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PSE&G Transmission Upgrade Should Boost Reliability, Create Jobs -- Report Says

Rutgers University analysis indicates utility's 10-year project could mean 6,000 jobs annually

transmission towers

Public Service Electric & Gas is investing billions of dollars to upgrade its transmission system, a strategy that bolsters the utility’s bottom line, but also is creating thousands of jobs and other economic benefits, according to a new study.

The analysis, commissioned by the Newark company and conducted by Rutgers University, said the company’s 10-year, $8.1 billion transmission investment will support 6,000 jobs annually -- generating more than $4.3 million in salaries and benefits as well as more than $640 million in revenue for state and local governments.

The projects, involving seven separate upgrades to the utility’s transmission system, are designed to increase the reliability of delivering power to customers, but also could reduce electric bills by easing congestion on the power grid, a problem that causes spikes in costs to consumers and businesses.

Some of the initiatives, however, are controversial, most notably the Susquehanna-Roseland project completed last month that traversed three national parks. Critics argue that instead of investing in new high-voltage lines to bring power to customers, the state should be targeting spending on renewable energy, promoting energy efficiency, and developing smaller, localized power plants.

With a steep drop in power prices from PSE&G’s large fleet of generating stations, the state’s largest utility is investing most of its capital budget on upgrading transmission lines, and to a lesser extent on the distribution system, which delivers electricity directly to consumers. That spending earns the company up to 12 percent on every dollar it invests.

Many business groups, legislators, and labor back the projects, especially in the wake of Hurricane Sandy, which left millions of New Jerseyans without power, some for up to two weeks or more.

“Customers get better reliability and access to lower cost electricity and it creates thousands of badly need jobs,’’ said Senate President Steve Sweeney (D-Gloucester).

Joseph Seneca, professor at the Edward J. Bloustein School of Planning and Public Policy and coauthor of the study, agreed, saying the investment by PSE&G is a large and continuous economic engine for New Jersey.

“It’s a textbook example of what an effective and counter-cycling economic policy should be,’’ Seneca said, adding it comes at a time when the state’s economy still has considerable slack, particularly in the labor markets. Since late 2007, New Jersey has lost more than 91,000 fewer jobs in the private sector, he said.

“There are significant challenges ahead,’’ Seneca said, citing the closing of casinos in Atlantic City. Four will have been shuttered this year by the end of the month, putting several thousand on the unemployment line.

“The aggregate impact from PSE&G’s portfolio of capital investments will increase state GDP (gross domestic product) by an estimated $6.6 billion and drive much-needed economic growth for the state on a sustained basis,’’ Seneca said.

Ralph LaRossa, president and chief operating officer of PSE&G, said the study details how its infrastructure investments are stimulating the New Jersey economy.

“We’re proud to be able to build a more reliable system that will be a competitive advantage for the state and better serve our customers, but we’re equally proud to be able to give people a chance to put their skills to good use and support their families,’’ LaRossa said.

LaRossa conceded that the planned expenditures on transmission lines will have an impact on customers' bills, but noted some projects, such as the Susquehanna-Roseland line, will drop congestion charges. Projections by others said the project would save customers $200 million.

Assemblyman Joseph Egan (D-Middlesex), business agent of the International Brotherhood of Electrical Workers Local 456, said the project put, at its peak, 500 members of his union to work.

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