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In re Petition of Bergen County Utilities Authority

Decided As Amended April 25 1989.: February 1, 1989.

IN THE MATTER OF THE PETITION OF THE BERGEN COUNTY UTILITIES AUTHORITY AND THE HACKENSACK MEADOWLANDS DEVELOPMENT COMMISSION FOR THE INCLUSION OF A DECREASE IN RATES CHARGED FOR SOLID WASTE DISPOSAL AT THE KINGSLAND LANDFILL INTO THE HACKENSACK MEADOWLANDS DISTRICT AVERAGED RATES


On appeal from the Board of Public Utilities.

Gaulkin, R. S. Cohen and Arnold M. Stein. The opinion of the court was delivered by R. S. Cohen, J.A.D.

Cohen

[230 NJSuper Page 413] Bergen County Utilities Authority (BCUA) and Hackensack Meadowlands Development Commission (HMDC) petitioned the Board of Public Utilities (BPU) for approval of HMDC's district-wide

averaged rates for solid waste disposal.*fn1 Jersey City and its Incinerator Authority and the County of Passaic opposed the petition. Solid Waste Action Coalition, formed by municipal solid waste customers of BCUA, also intervened. The matter was heard by an Administrative Law Judge (ALJ) who issued an Initial Decision concluding that BCUA's budget should be reduced by some $5.3 million for the purpose of inclusion in the district-wide averaged rates. BPU rejected the Initial Decision and ruled that the budget proposed by BCUA should be included as submitted. Jersey City and Passaic County separately appealed. We consolidated the two appeals. We now reverse and remand for reconsideration by BPU, and order that Commissioner Robert Guido shall not participate.

The ALJ's Initial Decision was 40 pages long. It dealt comprehensively with the contentions of the petitioner BCUA and the various intervenors on the disputed budgetary items. It made thorough and detailed findings and explained the conclusions that (1) BCUA's 1987 budget should have included appropriations of retained earnings $3.15 million higher than the proposed $3.46 million; (2) the budgeted $693,000 for equipment replacement should be reduced by $365,000 to reflect non-purchase of a bulldozer, and by an additional $283,433, representing the difference between expending and depreciating the purchase of additional new equipment; (3) the proposed $2.64 million for BCUA's resource recovery program was reasonable and includable to the extent of $1.14 million, but that the remaining proposed $1.5 million appropriation for a self-insurance reserve fund for environmental impairment liability arising from operation of the as-yet-not-built resource recovery

plant was premature and should not be included for rate averaging purposes.

BPU's opinion rejecting the ALJ's Initial Decision is three pages long. The first page contains a lengthy caption and one introductory paragraph. The second page has a brief procedural outline and a listing of the issues and the parties' positions on them, without explanations or evaluations. The text of the last page is reproduced in full:

After careful review and consideration of the post-hearing briefs, the Initial Decision and the exceptions to the Initial Decision, the Board finds the argument of the BCUA and the Solid Waste Action Coalition to be persuasive. Accordingly, the Board further finds that no adjustment should be made to the 1987 BCUA budget and that the inclusion of said budget, previously accorded interim approval, should be approved on a permanent basis.

With regard to the issue of capital outlays, the record adequately reflects the need for the subject equipment to enable the BCUA to operate and maintain the disposal facility in a reasonable manner and indicates that the expenditures for said equipment were appropriated by the BCUA in a manner consistent with applicable state requirements.

The Board is of the further opinion that the level of retained earnings appropriated by the BCUA is reasonable and that to increase said appropriation would be contrary not only to state policy but also to concepts of fiscal responsibility.

While agreeing with the inclusion by the ALJ of approximately $1.1 million in resource recovery expenses as consistent with Board policy, the Board would also include the $1.5 million related to a self-insurance fund as said fund is a component necessary for the operation of the facility and the level of expense is reasonable in light of the current insurance crisis that exists in New Jersey, especially with regard to environmental concerns. The Board is also of the opinion that the need to create such a fund is both present and vital. This is an item that cannot wait until the resource recovery facility begins its operations.

Therefore, based upon the entire record and the foregoing statements, the inclusion of the 1987 BCUA budget into the Hackensack Meadowlands District uniform system of rates, previously given interim approval by Order issued January 30, 1987, is HEREBY APPROVED on a ...


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