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In the Matter of the Applications of Verizon New Jersey, Inc.

A-4473-05T2, A-6566-05T2, and A-6567-05T2 (N.J. Super. App. Div. 2008) (Unpublished)

UTILITIES — A board of public utility regulation that provides a utility does not need to share its income with its ratepayers upon a private sale of its property when the utility undertakes alternative means to benefit the public’s interest.

A utility sought and received approval from the Board of Public Utility (BPU) to sell three separately owned properties to private parties. Each sale was subject to reasonably timed and valued appraisals. The utility was not obligated to share the proceeds from its land sales with ratepayers.

The New Jersey Division of Rate Counsel challenged these sales, contending that the BPU’s ruling denying ratepayers the sharing of proceeds from the sale of utility property based upon the form of regulation was inherently wrong.

The Appellate Division first stated that it would not upset the final determination of an agency (the BPU) unless it was shown that the agency acted in an arbitrary, capricious or unreasonable manner or that the agency’s determination violated legislative policies expressed or implied in the act governing the agency. Here, the Court concluded that the final decision of the BPU was legally correct. It found that the BPU had issued a prior regulation upon which it relied in this matter. The prior regulation did not require income sharing with ratepayers upon a private sale of utility property when the utility undertook alternative means to benefit the public’s interest. The Court noted that the BPU had previously found, in an earlier ruling, that the utility spent money, over a five year period, for substantially beneficial public programs. Thus, it agreed with the BPU’s conclusion that the Rate Counsel was raising an argument that had previously been rejected by the BPU for good reasons.

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