Lavallette Forced to Add Surcharge to Electric Bills

An utility pole with electrical equipment. (Photo: Daniel Nee)

Lavallette council members begrudgingly approved a surcharge for both residential and business electricity accounts Monday night, following the outcome of litigation surrounding an electrical transmission line in Pennsylvania and North Jersey.

The municipal electric utility will charge residential customers an extra $5 per month and commercial customers $15 per month until construction costs of a transmission line between Susquehanna, Pa. and Roseland, N.J. is completed by PJM, an electricity transmission organization that covers 13 states.

“We’ve had a flat rate structure for 10 years,” said Councilman James Borowski. “The price of electricity has been going down but the price of delivery has been going up and we’ve been trying to keep equilibrium.”

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A kink in that methodology developed when other states sued, claiming in a number of rounds of litigation that customers south and east of the transmission line were not paying enough toward its construction since the energy is being transmitted to the area instead of being “exported.”

“PJM was initially trying to amortize the cost of this project across all the users,” said Mayor Walter LaCicero. “They litigated for years with several unfavorable decisions, but kept going up the ladder. We structured our rates around the idea that this would be shared all around.”

There is a light at the end of the surcharge tunnel, however.

“The upside is that these costs are fixed through 2025 and that line will be paid for and those costs will no longer have to be paid,” said LaCicero. “It’s our intention to keep an eye on it and see when we can eliminate these additional charges that we’re going to have to put in place.”

The rate for electricity is set by ordinance. Monday’s vote was the introduction of the ordinance revision, and a public hearing and second vote will be held at the Oct. 1 council meeting.