The state Board of Public Utilities is expected to approve a settlement today that will let Public Service Electric & Gas build a new switching station in Newark’s West Ward, a project the utility says could prevent some of the widespread outages that left most of the city in the dark after Hurricane Sandy.
The agreement between PSE&G and Newark may end a year-old dispute over the utility’s plans to build a $138 million switching station, a project required by the operator of the nation’s largest power grid to increase reliability and relieve congestion. The latter can spike power prices for both consumers and businesses.
In the wake of the storm, which left millions of customers without electricity and gas, some for more than a week, the state has put greater emphasis on building resiliency into the power grid. That has led the BPU to order utilities to upgrade their infrastructure, an order PSE&G has embraced.
The state’s largest utility won approval from the BPU last May for a $1.2 billion program to upgrade its electric and gas systems, boosting the resilience of both. The Newark project is part of those improvements.
At one point during Hurricane Sandy, 95 percent of Newark was without power for at least 24 hours, largely because enormous storm surges flooded switching stations and substations that were located closer to the water, according to Karen Johnson, a spokeswoman for PSE&G. The new switching station is located farther inland. If it had been built before the storm, it could have helped keep the lights on in Newark for thousands of customers, the utility said.
Initially, Newark officials balked at approving the project, rejecting the proposal at a zoning board meeting, objecting to its size, location, and other aspects of the plan. But this past November, city officials reached a settlement with PSE&G, which agreed to guarantee payments for the next 30 years to the city. The agreement will allow the city to float a bond and receive the funds sooner.
The switching station is part of the utility’s transmission system, where high-voltage power from transmission lines is stepped down to allow electricity to be delivered to utility substations, which send it to homes and businesses.
“Based on the current demand projections, this station will be critical in providing Newark residents and business with the reliability they need as early as the summer of 2016,’’ said Jorge Cardenas, PSE&G’s vice president of asset management in a press release last February.
As part of the project, PSE&G will spend between $4.5 million and $8 million to address environmental concerns on the property. The utility also agreed to reduce the size of the project by approximately 2.5 acres to about three acres. The other land will be given to the city for redevelopment.
Newark officials did not respond to a call for comment. The BPU does not comment on issues pending before the agency.