Should NJ Laws Limit Competition?

Every time we pay a utility bill, it includes a “societal benefits charge” that funds a program to assist needy, qualified customers pay their gas and electric bills.  The NJ Board of Public Utilities (BPU) oversees this program and conducts a competitive bidding process to select a third-party nonprofit organization to administer the program. The nonprofit NJ Shares ran it for several years.  In 2012, the NJ Comptroller Office released a scathing report about NJ Shares, questioning expenditures and flaws in its program, including $3,339 in alcohol charges at a restaurant in violation of a policy and catered affairs at NJ Devils games.

Who would do something like this? Look closer at NJ Shares, a nonprofit created in 1998 by utility companies with six utility employees on its Board of Directors.  Some might say NJ Shares is a utility club dressed as a nonprofit.

Upon the audit’s release, the BPU put the program to bid.  In the three consecutive bid processes, the BPU awarded the contract to the nonprofit Affordable Housing Alliance, which was established in 1991 to serve needy populations in NJ.  All good, right?

Interestingly, the NJ State Legislature passed Bill A3096/S2129 that includes new language and requires the BPU pick an administrator that must have 1) a Board comprised of not less than five utility representatives and 2) a network of over 200 partner organizations.

These are two very unique and very strict requirements.  In fact, out of the hundreds of nonprofit groups in New Jersey, we believe one and only one nonprofit would qualify for this job.  Can you guess which one?  NJ Shares.  The same NJ Shares that the state comptroller wrote up for misusing public funds that were meant to help needy customers keep their heat and power on!

Our utility companies and/or their associated nonprofit really reached for the stars on this one. What do you do when you can’t beat the competition?  You use your lobbying power to write a law that eliminates it.  And, shockingly -- so far, it’s working.  Both the Senate and Assembly passed this bill.  It now sits with Governor Murphy, who we strongly urge to veto it. Why?

If the bill becomes law, three things happen: 1) it squashes the BPU’s authority to select the best candidate for the job, as the bill’s extremely limiting qualifications would allow one candidate, 2) the sole candidate (and, therefore, the predetermined winner) will have no reason to submit competitive pricing or maintain distribution goals, and 3) finally, the salt in the wound … with no viable competition, who’s to say what the costs to run the program would be? That “societal benefits charge” line item on your bill could very well go up, but do you have any faith that the money would go where it’s intended? 

We urge Governor Murphy to veto this bill.  There are hundreds of nonprofits on state contracts that want to have faith in an open and fair system.  Keep the competitive bid process alive, so a truly qualified candidate can win the job - fair and square.