NEWARK, N.J., July 14, 2021 /PRNewswire/ -- PSE&G
executed an agreement today with the New
Jersey Board of Public Utilities and New Jersey Division of
Rate Counsel related to its transmission rates that would save the
typical electric residential customer about 3% on their bill, or
approximately $3 per month. If
approved by the Federal Energy Regulatory Commission, the agreement
would reset the base return on equity for PSE&G's transmission
formula rate at 9.9%, reduced from 11.18%. Combined with other
elements of the settlement, PSE&G's transmission revenues would
be lowered by approximately $140
million per year.
"This settlement, under which PSE&G has voluntarily agreed
to reduce its electric rates, is a balanced resolution that will
deliver timely rate savings to customers," PSE&G President and
Chief Operating Officer Kim Hanemann
said. "PSE&G's transmission investments also have saved
customers hundreds of millions of dollars in congestion costs,
increased the reliability and resiliency of the grid and will
support greater development of renewable resources to help
New Jersey meet its clean energy
goals."
Since 2007, PSE&G has built more than 500 miles of
high-voltage transmission circuits, curing more than 200
reliability violations identified by PJM. These upgrades replaced
transmission lines built long before most homes and offices were
air-conditioned and businesses relied on around-the-clock energy
supplies. These investments have significantly improved network
reliability and led to an 80% reduction in transmission outages —
supporting today's always-on lifestyles.
With all of these important investments in the system and before
factoring in the rate reduction contained in this settlement,
PSE&G's residential rates are still approximately 30% lower
than a decade ago and 40% lower when adjusted for inflation.
PSE&G will seek FERC approval of the agreement and request
that the rate reduction be effective on Aug.
1. FERC action is expected to take place later this year. If
the agreement is approved, customers would then receive the full
benefit associated with this change back to Aug. 1.
If approved by FERC, the agreement will provide benefits for
customers and regulatory certainty for all parties. Key terms and
impacts of the agreement include:
- Reset of PSE&G's base transmission ROE to 9.9% from 11.18%,
which will lower its annual transmission revenue requirement by
about $100 million per year
(pre-tax);
- Lower annual depreciation expenses of approximately
$42 million with a corresponding
reduction in revenue requirement (resulting in no net impact on
earnings);
- Improved cost recovery methodologies regarding materials and
supplies, as well as administrative and general costs;
- An increase in PSE&G's equity ratio from 54% to 55% of
total capitalization;
- Settling parties cannot challenge the formula rate for three
years from the effective date; and
- No impact on existing incentives, the ability for PSE&G to
seek new incentives, or the ability for BPU and/or Rate Counsel to
oppose such a request.
The financial impact of this settlement agreement is expected to
lower PSE&G's net income by approximately $50 million to $60
million, or $0.10 per share to
$0.12 per share, on an annual basis
in the first 12 months, once implemented.
PSE&G
Public Service Electric & Gas
Co. (PSE&G) is New Jersey's
oldest and largest gas and electric delivery public utility,
serving three-quarters of the state's population. PSE&G is the
winner of the ReliabilityOne Award for superior electric system
reliability in the Mid-Atlantic region. In 2020, PSE&G was
named the most trusted combined gas & electric utility in the
East Region, by the Cogent Syndicated Brand Trust Index. PSE&G
is a subsidiary of Public Service Enterprise Group Inc. (PSEG)
(NYSE:PEG), a diversified energy company. PSEG has been named to
the Dow Jones Sustainability Index for North America for 13 consecutive years
(www.pseg.com).
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at:
www.pseg.com
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Forward-Looking Statement
The statements contained in this press release that are not
purely historical are "forward-looking statements" within the
meaning of The Private Securities Litigation Reform Act of 1995.
Such forward-looking statements are subject to risks and
uncertainties, which could cause actual results to differ
materially from those anticipated. Such statements are based on
management's beliefs as well as assumptions made by and information
currently available to management. Factors that may cause actual
results to differ materially from those contemplated in any
forward-looking statements made by us herein are discussed in our
Annual Report on Form 10-K and subsequent reports on Form 10-Q and
Form 8-K filed with the Securities and Exchange Commission (SEC),
and available on our website: https://investor.pseg.com. All of the
forward-looking statements made in this press release are qualified
by these cautionary statements and we cannot assure you that the
results or developments anticipated by management will be realized
or even if realized, will have the expected consequences to, or
effects on, us or our business, prospects, financial condition,
results of operations or cash flows. Readers are cautioned not to
place undue reliance on these forward-looking statements in making
any investment decision. Forward-looking statements made in this
press release apply only as of the date hereof. While we may elect
to update forward-looking statements from time to time, we
specifically disclaim any obligation to do so, even in light of new
information or future events, unless otherwise required by
applicable securities laws.
From time to time, PSEG, PSE&G and PSEG Power release
important information via postings on their corporate Investor
Relations website at https://investor.pseg.com.
Investors and other interested parties are encouraged to visit the
Investor Relations website to review new postings. You can
sign up for automatic email alerts regarding new postings at the
bottom of the webpage at
https://investor.pseg.com.
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SOURCE Public Service Electric & Gas (PSE&G)