do occur last for.

Any change to the way customers are billed would first have to be approved by the Board of Public Utilities.

"It might make sense because we feel that we want to make energy-efficiency programs and measures available to more people, not just people who can afford to put in high-efficiency furnaces and replace all their windows with high efficiency glass," she said.

Johnson said there was no timeline for when an application for a change might be submitted.

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Contact reporter Adam Hochron at 609-359-5326 or Adam.Hochron@townsquaremedia.com