New Jersey Natural Gas (NJNG) Tuesday received approval from the New Jersey Board of Public Utilities (BPU) to implement its Safety Acceleration and Facility Enhancement (SAFE) program, which will replace 276 miles, or about 50%, of the cast iron and unprotected steel mains and associated services in its delivery system over the next four years.
Cast iron and unprotected steel mains and services were the most commonly used in the industry prior to 1970 and are more susceptible to corrosion and leaks. Excluding third-party damage, this aged infrastructure accounts for more 95% of all leaks found within NJNG’s system, the utility said.
“With the approval of our SAFE program, we will significantly reduce the older and more susceptible parts of our infrastructure over the next four years,” said NJNG CEO Laurence M. Downes.
NJNG will seek to recover its investment of $130 million of SAFE replacements over the four-year program, including a weighted average cost of capital of 6.9%. The spending will be subject to review in NJNG’s next base rate case, which is to be filed by November 2015.
About 570 miles of NJNG infrastructure has been identified as being at least 45 years old. The company addresses the replacement of these facilities through its annual capital construction plan. The accelerated replacement of this aged main through the SAFE program is consistent with the state’s Energy Master Plan and its emphasis on investment in natural gas infrastructure as a pathway to lower energy costs and enhanced energy security, the utility said.
NJNG will provide to the BPU and rate counsel a list of SAFE projects to be addressed each year, with the first to be provided within 90 days of the board order. Anticipated work schedules will be filed on or about Oct. 1 for each subsequent year the program is in effect.
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