Dive Brief:
- New Jersey's largest electric utility last week announced a $5.4 billion expansion to its five-year infrastructure spending plan, including almost $3 billion for energy efficiency, electric vehicle infrastructure and energy storage.
- PSEG boasts the investments could lead to 8% to 10% annual rate base growth.
- The proposal also includes a $2.5 billion expansion of PSEG's Energy Strong program, which aims to harden electric and gas facilities. The first phase of the program is expected to be completed later this year.
Dive Insight:
PSEG officials say the investment program will help New Jersey achieve its aggressive clean energy goals, but the utility does not appear to have sold all stakeholders on the plan. While PSEG's announcement makes multiple mentions of the rate base expansion, the state's Division of Rate Counsel has called it a "massive transfer of wealth" to shareholders.
The utility on Thursday revealed a plan to invest $14 billion to $17 billion over the next five years, an expansion of its previous plan to invest up to $13.2 billion over a five-year period ending in 2022. The new proposal includes the utility's first major investment in electric vehicle infrastructure.
PSEG Chairman, President and CEO Ralph Izzo called the plan an "ambitious program" that represents a "strong commitment to modernization of our infrastructure and a clean energy future." Along with being a boon to the utility's ratebase, Izzo said the plan will help customers control their energy use, consume cleaner power and lower their monthly bills.
The clean energy investment of $2.9 billion includes $2.5 billion for energy efficiency, $300 million for electric vehicle infrastructure and $100 million for utility-scale energy storage systems. The proposed $2.5 billion expansion to the Energy Strong program, which PSEG has dubbed "Energy Strong II," aims to boost reliability and resiliency.
New Jersey's work to increase its clean energy options has put it at the center of a debate over how to maintain emissions-free generation. Last month, Democratic Gov. Phil Murphy signed two bills, including a controversial measure to establish a Zero Emissions Certificate (ZEC) program for the state's nuclear power plants.
The second bill raises the state's renewable portfolio standard to 50% by 2030, establishes a 2,000 MW by 2030 target for energy storage and updates the state’s policies for offshore wind, community solar and energy efficiency.
