Economically Vibrant Energy Future

Powering Progress

The modern electric grid is one of the 20th century's great achievements. This didn’t happen by chance. For more than a century, the mission and mandate of utilities were closely aligned with a major goal of society: Providing universal access to an around-the-clock supply of reliable, affordable power.

As larger community goals have changed, energy companies such as PSEG have evolved to remain aligned with them – for example, by helping to meet urgent deadlines for reducing global emissions of carbon dioxide and other greenhouse gases.

Today, the role of the utility is evolving as we adjust to meet the changing expectations of customers. At PSEG, our vision of the future is one where customers use less energy, the energy they use is cleaner, and its delivery is more reliable and more resilient than ever.

Under the banner of "Powering Progess," our company has established new business priorities to help this vision of the future become a reality – for the benefit of the environment, our customers and our shareholders. Our new priorities include:

Energy efficiency: The first and most significant change will be a reordered focus of our core mission – shifting from the 20th-century model in which utilities sought to sell as much electricity as possible, to a new approach in which our mandate is to help customers use less energy and, by doing so, help them to save money on their monthly bills.

We believe this transition to energy efficiency must be a top priority for utilities in the future. Energy efficiency delivers clean energy benefits similar to solar or wind, but at a fraction of the cost to consumers.

Clean energy: The U.S. and other nations already are beginning the conversion to renewable resources, such as solar, terrestial wind and offshore wind. PSEG is New Jersey's leading developer of solar energy resources and is a supporter of multi-state efforts to develop offshore wind facilities off the Mid-Atlantic coastline.

We also must continue to work with state and federal policymakers to preserve our existing carbon-free energy sources, such as nuclear.

And because transportation represents the nation’s largest source of greenhouse gases, utilities should lead the drive to electrify the sector – cars, trucks, buses and trains – by investing in a universal EV-charging infrastructure.

Connected customers: Energy companies are reimagining the electric grid as a digital network that not only delivers electricity, but also provides customers access to a universe of clean energy resources and services. In the short-term, such smart grid technology would provide real-time data on outages – and give restoration crews the information they need to respond to disruptions immediately.

Smart-grid technology also will enable customers to access a variety of data to help customize their energy use in whatever manner suits their needs.

Infrastructure: Energy companies evolve, we must also realize that the existing energy grid remains essential. That's why we should continue to invest in modernizing the nation's aging electric and gas infrastructure.

And finally, to achieve this vision, and ensure sustainability, PSEG has long pursued a business strategy based on operational excellence, financial strength and disciplined investment.

Energy companies are leading a new era of growth and change that will once again provide widespread benefits for the communities we serve. If utilities are able to evolve quickly, we can and will lead the energy industry toward a stronger, cleaner, more efficient future.

Reliability is the foundation of our success

Since our company was founded in 1903, customers have relied upon PSE&G to keep the power flowing. Even as storms grow more severe, our 2.2 million electric customers and 1.8 million gas customers expect the lights to stay on and to have high quality gas service. We’re proud to meet these reliability expectations, time and time again.

PSE&G designed and constructed a large portion of New Jersey’s energy grid to last – and it shows. Our electric and gas infrastructure is the foundation for one of the most reliable, resilient utilities in the nation. We have been named the Mid-Atlantic region’s most reliable electric utility for 17 consecutive years. Nationwide, PSE&G's reliability ranks among the top 10 percent of utilities with more than 500,000 customers.

PSE&G's average system outage duration is 45 minutes, substantially lower than the national average of 1 hour 47 minutes, and many of our customers do not experience any outages. When the power does go out – usually when a storm brings down tree limbs and power lines – PSE&G customers on average are restored within 71 minutes, one of the best response rates in the industry. PSE&G responds to gas leaks within an hour 99.9 percent of the time. Learn more about our Electric System Upgrades.

As customer needs and weather patterns change, we must continue to make the necessary investments in the infrastructure and programs that are the very foundation of our state’s economy and way of life. PSE&G has a projected capital investment program of $12 - $16 billion over the next five years to continue our momentum to modernize and upgrade the transmission grid. That builds upon the $13.7 billion worth of investments made in the past decade to maintain the reliability that our customers have come to expect.

Under our Energy Strong program, for example, we are elevating switching and substations to minimize the risk of losing power. We are infusing the network with advanced microprocessors and other advanced technology to more quickly identify trouble spots and expedite repairs. Today, nearly 500,000 customers who lost power under Superstorm Sandy will not lose power when the next big storm hits. Learn more about our Energy Strong Program.

With PSE&G's Gas System Modernization Program, which began in 2016, we are accelerating replacement of aging cast-iron and unprotected steel gas pipes in communities across our territory to reduce leaking methane, a potent greenhouse gas. By the end of 2018, approximately 450 miles of high-risk pipe will have been replaced, with 875 miles more to be replaced by 2023. Learn more about our Gas System Modernization Program.

