PSE&G Unveils $3.9 Billion, 10-Year Proposal To Make NJ "Energy Strong"

Wed Feb 20, 2013 10:53am EST

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Proposal will create 5,800 jobs and reduce the impact of future outages
NEWARK, N.J.,  Feb. 20, 2013  /PRNewswire/ -- Public Service Electric and Gas
Company (PSE&G) today proposed to invest  $3.9 billion  during the next 10 years
to proactively protect and strengthen its electric and gas systems against
increasingly frequent severe weather conditions. In a filing with the  New
Jersey  Board of Public Utilities, PSE&G asked for initial funding approval of 
$2.6 billion  during the first five years. Since some of the improvements will
take more than five years to implement, the utility may seek approval to spend
an additional  $1.3 billion  in the following five years to complete the
program.

(Logo:  http://photos.prnewswire.com/prnh/20120830/MM62627LOGO  )

PSE&G's "Energy Strong" program would include protecting more than 40 utility
installations from storm surges, strengthening distribution lines, making the
electric grid smarter and thereby easier to restore customers, and modernizing
the gas distribution system. The proposal would create 5,800 direct and indirect
jobs and stimulate substantial economic activity for  New Jersey  businesses,
all without impact on customers' monthly bills.  

"PSE&G has been recognized repeatedly for providing safe, highly reliable
service," said  Ralph Izzo, PSEG chairman and CEO. "But reliability is no longer
enough; we must also focus on the resiliency of our systems to withstand natural
disasters.

"It's clear that Sandy, Hurricane Irene and the October ice storm in 2011
represent extreme weather patterns that have become commonplace," Izzo said.
"It's equally clear that how we live and do business is so dependent on energy
that any outage is hard to tolerate. Sandy was a defining event for all of us;
the state's entire energy infrastructure needs to be rethought in light of
weather conditions that many predict will continue to occur."  

"PSE&G is responding to Sandy with a program that looks to the future with
investments that would better protect homes and businesses when the next storm
hits, while also improving day-to-day reliability," added  Ralph LaRossa, PSE&G
president and COO.  

During Sandy, 2 million of PSE&G's 2.2 million electric customers lost power due
to damaged switching and substations, damaged poles and electrical equipment,
and downed trees that brought down wires. With the protections outlined in the
filing in place, about 800,000 of those affected by a storm like Sandy would
have remained with power and restoration times for the rest would be reduced. 

A new report from the American Society of Civil Engineers (ASCE) warns that the
failure to make adequate infrastructure investments in the U.S. electric grid
could significantly affect business productivity, employment and
competitiveness. ASCE finds that by 2020, closing the investment gap in our
electrical grid would save American businesses  $126 billion, prevent the loss
of 529,000 jobs, and avert  $656 billion  in personal income losses.

"The cost of inaction is too high," Izzo said. "We have a choice: continue to
make incremental improvements and repairs to our electric and gas systems as we
have always done. Or, we can be truly forward-looking and make more substantial
investments that will help our state be better prepared for the next Irene,
Sandy or other catastrophic event." 

Little Impact on Customer Bills  
Pointing to lower gas bills and stable electric bills, the utility said making
these added investments now will have little overall impact on residential or
business customer bills. The price of natural gas has dropped nearly 40 percent
in the past three years, which has lowered the cost of heat and electricity. In
2014 and 2016, certain transitional charges related to deregulated supply
markets will roll off customer bills.

"This is the right time to make these investments.  With significantly lower gas
prices and retiring some transitional charges, we can essentially make these
critical investments without raising bills," LaRossa said. The utility estimates
that in 2018, a typical annual residential electric bill will be approximately 5
percent lower than it was in 2008 and a typical gas bill will be approximately
35 percent lower -- even with the proposed additional spending - and still well
below the rate of inflation.

LaRossa said a number of labor leaders, mayors and chambers of commerce have
already expressed support for the utility's proposal, which will create 5,800
new jobs in construction, engineering and support services. "They believe these
are important investments for  New Jersey," he said. "We look forward to
discussing our plans in more detail with regulators and other state officials on
the best way to proceed to protect  New Jersey's quality of life and economic
competitiveness."

Key provisions of PSE&G's 10-year plan include:

* $1.7 billion  to raise, relocate or protect all switching and substations
(listed in attachment) affected by recent storms as well as those in newly
designated flood zones.  
* $1.04 billion  to replace and modernize 750 miles of low-pressure cast iron
gas mains in or near flood areas.   
* $454 million  to deploy smart grid technologies to better monitor system
operations to increase our ability to more swiftly deploy repair teams.  
* $215 million  to improve pole distribution systems.  
* $200 million  to create redundancy in the system, reducing outages when damage
occurs.  
* $60 million  to move 20 miles of overhead electric distribution lines
underground.  
* $140 million  to protect 9 natural gas metering stations and a liquefied
natural gas station affected by Sandy or located in flood zones.

"We strongly believe that making these investments in protecting our energy
infrastructure against future superstorms, while keeping customer bills well
below the Consumer Price Index from 2008 to 2018, is a significant win for
customers and  New Jersey's economy," Izzo said.  

