PSE&G Wins NJ Approval For $190 Million In Efficiency Projects
01 Juli 2009 - 7:25PM
Dow Jones News
Public Service Electric & Gas Co. won approval from New
Jersey regulators Wednesday for $190 million in efficiency
projects.
The subsidiary of Public Service Enterprise Group Inc. (PEG)
will spend the money on a range of projects, with the largest slice
going to cut energy use at hospitals. PSE&G's initial return on
equity it invests is 10%, the company said.
The efficiency program is part of nearly $1.7 billion in
spending planned by Public Service Enterprise Group to expand its
utility investment amid weak power demand and slumping market
prices for electricity. The Newark company operates New Jersey's
largest electric and natural gas utility and a merchant generation
business that sells the output from its power plants at market
prices.
The efficiency plan, which will result in a slight rate increase
for PSE&G customers, is one of three programs the utility has
proposed to boost earnings. The utility won approval for $694
million in new infrastructure projects in April and awaits a
decision on nearly $800 million in solar projects.
PSE&G's proposals came in response to a request by New
Jersey Gov. Jon Corzine for public works projects to stimulate the
economy and boost employment. The utility estimates the efficiency
projects will add about 700 jobs during the next two years.
PSE&G estimates the $190 million in new spending will add $2.60
and $3.10 to the annual bill of a typical electricity and natural
gas customer, respectively.
A company spokeswoman said PSE&G's investment in the
efficiency projects will be recovered over a 60-month period and
start contributing to earnings later this year.
The efficiency projects are an expansion of a $46 million
program PSE&G won approval for last fall. The projects will
include residential customers, but a majority of the money will go
to business and government projects. A $68 million slice will be
spent on making hospitals more efficient, including changes in
heating and air conditioning systems.
PSE&G expects a decision on its final solar proposal by the
end of the year. The utility's President Ralph LaRossa said at an
industry conference last month that state regulators have given
PSE&G positive feedback on more than half of the proposal,
including the installation of solar panels on up to 200,000 utility
poles and larger-scale solar projects, while struggling with
projects to install solar panels on government buildings and at
affordable housing complexes.
Public Service Enterprise shares were recently up 37 cents, or
1.1%, at $33 apiece.
-By Mark Peters, Dow Jones Newswires; 212-416-2457;
mark.peters@dowjones.com