Opinion ID: 2312696
Heading Depth: 2
Heading Rank: 1

Heading: BPU Regulation

Text: The BPU was created by the Legislature in 1911, L. 1911, c. 195, as a successor to the Railroad Commission. See Junction Water Co. v. Riddle, 108 N.J. Eq. 523, 528 (Ch. 1931). The BPU has general supervision and regulation of and jurisdiction and control over all public utilities as hereinafter in this section defined    so far as may be necessary for the purpose of carrying out the provisions of this Title. N.J.S.A. 48:2-13. Regulation and control over public utilities is justified because it is beneficial to the State and its citizens, Riddle, supra, 108 N.J. Eq. at 528, and is necessary to insure uniformly safe, proper, and adequate service by utilities throughout the State. County of Bergen v. Department of Pub. Utils. of N.J., 117 N.J. Super. 304, 312 (App.Div. 1971). The Legislature intended to delegate to the Board the widest range of regulatory power over public utilities   . Township of Deptford v. Woodbury Terrace Sewerage Corp., 54 N.J. 418, 424 (1969); In re Public Serv. Gas & Elec. Corp., 35 N.J. 358, 371 (1961). The statutory definition of public utility, N.J.S.A. 48:2-13, has remained essentially the same since the BPU's creation in 1911. Once an entity is found to fit within the definition of public utility, it is subject to the Board's regulatory scheme, which is extensive and detailed. The BPU has the authority to grant franchises and privileges to any public utility, if after a hearing the board determines that the privilege or franchise is necessary and proper for the public convenience and properly conserves the public interests. In granting its approval the board may impose such conditions as to construction, equipment, maintenance, service or operation as the public convenience and interests may reasonably require. [ N.J.S.A. 48:2-14.] The Board may require public utilities to comply with the laws of this State, to adopt a uniform system of accounting, and [t]o furnish periodically a detailed report of finances and operations   . N.J.S.A. 48:2-16(2)(a), (b). The Board may [f]ix the fees to be paid by any consumer or user of any product or service of a public utility   . N.J.S.A. 48:2-20(c). The Board may require every public utility to file schedules listing classifications and rates, tolls, fares, or charges. N.J.S.A. 48:2-21(a). The Board may fix rates, N.J.S.A. 48:2-21(b), and may determine whether rate increases are just and reasonable. N.J.S.A. 48:2-21(d). The board may enter into compacts in the name of the state of New Jersey with [other] states    for the purpose of establishing joint regulation and control of rates for electricity and gas transmitted between such states. N.J.S.A. 48:2-22. It is the Board's function to require public utilities to furnish safe, adequate and proper service    and to maintain its property and equipment   . N.J.S.A. 48:2-23. Public utilities must obtain permission from the Board before discontinuing, curtailing or abandoning any service. N.J.S.A. 48:2-24. The Board may require a public utility to establish, construct, maintain and operate any reasonable extension of its existing facilities   . N.J.S.A. 48:2-27. [3] The statutory scheme contemplates that regulated public utilities may be awarded exclusive franchises or privileges: Generally speaking, a franchise is a privilege of a public nature conferred by government on an individual or corporation to do that which does not belong to the citizens of the country generally by common right. In the case of public utilities, it means permission to operate a business, peculiarly of a public nature and generally monopolistic. [ In re Petition of South Lakewood Water Co., 61 N.J. 230, 238 (1972).] The BPU oversees utilities to prevent abuse of their franchise and to ensure that consumers are provided with safe and adequate services at reasonable rates. See Township of Marlboro v. Village Water Co., 72 N.J. 99, 108 (1976); In re Petition of New Jersey Natural Gas Co., 109 N.J. Super. 324, 335 (App.Div.), certif. denied, 56 N.J. 475 (1970).