PSE&G wants to spend $3.9 billion to protect its network against Atlantic storms

Public Service Electric & Gas Co. wants to spend $3.9 billion over the next decade to protect its network against Atlantic storms, which government scientists predict will grow in intensity, the company announced Wednesday.

The utility's plans, subject to approval by the New Jersey Board of Public Utilities, come just months after Hurricane Sandy swept through the New Jersey coastline and wiped out power to more than 2.5 million people.

"It's clear that Sandy, Hurricane Irene, and the October ice storm represent extreme weather patterns that have become commonplace," said Ralph Izzo, chief executive officer and chairman of the utility's parent, Public Service Enterprise Group Inc. "Reliability is no longer enough. We must also focus on the resiliency of our systems to withstand natural disasters."

In a filing with the utility board Wednesday, PSE&G laid out plans to elevate or relocate electrical substations, reinforce poles, and replace 750 miles of aged gas mains.

Company officials say the improvements would not mean a bill increase for PSE&G's four million electricity and gas customers in New Jersey. But the move would offset projected rate decreases brought on by the phasing-out of surcharges related to deregulation in the late 1990s and by historic lows in the price of natural gas - down almost 70 percent since 2008, according to the U.S. Energy Information Administration.

Stefanie Brand, director of the New Jersey Division of Rate Counsel, the state advocate for utility customers, said she was concerned about the size of the project.

"You have businesses and residents who are struggling to get back after Sandy, and this is an enormous amount of money," she said. "There's no consideration that prices need to come down. We have the seventh-highest electricity rates in the country."

The announcement comes as government officials and property owners work on shoring up the coastline. Scientists project that rising sea levels and worsening storms in decades ahead could prove destructive for low-lying areas.

"In bridge you have to play the hand you're dealt, and we've been dealt a difficult hand with climate change, we being the scientists who have to try to predict what will happen, and also human society, which has to decide what to do about it," Thomas Knutson, a meteorologist with the National Oceanic and Atmospheric Administration, said in a recent interview.

"At least with sea-level rise, we have a good sense for what the impacts on storm surge will be. Roughly speaking, with future sea-level rise, whatever storm surge you have now will come in that much higher."

Under the plan filed Wednesday, PSE&G would bury 20 miles of power lines, primarily in North Jersey where systems along New York Harbor went underwater during Sandy. For most of PSE&G's network, that option was deemed too expensive, said PSE&G president Ralph LaRossa.

Instead, the company will reinforce poles to allow them to withstand winds of 65 m.p.h.; currently, they are rated for 55 m.p.h. Sandy generated winds of 89 m.p.h. on Long Beach Island.

The state's largest electricity and gas utility, PSE&G is making the case that protecting against outages such as those seen during Sandy is essential to maintaining a sound economic environment in the state, something business leaders agree with.

"After Sandy, a lot of businesses were closed for a long time," said Tom Bracken, president of the state chamber of commerce. "There are multiple ripple effects with a loss of energy. It's not just the company, but the customers, its employees, and suppliers."

Company officials say the 10-year project could also generate 5,800 construction, engineering, and related jobs in a state where the unemployment rate was 9.6 percent in December.

No schedule has been set for consideration of the filing. PSE&G said it expected a decision could be a year away.

On Wednesday, Izzo made clear his belief about the consequences if the state utility board's failed to approve the plan.

"We believe if these measures were in place before Sandy, we would have had half the outages," he said. "There is no better time, and we're looking forward to the conversation with the many interested parties."