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In re Bator

July 23, 2007


On appeal from the State Ethics Commission.

The opinion of the court was delivered by: Fuentes, J.A.D.



Argued April 25, 2007

Before Judges Cuff, Fuentes and Baxter.

Petitioner Christine Bator, a Commissioner of the Board of Public Utilities (Board or BPU), appeals from a decision of the State Ethics Commission (SEC) advising that she must recuse herself from any matters handled by the BPU that involve her sister's work product or about which her sister makes a presentation to the Board. Petitioner's sister is a BPU employee within the Division of Energy, holding the position of Chief of the Bureau of Rates and Tariffs.

After reviewing the record, and in light of prevailing legal standards, we affirm. We are satisfied that there is a disqualifying conflict of interest here because petitioner's sister has a significant role in matters assigned to her Bureau. Allowing petitioner to participate in matters on which her sister worked, creates a reasonable public impression that petitioner may not be impartial in considering those matters.


On January 9, 2006, petitioner was appointed to fill a Republican seat on the BPU. The Board consists of five members appointed by the Governor, no more than three of whom can belong to the same political party. N.J.S.A. 48:2-1c. Commissioners are appointed to a term of six years. Ibid. The Governor designates one of the members as president of the Board, who serves as the agency's chief administrative officer. N.J.S.A. 48:2-1.1.

The BPU has general supervisory and regulatory power over public utilities in New Jersey, including "any railroad, street railway, traction railway, autobus, charter bus operation, special bus operation, canal, express, subway, pipeline, gas, electricity distribution, water, oil, sewer, solid waste collection, solid waste disposal, telephone or telegraph system, plant or equipment for public use." N.J.S.A. 48:2-13. The BPU addresses "issues of consumer protection, energy reform, deregulation of energy and telecommunications services and the restructuring of utility rates to encourage energy conservation and competitive pricing in the industry."

The BPU is made up of several divisions. See New Jersey Board of Public Utilities, about.shtml (last visited July 6, 2007). One is the Division of Energy. The Division of Energy is comprised of four bureaus: Bureau of Revenue Requirements, Bureau of Rates and Tariffs, Bureau of Market Development and System Reliability, and Bureau of Conservation and Renewable Energy.

Alice Bator (Ms. Bator) is petitioner's sister, and is employed by the BPU, holding the position of Chief of the Bureau of Rates and Tariffs. She reports to the Director and Assistant Director of the Division of Energy. Ms. Bator manages a six-member staff and oversees the staff's review of cases and issues.


As background for its decision, the SEC gave the following description of Ms. Bator's role within the Bureau, including the manner in which matters before the Board are handled:

When her Bureau is assigned a matter, [Ms. Bator], in turn, assigns the matter to individual staff within the Bureau. She manages and oversees their review of the case and issues, including issues litigated at the Office of Administrative Law ("OAL"). After a full record has been developed on the Bureau's issues, [Ms. Bator], together with her staff, will then develop a Bureau position. The Bureau's analysis of the case, the issues and the Bureau's position are discussed with the Assistant Director and the Director. This discussion leads to the Division position, which is then presented by the Director and/or Assistant Director to the Executive Director, the head of the Board's technical staff. The Executive Director then signs off on the staff position, which is incorporated into the recommendations in the matter as it proceeds to the Board's agenda. A similar procedure is followed for settlements.

All matters pending before the Board, whether litigated or settled, eventually move to the agenda, after an agenda package is drafted for consideration by the Commissioners. The package includes a memorandum drafted by staff involved in each matter that includes the positions of the various parties, as well as a proposed form of Decision and Order, also often drafted by staff involved in the matter with the assistance of the Deputy Attorney General ("DAG") assigned to the case. Included also are copies of Stipulations and/or Initial Decisions, if applicable. The package goes through the same chain of command noted above. Generally, the names of the staff who prepared the package and managed and supervised the case are listed on the memorandum. The memorandum is then reviewed and signed by the Director . . . .

There have been occasions where [Ms. Bator] has discussed the Bureau's position directly with the Executive Director and where she has worked on special projects which involve a team of staff whose members are not all within the Division of Energy. These occurrences are rare as are the times that she directly briefs the Board prior to an agenda meeting or makes a presentation to the Commissioners at a public agenda meeting. Her agenda presentations have not occurred in several years.

In addition to contested cases, [Ms. Bator] may work to develop Board regulations, Board comments on regulations of other agencies and matters of Board policy. Her work relating to Board policy issues and regulations usually involves cooperation and coordination with other Board staff, with final review and oversight by the Assistant Director and Director of the Division of Energy, and ultimately the Executive Director.

The SEC also reviewed Ms. Bator's role in the proposed merger between the Public Service Electric and Gas Company (PSE&G) and the Exelon Corporation (Exelon), a high profile matter before the BPU:

[Ms. Bator] is overseeing/supervising the staff of the Bureau of Rates and Tariffs on certain specific areas regarding the PSE&G/Exelon merger, including synergy savings, impact on employees, service agreements and gas and electric market power issues (predominantly gas market power issues). To date, and with respect to those areas of responsibility, her Bureau has reviewed the filing and the testimony of the parties, assisted the Board staff's experts with their review and preparation of testimony, assisted the Attorney General's Office in its preparation for hearings, and attended hearings, with representation by a DAG, ...

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