Testimony of Ralph Izzo President and Chief Operating Officer Public Service Enterprise Group Incorporated
09 February 2007 - 3:59AM
PR Newswire (US)
New Jersey State Assembly Committee on Telecommunications and
Utilities - February 8, 2007 NEWARK, N.J., Feb. 8
/PRNewswire-FirstCall/ -- I am Ralph Izzo, president and chief
operating officer of Public Service Enterprise Group. Thank you,
Chairman Chivukula, and members of the Committee for the
opportunity to testify this morning. And, in the hope of perhaps
being invited back, I will keep my comments brief. The question of
how best to insure that New Jersey continues to be served by
reliable, affordable, safe, and environmentally sustainable energy
supplies is of critical importance. PSEG is in its second century
of helping to answer this question. The men and women who have made
PSEG one of the state's leading corporate citizens and the most
reliable energy company in the nation remain absolutely committed
to the task of helping our State meet the considerable challenges
ahead. I want to provide the Committee today with an outline of how
I think PSEG can best contribute to helping New Jersey meet its
energy objectives but before doing so, I'd like to offer some
general comments: * First, PSEG supports the goals set forth by
Governor Corzine in his Energy Master Plan directive. However, we
recognize there are no "silver bullets" to achieve those goals. An
integrated approach -- which includes energy efficiency,
distributed renewable resources, and central station power -- is
needed. * Second, any discussion of an energy policy must include
the effects on climate change. PSEG believes climate change and the
reduction of greenhouse gases that contribute to the phenomenon
represent the fundamental environmental challenge of our time. We
strongly support action on a national level to implement mandatory
and meaningful reductions in carbon dioxide and other greenhouse
gas emissions associated with our industry and the economy at
large. We also encourage policymakers in New Jersey to consider
carefully the areas where they can produce the greatest positive
impact. Clearly, NJ can influence retail energy customers -- for
example, through conservation programs -- to reduce energy
consumption and associated greenhouse gas emissions. However, the
likely outcome of New Jersey imposing carbon emission controls on
electric generating facilities unilaterally or in the context of
the Regional Greenhouse Gas Initiative will be to raise energy
costs here, impair the competitiveness of our economy, and shift
the generation of electricity to more carbon- intensive and
heavier-polluting facilities located outside of the region with no
environmental benefit at all. * Third, competitive electricity
markets, including the wholesale markets operated by PJM and the
Basic Generation Service auction operated by the NJ BPU, continue
to provide real, tangible benefits to the state's economy and
energy consumers. The BGS auction in which the state's electric
distribution utilities procure the energy and capacity with which
to serve customers is a highly competitive process that has helped
mitigate the impact of volatile world energy prices on New Jersey
consumers. * Fourth, New Jersey is linked to an interstate electric
and gas transmission network. The PJM Interconnection coordinates
supply and transmission of bulk power and administers wholesale
markets in 12 states and the District of Columbia. The Federal
Energy Regulatory Commission has jurisdiction over wholesale power,
transmission and natural gas pipelines. The U.S. Congress and the
White House will chart the nation's overall course on energy
policy, environmental policy, and climate policy. It is absolutely
essential that New Jersey policymakers be engaged at all of these
venues -- at PJM, at FERC, and on Capitol Hill. Now, let me answer
the question -- how can PSEG help? We want to be engaged as an
investor in and provider of the key services required to meet New
Jersey's energy and environmental goals and ensure the ongoing
reliability of the electric system. For over 100 years we have
invested in the future of the State. It is time to unleash our
expertise and leverage our relationship with customers and our
access to capital to create meaningful, integrated energy solutions
-- energy efficiency, demand side management, distributed renewable
resources, and central station electric power generation, in
particular, nuclear power. PSEG's role should not be limited to the
traditional functions of power generation and energy delivery. In
our view, the state's utilities are uniquely positioned to invest
in technologies, such as advanced metering infrastructure, that
would enable and empower customers to achieve efficiency gains on a
large scale. We also think utilities should be involved in
financing efficient equipment on the customer side of the meter.
Utilities have the brand recognition and, as noted, relationships
with customers. And perhaps more important, utilities also have the
ability to deploy "patient capital." By this I mean the ability to
make long-term investments that serve the public interest, as long
as there are assurances of earning reasonable returns on these
investments. This will require implementing innovative ratemaking
policies that would support our ability to commit capital to these
kinds of initiatives. As part of the energy master plan process,
we've proposed that utilities install advanced metering
infrastructure for all electric and gas customers. This technology
would enable customers to interact with energy suppliers in real
time and take advantage of new pricing and energy management
services. This kind of technology investment would be a logical
extension of a pilot program we now have under way called "MyPower
Connection." MyPower automatically adjusts central air conditioning
units in response to electricity price changes and provides
customers access to time-of-use pricing plans and additional
information on how to manage energy consumption. With respect to
renewable electricity supply, we've developed a strategy, called
"Green Towns" that would facilitate large-scale solar photovoltaic
installations at municipal properties through a partnership
involving the state's utilities, state agencies, municipal
governments, and the state's solar contracting industry. We think
this program has the potential to develop significant amounts of
solar power by 2020, and help reduce energy bills for local
government, county and state, and school districts thereby easing
property tax burdens as well. However, I must be candid in that
these technologies will cost considerably more than other supply
options for the foreseeable future. Let me repeat, an integrated
approach should favor efficiency and renewables but these resources
will not be enough. PSEG strongly believes an essential task for
our company, the energy industry, and state policymakers is to
maintain the reliability of our electric system. This will require
developing new power plants in New Jersey. There are, however, some
major issues to be considered. While there are a number of pilot
projects under way and the U.S. Department of Energy is evaluating
carbon capture technologies, there currently is no commercially
available technology to control carbon emissions from conventional
fossil-fueled power plants. New clean coal technologies such as
integrated gasification-combined cycle (IGCC) are still on the cusp
of commercial and technical viability. And developing this
technology in the context of the current structure of wholesale
markets presents very significant risks for merchant energy
suppliers. Nuclear power is a proven, emissions-free electric
generation technology that is available. But nuclear power has its
own set of risks: siting issues, the unresolved issue of spent fuel
storage, and an exceptionally long licensing and construction
timeframe. However, any plan for a carbon-constrained future must
include the benefits of nuclear power. PSEG stands ready to work
with NJ to develop the infrastructure that enables energy
efficiency as the first choice for consumers and businesses, that
implements renewable supplies for customers who will benefit the
most, and that ensures a long-term foundation of reliable,
carbon-friendly, central station power, especially nuclear. Thank
you for your time and for the opportunity to appear before the
Committee. I would be happy to respond to questions. DATASOURCE:
Public Service Enterprise Group CONTACT: Paul Rosengren,
+1-973-430-5911 Web site: http://www.pseg.com/
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