Dive Brief:
- The New Jersey Board of Public Utilities on Tuesday approved the five-year gas system modernization plan proposed by Public Service Electric & Gas Company (PSE&G), signing off on $1.875 billion in costs over the next five years.
- The utility says the program will create more than 3,000 jobs and spur economic growth, along with making the system safer by replacing 875 miles of pipeline.
- While the project carries a hefty price tag, the utility has maintained that because natural gas commodity prices are expected to remain low for some time, now is the time to accelerate the gas replacement program.
Dive Insight:
It took less than a year for the New Jersey Board of Public Utilities to sign off on the gas line replacement program, highlighting the urgency at hand. PSE&G has about 4,000 miles of natural gas distribution pipelines in New Jersey, and roughly a quarter of the system was installed before 1960. Those older sections are the most leak-prone, the utility says, accounting for about two-thirds of leaks.
PSE&G filed its petition for the program last July. Along with other replacement efforts, the approval means the utility can replace its cast-iron and unprotected steel pipes within 25 years.
In the order approving the program, New Jersey regulators agreed replacing the pipes and making other modernization investments "should mitigate potential damage to the system and reduce methane emissions, as well as enhance public safety and result in increased long-term reliability."
The utility filed a settlement to advance the replacement program about a month ago. Parties to the settlement included BPU staff, the New Jersey Division of Rate Counsel, the Environmental Defense Fund, and unions and labor groups.
According to PSE&G, low gas commodity prices in recent years mean that the work can be done with less of a financial blow to customers. Since 2009, the utility's residential customers have seen gas heating bills decline about 50%.
