Public Service Electric & Gas has reached a tentative settlement with state regulators allowing it to spend more than $700 million to install smart meters in the homes and businesses of its 2.3 million electric customers.
Customers will ultimately pay for the meters. But exactly how much each customer will be charged and when is not yet set.
The agreement, which could be approved by the New Jersey Board of Public Utilities as early as Thursday, signals a huge step toward bringing smart meters, a technology widely used in the rest of the country, to a significant portion of the state.
Smart meters, sometimes called advanced metering infrastructure (AMI), create a two-way communications system between customers and the utility, a technology that advocates say can lower electric bills and speed restoration of power during outages.
The technology also is viewed as critical to creating a smarter power grid, particularly at a time when New Jersey is transitioning to intermittent renewable energy sources like solar power and offshore wind farms.
Under the proposed settlement with PSE&G, the utility will begin installing smart meters to 80,000 customers this year, then accelerating installations to 300,000 in 2022; and 900,000 customers in each of the next two years. Customers will have the opportunity to retain their traditional meters but will still have to pay for the program in future bills.
“These smart meters are designed to provide our electric customers with valuable information about their energy usage and allow PSE&G to provide even better customer service,’’ said Mike Jennings, a spokesman for the utility.
Other electric companies to follow suit
So far, only the state’s smallest electric utility, Rockland Electric, has installed smart meters in its 66,000 customers’ homes. But besides PSE&G, the other two large electric companies have petitions filed to move to the technology. Jersey Central Power & Light wants to spend $418 million over four years to install smart meters for its 1 million customers, while Atlantic City Electric aims to invest $220 million over two years.
After years of pressing the BPU to move forward on the technology, clean-energy advocates praised the proposed agreement with PSE&G.
“The settlement is a clear sign New Jersey is joining the rest of the country in installing smart meters,’’ said Doug O’Malley, director of Environment New Jersey. “By the middle of the decade, we will have caught up with other states.’’
In the PSE&G case, the proposed settlement amounted to largely what the utility sought — at least in total dollars. The proposed settlement of $707 million is just shy of the $714 million sought by the utility in its petition filed in April 2020. Typically, in rate cases, the BPU generally gives utilities only half — or less — of what they originally sought.
In this instance, Rate Counsel Stefanie Brand said there was little dispute over what the program would cost. “The big difference is how they would be paid,’’ said Brand, saying the utility wanted to be paid as they invested the money. Instead, the settlement leaves the costs to be recovered in an upcoming base rate case, expected to be filed by the end of 2023, Brand said.
In addition, the utility will seek to recover stranded costs for replacing analog meters that have not yet outlived their usefulness. The recovery of those costs also will be determined in the base rate case, according to Brand.