Overview: In the next four years, Public Service Enterprise Group will invest more than $6 billion in capital expenditures, a sum that will drive a lot of economic growth and may determine what businesses exit the recession the quickest.
Synopsis: Few businesses are more important to New Jersey than its utilities, perhaps none more so than the state’s largest gas and electric utility. PSEG outlined its capital spending plans in an earnings call last week, making clear its commitment to completing a controversial high-voltage transmission line through the heart of the New Jersey Highlands. Even with a delay in a portion of the project, spending will ramp up from $350 million in 2010 before ending in 2013 with more than $1.1 billion in expenditures. The transmission line will account for nearly half of the $6.1 total capital spending plan.
What it means: Despite intense opposition from virtually all of the state’s environmental groups and delays in trying to win siting approval through the Delaware Water Gap, the utility is clearly committed to the project. So far, it retains the backing of PJM Interconnection, which says the line is needed to avoid reliability problems that could occur as early as next summer. If the transmission line is not built, PSEG expects consumers to continue to be slammed with high electric bills because of congestion in northern New Jersey on the regional power grid.
Interesting new detail: PSEG is slowly ramping down investment in renewable energy and programs recommended by the state’s Energy Master Plan (EMP). Spending drops from $350 million in 2010 estimates to just $30 million in 2013. PSEG CEO and President Ralph Izzo attributes the drop to the winding down of its Solar 4 All program, but the company is probably holding its cards a bit to see what the Christie administration does to revamp the state’s EMP.
What’s next: Like PSEG, the state’s fledgling renewable energy industry is eager to see how aggressive the new governor will be in pursuing very aggressive goals to increase reliance on solar and wind power. PSEG embraced the targets under the Corzine administration, and its half-billion dollar solar program spending benefitted many smaller solar firms in the state, which won contracts under the Solar 4 All program.