Public Service Enterprise Group (NYSE: PEG) Chairman, President and CEO Ralph Izzo told shareholders at the company’s April 17 annual meeting that PSEG is investing billions of dollars in projects aimed at improving the reliability of New Jersey’s energy infrastructure, helping the environment and stimulating the economy.
“We are pursuing a $6.7 billion investment program – one that is creating thousands of jobs and bolstering New Jersey’s economy,” Izzo said. “Utilities can be important allies in addressing a range of pressing societal needs – for economic growth, good jobs, a healthy environment and thriving communities.”
Public Service Electric and Gas (PSE&G) is creating jobs by investing in a variety of areas. The New Jersey utility is investing $3.5bn in transmission projects that will help maintain and improve reliability and lower costs. It is also spending $307m to bring energy efficiency improvements to customers who otherwise might not have been able to afford them.
PSE&G is also expanding its investments in gas and electric infrastructure improvements, and spending more than $700m in solar energy projects that are expected to create the equivalent of more than 1,000 jobs. The company is looking to do even more in this area, Izzo said, with a focus on solar projects on landfills and former industrial sites that can be brought back to life.
Izzo pointed to the recent completion of $1.3bn in advanced emissions controls at PSEG’s Mercer and Hudson coal plants in New Jersey. These projects created 1,600 construction jobs as well as some full-time positions and made the plants two of the cleanest facilities of their type in America. The company retrofitted these New Jersey plants with SO2 scrubbers, selective catalytic reduction (SCR), baghouses and activated carbon injection.
Izzo, by the way, didn’t mention the Bridgeport coal capacity in Connecticut, where the company in recent years has been burning ultra-low-sulfur coal from Adaro Energy in Indonesia to control SO2 emissions without the expense of installing a scrubber.
In an April 3 conference presentation, the only new emissions retrofit the company shows as being in the works for its coal-fired capacity is SCR due for installation by 2014 at the Conemaugh power plant in Pennsylvania, which PSEG co-owns with several other parties. The conference presentation said the company is well positioned to comply with both the Cross-State Air Pollution Rule (CSAPR) and the Mercury and Air Toxics Standards (MATS) from the U.S. Environmental Protection Agency.
A power market uplift is expected as a result of environmental rules due to retirements, derates, higher costs or higher emission allowances prices, said the conference presentation. Estimated energy impact of CSAPR and MATS are $2-$5/MWh, which is not fully reflected in current forward prices. Power plant retirements will provide strong support to capacity markets, the presentation added.
The April 3 conference presentation noted that since 2008 there has been active coal/gas switching in the PSEG fleet. “Coal generation and margin percentage have been replaced by our combined cycle output,” the presentation said.
Izzo noted in the April 17 annual meeting speech that PSEG’s combined cycle units set a new record for energy production in 2011 and its nuclear plants operated at a 93% capacity factor. The company’s 1,173-MW Hope Creek nuclear unit set a new record for output in 2011, he added. The conference presentation shows that Hope Creek is due for a refueling outage in the spring of this year.
“New clean power plants have been built in a cost-effective way, and existing plants improved as a result of competition in the power market,” Izzo said. He added that PSEG is building a total of 400 MW of new, clean peaking generation in New Jersey and Connecticut, and said the market supports a growing role for energy efficiency and programs to reduce peak usage.
The conference presentation said that potential new sites for gas-fired generation include Bergen, Essex, Kearny, Hudson, Linden, Sewaren and Bridgeport, with Sewaren and Essex topping that list.
PSE&G continues to pass through savings from falling natural gas prices, Izzo said. PSEG has reduced costs for residential gas customers more than 35% over the last three years.
Public Service Enterprise Group is a publicly-traded, integrated generation and energy company headquartered in Newark. Its main subsidiaries are: Public Service Electric and Gas, PSEG Power LLC and PSEG Energy Holdings LLC. PSE&G is a regulated New Jersey utility delivering gas and electric to about 70% of New Jersey’s population. PSEG Power is a major wholesale energy supplier in the Northeast with three main subsidiaries: PSEG Fossil LLC, PSEG Nuclear LLC and PSEG Energy Resources & Trade LLC. PSEG Energy Holdings is a company with domestic investments and has two main energy-related businesses: PSEG Global and PSEG Resources.