PSEG Wants $1.8B Gas Main Upgrade In NJ; Bills May Increase

The Public Service Electric and Gas Company (PSE&G) is proposing a $1.87 billion settlement with the New Jersey Board of Public Utilities (BPU) and other parties that will allow the utility provider to kick off a massive gas main replacement project. But what does it mean for PSE&G customers and their annual bills?

The proposed settlement will enable PSE&G to replace 875 miles of cast-iron and unprotected-steel gas mains and make other improvements to its gas system over a five-year period, the company announced Monday.

PSE&G has almost 4,000 miles of cast-iron gas pipes, more than any other utility in the nation, spokespeople stated.

According to PSE&G:

“The mains and service lines will be replaced with strong, durable plastic piping, which is much less likely to have leaks and release methane gas. The new elevated pressure systems also enable the installation of excess flow valves that automatically shut off gas flow if a service line is damaged, and better support the use of high-efficiency appliances. The five-year program is also expected to create about 3,200 sustained jobs.”

The impact on customers’ annual bills is expected to be modest… about $17 for the typical customer, according to PSE&G.

The company stated:

“Under the settlement, PSE&G’s return on equity on the investment will be determined as part of the utility’s base distribution rate review currently under way. The average annual bill impact for a typical residential customer is expected to be less than a 2 percent increase, or about $17, per year over the five-year program.”

The BPU board is scheduled to rule on PSE&G’s proposed settlement on Wednesday during its meeting in Trenton.

The settlement dates back to a 2017 filing with the BPU. That year, the agency approved new rules that support longer-term infrastructure programs of up to five years.

The proposed agreement caps off almost nine months of formal discovery, review and discussions, including public hearings before the BPU, according to PSE&G.

“Pipes installed before 1960 are the most leak-prone,” PSE&G stated. “They make up 25 percent of [our] network, yet account for 65 percent of leaks, excluding third-party damages.”

The five-year pipe replacement program would reduce greenhouse gas emissions by an amount equal to “taking 30,000 vehicles off the road,” PSE&G stated.

PSE&G spokespeople said that parties supporting the settlement include the New Jersey Division of Rate Counsel, the Environmental Defense Fund, Local Union 94 of the International Brotherhood of Electrical Workers, Local 855 of the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry, the Engineers Labor-Employment Cooperative, New Jersey Laborers – Employers Cooperation and Education Trust, Ferreira Construction, and Creamer-Sanzari Joint Venture.

The proposed settlement is one of multiple cases involving the utility and its owner, Public Service Enterprise Group, that could impact its customers’ bills in the near future. According to NJ Spotlight:

“The most controversial, by far, is legislation (S-2313) that would have customers of all four electric utilities in New Jersey pay up to $300 million a year to prop up PSEG’s three nuclear units in South Jersey. It is awaiting action from Gov. Phil Murphy, as is another bill (A-3723) that would boost ratepayer bills to promote solar and other clean-energy programs.”

• See related article: Your NJ Electric Bills May Go Up, If Gov. Phil Murphy Says Yes

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File Photo: PSE&G