Grid Operator Approves More Than $1.5B in Projects, Mostly for PSE&G
Heavy investment in transmission infrastructure addresses reliability issues linked to outdated equipment
The regional operator of the power grid has approved more than $1.5 billion in new electric transmission projects, but the bulk of the spending will occur in upgrades in the franchise territory of Public Service Electric & Gas.
The authorizations include several large and midsize projects that address reliability issues in multiple areas, according to PJM Interconnection officials. The largest project, involving a planned expenditure of $739 million, is designed to deal with aging infrastructure in Burlington, Mercer, and Middlesex counties, requiring a rebuilding of portions of existing transmission lines.
All told, however, PSE&G, New Jersey’s largest electric utility, will spend more than $900 million on a range of projects approved by PJM, continuing a trend of investing heavily in transmission projects.
Transmission investments are proving increasingly lucrative to utilities, which are under pressure from PJM and state and federal regulators to invest in modernizing an aging power grid. Some of the transmission towers slated to be replaced by PSE&G under the projects approved by PJM were built in the 1920s, according to John Ribardo, senior director of strategic projects at the utility.
“The real issue is aging infrastructure,’’ Ribardo said.
“The growing need to replace aging infrastructure, energy efficiency, and the resulting reduction in the growth of demand for electricity are affecting transmission development,’’ said Andrew Ott, president and CEO of PJM. “The current round of projects approved by the board reflects that trend.’’
With these changes, PJM has authorized more than $30.8 billion in transmission additions and upgrades in a regional transmission expansion plan since its first one in 2000. Those costs are beginning to be felt by consumers. PSE&G customers have seen transmission costs rise from approximately 20 percent of their bill to roughly 40 percent today.
The utility is continuing to plan to invest in its system, too. At an annual investors’ conference last spring, PSEG executives indicated they would spendin capital through 2020, most of it on improvements to its transmission and distribution systems.
The north New Jersey project approved by PJM includes replacement of equipment, that has shown signs of wear because of age. Parts of a 30-mile link of the three-stage project are 86 years old on average and have reached the point at which they need to be replaced. As part of the upgrade, 138-kilovolt lines will be replaced by 230-kilovolt lines. The projected total project cost runs about $739 million.
PJM also approved $90 million worth of projects that involve PSE&G installing new equipment at four substations to keep its systems stable at times of low power load. Those projects are expected to be completed sometime in 2019.
The grid operator also approved a range of projects in north Jersey to install a new transformer and build a new 60-kilovolt circuit with a cost approaching $44 million.
The only other utility in New Jersey to have a project approved by PJM was Jersey Central Power & Light. It involves a small $10,000 project installing new equipment at a Mount Pleasant substation.