Dive Brief:
- A settlement deal has been reached between New Jersey's Board of Public Utilities (BPU), interest groups and Public Service Electric and Gas (PSEG) to fund $1 billion of a massive infrastructure improvement project after a year of wrangling. The "Energy Strong" project was originally budgeted for $3.9 billion when filed last year -- the largest filing by a utility in New Jersey's history.
- $400 million will go to rebuilding or flood-proofing 29 switching stations affected by Sandy; $350 million to replace or upgrade 250 miles of gas mains within flood zones; $150 million for intelligent grid technology that will help protect customers from outages. A further $220 million that the utility hopes to be reimbursed for in its next rate filing, due late 2017, will be spent on repairing its substations, also affected by the storm. The repairs are due to begin by end of 2014.
- The cost of the improvement project will be passed on to rate payers with a $4 increase to the average customer's monthly utility bill.
Dive Insight:
Adverse weather preparedness has become a critical issue for many East Coast utilities. Hurricanes Irene and Sandy, together with increasingly volatile summer and winter weather patterns, has brought reliability -- long mission critical for utilities -- to the fore for PSEG.
"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," said PSEG CEO Ralph Izzo.
Izzo has expressed frustration with the BPU and stakeholders' opposition to the original budget for the project throughout the proceedings.
