PSE&G Unveils $3.9 Billion, 10-Year Proposal To Make NJ "Energy Strong"
Proposal will create 5,800 jobs and reduce the impact of future outages
Customer bills will remain stable - and will be lower than in 2008
NEWARK, N.J., Feb. 20, 2013
NEWARK, N.J., Feb. 20, 2013 /PRNewswire/ --Public Service Electric and Gas
Company (PSE&G) today proposed 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 conditions. 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
(Logo: http://photos.prnewswire.com/prnh/20120830/MM62627LOGO )
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 proposal would create 5,800 direct and
indirect jobs and stimulate substantial economic activity for New Jersey
businesses, all without impact on customers' monthly bills.
"PSE&G has been recognized repeatedly for providing safe, highly reliable
service," said Ralph Izzo, PSEG chairman and CEO. "But reliability is no
longer enough; we must also focus on the resiliency of our systems to
withstand natural disasters.
"It's clear that Sandy, Hurricane Irene and the October ice storm in 2011
represent extreme weather patterns that have become commonplace," Izzo said.
"It's equally clear that how we live and do business is so dependent on energy
that any outage is hard to tolerate. Sandy was a defining event for all of us;
the state's entire energy infrastructure needs to be rethought in light of
weather conditions that many predict will continue to occur."
"PSE&G is responding to Sandy with a program that looks to the future with
investments that would better protect homes and businesses when the next storm
hits, while also improving day-to-day reliability," added Ralph LaRossa, PSE&G
president and COO.
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.
A new report from the American Society of Civil Engineers (ASCE) warns that
the failure to make adequate infrastructure investments in the U.S. electric
grid could significantly affect business productivity, employment and
competitiveness. ASCE finds that by 2020, closing the investment gap in our
electrical grid would save American businesses $126 billion, prevent the loss
of 529,000 jobs, and avert $656 billion in personal income losses.
"The cost of inaction is too high," Izzo said. "We have a choice: continue to
make incremental improvements and repairs to our electric and gas systems as
we have always done. Or, we can be truly forward-looking and make more
substantial investments that will help our state be better prepared for the
next Irene, Sandy or other catastrophic event."
Little Impact on Customer Bills
Pointing to lower gas bills and stable electric bills, the utility said making
these added investments now will have little overall impact on residential or
business customer 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. In 2014 and 2016, certain transitional charges related to
deregulated supply markets will roll off customer bills.
"This is the right time to make these investments. With significantly lower
gas prices and retiring some transitional charges, we can essentially make
these critical investments without raising bills," LaRossa said. 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 – and still well below the rate of inflation.
LaRossa said a number of labor leaders, mayors and chambers of commerce have
already expressed support for the utility's proposal, which will create 5,800
new jobs in construction, engineering and support services. "They believe
these are important investments for New Jersey," he said. "We look forward to
discussing our plans in more detail with regulators and other state officials
on the best way to proceed to protect New Jersey's quality of life and
Key provisions of PSE&G's 10-year plan include:
o$1.7 billion to raise, relocate or protect all switching and substations
(listed in attachment) affected by recent storms as well as those in newly
designated flood zones.
o$1.04 billion to replace and modernize 750 miles of low-pressure cast iron
gas mains in or near flood areas.
o$454 million to deploy smart grid technologies to better monitor system
operations to increase our ability to more swiftly deploy repair teams.
o$215 million to improve pole distribution systems.
o$200 million to create redundancy in the system, reducing outages when
o$60 million to move 20 miles of overhead electric distribution lines
o$140 million to protect 9 natural gas metering stations and a liquefied
natural gas station affected by Sandy or located in flood zones.
"We strongly believe that making these investments in protecting our energy
infrastructure against future superstorms, while keeping customer bills well
below the Consumer Price Index from 2008 to 2018, is a significant win for
customers and New Jersey's economy," Izzo said.
Forward Looking Statement
Certain of the matters discussed in this report constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements are subject to risks and
uncertainties, which could cause actual results to differ materially from
those anticipated. Such statements are based on management's beliefs as well
as assumptions made by and information currently available to management. When
used herein, the words "anticipate," "intend," "estimate," "believe,"
"expect," "plan," "should," "hypothetical," "potential," "forecast,"
"project," variations of such words and similar expressions are intended to
identify forward-looking statements. Factors that may cause actual results to
differ are often presented with the forward-looking statements themselves.
Other factors that could cause actual results to differ materially from those
contemplated in any forward-looking statements made by us herein are discussed
in Item 1A. Risk Factors, Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations (MD&A), Item 8. Financial
Statements and Supplementary Data —Note 13. Commitments and Contingent
Liabilities, and other factors discussed in filings we make with the United
States Securities and Exchange Commission (SEC).
