NJ Infrastructure Draws PSE&G's Focus - Analyst Blog
July 15 2011 - 2:52PM
Zacks
Public Service Enterprise Group Inc. (PEG) also
known as PSE&G received approval from the New Jersey Board of
Public Utilities (“BPU”) to invest in both expanding and upgrading
its electric and gas infrastructure, and programs to help it become
more energy efficient. PSE&G will spend about $273 million on
electric and gas projects in New Jersey. The utility will also
invest an additional $95 million in its ongoing energy efficiency
programs.
Of the $273 million earmarked for ongoing electric and gas
projects, PSE&G will spend about $195 million in accelerated
capital improvements to its electric distribution network. Among
the projects are upgrades to voltage regulators, insulators, and
breakers at substations; the replacement of underground cable
facilities including transformers, network protectors and relays;
upgrades to substation fire protection systems, and the replacement
of overhead cable and other equipment.
PSE&G will spend the other $78 million of the above $273
million on eight projects to enhance the reliability of the
utility's gas distribution system. Among the projects are the
replacement of 47 miles of aging cast iron and bare steel gas mains
and 4,200 bare steel gas services. Other projects include the
replacement of aging or obsolete gas pressure regulators, meter and
regulating equipment, and electronic measurement systems.
Lastly, PSE&G will spend $95 million to bring energy
efficiency measures to cash-strapped hospitals, municipalities,
non-profits and multi-family housing units, including affordable
housing and senior projects. The investment is an extension of a
$166 million program approved in 2009 to provide energy audits and
the direct installation of energy efficiency measures to customers
who might not otherwise have been able to afford
them.
PSE&G, based in Newark, New Jersey, is a diversified utility
holding company. Its operations are mostly located in the
Northeastern and Mid-Atlantic parts of the U.S.
Going forward, Public Service Enterprise’s robust portfolio of
regulated and non-regulated utility assets offers steady earnings
and significant long-term growth prospects. The company remains
focused on operational excellence, financial strength and
disciplined investment. Also, the company’s earnings growth will be
driven by a low-cost nuclear fleet, assumed rate relief and
addition to generating capacities.
However, the increasing cost of coal, higher pension and
financial costs, and power-price volatility are areas of concern.
In the near term, we see the shares of the company performing in
line with the broader market and thus reiterate a short-term Zacks
#3 Rank (Hold rating) on the stock, along with a longer-term
Neutral recommendation. This is in line with its peers like
American Electric Power Company Inc. (AEP) and
Ameren Corporation (AEE).
AMEREN CORP (AEE): Free Stock Analysis Report
AMER ELEC PWR (AEP): Free Stock Analysis Report
PUBLIC SV ENTRP (PEG): Free Stock Analysis Report
Zacks Investment Research
Public Service Enterprise (NYSE:PEG)
Historical Stock Chart
From Aug 2024 to Sep 2024
Public Service Enterprise (NYSE:PEG)
Historical Stock Chart
From Sep 2023 to Sep 2024