Forward Looking Statement
Certain of the matters discussed in this report constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements are subject to risks and uncertainties,
which could cause actual results to differ materially from those anticipated.
Such statements are based on management's beliefs as well as assumptions made by
and information currently available to management. When used herein, the words
"anticipate," "intend," "estimate," "believe," "expect," "plan," "should,"
"hypothetical," "potential," "forecast," "project," variations of such words and
similar expressions are intended to identify forward-looking statements. Factors
that may cause actual results to differ are often presented with the
forward-looking statements themselves. Other factors that could cause actual
results to differ materially from those contemplated in any forward-looking
statements made by us herein are discussed in Item 1A. Risk Factors, Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations (MD&A), Item 8.  Financial Statements and Supplementary Data -Note
13. Commitments and Contingent Liabilities, and other factors discussed in
filings we make with the United States Securities and Exchange Commission (SEC).
 

These factors include, but are not limited to:

* adverse changes in the demand for or the price of the capacity and energy that
we sell into wholesale electricity markets,  
* adverse changes in energy industry law, policies and regulation, including
market structures and a potential shift away from competitive markets toward
subsidized market mechanisms, transmission planning and cost allocation rules,
including rules regarding how transmission is planned and who is permitted to
build transmission in the future, and reliability standards,  
* any inability of our transmission and distribution businesses to obtain
adequate and timely rate relief and regulatory approvals from federal and state
regulators,  
* changes in federal and state environmental regulations that could increase our
costs or limit our operations,  
* changes in nuclear regulation and/or general developments in the nuclear power
industry, including various impacts from any accidents or incidents experienced
at our facilities or by others in the industry, that could limit operations of
our nuclear generating units,  
* actions or activities at one of our nuclear units located on a multi-unit site
that might adversely affect our ability to continue to operate that unit or
other units located at the same site,   
* any inability to balance our energy obligations, available supply and risks,  
* any deterioration in our credit quality or the credit quality of our
counterparties, including in our leveraged leases,  
* availability of capital and credit at commercially reasonable terms and
conditions and our ability to meet cash needs,   
* changes in the cost of, or interruption in the supply of, fuel and other
commodities necessary to the operation of our generating units,  
* delays in receipt of necessary permits and approvals for our construction and
development activities,  
* delays or unforeseen cost escalations in our construction and development
activities,  
* any inability to achieve, or continue to sustain, our expected levels of
operating performance,  
* any equipment failures, accidents, severe weather events or other incidents
that impact our ability to provide safe and reliable service to our customers,  
* increase in competition in energy supply markets as well as competition for
certain rate-based transmission projects,  
* any inability to realize anticipated tax benefits or retain tax credits,  
* challenges associated with recruitment and/or retention of a qualified
workforce,  
* adverse performance of our decommissioning and defined benefit plan trust fund
investments and changes in funding requirements, and  
* changes in technology and customer usage patterns.

All of the forward-looking statements made in this report are qualified by these
cautionary statements and we cannot assure you that the results or developments
anticipated by management will be realized or, even if realized, will have the
expected consequences to, or effects on, us or our business prospects, financial
condition or results of operations. Readers are cautioned not to place undue
reliance on these forward-looking statements in making any investment decision.
Forward-looking statements made in this report apply only as of the date of this
report. While we may elect to update forward-looking statements from time to
time, we specifically disclaim any obligation to do so, even if internal
estimates change, unless otherwise required by applicable securities laws.  The
forward-looking statements contained in this report are intended to qualify for
the safe harbor provisions of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended.

Public Service Electric and Gas Company (PSE&G) is  New Jersey's oldest and
largest regulated gas and electric delivery utility, serving nearly
three-quarters of the state's population.  PSE&G is the winner of the
ReliabilityOne Award for superior electric system reliability.  PSE&G is a
subsidiary of Public Service Enterprise Group Incorporated (PSEG) (NYSE:PEG), a
diversified energy company (www.pseg.com).

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 PSE&G ENERGY STRONG INFRASTRUCTURE PROGRAM FILING    
 Switching and/or substations to be raised or fortified 
                                                      
 NAME              MUNICIPALITY          COUNTY     
 Belmont           Garfield              Bergen     
 Garfield Place    South  Hackensack     Bergen     
 Hackensack        Hackensack            Bergen     
 Hillsdale         Hillsdale             Bergen     
 Little Ferry      Little Ferry          Bergen     
 New Milford       New Milford           Bergen     
 River Edge        River Edge            Bergen     
                                                    
 Essex             Newark                Essex      
 Newark Airport    Newark                Essex      
 Port Street       Newark                Essex      
                                                    
 Bayonne           Bayonne               Hudson     
 Hoboken           Hoboken               Hudson     
 Howell Street     Jersey City           Hudson     
 Hudson            Jersey City           Hudson     
 Jersey City       Jersey City           Hudson     
 Madison Street    Hoboken               Hudson     
 Marion            Jersey City           Hudson     
 Marshall Street   Hoboken               Hudson     
 River Road        North Bergen          Hudson     
 South Waterfront  Jersey City           Hudson     
 St. Paul's        Jersey City           Hudson     
 Third Street      Kearny                Hudson     
                                                    
 Ewing             Ewing                 Mercer     
                                                    
 Cliff Road        Sewaren (Woodbridge)  Middlesex  
 Sewaren           Sewaren (Woodbridge)  Middlesex  
                                                    
 Jackson Road      Totowa                Passaic    
                                                    
 Somerville Sub    Somerville            Somerset   
                                                    
 Bayway Sub        Elizabeth             Union      
 Linden            Linden                Union      
 Cranford          Cranford              Union      
 Rahway            Rahway                Union      


SOURCE  Public Service Electric & Gas Company (PSE&G)


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