Public Service Electric & Gas, New Jersey, plans to spend $1.6 billion over the next five to eight years to upgrade its transmission lines to replacing its aging energy delivery system and to maintain reliability of the power grid.
The utility is supporting the construction of several new high-voltage transmission lines that will significantly improve the long-term reliability of the electric system that serves its customers, said Ralph Izzo, chairman and chief executive officer of Public Service Enterprise Group, the owner of PSE&G.
Izzo told shareholders gathered for the company’s annual meeting that PSEG is “well positioned for earnings growth and expansion.” He said the company expects the combination of earnings growth and dividends to produce annual shareholder returns in the range of 10 to 13 percent through 2011.
Izzo noted that PSEG completed 2007 with operating earnings well above what the company had forecasted a year earlier and had improved its business profile for growth with manageable risk. He said the company’s two main earnings drivers were PSEG Power, its large domestic electric supply business and PSE&G, its New Jersey electric and gas utility.
Izzo also outlined opportunities for growth in the areas of climate change and the need for a new energy supply.
“Leadership on the issue of climate change is important for our business as well as our society. While it is a challenge, it also represents opportunity to grow with investments in energy efficiency, renewable energy and clean central station power,” Izzo told shareholders.
He said he was encouraged by the passage of legislation in New Jersey that recognizes the role that utilities can play in promoting a sustainable energy future. He highlighted the approval the company received last week from state regulators to help expedite investment in solar energy and noted that PSEG recently put forward proposals to develop offshore wind energy and expand utility investments in energy efficiency.
Izzo also talked about the importance of ensuring “universal access to energy efficiency and renewable energy,” so that every neighborhood can enjoy the benefits.
PSEG’s near-term growth plans involve proposing 300 to 400 MW of new peaking capacity in New Jersey, in addition to other peaking units in Connecticut.
The company is also looking at the viability of building a new nuclear plant at the site of its Hope Creek and Salem units. This is a more long-term proposition, Izzo noted, given the years of permit and regulatory preparation that would be needed before a decision is made to proceed with a formal application. Nuclear energy is free of carbon emissions.