COURT HOUSE – With clean energy goals driving a surge in electric energy at the expense of fossil fuels, Atlantic City Electric (ACE) has announced a portfolio of projects that will modernize the South Jersey electric grid, making it both more flexible and more resilient.
ACE has bundled over 80 projects under the heading Power the Future. The entire program has been submitted to the New Jersey Board of Public Utilities (BPU). The agency has become a busy hub of activity, with projects ranging from 100 turbine wind farms to single residential smart meters clamoring for attention in the race to meet New Jersey’s ambitious clean energy goals.
The goals for Power the Future include preparing for greater demand on the grid as more devices are powered by electricity, facilitating interconnection with distributed residential energy generation, making the grid more resilient in the face of more frequent severe storms and creating ways to encourage and support the movement of electricity demand from current peak period.
The company announced five categories of projects:
- Solar/Distributed Energy Resource Enablement
- Targeted Reliability Improvements
- Smart Technology Upgrades
- Infrastructure Renewal
- Substation Improvements
The proposals filed with the BPU set a goal for the initial execution of the Power the Future plan in mid-2023. As with all such investments, the company will seek recovery of the costs through rate increases beginning in 2023 and running through 2027.
Other projects are underway that will also seek cost recovery from customers. The company has already said it will be seeking a rate increase for cost recovery of the residential smart meter initiative. The company’s current estimate in its Power the Future BPU filing is an average residential monthly increase of around $5.01.
What is more opaque is the cost of electric generation itself as the state transitions away from heavy reliance on natural gas to renewables, including wind farm-generated electricity. The state’s energy master plan assumes that there will be an increase in the need for purchasing electric power from out-of-state sources. But the public has not received a financial picture of what that growing dependence on out-of-state energy will do to costs.
The company says the Power the Future initiative is likely to add 600 full-time jobs to the workforce of ACE and its contractors and suppliers. Much like the wind farm initiative, the portfolio of projects that make up Power the Future has been presented as a major source of economic development and job creation. There is no readily available analysis of what education and skills background will be required for these new jobs and how those needs match up with the county workforce.
Modernizing the grid is an unavoidable and essential part of any move to clean energy, according to reports from risk management consultancies like Marsh & McLennan and academic institution reports like those from New Jersey’s own Princeton University. The issue has been how to make the necessary large investments in grid modernization without creating a consumer backlash when cost recovery efforts drive up bills substantially.
Marsh & McLennan’s 2020 report on the electric grid projects a need for $2 trillion in investment. Just one factoid from the study is that an estimated 140,000 miles of transmission lines will need to be replaced by 2050.
A U.S. Department of Energy survey projects that 90% of the country’s existing large transformers have an average age of 40 years. Industry studies show that this is an age point when malfunctions escalate.
Princeton University researchers say that the Marsh & McLennan estimate of needed investment in the grid is too low and more dollars will be needed.
As these reports on grid modernization, alternative energy wind farm installations, and smart home meter initiatives multiply, the larger picture becomes more confusing. We are in the midst of a major and seemingly total transformation of our energy infrastructure, one where a miscalculation could have serious repercussions. Yet the public sees the transformation in stages as the plans are presented to boards like the BPU.
Many of the projects in Power the Future may well have beneficial impacts on reliability and greater flexibility for interconnecting distributed power sources. One can evaluate them on that basis and approve their cost recovery accordingly. Yet they are also part of the larger transformation, a more comprehensive picture. The details are less clear in that picture and the changes to cost distribution remain unknown.
Thoughts? Tips? Know something about ACE’s new slate of upgrades? Email vconti@cmcherald.com.
