PSE&G’s Scaled-Back Proposal for Upgrading Gas and Power Grids OK’d

Tom Johnson | September 12, 2019 | Energy & Environment
State agency shelves the utility’s separate filing for $2.8 billion on energy efficiency projects

Sunset power grid
The state yesterday approved a scaled-back proposal by Public Service Electric & Gas to upgrade its gas and power grids, accepting a $842 million, four-year program that is considerably less than the $2.5 billion originally sought by the Newark utility.

The New Jersey Board of Public Utilities’ (BPU) approval of the spending program was followed by the agency’s shelving until next spring of a separate filing by PSE&G, the state’s largest utility, to spend another $2.8 billion on energy efficiency projects for its customers.

Instead, the board gave approval for PSE&G to continue four of its existing energy-efficiency programs at a projected cost of $27 million.

In other matters, the agency approved four new gas tariffs that will essentially keep home heating costs flat for New Jersey’s gas utilities this winter, beginning Oct. 1. PSE&G’s 1.9 million customers will see the biggest drop in bills, with a net decrease of $15.97 per year.

In sum, yesterday’s actions by BPU reflected mostly positive news for utility customers, who are facing rising bills because of the state’s shift to cleaner sources of energy and a $300 million a year subsidy awarded to the utility’s parent, PSEG, to keep its three nuclear power plants in South Jersey from closing.

Ins and outs of pipelines

The approval of PSE&G’s $842 million so-called Energy Strong program will not immediately increase customers’ bills. In scaling back the spending, the agency and the New Jersey Division of the Rate Counsel eliminated a proposal by the utility to invest another $863 million in 14 new gas pipelines to back up supplies in the event of disruptions in interstate pipelines.

Many environmental groups oppose building new pipelines, saying the state needs to phase out its reliance on natural gas and other fossil fuels. Nevertheless, PSE&G expressed gratitude that the agency extended its Energy Strong program.

“Energy Strong II will continue our critical post-Superstorm Sandy infrastructure work to ensure we are ready for future extreme weather events,’’ said Michael Jennings, a company spokesman.

The extension will include projects to mitigate flooding at 16 electric substations that serve 166,000 customers, subdivide more than 1,100 circuits that serve 1.2 million customers, and upgrade grid communications.

Jennings also said the state is looking forward to the board taking up its $2.8 billion Clean Energy Future proposal on energy efficiency. “This comprehensive proposal would provide all of our customers with opportunities to lower their utility bills, while also creating jobs and help New Jersey achieve the important goals established by New Jersey’s Clean Energy Act,’’ he said.