Rockland Electric Company Files Rate Request with NJBPU

PEARL RIVER, NY August 17, 2009 — To provide for the continued safety, reliability and security of its electric delivery system amid steadily rising costs, Rockland Electric Company today filed an electric base rate case with the New Jersey Board of Public Utilities (NJBPU).

To meet those increasing costs, Rockland Electric Company is seeking approval of a $9.8 million increase in electric distribution base rates, an overall total revenue increase of 3.8 percent. That would represent Rockland Electric's first rate increase in three years. Rockland Electric's previous rate increase, which was approved by the NJBPU in 2007, was 3.4 percent. The Company is proposing that the new rates take effect in May 2010.

The proposed rates for electric service are necessary to provide sufficient operating revenues to meet operating expenses, infrastructure investment needs, taxes and fixed charges, as well as increased costs associated with employee health care and pensions. The proposed rates also support the Company's ability to maintain its creditworthiness at a level sufficient to raise capital necessary to perform its work.

Since the last rate filing in 2006, the Company has made substantial investments in its electric distribution system to provide for safe and adequate electric service to the Company's approximately 72,000 customers in parts of Bergen, Passaic and Sussex counties. In order to build infrastructure to serve new customers and to keep pace with current demand, Rockland Electric has spent over $100 million over the past five years for new electric system construction and upgrades.

Rockland Electric has expanded the electric system's capacity in its eastern Bergen County service territory by completely rebuilding the Cresskill substation, improving the Closter substation and upgrading the existing high voltage feeders that run between those two substations. Businesses and residents in Cresskill, Demarest, Alpine, Haworth and Closter benefited from these improvements. Several other improvement projects also benefitted them and the rest of Rockland Electric's customers.

Projects completed or in progress reflected in the current proposal include: a $1.6 million upgrade of the Harings Corner substation in Old Tappan, the $1.1 million installation of nearly one mile of underground circuitry at the Darlington substation in Ramsey and a $600,000 upgrade of 2.5-miles of the electric system in Upper Greenwood Lake. All of these projects are aimed at improving electric service reliability to Rockland Electric Company customers.

In addition to these infrastructure improvements, the Company continues to operate and maintain its 14 distribution substations, 778 miles of overhead distribution lines, 536 conductor miles of underground distribution and 69 distribution circuits and related infrastructure in a manner that provides for safe and reliable service to its electric customers.

With the proposed rate increases, the bill for a typical residential electric customer using a monthly average of 925 kWh would increase on average $9.64 per month, from $174.99 to $184.63, or a 5.5 percent increase.

These proposed new rates cover the cost of delivering the electricity itself. The cost of the electric commodity, which represents the bulk of the customer bill, is set by market forces. That price is determined each year primarily in the Basic Generation Service (BGS) auction overseen by the NJBPU. Since the deregulation of the electric utility industry in New Jersey, all of the state's electric utility companies purchase power for their customers through the auction. If the current trends in the energy commodities markets continue, the next auction's prices could very well mitigate, or even offset, the effects of the proposed new rates on the monthly bill.