NJ Utility Makes $3.9 Billion Plans to Deal with Future Big Storms

Still stinging from Superstorm Sandy, New Jersey-based Public Service Electric and Gas Company (PSE&G) is proposing to invest $3.9 billion during the next 10 years to proactively protect and strengthen its electric and gas systems against increasingly frequent severe weather.

In a filing with the New Jersey Board of Public Utilities, PSE&G asked for initial funding approval of $2.6 billion during the first five years. Since some of the improvements will take more than five years to implement, the utility may seek approval to spend an additional $1.3 billion in the following five years to complete the program.

PSE&G’s “Energy Strong” program would include protecting more than 40 utility installations from storm surges, strengthening distribution lines, making the electric grid smarter and thereby easier to restore customers, and modernizing the gas distribution system. The utility says its proposal won’t impact residential or business customers’ monthly bills because the investments will be offset by lower natural gas prices and some charges that are scheduled to drop from bills.

The price of natural gas has dropped nearly 40 percent in the past three years, which has lowered the cost of heat and electricity, says PSE&G. In 2014 and 2016, certain transitional charges related to deregulated supply markets will roll off customer bills. With the lower gas prices and retiring some transitional charges, the utility can make the investments without raising bills. The utility estimates that in 2018, a typical annual residential electric bill will be approximately 5 percent lower than it was in 2008 and a typical gas bill will be approximately 35 percent lower - even with the proposed additional spending.

Key provisions of PSE&G’s 10-year plan include:

• $1.7 billion to raise, relocate or protect all switching and substations affected by recent storms as well as those in newly designated flood zones.
• $1.04 billion to replace and modernize 750 miles of low-pressure cast iron gas mains in or near flood areas.
• $454 million to deploy smart grid technologies to better monitor system operations to increase the ability to more swiftly deploy repair teams.
• $215 million to improve pole distribution systems.
• $200 million to create redundancy in the system, reducing outages when damage occurs.
• $60 million to move 20 miles of overhead electric distribution lines underground.
• $140 million to protect 9 natural gas metering stations and a liquefied natural gas station affected by Sandy or located in flood zones.

During Sandy, 2 million of PSE&G’s 2.2 million electric customers lost power due to damaged switching and substations, damaged poles and electrical equipment, and downed trees that brought down wires. With the protections outlined in the filing in place, about 800,000 of those affected by a storm like Sandy would have remained with power and restoration times for the rest would be reduced, says the company.