PSE&G Plans Five-Year Capex Program of Up to $18 Billion

Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Public Service Enterprise Group (NYSE:PEG) (Newark, New Jersey), corporate parent to Public Service Electric & Gas Company (PSE&G), a large New Jersey-based combination electric and gas utility, plans to make capital investments of between $15.5 billion and $18 billion over the 2023-2027 period, company officials told investors and analysts last month. Over a longer 10-year period, 2023-2032, the company wants to increase capital investment to a total of between $34 billion to $40 billion, it said at an investor day event March 10 in New York.

In PSE&G's five-year plan, the electric distribution and natural gas distribution businesses are slated for about $1 billion each per year over the 2023-2027 period. The utility's transmission looks to get an average annual investment of approximately $600 million over the five-year period. PSE&G's investment in clean energy, largely to meet the requirements of New Jersey's clean energy law, is expected to see investment of about $450 million per year over the next five years.

Over the next 10 years, PSE&G expects to devote 34% of its capital spend to its electric distribution system and a further 33% to its natural gas distribution system. Capital expenditures (CapX) for its electric transmission business will total approximately 16% of overall capital spend. Clean energy is scheduled to receive about 17% of capital outlays over the 2023-2032 period, the company said March 10. Most of the clean energy investments will go to customer programs to use electricity more wisely, complete the rollout of advanced digital meters, and support electric vehicle adoption with incentives to install more home charging stations.

Under the 10-year spending plan, investment in each of the four business categories could rise slightly, should conditions warrant, company officials told analysts and investors.

Industrial Info is tracking eight capital projects involving PSE&G, with a total investment value (TIV) of about $1.1 billion. Subscribers to Industrial Info's Global Market Intelligence (GMI) Power Project Database can click here for a list of detailed project reports.

Although the utility continues to hold electric generation assets, earlier this year it sold its 25% stake in the planned Ocean Wind I offshore windfarm, a 1,100-megawatt (MW), $2 billion project, back to Orsted, which now owns the 100% of the project. That transaction is expected to close in this year's second quarter. Subscribers can click here for a project report.

Most of the corporate parent's earnings come from its regulated utility subsidiaries, and that's where most of the projected capital outlays are scheduled to go over the next five and 10 years.

On March 10, PSEG Chair, President and CEO Ralph LaRossa told analysts and investors: "The funding of PSE&G's investments in infrastructure modernization and decarbonization will be complemented by our decision to retain our 3,766-MW nuclear fleet following the passage of the Inflation Reduction Act, and the establishment of the nuclear production tax credit (PTC) that is expected to stabilize nuclear economics into the next decade. The PTC enables multiple paths to optimize our nuclear operations via capacity uprate projects, fuel cycle extension, and potential license extension with modest investment."

The utility's five-year CapX program is driven by electric and gas system modernization and meeting the decarbonization and energy policy goals established by New Jersey. Longer term, the 10-year capital program calls for upgrading the utility's 69-kV lines to support increased electrification while the electric distribution system will replace aging equipment, modernize and upgrade the "last mile" of the electric distribution system in order to prepare for the wider use of electric vehicles. The gas pipeline business will, by 2032, finish its replacement of aging cast-iron and unprotected steel mains, which will reduce methane leaks.

Subscribers to Industrial Info's GMI project and plant databases can click here for a full list of detailed reports for projects mentioned in this article, and click here for a full list of related plant profiles.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).