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Hearings set on $3.9 billion PSE&G upgrade


Public Service Electric and Gas Co.’s multibillion-dollar plan to weatherproof its power grid is set to go before the public in a series of potentially contentious hearings starting next month that will highlight the debate over how to avoid storm-related power outages — and who should pay for it.

Beginning Sept. 16 in Newark, state regulators plan to take comments on a $3.9 billion proposal by PSE&G to upgrade its power distribution system to help avert the kind of widespread damage and lengthy power outages that followed snow-, wind- and rainstorms the past two years.

The Newark hearings are at 3:30 p.m. and 6:30 p.m. at Essex County College. Other hearings are scheduled Sept. 19 in New Brunswick and Oct. 7 in Cherry Hill.

The hearings before the Board of Public Utilities will pit proponents of the plan, who back upgrades as crucial to improving reliability, against foes, who see it as a poorly planned effort that would be unfairly financed by PSE&G customers. PSE&G, the state’s largest utility, serves 2.2 million customers, including 600,000 in Bergen and Passaic counties.

Other proposals

How the case plays out also will set the tone for review of similar “storm hardening” proposals that the board has ordered other utility companies to submit as it tries to put together a comprehensive plan for securing the power grid while minimizing the impact on electric and gas bills.

The issue “is incredibly important because it has long-term consequences for the state’s economy,” said Frank Felder, director of the Center for Energy, Economic & Environmental Policy at Rutgers University. The hearings “are going to kick off this debate and discussion about how much we want to do and what we want to spend.”

Supporters of PSE&G’s so-called Energy Strong proposal include trade unions and business groups who say it will create jobs and help attract business to the state. The company actively sought support through email and news-release campaigns touting the potential benefits of the proposal.

“It’s important, not only from the selfish standpoint of our members going to work, but it’s important for New Jersey and for all its citizens,” said Bill Mullen, president of the New Jersey Building and Construction Trades Council. “If we have a weak power grid, it could be a deciding factor for when a company wants to either expand or commit to New Jersey.”

Hospitals and public officials from about 50 municipalities and Bergen County government have endorsed the plan as well.

But business groups also have split over PSE&G’s request to have ratepayers fund the effort, as opposed to the traditional process of investing in work and then having regulators review it before approving rate hikes. They also have called the plan too limited because the upgrades would, according to the company, reduce storm-induced blackouts for only 39 percent of PSE&G’s customers.

Similar concerns

A state office that advocates for utility customers has raised similar concerns, while environmental groups say the plan fails to include energy efficiency and clean-energy measures that would reduce the load on the current system and lower costs.

“We will be energy-loud and strong at the hearings,” said Jeff Tittel, director of the state chapter of the Sierra Club. “Here is our chance to make up for mistakes in the past and do things better going forward.”

Under the 10-year plan, power lines would be strengthened or buried, gas mains improved and more than 30 electricity-transfer stations raised, moved or otherwise flood-proofed. Computer systems also would be modernized to help repair crews identify problem spots after storms and to better inform customers of progress fixing outages.

The hearings will focus on the first $2.6 billion worth of work, planned over five years, with the rest of the program to be reviewed at a later date.

While PSE&G says the project would raise the average residential electric bill by 4.5 percent and the gas bill by 5.4 percent over five years, the company has stressed that the increases would be largely offset with the expiration of special surcharges currently on bills.

After the public hearings, the case will proceed to a trial-like proceeding scheduled in January, with testimony and evidence submitted to a utility board commissioner. The full board will then decide.

For its part, the company is happy the plan is moving to the hearing stage, said spokeswoman Kristine Lloyd.

“The longer it takes them to make a decision, the later we will be able to get started,” she said.