JCP&L Says It Will Spend $250M On Infrastructure, Reliability of Power Grid

Beleaguered utility, target of aggressive rate case brought by BPU, has earned bad rep for leaving customers in the dark during extreme weather

Under fire from state regulators, Jersey Central Power & Light says it will step up spending this year to enhance its utility infrastructure and reliability of its power grid, investing more than $250 million to help reduce the number and duration of power outages.

The state’s second-largest utility with more than 1 million customers yesterday said it would invest an additional $50 million above what it spent in the previous year in its 13-county service territory.

The announcement in a press release issued by the company comes at a time when state regulators and the utility are embroiled in a controversial rate case, with the staff of the New Jersey Board of Public Utilities recently recommending an unprecedented cut of $200 million in rates JCP&L collects from its customers.

The past few years have been trying for the state’s utilities, weathering extreme storms such as Hurricane Sandy, which left millions without power for a week or more. None more so, however, than JCP&L. Ninety percent of JCP&L’s customers were left without power, some for 12 days or more.

The utility’s performance in that storm and others only heightened scrutiny about its operations, a source of complaints for years from customers, residents, and state regulators. Indeed, the current rate case before the BPU was triggered by claims from the New Jersey Division of Rate Counsel asserting that the utility was overearning on what the state stipulated it could profit from its investments in the power grid.

In announcing the investments, the utility said major projects scheduled for this year include planning and completing transmission-line projects in Monmouth, Ocean, and Morris counties; finishing a smart-grid modernization initiative in Morris County; and building a new substation in Hunterdon County.

Smart-grid technology is viewed by many utilities as a way of responding more quickly to widespread outages by alerting company officials as to precisely where they are occurring. The technology also could help utilities better inform local officials about the extent of outages and when they could be restored, an effort repeatedly criticized as ineffective during legislative hearings on the response to Sandy.

The technology is being deployed with the help of a $7 million smart-grid technology grant in circuits serving Bernards Township, Harding Township, and Morristown, according to the utility.

“We review planning and analysis data each year and dedicate the necessary resources to continually improve our system to exceed customer expectations and deliver the quality service our customers expect and deserve,’’ said Jim Fakult, president of JCP&L. “The 2014 infrastructure spend includes projects to implement new technologies, further improve reliability, and prepare for future growth.’’

Stefanie Brand, New Jersey Director of the Division of Rate Counsel, welcomed the news of increased spending by the utility.

“We have been wanting them to invest in the system for some time,’’ Brand said. “We are looking out for ratepayers’ interest in promoting greater reliability for the system.’’

In keep with other utility capital expenditures in recent months, JCP&L is proposing to spend about 60 percent of its investment on transmission projects, which help deliver power from electricity generating stations to local substations.

Those investments typically earn utilities a much higher rate of return than money invested in the local distribution system, which delivers power from substations to homes and businesses.

Those projects include a new high-voltage line between Manalapan and Hightstown; a new substation in West Amwell to enhance reliability in Hunterdon County; and new equipment to upgrade a substation in Manalapan. The utility’s projects also include designing new transmission lines between Montville and Riverdale; between Whippany and Montville; and between Neptune and Howell in Monmount County.

The costs of the increased investments likely will be passed on to JCP&L customers, who already face higher bills if the state approves more than $600 million in costs the utility incurred in restoring power during recent extreme weather.