- Public Service Enterprise Group (PSEG) unveiled plans Monday at the utility’s annual investor day conference to spend up to $900 million on grid improvements, with a focus on boosting reliability and expanding electric vehicle infrastructure.
- The new projects will increase the New Jersey-based PSEG's overall capital spending plan for 2021-2025 by almost a billion dollars to the $14 billion to $16 billion range, up from $13 billion to $15 billion previously planned, said Michael Schmid, vice president for asset management and centralized services at the utility.
- PSEG executives also touted the company’s plans to transform its business model to a regulated utility with predictable earnings. The utility will reach a major milestone in that process next year, after it completes the sale of its fleet of fossil-fuel power plants that sell electricity on the wholesale market.
PSEG’s Infrastructure Advancement Plan, which the utility laid out Monday, calls for hundreds of millions in additional spending on last-mile reliability, building out EV infrastructure, and modernizing electric substations and gas metering and regulating stations.
The utility will file plans for the projects with the New Jersey Board of Public Utilities in the coming months, with hopes of winning approval in time to start construction in mid-2022, according to the presentation PSEG made to investors.
PSEG plans to spend $175 million to $225 million on improving the reliability of its transmission network where it connects with residential neighborhoods, which the utility has refers to as “last-mile reliability.”
The work involves replacing underground cables, installing spacer cables and upgrading poles, among other measures.
The utility is also proposing to spend $75 million to $100 million on capacitor bank and secondary line upgrades to both support the growth of customer-sited solar as well for the electrification of the transportation sector, the PSEG presentation states.
PSEG has also budgeted $125 million to $150 million to install 2,000 EV chargers at 65 company facilities to support the utility’s electrification of its fleet, which includes thousands of trucks and other vehicles.
The largest expense in PSEG’s proposed upgrades are up to $450 million to modernize electrical substations and gas metering and regulating stations.
The utility will be seeking permission from regulators to modernize six electrical substations, including “aging” 26 kV oil-filled circuit breakers, and seven gas metering and regulating stations.
PSEG’s proposed investments in last-mile transmission and EV infrastructure, in turn, are being driven by changes in the economy and society that have seen a major shift towards home-based work and efforts to electrify the transportation sector, said PSEG's Schmid.
PSEG also announced, at Monday’s investor summit, that 90% of the company will be a fully-regulated utility by next year.
PSEG indicated that marker will be reached after it closes on the $1.92 billion sale of its fossil fuel power plants to subsidiaries of a fund controlled by ArcLight Capital Partners. The sale will both boost the percentage of power PSEG generates from nuclear and renewable sources, while jettisoning its fleet of power plants that sell electricity in the wholesale market.
The shift towards a regulated utility business model will mean more predictable earnings and revenue for investors, eliminating the fluctuations and price swings that come with operating power plants that sell electricity into the wholesale market, Schmid said.
“We can give earnings information” to investors “based on a predictable, stable utility business,” he said.