Storms have utilities set to spend big in coming months

Electric companies say their major projects are driven by Sandy and Irene, but also regularly scheduled infrastructure reinforcement

NJBIZ STAFF//April 5, 2013//

Storms have utilities set to spend big in coming months

Electric companies say their major projects are driven by Sandy and Irene, but also regularly scheduled infrastructure reinforcement

NJBIZ STAFF//April 5, 2013//

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New Jersey utilities will spend several hundred million dollars this year to improve infrastructure, proceeding with planned upgrades while regulators sort through rate hike requests submitted to cover past projects.

Utilities said their 2013 spending is part of regular capital budgets and not simply responses to the bad spate of storms since 2011, though weather-related damage informs priorities.

Jersey Central Power & Light Co. spokesman Ron Morano said the Morristown-based utility has always upgraded systems annually, but has been releasing more details since 2011, when regulators and consumers said the company wasn’t investing enough.

Morano said JCP&L, which is seeking a separate rate hike to pay for repairs for prior storms, will spend nearly $200 million this year as “part of the annual investment and reinforcement JCP&L makes to our system year to year.”

Projects already budgeted for 2013 include completing a new substation, building new circuits, replacing underground cables, and inspecting and replacing utility poles. The spending also includes tree trimming, including the use of helicopter saws that cut branches near transmission lines in hard-to-reach areas.

The company says improvements to its distribution circuits — such as adding animal guards, spacer cable, fuses and installing new wire — are expected to reduce outages on key distribution lines affecting about 100,000 customers in north and central New Jersey. The company serves about 1.1 million customers total in 12 counties.

While those projects proceed, public hearings are under way for a rate hike JCP&L has filed with the state Board of Public Utilities to recover about $600 million in costs incurred by hurricanes Sandy and Irene, as well as the late October 2011 snowstorm. JCP&L said its request amounts to a 4.5 percent hike, or $4.44 a month, for a typical customer.

The state’s largest utility, PSE&G, has filed a proposal to spend nearly $4 billion on comprehensive infrastructure improvements over the next 10 years. Details are still being sorted, as the BPU has demanded more information about projects and cost estimates before it begins public hearings on the plan, which has attracted early criticism from advocacy groups like AARP.

The Newark-based utility has projected the cost of its plan will be approximately offset by 2018 after factoring declining natural gas prices and the expiration of certain surcharges. If not for the new infrastructure proposal, PSE&G has said a typical electric and gas ratepayer would have seen a decline of about $8 a month by 2018. President Ralph LaRossa said if all new projects are approved, that figure drops to decrease of about $1 a month. The utility serves nearly three-quarters of the state’s population.

Meanwhile, PSE&G is spending about $1.8 billion on capital projects in 2013, mostly to upgrade transmission and distribution facilities for its electrical system. That’s nearly two-thirds of the company’s $2.8 billion operating budget, said spokeswoman Kristine Snodgrass, and those projects were planned before damage from recent storms.

Atlantic City Electric says it plans to spend $235 million this year, or about 59 percent of its operating budget, to upgrade service in its South Jersey territory. The company says this year’s spending is part of a five-year plan calling for $800 million in infrastructure investment.

The company plans to build new substation and transmission lines and replace wooden utility poles with steel poles that feed barrier islands in order to improve resiliency.

Separately, Atlantic City in December filed a rate hike request with the state seeking $70 million — equal to a 7 percent increase, adding about $12.69 a month for a typical residential customer — to cover prior projects. That request included responses to Hurricane Sandy and the so-called derecho in July. Atlantic City serves about 550,000 customers.

The smallest of New Jersey’s utilities, Rockland Electric, which serves about 60,000 North Jersey customers, said it will spend about $15 million this year on infrastructure.

Plans include developing a new electric substation in Montvale, upgrading construction of two new circuits in Old Tappan, a service reliability project in Mahwah and system reliability improvement projects throughout its area.

In response to damage from Hurricane Sandy, Rockland plans to install underground lines at certain locations and step up its tree trimming. Rockland said it is still developing post-Sandy projects.

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