(Editor’s note: This story has been updated for clarification.)
Ralph LaRossa, Public Service Electric & Gas’ outgoing president and chief operating officer, discussed some of the utility’s future plans at the New Jersey Alliance for Action’s “Investing in Southern New Jersey” conference June 23.
Among a number of topics, including increased investments in electric car charging stations and natural gas, LaRossa said PSE&G and its parent, Public Service Enterprise Group, should examine how customers should be paying for services.
Currently, there are two costs.
The delivery side accounts for the cost of PSEG maintaining the infrastructure (electric wires and equipment) it needs to serve customers. Then there’s the supply side, which is the actual electricity itself, where customers pay based on the amount of electricity they use (that is, what’s on your meter).
On the delivery side, customers pay a fee based on usage at a predetermined rate. In the future, LaRossa said he could envision a situation where customers pay a flat fee based on the size of wire they are using rather than usage.
“We need to figure out the whole model for the electric side of the business,” LaRossa said. “We need to figure out whether customers should just be paying rent for the size of wires they are using, or pay volumetric-based power bills. In my opinion, you should be paying a flat fee for whatever size of wire you’re using. That’s a policy decision that’s going to be made down the road.”
LaRossa is stepping down from his current role of more than a decade to become the president and COO of PSEG’s merchant generation business, PSEG Power. A regular member of the NJBIZ Power 100 list of the most powerful people in New Jersey business, he will be replaced by David M. Daly, president and COO of PSEG Long Island.
Here’s a look at more of what he discussed.
LaRossa told the crowd at the conference that PSEG should also look to take advantage of the fact that sales of electric cars in the U.S. soared in 2016, as the nation looks to become more environmentally conscience.
That success, he said, could power a potentially new line of big business for PSEG and other utilities: building roadside stations that make it convenient for drivers to recharge their car batteries.
“It’s time to start having the conversations about how we’re going to do electric vehicle charging in the state,” LaRossa said. “The question I am continuing to pose is whether these charging stations should be part of a utility infrastructure or should we be having someone else doing it? Can we provide universal access to all drivers of electric cars or are only the people who have Teslas going to be the ones to be able to charge their cars?
“If you want to provide universal access, than use the utilities for it, figure out what the connections are and let’s make that happen. But, right now, we’re still in the phase where, if you have a Tesla, you get the charge, and if you don’t have a Tesla, you don’t get the charge. I’m not sure if that’s the model that we want to have. In my opinion, we should provide universal charging access to all of the residents of New Jersey.”
Currently, the Tesla’s Model S is the top-selling electric car in the U.S., with the Chevrolet Volt, Ford Fusion Energy and Nissan Leaf also in the Top 5 best-sellers.
According to Fleetcarma, which tracks the sale of electric vehicles, New Jersey had the sixth-highest total sales of electric cars in 2016, with 3,248 sold.
Compressed natural gas will also be a big area of future investment for PSEG, LaRossa said, especially at the state’s largest maritime shipping centers, the Port of Newark and Port of Southern New Jersey. These investments will be made in light of the fact that the utility is no longer required to use refinery gas.
“I think we need to look at CNG in ways we haven’t looked at it before,” LaRossa said. “PSEG was still taking refinery gas for a long time because of a deal made with the state to keep those refineries open. We’ve stopped that, and we’ve closed the valve from those refineries and we’ve disconnected. Now the quality of the gas in northern New Jersey is better, so, hopefully, we can make some investments in CNG technologies in northern Jersey.
“I specifically think it’s important that we make investments around the Port of Newark area, and I think it would be help if we made them in the South Jersey port. We should find ways to convert tankers into compressed natural gas tugs because, after the Bayonne Bridge (is) raised, there are real opportunities there.”
The Port Authority of New York and New Jersey is expected to finish the $1.6 billion project to raise the Bayonne Bridge at the end of this month. The project will elevate the bridge to 215 feet from 151, allowing larger ships to pass through.
LaRossa is proud of the fact that, during his tenure as president and COO, PSE&G has vastly improved its power transmission capabilities since Superstorm Sandy in 2012; shuttered end-of-life assets such as its two biggest coal-burning plants in Jersey City last month; and is investing $550 million per year to replace its outdated cast iron gas distribution system — the largest in the country. That project is expected to take up to 30 years to complete.
LaRossa also touted PSEG’s continued expansion into solar energy. Its Solar 4 project was recently extended and will invest $275 million in solar farms covering landfills by 2012, creating 575 construction jobs alone as a result.
He urged residents to trust that solar power will lower utility bills and, therefore, rooftop solar is not for everyone.
“When we make the investment in solar, whether it’s us or someone else, the investment being made by the utility allows all customers to benefit — not just the person who can afford to put the rooftop solar panels on,” LaRossa said. “Besides that, we use all union labor for our solar projects. This is a state that really values union labor. You can’t do that on those individual rooftop solar projects. It’s not that I’m beating up rooftop solar, I just think that the people who can afford to do it are the ones who should be doing it.
“If they don’t want to use the (power) wires, just give us the wires back to us and we’ll bring them to the people who can use them. This is something that we have to continue to talk about going forward from a policy standpoint.”