Two Environmental Groups File with BPU to Block PSE&G Grid Upgrade

Tom Johnson | July 16, 2013 | Energy & Environment
Conservationists argue that $3.9B should go to clean power, renewables, and energy efficiency rather than propping up outdated, dirty technologies

pseg no grid new site
Two of the state’s largest environmental groups are trying to intervene in a rate case in which New Jersey’s largest utility is seeking to spend up to $3.9 billion to make its energy infrastructure more resilient to extreme weather.

In a filing last week with the New Jersey Board of Public Utilities, the New Jersey Sierra Club and the New Jersey Environmental Federation argued that the agency should focus on enhancing efforts to promote energy efficiency, renewable energy, and distributed generation — where electricity is produced and consumed locally.

The intervention, if granted by the BPU, would probably make what already has been a contentious rate case even more so. Despite the high cost of the initiative, even regulatory officials concede that the state must take steps to prevent 7 million people from losing power in extreme storms, which is what happened during Hurricane Sandy last October.

Public Service Electric & Gas filed the case in February. Its petition quickly sparked criticism from advocacy groups representing senior citizens, large energy consumers, and consumer advocates, all of whom fear it will raise New Jersey energy bills, which already are among the highest in the nation.

PSE&G argues that rates, for the most part, would remain flat even with the expenditures because of historically low natural gas prices and the winding down of other surcharges on electric bills stemming from the deregulation of the energy sector more than a decade ago.

In addition, the utility continues to pile up endorsements for its filing, which it claims will help reduce outages in extreme weather, and help to restore power more quickly when it is lost.

Yesterday, PSE&G put out a press release saying 54 towns in New Jersey as well as five counties have backed resolutions endorsing the project. More than 1.9 million PSE&G customers lost power during Sandy — some for as long as two weeks.

“With Sandy, Irene, and the 2011 October snowstorm, we had three of the most damaging storms in our company’s history in quick succession,’’ said Ralph LaRossa, president and chief operating officer of PSE&G in the press release. “It was clear that we needed to do something extraordinary.’’

The utility’s proposal, dubbed Energy Strong, would invest $3.9 billion over 10 years to protect switching and substations from water damage, reinforce utility poles and overhead wires, deploy smart-grid technology, and replace gas lines in flood-prone areas.

The entry of the two environmental groups in the BPU rate case is unusual, but it underscores the concerns harbored by some who fear the state’s aggressive clean energy goals may be undermined by huge investments in making the power grid more resilient.

The decisions made by the BPU in this case “will determine whether the state will be tying its energy future to old, dirty, and dangerous energy sources and perpetuating the life of these sources, or whether it will be encouraging energy efficiency and the growth of renewable sources,’’ Jeff Tittel, director of the New Jersey Sierra Club said in a filing prepared by the Eastern Environmental Law Center.

A PSE&G official disputed that assessment. “PSE&G has a long history of commitment to energy efficiency and renewable energy,’’ said Michael Jennings, a spokesman for the company. “We share the Sierra Club’s view that renewable generation and energy efficiency must be a significant part of New Jersey’s energy future, but that does not reduce the need to harden and protect our distribution infrastructure from natural disasters like Sandy.’’

The environmentalists also are unhappy because lawmakers and the Christie administration used $1 billion in clean energy funds to plug holes in state budgets in recent years. In addition, the administration is setting aside nearly $100 million to promote the development of combined heat and power (CHP) plants, generating units widely viewed to be more efficient and less costly than traditional power plants.

Dave Pringle, campaign director of the New Jersey Environmental Federation, urged the board to support policies that encourage energy efficiency, conservation, and demand-response, a program in which large energy users reduce their consumption of electricity during times of high demand.

“These policies reduce costs to consumers, reduce load and prevent service interruptions, reduce pollution and disease, and create jobs and economic development,’’ Pringle said in the filing.

Tittel also argued that the emphasis on those policies will help the state meet aggressive goals to reduce greenhouse gas emissions, which he said are needed to prevent even more damage to the energy infrastructure, businesses, and residents.

In a study released yesterday, the Natural Capital Project said that 16 percent of the U.S. coastline, harboring 1.3 million people — including 250,000 elderly and 30,000 families below the poverty line — live in “high hazard areas’’ along the shore. The study said $300 billion in residential property value is in danger.