PSE&G To Build New Solar Farm on Hackensack Brownfield
Utility seeks approval for $883M investment to increase solar capacity in New Jersey.
- Credit: Governor's Office/Tim Larsen
Public Service Electric & Gas is hoping to remain a big player in helping New Jersey achieve its ambitious solar energy goals.
In a groundbreaking for a new solar farm at a brownfield next to the Hackensack River, the company announced yesterday it wants to invest $883 million over the next five years to build an additional 233 megawatts (mw) of solar capacity in New Jersey.
The event in Hackensack meshed well with a top priority of the Christie administration -- trying to reclaim abandoned industrial properties and landfills and converting them into facilities producing clean solar power to help meet the state’s electricity needs and creating well-paying jobs in the process.
PSE&G, the state’s largest utility and by far most aggressive in pursuing solar projects, already has reclaimed three brownfields and converted them into solar facilities in Trenton, Linden and Edison. Each had been a former coal gasification site, places where coal was converted to gas, used for street and residential lighting, a practice abandoned at the turn of the 20th century. It also has built a solar facility on a former garbage dump and another brownfield, a place contaminated by industrial operations and no longer active.
The utility’s latest proposal, to be filed with the state Board of Public Utilities as early as today, asks approval to invest up to $690 million to develop 136 mw to build more grid-connected solar projects, which supply electricity directly to the regional power grid, on landfills, brownfields, and other underutilized properties.
Ninety of those 136 mw would be targeted for grid-supply projects with another 20 mw slated to be put on warehouse roofs and 25 mw on large parking lots. The proposal also involves a 1mw pilot project for solar projects that test and demonstrate emerging solar technologies.
In addition, the company also is proposing to continue a Solar Loan program, investing another $194 million to help develop 97 mw of solar on homes and businesses.
“These proposals build on the success of our current programs,” said Ralph Izzo, chairman of the utility’s parent company Public Service Enterprise Group and its CEO and president. “We are poised to make these New Jersey investments that will create 300 construction jobs per year, provide significant business opportunities for our suppliers and advance the state’s Energy Master Plan objectives.”
The investments occur at a pivotal time for the state’s solar industry. It has seen prices for solar credits, which owners of solar systems earn for the electricity produced by their arrays, fall from a high of more than $600 last summer to $130 this week, causing fears investment in the sector will dry up. The decline is blamed on an overbuilding of solar systems, a problem the state aims to address through a new bill signed into law last month.
Gov. Chris Christie, whose administration has had a frosty relationship with PSEG, heaped praise on the company at the event, standing at a podium with the Bergen County Jail looming in the background.
“This was a vision that we had during the campaign to take existing landfill sites and brownfields and build solar farms on them,” Christie said. “PSE&G stood up to help us make that vision come true and I’m thrilled to hear Ralph’s announcement about an additional $883 million in investment.”
In an irony, the company and administration were on opposite side of arguments in a federal court yesterday in Trenton, over a plan pushed by Christie to incent new power plant construction in the state. The court held oral arguments but held off in making a decision on the issue.
The investment, however, is in keeping with the company’s recent strategy. With power prices plummeting, the company, which owns a huge fleet of power plants, had been directing most of its capital investment into the utility, either in modernizing its transmission system or in developing new solar capacity or energy efficiency projects.
When undertaken by the utility, those projects are guaranteed a specific rate of return. In this case, the company is seeking a return on its net investment of 8.21 on both its solar loan program and its so-called Solar 4 All program to build solar on landfills, brownfields and other areas.
The impact on ratepayers, according to the utility, would be minimal, costing a typical electric customer 68 cents to cover the Solar 4 All program in its first year and just 16 cents to cover program costs for the Solar Loan program. Izzo declined to project costs beyond those years, saying it would depend on various factors, but said the increase or decrease in customers’ bills would amount to cents, not dollars.
Whether the BPU is willing to add another $883 million into the utility’s rate base remains to be seen. Many businesses are complaining about the high cost of solar, which is ultimately borne by utility ratepayers, although PSE&G’s current programs redirect various credits to utility customers to offset the cost of the program.