Public Service Enterprise Group (PSEG) Inc. has announced an increase in its 5-year regulated capital spending plan, potentially reaching $21 billion. The company aims to invest in solar, energy efficiency, and grid projects to ensure reliability and achieve its net zero goals by 2030. PSEG’s commitment to climate action positions it as a trailblazer among major utility and power generator firms.
PSEG’s net zero goal consists of three core pillars. Firstly, the company aims to achieve net zero greenhouse gas (GHG) emissions by 2030 for its utility operations. Secondly, PSEG commits to transitioning its power generation to be entirely GHG and carbon-free. Lastly, the company aims to make substantial contributions to broader decarbonization efforts within the regional economy.
PSE&G, PSEG’s utility arm, has already made significant progress in reducing GHG emissions by over 50% from 2005 levels. The company now aims to achieve net zero GHG emissions by 2030, including addressing emissions associated with natural gas use. PSE&G serves about 2 million customers across New Jersey for various crucial needs.
To address their 2030 GHG emissions, PSEG plans to use carbon offsets from projects that reduce or remove carbon elsewhere. Each offset equals a tonne of carbon emissions. This aligns with New Jersey’s accelerated decarbonization initiatives.
In February 2023, New Jersey Governor Phil Murphy announced the state’s ambition to achieve 100% clean electricity by 2035, accelerated from the initial target of 2050. The state also aims to electrify 10% of commercial and residential buildings by the end of 2030. These goals demonstrate the state’s commitment to swift and concrete climate action.
New Jersey’s Energy Master Plan (EMP) aims to achieve the 100% clean electricity benchmark by 2050, including a goal of 7,500 MW of offshore wind generation by 2035. The state has already exceeded its target of 3.75 GW of new solar generation by 2026, securing 4 GW of solar power. These initiatives are projected to result in significant savings and a reduction of GHG emissions by 2030.
Furthermore, New Jersey has announced initiatives to support the transition to electric vehicles (EVs). The state has adopted the Advanced Clean Cars II program and allocated funds to establish an incentive program for consumers switching to zero-emission vehicles. PSE&G has already installed over 8,000 chargers through their EV Charging Program and invested in smart charging infrastructure.
Considering the increased demand for clean energy and electrification, PSEG’s regulated capital plan has been expanded from $16 billion to $18.5 billion for 2023-2027. This includes a transmission project awarded to PSEG to accommodate data center growth and facilitate power plant retirements. The company’s total capital plan for 2024-2028 now ranges from $19 billion to $22.5 billion, including investments in its power supply subsidiary and other areas.
PSEG has affirmed that no new equity is needed to support this capital plan. The company expects long-term annual earnings growth between 5% and 7% for 2024-2028, driven by rate base expansion at PSE&G and the production tax credit for its unregulated nuclear fleet. The Inflation Reduction Act’s nuclear production tax credit offers up to $15/MWh for electricity generated by nuclear plants in service in 2024.
Overall, PSEG’s $21 billion investment for its net zero 2030 climate vision is a significant step forward in the energy industry. It demonstrates the company’s commitment to combating climate change and fostering a greener and more sustainable industry.