PSE&G 2012 Annual Report Download - page 5

The energy markets in our region have been responsive to
consumer needs. Our residential customers have been paying
less to heat their homes as natural gas prices have fallen. Since
January 2009, PSE&G residential customers have benefited
from nine bill reductions for gas supply, for a total savings of 39
percent, or more than $670 per customer. We are pleased to
be able to pass on these savings to our customers. In addition,
lower natural gas prices have helped to keep electric bills
stable because gas is a major fuel used to generate electricity.
We remain focused on growing as an operationally excellent,
integrated energy company – a regulated utility plus a power
business. Our combined strengths provide flexibility and an
important degree of diversification to help us weather different
markets and economic cycles while increasing our options. In
the current environment of lower energy prices, we have been
using cash flows from our power generation business to help
fund growth investments at our regulated utility. Our credit
ratings remain in a desirable range. In 2012, we received a
credit upgrade at PSE&G. All of this has been accomplished
without having to issue additional shares of equity.
investing in an energy
strong future
As has been our tradition, we plan to pursue investments
to advance New Jersey’s energy and economic goals. We
are hard at work doing this on many fronts – through efforts
that modernize infrastructure, provide renewable and energy
efficiency solutions, and create jobs.
Our forecast includes more than $6.1 billion in capital
spending over the next three years, 80 percent of which is
at PSE&G. Electric transmission – the highway network for
moving power – represents the single largest part of this
investment. We passed an important milestone this past
year when we received final approval from the National Park
Service for the Susquehanna to Roseland line, a major grid
upgrade that will improve electric service for millions of
people. Also, in 2012, we obtained approval from the New
Jersey Board of Public Utilities to construct the North Central
Reliability Project, which will upgrade transmission lines and
substations in northern and central areas of New Jersey.
These investments are being done to support reliability,
but they deliver additional benefits – creating good jobs,
providing an economic stimulus, and lowering bills by reducing
line congestion. For instance, our transmission projects are
expected to provide the equivalent of 6,500 jobs over the next
three years. In addition to transmission, PSE&G is continuing to
invest in electric and gas distribution – the “local roadways” of
our pipes and wires – to support highly reliable service.
Sustainability has defined us for more than 100 years.
However, in the aftermath of Sandy, it is clear that additional
steps need to be taken with a focus on rebuilding and
fortifying our systems to be more resilient and improve New
Jersey’s ability to withstand and recover from future storms.
To achieve this goal, we have proposed a new Energy
Strong program, through which we would invest $3.9
billion over 10 years in improvements that will protect and
strengthen our electric and gas delivery systems and help
safeguard our customers and communities. In addition, we
have proposed spending on transmission projects amounting
to approximately $1.5 billion over the 10-year period to
harden and further improve the resiliency of the grid.
Our Energy Strong program involves a range of measures,
with a focus on protecting critical electric and gas facilities;
deploying smart grid technologies to better monitor system
operations; creating redundancy in the system so that
power can still flow around a problem when a circuit fails;
and strengthening poles and moving some overhead lines
underground. These reinforcements go beyond a traditional
reliability program by adding new layers of protection. In
addition, this effort would create nearly 6,000 jobs and support
New Jersey’s economic vibrancy and competitiveness.
Moreover, with gas commodity costs down and certain
restructuring charges rolling off, we anticipate that our Energy
Strong program will have minimal impact on customer bills.
As New Jersey’s oldest and largest utility, we have been
dedicated to helping New Jersey achieve important goals for
more than 100 years. PSEG stands ready to do our part in