In This Article:
This story was originally published on Utility Dive. To receive daily news and insights, subscribe to our free daily Utility Dive newsletter.
Dive Brief:
-
Initial and advanced interconnection requests from data centers and other large loads jumped to 4.7 GW from 400 MW a year ago at Public Service Electric & Gas, according to Ralph LaRossa, chair, president and CEO of Public Service Enterprise Group, the utility’s parent company.
-
The projects are on average about 100 MW, which can often fit within PSE&G's “robust” transmission system, LaRossa said Tuesday during a quarterly earnings conference call.
-
PSEG is also in talks with potential data center customers that are interested in buying electricity directly from the Hope Creek and Salem nuclear power plants in southern New Jersey, according to LaRossa. PSEG Power owns 2,483 MW in the power plants.
Dive Insight:
PSEG is “constructively positioned” going into 2025, according to Guggenheim Securities analysts, led by Shahriar Pourreza. “Among utility peers, we believe [PSEG] offers potential earnings upside from data center commercial agreements, higher PJM regional load growth driving transmission investments, a constructive regulatory environment and no need for equity financing during a time of major equity issuance for the utility sector, driven by incremental growth and balance sheet repair,” the analysts said in a note Tuesday.
However, the potential large load growth comes amid uncertainty surrounding the future of the PJM Interconnection’s capacity market.
“I don't know if there is a PJM market anymore,” LaRossa said, noting that some states in the grid operator’s footprint are exploring alternative approaches to ensuring they have adequate power supplies.
“My concern there is mostly from a reliability standpoint,” LaRossa said. “Are we going to be able in this construct, to attract generation to the PJM region as a whole, and if so, is it going to be in a timely enough fashion?”
New Jersey is at a crossroads, according to LaRossa. “We're all trying to figure out the best way to move forward. I don't think there's a clear answer on it.”
Customer affordability is also a major issue, according to LaRossa. Driven by the results of PJM’s most recent capacity auction, the New Jersey Board of Public Utilities expects electric bills for PSE&G’s residential customers will jump 17.2% on average for the 12-month period starting June 1. The utility, which has about 2.4 million electric customers, makes no money on the default supply of electricity.