The $3.9 billion price tag can seem off-putting at first. But PSE&G's Energy Strong program is an investment that will pay off with long-term results.
The investments over 10 years include improvements to protect utility installations from storm surges and to strengthen distribution lines.
A cynic could say the utility is trying to capitalize on recent freak storms to go on a spending spree. But the need to upgrade infrastructure to withstand the increasingly unpredictable weather can't be overlooked. Storms like Sandy, Irene and the Halloween 2011 snowstorm get "100-year storm" labels for their intensity, but are happening all too often now. These storms show how vulnerable we are when power is curtailed for more than a few days, or even hours. Businesses are impacted when they can't reopen due to power outages, especially small-business owners who don't have the margin to withstand extensive disruptions.
PSE&G argues now is the time to take action, and they make a compelling case. Interest rates are low, making borrowing more affordable. The cost of natural gas is also low now. A 9 percent unemployment rate means labor is available, one reason why unions are supporting the Energy Strong program. PSE&G says 5,800 jobs will be created, including in engineering, design and construction.
Another reason involves perceptions, always important when dealing with an expense that hits everyone: utilities bills are expected to decline when market restructuring surcharges come off PSE&G bills in 2014 and 2016. The utility argues that customers won't notice an impact because the costs to cover Energy Strong will essentially come from the savings from the restructuring surcharges rolling off bills. That's predicated on natural gas prices remaining low in the coming years, an assumption that seems reasonable given the vast supplies of shale gas currently being found in Western Pennsylvania.
While it might seem appealing to have a lower electric bill in a few years, New Jersey residents and businesses must be willing to invest in the state's utility infrastructure, especially when PSE&G promises there will be minimal or no impact on wallets. Doing otherwise would be penny wise and pound foolish.