Adequate power, lower rates this summer – PSE&G

Public Service Electric and Gas Co. (PSE&G) says it will have adequate power to meet the needs of its customers in New Jersey during the summer’s peak demand season, and that power prices will be slightly lower than last year.

“Going into the summer, customers want to know two things: Will there be enough electricity to run my air conditioner and fans? And, how much is the power going to cost me?” the utility’s President & COO Ralph LaRossa said in a statement.

The outlook for the summer is positive on both counts.

Regional grid operator PJM recently assured the utility there will be adequate supply to serve its customers, a PSE&G spokesperson told TransmissionHub June 19. The utility, which buys its power from other generators, expects a peak demand of approximately 10,575 MW this summer, below its all-time peak demand of 11,108 MW set in August 2006.

The utility has committed to make $1.5bn in upgrades during 2012, including significant investments in new technology, equipment, and upgrades to its transmission and distribution facilities that will help meet typically high summer demand.

Upgrades that will help maintain system reliability include equipment upgrades at six switching stations and substations that use state-of-the-art gas insulated switchgear (GIS) to maintain electric system reliability. Housed inside buildings instead of being exposed to the elements like open-air switching stations and substations, GIS equipment requires less maintenance and has a life cycle of up to 50 years, the company said.

PSE&G spent $84m for GIS equipment and capacitor banks at the Branchburg, N.J., switching station alone.

In addition, the utility spent $75m to reconductor aging underground circuits to provide greater capacity and reliability in Waldwick, Cherry Hill, Gloucester and Camden. It also spent $45.8m to install new circuit breakers, a new substation at Cedar Grove, N.J., and a new 69-kV circuit that connects to another new station in Wayne.

The company also invested $23m to add redundancies to 26-kV networks in the downtown Newark area, $19m to install a 69-kV circuit between two substations in Camden County to increase reliability and supply capacity, $18m for a transformer and circuit breaker that provides additional capacity and flexibility at a switching station in Camden County, $13m for transformers that provide additional capacity for Newark Airport, and $28m for tree trimming to ensure adequate clearance between trees and energized power lines.

Despite these expenses, electricity costs will be slightly lower than last year. As a result of the drop in the price of natural gas, prices reflected in the most recent basic generation service auction held in February are lower than last year, according to the spokesperson. Starting June 1, residential customers began paying about 3.6% less annually for electricity than 2011. For the summer, a typical PSE&G residential electric customer will see a reduction of approximately 2.8% from last year’s rates.

PSE&G is one of four companies that comprise Public Service Enterprise Group (NYSE: PEG).