It is turning out to be a very good week for Public Service Enterprise Group.
Public Service Electric & Gas, the company’s utility, won approval yesterday from state regulators to spend $1.9 billion over the next five years to replace much of its aging gas-pipeline system.
In addition, Gov. Phil Murphy is expected to sign today a controversial bill (S-2313) that could provide PSEG with up to $300 million a year in subsidies from utility customers across the state to keep its nuclear plants afloat.
Meanwhile, PSE&G has quietly updated its pending base-rate petition before the New Jersey Board of Public Utilities to boost its revenue request from the original $27 million it sought to $133 million, according to Stefanie Brand, director of the Division of Rate Counsel.
PSEG also is expected to be a big beneficiary of a second bill (S-2314) being signed by the governor, a measure to ramp up New Jersey’s reliance on renewable energy and to step up efforts to increase energy efficiency. By 2030, half of the state’s electricity must come from renewable energy, such as offshore wind and solar.
Too big a burden
Some prominent environmental groups welcome the latter bill, primarily because it presumably will advance Murphy’s ambitious clean-energy agenda, but others worry about the cumulative impact of the initiatives, including subsidizing nuclear power, on ratepayers and businesses.
Sen. Sam Thompson, a Republican from Burlington County, voiced those concerns to Board of Public Utilities president Joseph Fiordaliso during an appearance before the Senate Budget and Appropriations Committee.
“Cumulatively, if we’re going to get this percentage from nuclear, this percentage from solar, and this percentage from wind, what is the bottom-line impact on ratepayers?’’ asked Thompson.
Fiordaliso replied that the process is now subject of the agency’s deliberations. “I assure you we’ll be very prudent in our approach and how it will affect ratepayers,’’ he said.
Nevertheless, the signing of the two bills will mark a major shift in the state’s energy policy, a change that could significantly boost what utility customers spend to support New Jersey’s clean-energy programs. In the long run, clean-energy advocates contend prices will drop as the state achieves improved efficiency in reducing energy use.
Partnering with utilities
“The Murphy administration seems to be partnering with the state’s utilities to advance its environmental agenda,’’ said Paul Patterson, an energy analyst with Glenrock Associates in New York City. “That could be good news for the utilities.’’
Some argue, however, it may be bad news for consumers.
“How much is enough?’’ asked Jeff Tittel, director of the New Jersey Sierra Club, who opposes both bills. “What this shows is some people rob you with a gun; others rob you with a pen. Tomorrow, they’re going to use the governor’s pen.’’
The $1.875 billion gas modernization program approved yesterday by the BPU is a slimmed-down version of an aggressive program the utility filed last year to replace cast-iron and steel pipes, part of an industry-wide effort by utilities to fix aging mains at a time when natural-gas prices cushion the impact of the program on customers.
“It’s significantly less than what they initially requested,’’ Brand said, referring to the original $2.7 billion filing by the utility. “We are interested in them doing this work because it’s a safety issue.’’
Under the program, the utility will replace 875 miles of pipes and gas infrastructure through 2023. PSE&G has just under 4,000 miles of cast-iron gas pipes, more than any other utility in the nation. Pipes installed before 1960 are the most leak-prone, making up one quarter of its network.
Detecting gas leaks
As part of the program, the utility will use advanced leak-detection technology and data analytics to map and measure leaks from underground natural-gas lines. The technology is targeted at detecting methane, a potent greenhouse gas.
“Reducing methane emissions is one of the quickest ways we have to protect the climate. PSE&G deserves credit for making this a priority,’’ said Mary Barber of the Environmental Defense Fund, which is working with the utility on the issue.
“This acceleration enhances safety, helps protect the environment, and saves customers money over the long run,’’ said David Daly, PSE&G president and COO.
According to the utility, the impact on the average annual residential customer bill is expected to be less than a 2 percent increase, or about $17 year during the five years.