NEWARK, N.J. (AP) — New Jersey's largest utility announced a settlement Thursday with regulators to allow it to raise rate and spend $1.22 billion over five years to strengthen its electric and gas systems to protect them from future storms.
The deal, which still requires final approval from the state Board of Public Utilities, is scaled back significantly from the $2.6 billion five-year plan Public Service Electric & Gas proposed last year.
It would allow the utility, which serves about three-fourths of the state's customers, to upgrade all 29 substations that were affected by Superstorm Sandy in 2012 and Tropical Storm Irene the year before, as well as used redundancies and technology intended to make it easier to restore power after it is knocked out.
The company has dropped, for now, plans to move some overhead lines underground and strengthen utility poles. It is also scaling back replacement of old cast iron gas mains, now planning to upgrade 250 miles instead of 750.
Under the new agreement, the company could add charges to bills to recoup $1 billion starting next year as the work is done. It can seek approval by November 2017 to recoup the other $220 million through changes to the base rates.
The company said the rate increases would add 2 percent to the average bill by 2018, but said that would be more than offset by surcharges that are expiring.
Consumer and environmental groups opposed the initial plan, worried about the cost, whether the utility would be adequately accountable for its spending and whether it would mean pulling back on energy efficiency programs.
The New Jersey chapters of the AARP and Sierra Club hailed the deal announced Thursday as an improvement.