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THE NEW YORK TIMES, SUNDAY, DECEMBER 29,1996

I N   P E R S O N

Blossom Peretz's No - Win Job

The State's Advocate for Utilities Customers Finds Complaints Are Her Constant Companions

By KIT R. ROANE

Blossom A. Peretz was sitting in her Newark office among the cluttered papers and calculations of her trade when the phone rang. It was a reporter, one of many this day, asking her what it was like to hold what would easily be the most thankless and least understood job in New Jersey government.

Mrs. Peretz, a 62-year-old former utilities lawyer, is director of the Division of the Ratepayer Advocate, which means she is charged with aligning the state's interest in having competitive utilities with its interest in having contented utilities customers. It isn't easy. She had just concluded negotiations that will result in a rebate of more than $90 million from the state's largest power company, the Public Service Electric and Gas Co., which is a major owner of the shuttered Salem nuclear power plant. The agreement, accepted by state regulators, would return about $15 to the average customer.

But this did not make Mrs. Peretz a popular figure among those she was appointed to protect. The settlement was immediately labeled a sellout by consumer advocates, customers and two state senators.

"We know we did an excellent job," said Mrs. Peretz, characterizing the flood of complaints about the settlement, which critics say should have resulted in at least $100 million more, as "unfair, not justified and totally wrong."

For Mrs. Peretz, the attacks come with the territory. She had few illusions about her reception when chosen nearly two years ago Governor Whitman to be the first Ratepayer Advocate. Case law and compromise were not what her constituents wanted to hear. They were eager for divine judgment and moral resolution - neither of which seem to mesh with the business of utility regulation.

Mrs. Peretz has taken charge of this new agency at a hectic time, when former monopolies - from electric and gas companies to telecommunications conglomerates are being forced to navigate in the uncharted waters of deregulation. Vying for a position of strength in what is becoming a national marketplace, corporations have been merging, making alliances, trying to quickly shed debt and gain market share, not always to the benefit of customers.

Much like the long-distance telephone services that consumers can choose from, New Jerseyans will soon be able to pick from numerous companies to provide their electric, gas and even local telephone service. The start of electric-utility deregulation will occur early next year, when local utilities will be forced to unbundle their power generation costs and allow other companies to transmit over their lines.

Could drive down prices and promote technological advances. But there are pitfalls for the individual consumer, who could become confused by choices, or left out of the kinds of deals that large, industrial customers can will be able to negotiate. The poor, who have been protected from losing service by government regulations and the transfer of cost to bigger electric users, could be overlooked, she said.

"We must make sure that the benefits of competition reach the level of residents and other small consumers, that the inner cities and the high cost geographic areas are not left out and big industry is not the only one with market power," she said.

The Salem settlement proves how tricky her task can be. While consumer and business interests lobbied for a settlement that would reap several hundred million dollars in rebates as well as a promise not to pass on capital costs of current repairs to ratepayers, Mrs. Peretz, chose a carrot-and-stick approach that she said would not only keep the process from reaching the courts (where a battle could be long and costly) but also bring greater benefits in the long term.

She pushed an easily defensible rebate structure for consumers, then asked the utility, P.S.E.&G., for several good-will gestures that would broaden the safety net for the state's poorest electricity users. These included spending $30 million to set up a low-income energy trust fund to insure that those who cannot pay for higher electricity costs will still be maintained on the system as it is deregulated, and the installation of a computer network to put poor customers in touch with social services.

Not everyone liked the approach, with both Senator John H. Adler, Democrat of Camden, and Senator C. Louis Bassano, Republican of Union County, criticizing the terms as merely a slap for the long-troubled utility. P.S.E.&G. had been billing ratepayers for nearly two years for energy never produced at the Salem nuclear powerplant, which had been undergoing repairs since early-1995 and still remains shut because of safety concerns.

Senator Adler said that while it was admirable to win benefits for low-income residents, Mrs. Peretz should not have allowed that concern to override the immediate issue of what was owed to all consumers.

"She got the minimum amount we were guaranteed and the declared victory", Mr. Adler said in a telephone interview. While it was fine to get services for the low-income population, this is a small amount for P.S.E.&G. Besides, I'd rather, have lower rates for everybody in the state. It would do more long-term good because it would help attract new businesses that employ people."

Mrs. Peretz has forcefully disagreed with such theories. "I did my legal analysis and crunched my numbers to come up with a position that will withstand an appeal, that is within the realm of the current law and the current administrative process," she said of the criticism, which has come also from the largest consumer protection group in the state and several environmental organizations. "The groups that criticize us have spent their dollars on balloons and turkeys and protests, but they don't do the same legal analysis," she added. "I would love to give every ratepayer in the state the dollars they are asking for but it is not realistic, and wouldn't withstand an appeal."

Much of the complaints may have more to do with a general distrust of the new agency and its philosophy. The division of the Ratepayer Advocate grew out of Governor Whitman's desire to move the state's dealings with utilities away from what had become a cycle of litigation in small ratepayer suits. Instead, the governor fashioned an agency that brings mediation to the process and that can look at the broader issues that would soon be affecting the state's former monopolies.

With that in mind, Mrs. Whitman. replaced the Division of Rate Counsel, with the Division of the Ratepayer Advocate, a $95,500 a year job, and appointed Mrs. Peretz, of Sea Bright, a longtime utilities lawyer and former legal analyst for the Board of-Public Utilities, the regulatory board, to head it.

"People were suspicious of the change and they were afraid of deregulation," Mrs. Peretz said. "They were used to an office that represented residential customers in litigation, but we have moved to a new role that fits into what is now happening in the utility industry. We are not so much litigating these issues anymore, as sitting at a table, and we are representing all classes of customers while helping to restructure the industry."

Mrs. Peretz also dismisses talk that she is afraid or unwilling to bring utilities to court when necessary, pointing to nearly six years as a lawyer for the Attorney General's office assigned to the Board of Public Utilities from the late 1970's to the early 1980's.

During that time, the board also regulated waste haulers in New Jersey, a group repeatedly accused of price fixing and often associated with the mob. Litigation was the preferred weapon, but the fight didn't always remain in court, she said.

"One day the accountant working for me had his brake lines slashed and my son was hit while driving down the highway by a car that then backed off and took the exit ramp," she said. "These things did not change our position."

She said she was also responsible for drafting a consumer bill of rights and helped enforce nascent conservation measures on utilities. It was at the height of the Iranian oil embargo and utilities were clamoring to raise rates.

"The utilities were told when they came in that they not only had to prove they needed higher rates because of escalating prices but also that they had put in policies that would conserve energy," she said. "This was the beginning of regulation based on conservation."

Now, as Ratepayer Advocate, Mrs. Peretz says she is again trying to steer utilities in the proper direction during a time of uncertainly and flux, this time with a minimum of litigation and an eye toward dependable future consumer protections.

"Hopefully in five years we will start to see the impact of deregulation," she said. "But there will be a lot of suppliers in the market and choosing one will be a lot like trying to buy a used car. If we put in the correct structures to safeguard the consumer all consumers will benefit. That's what this office is trying to do."