These factors include, but are not limited to:
oadverse changes in the demand for or the price of the capacity and energy
that we sell into wholesale electricity markets,
oadverse changes in energy industry law, policies and regulation, including
market structures and a potential shift away from competitive markets
toward subsidized market mechanisms, transmission planning and cost
allocation rules, including rules regarding how transmission is planned
and who is permitted to build transmission in the future, and reliability
oany inability of our transmission and distribution businesses to obtain
adequate and timely rate relief and regulatory approvals from federal and
ochanges in federal and state environmental regulations that could increase
our costs or limit our operations,
ochanges in nuclear regulation and/or general developments in the nuclear
power industry, including various impacts from any accidents or incidents
experienced at our facilities or by others in the industry, that could
limit operations of our nuclear generating units,
oactions or activities at one of our nuclear units located on a multi-unit
site that might adversely affect our ability to continue to operate that
unit or other units located at the same site,
oany inability to balance our energy obligations, available supply and
oany deterioration in our credit quality or the credit quality of our
counterparties, including in our leveraged leases,
oavailability of capital and credit at commercially reasonable terms and
conditions and our ability to meet cash needs,
ochanges in the cost of, or interruption in the supply of, fuel and other
commodities necessary to the operation of our generating units,
odelays in receipt of necessary permits and approvals for our construction
and development activities,
odelays or unforeseen cost escalations in our construction and development
oany inability to achieve, or continue to sustain, our expected levels of
oany equipment failures, accidents, severe weather events or other
incidents that impact our ability to provide safe and reliable service to
oincrease in competition in energy supply markets as well as competition
for certain rate-based transmission projects,
oany inability to realize anticipated tax benefits or retain tax credits,
ochallenges associated with recruitment and/or retention of a qualified
oadverse performance of our decommissioning and defined benefit plan trust
fund investments and changes in funding requirements, and
ochanges in technology and customer usage patterns.
All of the forward-looking statements made in this report are qualified by
these cautionary statements and we cannot assure you that the results or
developments anticipated by management will be realized or, even if realized,
will have the expected consequences to, or effects on, us or our business
prospects, financial condition or results of operations. Readers are cautioned
not to place undue reliance on these forward-looking statements in making any
investment decision. Forward-looking statements made in this report apply only
as of the date of this report. While we may elect to update forward-looking
statements from time to time, we specifically disclaim any obligation to do
so, even if internal estimates change, unless otherwise required by applicable
securities laws. The forward-looking statements contained in this report are
intended to qualify for the safe harbor provisions of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended.
Public Service Electric and Gas Company (PSE&G) is New Jersey's oldest and
largest regulated gas and electric delivery utility, serving nearly
three-quarters of the state's population. PSE&G is the winner of the
ReliabilityOne Award for superior electric system reliability. PSE&G is a
subsidiary of Public Service Enterprise Group Incorporated (PSEG) (NYSE:PEG),
a diversified energy company (www.pseg.com).
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PSE&G ENERGY STRONG INFRASTRUCTURE PROGRAM FILING
Switching and/or substations to be raised or fortified
NAME MUNICIPALITY COUNTY
Belmont Garfield Bergen
Garfield Place South Hackensack Bergen
Hackensack Hackensack Bergen
Hillsdale Hillsdale Bergen
Little Ferry Little Ferry Bergen
New Milford New Milford Bergen
River Edge River Edge Bergen
Essex Newark Essex
Newark Airport Newark Essex
Port Street Newark Essex
Bayonne Bayonne Hudson
Hoboken Hoboken Hudson
Howell Street Jersey City Hudson
Hudson Jersey City Hudson
Jersey City Jersey City Hudson
Madison Street Hoboken Hudson
Marion Jersey City Hudson
Marshall Street Hoboken Hudson
River Road North Bergen Hudson
South Waterfront Jersey City Hudson
St. Paul's Jersey City Hudson
Third Street Kearny Hudson
Ewing Ewing Mercer
Cliff Road Sewaren (Woodbridge) Middlesex
Sewaren Sewaren (Woodbridge) Middlesex
Jackson Road Totowa Passaic
Somerville Sub Somerville Somerset
Bayway Sub Elizabeth Union
Linden Linden Union
Cranford Cranford Union
Rahway Rahway Union
SOURCE Public Service Electric & Gas Company (PSE&G)
Contact: For media: Karen Johnson, +1-973-430-7734, or for customers & others:
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