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Regional Grid Operator Wants State Utility to Invest in Transmission

PJM proposal contingent on closing of three power plants in Atlantic City Electric's service territory

transmission towers

If B.L. England closes its power plants next year, the operator of the nation’s largest power grid is proposing that Atlantic City Electric, the utility serving much of South Jersey, invest at least $150 million in upgrading its transmission system.

PJM Interconnection recommended the upgrades to address reliability problems in the utility’s service territory should the three separate power units shut down. That could occur, primarily under a consent decree signed with the New Jersey Department of Environmental Protection, dealing with one of the plants. The staff recommendations still need to be approved by the PJM board. A former coal plant is supposed to shut down by next June, but two other units could follow suit, according to PJM. The grid operator failed to respond to a call for comments.

Cape May County, a familiar landmark to those traveling to Cape May on the Garden State Parkway, is a highly cont The proposed repowering of the B.L. England former coal plant in northernentious subject. It has sought to convert its coal unit to natural gas through a new 22-mile pipeline through the protected Pinelands Forested Management Area.

The New Jersey Pinelands Commission deadlocked this past January on whether to approve the project, but there is intense support for the proposal from the business community, Christie administration, and others. It could surface again, especially with recent nominations to the commission made by Gov. Chris Christie that could result in a change of outcome.

In its proposal, PJM said it would re-evaluate the needs for the upgrades in transmission systems if prospects for B.L England’s generation project changes. Still, PJM is proposing a tight timeframe for the upgrades to occur, with most of them supposed to be in service by June 2016.

Analysts said the move by PJM is not surprising.

“In the scheme of things, there are two natural options,’’ said Paul Patterson, an energy analyst with Glenrock Associates, referring to how to deal with reliability problems. Either you can build new generation or upgrade transmission systems, he said.

Atlantic City Electric said it would readily work with PJM and the New Jersey Board of Public Utilities to improve reliability.

“Our company is prepared to evaluate any recommendations put forth by PJM to upgrade transmission lines and substations to improve reliability for our customers,’’ said Frank Tedesco, a spokesman for Atlantic City Electric.

Like many other utilities in New Jersey, Atlantic City Electric has been investing more in its distribution system (which delivers power to homes and businesses from utility substations) and transmission infrastructure—especially so in the wake of extreme storms that left many customers without power.

In the past five years, the utility has invested $685 million in its distribution system, according to Tedesco.

To opponents of the proposed new natural gas pipeline to B.L. England, the prospect of upgrades to transmission lines is a better prospect than building in a protected area of the Pinelands.

“It will create jobs; it will not have the same impact as building a new pipeline through the Pinelands Forested Areas; and it’s better for the environment,’’ said Jeff Tittel, director of the New Jersey Sierra Club.

Tittel argued the upgrades in transmission systems would not result in importing dirty coal power from Pennsylvania and other areas, because much of the electricity will come from nuclear power plants in South Jersey.

The proposed natural gas pipeline project has generated a great deal of controversy. Four former governors -- Republicans Thomas Kean and Christine Whitman and Democrats Brendan Byrne and Jim Florio -- came out against the proposal, saying it threatened the integrity of the Pinelands plan.

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