PSE&G files for $2.54B extension of Gas System Modernization Program

Dawn Furnas//March 2, 2023

PSE&G files for $2.54B extension of Gas System Modernization Program

Dawn Furnas//March 2, 2023

In its effort to curb emissions from aging natural gas infrastructure, PSE&G filed for a three-year, $2.54 billion extension of its Gas System Modernization Program (GSMP) with the New Jersey Board of Public Utilities, the Newark-based energy company announced March 1. 

Launched in 2014, the program involves updating PSE&G’s gas system by replacing aged pipes with state-of-the-art gas lines, according to its website. 

The new proposal would continue this work, while sustaining the thousands of jobs created under GSMP II in addition to creating more positions, PSE&G said in a March 1 statement. GSMP III is planned to run from 2024 through 2027. 

What will customers see in GSMP III?

PSE&G delivers natural gas to nearly 2 million customers. The company said residential gas bills are now about 32% lower than in 2008, including decreases over the past two months. The proposed GSMP III would increase a typical residential gas customer bill by about 3%, or $3 per month, for each year of the three-year program.

The company estimated the work would reduce carbon dioxide equivalent (CO2e) emissions by more than 145,000 metric tons, while also introducing non-fossil alternatives, renewable natural gas (RNG) and hydrogen into PSE&G’s system. 

PSE&G emphasized the program supports Gov. Phil Murphy’s new climate goals, announced Feb. 15, which include accelerating the reduction of greenhouse gas emissions — especially in communities that are disproportionately affected by climate change. Those goals, however, were not met without criticism, as NJBIZ reported, with some agreeing with the need to convert to cleaner energy but objecting to an accelerated timeline to do so.

‘Powering Progress’ 

PSE&G said the first two phases of GSMP reduced methane emissions by nearly a quarter of a million metric tons of CO2e from its system compared with 2011 levels. Continuing the work “is essential to achieving our aim of reducing methane emissions by 58% from 2011 levels by 2030,” the company said. 

The company has about 3,000 miles of the oldest cast iron mains in the country, with an average age of 91 years – more than any other U.S. gas utility, it said, adding that third phase of the program expects to modernize about 860 miles of these pipes and about 200 miles of unprotected steel pipes. 

Kim Hanemann, PSE&G president and COO, effective June 30, 2021.

PSE&G President and Chief Operating Officer Kim Hanemann said investing in the infrastructure serves both the state’s and its customers’ needs. 

“PSE&G supports a balanced approach to decarbonization while meeting today’s energy demand – an approach that recognizes natural gas as a fuel to maintain affordability and reliability, as we continue to assess options including lower-carbon fuels and electrification,” Hanemann continued. “To date, this work has avoided methane emissions that equate to removing 54,000 cars from the road. Continuing GSMP, now with new RNG and hydrogen programs, helps keep us Powering Progress.” 

Speaking of RNG and hydrogen 

As part of GSMP III, a proposed renewable natural gas facility would inject processed landfill gas into PSE&G’s gas distribution system, improving air quality and reducing pollutants, PSE&G said.  

“This innovative project builds on the Middlesex County Utilities Authority’s continued success in reclaiming landfill gas, and could become a model for others working to reduce greenhouse gas emissions,” said John Wiley, Middlesex County Utilities Authority chairman of the board of commissioners. 

PSE&G’s plan also includes a 1 megawatt-rated electrolyzer to supply 2% hydrogen to a part of the gas distribution system. The goal of this aspect of the project would be to reduce an estimated 1,000 metric tons of CO2e annually. 

William Mullen, president of the New Jersey State Building & Construction Trade Council, said the program not only benefits customers but also “the trades that are contributing to the lasting quality of the infrastructure with their skilled work.”