Instead of continuing to cut trees all over New Jersey to protect an archaic power grid, New Jersey's biggest utility wants to spend big to protect the state from inevitable future storms like Sandy.
Public Service Electric and Gas (PSE&G) is asking regulators to approve $3.9 billion to upgrade the grid and if that's approved they could be back for $1.2 billion more over the next five years.
PSE&G wants to spend $1.7 billion to make substations floodproof by either raising them or relocating them away from designated flood zones. They also want to spend $1 billion to replace 750 miles of century-old gas pipelines, $454 million on sensors and other smart grid technologies to improve disaster response and $215 million to reinforce poles.
Almost 2 million PSE&G customers lost power during Sandy, about a quarter of the 8.5 million homes and businesses in the region. 800,000 of them would not have lost power if these upgrades had been in place during the storm.
PSE&G says that low natural gas prices will allow it to pay for the upgrades without raising rates on customers.
Smart grid came to the rescue after Sandy for Pepco, the utility that serves Washington, DC, and parts of Maryland. It was able to restore power for 130,000 homes in just two days because smart meters had been installed.
Utilities in other states affected by Sandy are also planning upgrades that build resiliency against storms. Northeast Utilities in Connecticut has approval to spend $300 million and New York's Consolidated Edison wants a rate increase for $1 billion in Sandy-related spending, including flood-proofing 13 substations and burying power lines.
The 2009 Recovery Act included the first investments in the US to create a smart grid. The $11 billion in funding was meant to kickstart the process, but it has slowed to a crawl since the money was spent. It will take $1.5 trillion over the next 20 years to modernize the grid, estimates Environmental Defense Fund.
Venture capital firms that focus on cleantech have settled on smart grid as one of the next big areas to invest in.