Tom Johnson reports on both the South Jersey Gas and PSE&G announcements in NJ Spotlight:
For the second time since 2004, Elizabethtown Gas, the utility once owned by the Kean family, is getting a new owner.
South Jersey Industries, the owner of South Jersey Gas, has agreed to buy the New Jersey utility, along with Elkton Gas, a small Maryland utility, from the Southern Co. in a $1.7 billion deal.
The acquisition, if approved by regulators, will make the Folsom-based energy company the second-largest gas provider in New Jersey with 675,000 customers. Elizabethtown, founded in 1855, has 288,000 customers in central and north Jersey.
The deal makes sense in that SJI is based in the state and has enjoyed a good relationship with the New Jersey Board of Public Utilities. Southern is based in Atlanta and only acquired Elizabethtown a year ago when it purchased its owner AGL Resources.
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“The acquisition of Elizabethtown Gas and Elkton Gas is a great fit for SJI and reinforces our commitment to high quality, regulated earnings growth,’’ said Michael Renna, president and CEO of SJI. “We share the same business model and are committed to the highest standards of safety, reliability, and environmental stewardship.’’
“It makes more sense for SJI to own Elizabethtown,’’ said Paul Paterson, an energy analyst for Glenrock Associates in New York City. “It probably brings more value to a company already based in the state.’’
Under the terms of the transaction, SJI is acquiring both companies for a total consideration of $1.7 billion, with an effective purchase price of $1.4 billion after taking into consideration the present value of tax benefits associated with the deal.
Public Service Electric & Gas gets green light for 3 new transmission projects
Public Service Electric & Gas yesterday got the go-ahead for three transmission projects totaling more than $200 million in new investments.
The projects were part of $1 billion worth of transmission-related upgrades approved by PJM Interconnection, which oversees the nation’s largest power grid serving more than 65 million people from the Eastern Seaboard to Illinois.
For PSE&G, the projects are the latest part of a huge investment planned by the state’s largest utility to upgrade and modernize the electric grid serving nearly 2 million customers.
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“The projects PJM approved today will strengthen the transmission grid by upgrading equipment and constructing lines between our stations to improve our network and maintain reliability for our customers,’’ said Isabel Goncalves-Rooney, project director.
The largest project will involve the investment of $197 million in Union County to upgrade existing substations in Springfield and Union and build a new 11-mile, 69-kilovolt line between Front Street and Stanley Terrace.
The other two projects also call for construction of 69-kilovolt lines between Hasbrouck Heights and Carlstadt (five miles) and Hilltop and Woodbury (15 miles). The respective costs are $21 million and $98 million.
The projects are the latest of more than $12 billion in investments planned by the utility between now and 2020, most of which will be spent on transmission and distribution upgrades.
The cost of the latest three projects will be factored into the price of electricity set in an annual auction held by the New Jersey Board of Public Utilities next February, according to Karen Johnson, a spokeswoman for PSE&G.
