UPDATE: NJ Regulators Delay Decision on PSEG Transmission Line
January 15 2010 - 1:42PM
Dow Jones News
New Jersey regulators voted Friday to delay for up to 30 days
their decision on a high-voltage power line proposed by a unit of
Public Service Enterprise Group Inc. (PEG).
New Jersey's largest utility has been planning the transmission
project for two years, saying it will relieve stress on existing
lines, improve reliability and provide access to lower-cost power.
But the timetable for what's known as the Susquehanna-Roseland
project has come into question, as other projects in the 13-state
PJM Interconnection power market, which includes New Jersey, have
been put on hold in recent weeks.
The New Jersey Board of Public Utilities said that in light of
the other delays, it will hold off on its decision and request a
further review from PJM. The grid operator, in a short letter to
regulators this week, said the New Jersey project is still needed
and isn't affected by the delays of other projects.
"We should seek and receive further detailed confirmation from
PJM," said Commissioner Joseph Fiordaliso, before the board voted
unanimously for the delay.
The $750-million, 45-mile project planned by Public Service
Electric & Gas, which is a unit of Public Service Enterprise
Group, would run from northern New Jersey into Pennsylvania.
PSE&G could earn up to a 12.9% return on its equity investment
in the project, which is scheduled to be operational in the summer
of 2012.
In a statement, a spokeswoman for PSE&G said the utility is
disappointed with the delay and considering its options to ensure
reliable service for its customers.
PSE&G is partnering on the transmission project with PPL
Corp. (PPL), which would build the $510 million Pennsylvania
portion of the line. PPL won the backing of state regulators there
Thursday.
But slumping power demand driven by the recession and
conservation and curtailment programs is causing utilities and
regulators to reconsider the schedule for transmission projects.
Although expected to rebound this year, power demand declined in
2008 and 2009, with last year's drop being the largest in more than
70 years.
In recent weeks, Allegheny Energy Inc. (AYE) and American
Electric Power Co. (AEP) said they plan to delay a $1.8 billion
transmission line from West Virginia to Maryland because of a
less-robust outlook for power demand. Pepco Holdings Inc. (POM)
followed by asking Maryland regulators last week to suspend a
review of a $1.2 billion transmission line through Maryland. The
companies will await a study of regional transmission needs
expected from PJM in late June.
Public Service Enterprise Group shares were at $32.32, down 50
cents, or 1.5%, in recent trading.
-By Mark Peters, Dow Jones Newswires; 212-416-2457
mark.peters@dowjones.com
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