When Public Service Electric & Gas proposed its $3.9
billion infrastructure-hardening project last year following the devastation of
Hurricane Sandy, it represented the single largest filing any New Jersey
utility had ever requested.
When state regulators today approved the $1 billion
settlement for the project, known as "Energy Strong," state Board of
Public Utilities President Dianne Solomon noted that the scaled-down version
was still a record.
"While substantially less than originally sought by the
company, make no mistake, this is the largest infrastructure investment
settlement ever to come before this board," Solomon told the audience in
Trenton. PSE&G’s original Energy Strong proposal in February 2013 was for
10 years and $3.9 billion, but the utility only filed for the first five years,
at $2.6 billion.
Earlier this month, PSE&G reached a settlement with BPU
staff and the plan’s former opponents, which included the state Division of
Rate Counsel and AARP New Jersey. The approved settlement, Solomon added,
strikes "a balance between the need for infrastructure-hardening
improvements, potential impact on reliability and inevitable rate impact on
PSE&G customers."
The cost of the project will be passed on to PSE&G’s 2.1
million customers.
Separately, the BPU also approved a measure today to work
with the state Division of Consumer Affairs to investigate and possibly
prosecute third-party energy suppliers, whose skyrocketing gas and electric
prices this winter affected thousands of New Jersey consumers. Nearly 3,000
residents claimed their third-party suppliers had engaged in advertising,
marketing and contracting practices that violated the state’s consumer
protection laws.
While the Energy Strong work would raise the average gas and
electric customer’s bill by about $4 per month, accompanying surcharges set to
roll off will more than offset the increase, state and utility officials have
said.
Make no mistake, this is the largest infrastructure
investment settlement ever to come before this board." - BPU President
Dianne Solomon
Electric upgrades include $400 million to raise or rebuild
PSE&G’s 29 switching stations that were flooded during Sandy. On the gas
side, the utility will spend $350 million to replace and modernize 250 miles of
low-pressure cast iron gas mains in or near flood areas. Another $150 million
will install smart-grid technologies to reduce the number of customers affected
during mass outages, and protect five natural gas metering stations knocked out
by Sandy.
An additional $220 million PSE&G said it will spend on
substation repairs is not part of the settlement, but the utility will seek
reimbursement at its next rate case in late 2017.
Work on the cast iron gas pipes will begin in the next two
weeks, while the substation replacement project will begin later this year,
PSE&G said.
Ralph Izzo, chief executive of parent company Public Service
Enterprise Group, expressed a hint of the frustration he openly voiced at the
end of the long and at times rancorous negotiations.
"While none of these improvements will be in place for
this year’s hurricane season, we are pleased to put shovels in the ground and
get started on this critical work so we are better prepared for the next storm
season," Izzo said in a statement.
AARP associate state director of advocacy Evelyn Liebman
said the approved project will save ratepayers money while improving the
system.
Liebman said the consumer protections for ratepayers built
into the settlement "set a good precedent for any future proposals of this
nature, whether they come again from Public Service or any of the other
companies."
She added, "we all agree there was a need to do some
improvement but what we all needed to see was an actual plan of work that make
sense, not a blank check that they originally filed."
Source: NJ.com
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