Lessons of Sandy Not Lost on Utilities Seeking to Spend More on Resiliency

Tom Johnson | October 31, 2016 | Energy & Environment
South Jersey Gas wants state approval of $500 million upgrade to its gas distribution system; PSE&G will disclose plans next year

Four years after Hurricane Sandy, the state’s utilities still are preparing to invest hundreds of millions of dollars to make their power grids more resilient to extreme storms.

South Jersey Gas is seeking approval for what initially was a seven-year, $500 million plan to modernize its gas distribution system at today’s monthly meeting of the state Board of Public Utilities in Trenton.

Public Service Electric & Gas, due to come before the regulatory agency for a rate case next year, is already considering options to present to officials about what actions they need to take to strengthen the utility’s electric and gas systems, according to executives.

Other utilities are embarked on similar investment programs — in part, spurred by the recognition painfully illustrated by Sandy that the infrastructure delivering gas and electricity to customers needs to be more resilient to big storms like Sandy, which are expected to become more frequent in the future.

With gas prices at near historical lows, both utility executives and regulatory officials believe this is an opportune time to undertake upgrades to aging systems to increase their reliability.

PSE&G, the state’s largest gas and electric utility, won approval from the BPU in May 2014 to invest $1.2 billion in its Energy Strong program, an initiative to replace older gas pipes, upgrade substations, and add intelligence to system to speed restoration when there are outages.

Roughly half of the money is targeted to upgrading 29 switching stations and substations damaged by high water or flooding during Sandy. Eight substations have been completed to date, including $20 million spent to reinforce and raise electrical equipment at its Hackensack substation.

Gov. Chris Christie visited the site Friday to highlight steps taken by utilities to better prepare for storms such as Sandy. “Man, we are a lot better off today than four years ago,’’ the governor said, referring to the investments made by the utility. “Now projects like this one are common around the state.’’

“Because of our infrastructure investments to date, if a Sandy-like storm were to occur today, about 225,000 customers impacted by flooded substations and switching stations during Sandy would not lose power,’’ said Ralph LaRossa, president and chief operating officer of PSE&G. “And customers who did lose power would be restored more quickly.’’

With Energy Strong nearing an end, the utility is looking at what other steps are needed to strengthen its grid, LaRossa said. The list of options include rebuilding more substations in danger, replacing more gas mains, and making the grid smarter, he said.

The utility is supposed to file a new rate case before the BPU by November 2017, according to a previous agreement with regulators. “A lot will depend on the new administration,’’ LaRossa said.

The case before the BPU today involves a petition by South Jersey Gas to continue an existing $141 million gas modernization program, due to end at the close of 2016. The new program aims to replace aging cast-iron mains and other pipes most prone to leaks in its distribution system.