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NJ's biggest utility plans $4B upgrade after Sandy

Published on NewsOK Modified: February 20, 2013 at 2:51 pm •  Published: February 20, 2013

New Jersey's largest utility company has proposed spending $3.9 billion over a decade to stormproof its Superstorm Sandy-battered electric and gas system in a time when big storms have become more frequent.

Newark, N.J.-based PSE&G said it can be done without raising customers' bills — so long as power supply costs don't shoot up.

"We live in a digital society nowadays, we have a digital economy," said PSE&G Chairman and CEO Ralph Izzo. "This is about protecting our way of life in extreme weather."

The company says it plans to raise some flood-prone substations, build barriers around others and line cast-iron gas lines with plastic. It wants to fortify overhead power lines so they could withstand sustained 65 mph winds, not just the 55 mph winds they're built for now. It also wants to break electrical circuits into smaller units so that when the power goes out, fewer customers will be affected. And it wants technology to help fix problems faster.

New Jersey, like other places, has seen more frequent and more damaging storms, including Tropical Storm Irene and an ice storm in 2011. During Superstorm Sandy last year, 2 million of the company's 2.2 million customers lost power as trees took down power lines and substations flooded. The company says 800,000 would not have been knocked out if the proposed upgrades were in place. And the rest would have had service returned sooner.

For instance, company officials said the Newark Liberty Airport would have had a shorter shutdown after Sandy if the Newark electrical substation had been protected from flooding.

PSE&G serves about three-fourths of New Jersey electrical customers, including many in the Philadelphia and New York City suburbs.

The company said ratepayers would see no increases or small ones on their bills because two surcharges are due to come off bills in the next few years. Thanks to lower natural gas supply costs, Izzo said, the average residential customer with both gas and electric service now is paying about $2,400 per year to the company — $600 less than in 2008. He said the aim is that the bills would not rise because of the proposed project.

But the estimates do not include $250 million to $300 million the company needs to pay for repairs for damages caused by Sandy. It's not clear how those repair costs might be passed on to customers.

Almost as soon as PSE&G filed its proposal, the New Jersey Chamber of Commerce gave its support.

"Investing in a reliable and resilient energy infrastructure that is better able to withstand powerful and damaging storms like Sandy and other natural disasters will help keep New Jersey competitive and open for business," chamber President and CEO Thomas Bracken said in a statement.

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