In an announcement, the Newark-based utility said it asked for initial funding approval of $2.6 billion from the Board of Public Utilities to cover the first five years of upgrades. An additional $1.3 billion would be sought over the next five years.
If the BPU approves the funding, it will have to come out of customers' pockets, but PSE&G said it doesn't anticipate a huge impact to payers, given that natural gas is 35 percent lower now than it was in 2008.
"The good news is that the timing is right to get the work done now without increasing customers' bills," said Ralph Izzo, PSE&G chairman and CEO. "Interest rates are low and labor is available."
A gas and electrical customer who paid $3,000 a year in utility bills now pays about $2,400, said Ralph LaRossa, PSE&G president and chief operating officer. Barring a rise in commodity prices, that bill in 2018 would be about the same with all the improvements made.
"The cost of inaction is too high for New Jersey businesses and families to bear," he said.
Among the improvements would be raising substations or building barriers to protect them from flooding, replacing or modernizing gas mains in and near flood areas, deploying smart grid technology to better monitor systems operations, and improving pole distribution systems.
Sandy exposed a number of weaknesses in the state's electrical grid — 2 million of the company's 2.2 million electric customers lost power due to damaged switching and substations, damaged poles and electrical equipment, and downed trees that bought down wires, the company said. PSE&G wants to make the improvements in the face of the trend of increasingly violent storms.
AARP New Jersey quickly came out in opposition of the multibillion-dollar program, saying it could have serious impacts on low-income ratepayers.
“In light of all that our fellow New Jerseyans have and continue to endure, we call on the Board of Public Utilities to carefully and diligently scrutinize the sheer size of this request and its impact on maintaining affordable utility services — especially for those living on low and fixed incomes — and whether the benefits outweigh the costs of the company’s proposed projects,” said Dave Mollen, AARP New Jersey’s president, in a press release.
But Clark Barrineau, of the American Society of Civil Engineers, said the investment is a wise one.
"We believe investment in infrastructure leads to business growth and greater economic competitiveness in the global marketplace," he said. "If we don't invest in infrastructure, the American economy will suffer, eventually resulting in the loss of jobs, personal income and the GDP."
An ASCE study found that by 2020, closing the investment gap in the electrical grid could save American businesses $126 billion, prevent the loss of 529,000 jobs and avert $656 in personal income losses.
Contributing: Jared Kaltwasser