Our groundbreaking Clean Energy Future proposal also would have enormous benefits for the environment, customers and the company. These three filings call for historic investments in energy efficiency, electric vehicle charging infrastructure, in utility-scale energy storage capabilities, and in technology, including smart meters, that will help PSE&G take great leaps forward in sustainability, reliability and resiliency. See the details here:

In 2018, PSE&G proposed a five-year extension of Energy Strong that calls for the continued hardening of gas metering and regulating stations against flooding, as well as to reduce potential methane releases and add redundancy to the natural gas system in the event of a major gas supply disruption.

Working with Suppliers

We value suppliers who share our commitment to reliability, quality and integrity. We have strong relationships with our suppliers and depend on them to meet the highest standards of service.

Working with as many suppliers as we do is a complex process that requires thoughtful and meticulous management. We expect our suppliers to meet our ethical standards and have a procurement and supplier management process that conforms to the highest standards in the industry.

PSEG's management practices and ethical code, our Standards of Conduct, are woven into everything we do, including our relationships with suppliers. When considered for a new contract of any type, suppliers go through a rigorous pre-qualification review. After contract award, PSEG Procurement monitors the performance of key suppliers in concert with the Corporate Health and Safety organization. In addition, a third-party compliance auditor verifies certain health and safety information to conform with regulatory and PSEG standards. Key suppliers are graded based upon performance metrics and incentives are included in a majority of key supplier contracts. Read more about our relationship with suppliers.

Supplier Diversity

PSEG's supplier diversity process has been in place for over 30 years, utilizing a number of processes and initiatives to grow business relationships and expenditures with certified minority-women-veteran-, and service disabled veteran-owned businesses. In 2017, PSEG achieved historic results by spending more than $532 million or 18.6 percent with MWVBE's due in part to PSEG's internal performance goals, aggressive outreach methods, business advocacy partnerships, education, mentoring and communication.

PSEG's primary outreach initiative is hosting PSEG-sponsored complementary external supplier diversity procurement fairs to connect and interview minority, women, veteran, and service disabled veteran-owned businesses for potential procurement opportunities with PSEG's Procurement organization and PSEG leadership. Each fair includes a supplier workshop on "How to do Business with PSEG with business success tips" and a diverse supplier presentation. PSEG helps to expand attending business suppliers' opportunities by including PSEG's top prime suppliers, New Jersey-regulated utilities and major New Jersey corporations at each of its fairs.

PSEG is an active corporate member of numerous external supplier diversity advocacy organizations that share their extensive minority, women, veteran, and service disabled veteran-owned business databases for our procurement bid and contract inclusion.

Transforming our company with technology

For 115 years, PSEG has done business using traditional infrastructure – from pipes, poles and wires to technology. But that reliance on tradition is changing. Imagine your energy provider at the center of a two-way digital communication network, a transformation taking it from your everyday energy delivery company to a technology company that also provides energy services.

At PSEG, we are calling this transformation the Energy Cloud, a proposal that reimagines today's energy grid as a network connecting homes and businesses with a universe of clean energy sources and services, using data to help customers customize their energy use in whatever manner suits their needs.

At the core of the Energy Cloud (proposed to the BPU in September 2018) is the implementation of smart meters – safe, state-of-the-art hardware and software that provide two-way communications between the customer and PSE&G, allowing for real-time data gathering and analysis.

Smart meters benefit customers because this technology can assist in shortening power outages, provides more accurate restoration times and providing more accurate billing and usage. It also benefits the environment – reducing our carbon footprint by reducing the number of PSE&G vehicles on the road; paving the way for broader adoption of clean energy such as rooftop solar; and providing useful data to improve vegetation management.

The Energy Cloud's most transformative benefits are aimed at customers:

  • Artificial intelligence will help PSE&G anticipate a customer billing question or generate offers for smart home automation, WorryFree appliance monitoring or an energy efficiency program;
  • Machine learning will analyze smart meter data and detect anomalies such as an outage or an aging appliance, alert the customer and recommend a remediation plan;
  • Smart home assistants, such as Google or Amazon AI assistant, will help customers manage their financial and sustainability goals with functions like setting a monthly spend or carbon footprint target

Smart meters are central to the Energy Cloud because they provide the customer data that enables this array of new tools and services.

PSE&G also will soon be able to digitize nearly 100 percent of customer interactions, resulting in reduced costs and increased customer satisfaction.

Our technological transformation won't stop there. Generating electricity with very low levels of carbon pollution will be a vital part of New Jersey's clean energy future.

Utilizing energy storage technology, PSE&G can better integrate renewable energy onto the electric grid, providing resiliency for critical infrastructure and enabling electric lines to handle greater capacity during times of peak electric use.

Advances in technology play a key role in PSEG's power generation business, as well. Continuing PSEG PSEG Power's efforts to increase reliability and operate a cleaner, more efficient fleet, PSEG Fossil commenced commercial operation of two new combined-cycle natural gas plants in 2018, in Sewaren, New Jersey and Prince George's County, Maryland. A third is under construction in Bridgeport, Connecticut, scheduled for operation in June 2019.

These combined-cycle plants use state-of-the-art emissions control technology, resulting in cleaner generating capacity to help meet their regions’ energy needs. They run primarily on clean, efficient natural gas and will support electric system reliability for the next 40 years.


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