The New Jersey Board of Public Utilities (Board) approved a stipulation of settlement authorizing Atlantic City Electric (ACE) to invest $79 million in a five-year capital investment plan to improve distribution grid resiliency under the company’s PowerAhead Program. The projects are intended to improve the storm resiliency of distribution infrastructure and lessen outage restoration times for the benefit customers.
“With the lessons of past storms on our minds and hurricane season upon us, the Board appreciates the need to harden utility infrastructure to withstand threats that come with major storm events,” said Richard S. Mroz, President, New Jersey Board of Public Utilities. “The Board believes it is critical to support cost effective opportunities to harden utility infrastructure against future storms as a means to minimize the number and duration of future outages.”
On March 22, 2016, ACE filed a petition seeking approval to establish a $176 million PowerAhead Program. The petition also requested approval of an associated cost recovery mechanism to allow ACE to recover revenue associated with the resiliency program based upon the planned in-service date.
After two public hearings held on June 30, 2016, the parties, including ACE, NJ Division of Rate Counsel, Environmental Defense Fund and Unimin Corporation, reached a stipulation of settlement. The parties agreed to an investment level of $79 million and the associated recovery mechanism.
The specific PowerAhead investment areas and levels are as follows:
Structural and Electrical Hardening…$24 million
Selective Undergrounding…………. $11 million
Barrier Island Feeder Ties………….. $13 million
Distribution Automation…………… $15 million
Electronic Fusing……………………$2 million
New Substation – Harbor Beach……$14 million
The agreed upon cost recovery mechanism allows rate recovery on a provisional basis of all expenditures related to facilities that have been placed in service. The associated costs will be subject to review by the Board in ACE’s next base rate case, which is to be filed within three years. The Board believes the cost recovery mechanism strikes a balance between the company’s need to earn a reasonable rate of return over the life of the investments while protecting ratepayers from paying more than reasonably necessary. Ratepayers will see no rate impact until an improvement project is placed in service.Related Articles: