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PSE&G approved to invest more than $700M to install NJ smart meters

Published on January 11, 2021 by Kim Riley

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The New Jersey Board of Public Utilities last week approved a more than $700 million investment by Public Service Electric & Gas (PSE&G), the state’s largest and oldest investor-owned utility, to install smart meters for its 2.3 million electric customers.

The smart meters — also known as advanced metering infrastructure (AMI) — will establish two-way communications between PSE&G customers and the utility, and is widely considered necessary technology for creating a smarter power grid.

For PSE&G, smart meters are the foundation for its Energy Cloud AMI effort to create such an integrated communications network, which will allow automatic, near real-time meter reading that could virtually eliminate estimated utility bills, provide more efficient response to outages, and let customers make more informed decisions about their energy usage.

“This is a vital step toward achieving a smarter and cleaner energy future for New Jersey,” PSE&G President Dave Daly said in a Jan. 7 statement. “Smart meters provide the real-time communications necessary to better serve our customers and will provide electric customers with valuable information about their energy consumption.”

Smart meters and the supporting communications network also will help expedite electric service restorations when severe weather strikes and will improve service quality, said Daly.

When the N.J. Board of Public Utilities in February 2020 determined that AMI is a means to achieve the objectives of the governor’s 2019 Energy Master Plan, it also directed PSE&G, Atlantic City Electric Co., and Jersey Central Power and Light Co. to file petitions, or update previously filed petitions, for AMI implementation within 180 days.

Following extensive discovery and settlement meetings throughout 2020 between PSE&G and several stakeholder parties, the board’s Jan. 7 order approved PSE&G’s Clean Energy Future – Energy Cloud (CEF-EC) Program to include installation of approximately 2.2 million AMI meters at an estimated investment cost of $707 million for the smart meters, network infrastructure, and associated information technology to be deployed.

The estimated breakdown of the company’s $707 million CEF-EC Program investment is: $660 million for meter infrastructure; $23 million for the network; and $24 million for CEF-EC related IT capital. Additionally, PSE&G expects its associated operating and maintenance (O&M) costs to top $71 million, bringing estimated expenditures to $778 million, according to the NJ board’s order.
However, the board also noted in its order that “the Parties recognize that the CEF-EC Program will be of such substantial scale and scope that there is uncertainty as to the precise timing and budget for each phase of AMI meter deployment.”

In particular, said the board, the ongoing COVID-19 pandemic and related health state-of-emergency has created an “unpredictable duration and may impact the Company’s ability to access premises for meter installation work.”

Accordingly, PSE&G may make adjustments to the AMI deployment schedule in response to real market and service conditions experienced and the board said that the $707 million total capital investment may change.

PSE&G says its CEF-EC Program is the initial phase of its AMI project, with three additional releases expected to commence in the coming years, according to the board’s Jan. 7 order.

Specifically, PSE&G this year plans to install approximately 80,000 AMI meters. In 2022, the company plans to install roughly 300,000 AMI meters, and in 2023 and 2024 will install some 900,000 meters each year, according to the board’s order.

PSE&G says that the CEF-EC Program will further New Jersey’s energy goals by lowering energy consumption and customer bills; reducing greenhouse gas emissions; making the electric grid more reliable, resilient and safe; and enabling a number of customer, community and company smart energy capabilities, according to the order.

For example, PSE&G’s improved communications will lead to fewer truck dispatches and other efficiencies that are expected to reduce the utility’s carbon dioxide emissions by about 2,800 metric tons per year.

“A smart meter network is essential to PSEG’s Powering Progress vision for a future in which we help our customers use less energy, ensure that the energy they do use is cleaner, and deliver that energy more reliably than ever,” Daly said.