PSE&G President and Chief Operating Officer Kim Hanemann has lived through some of the state’s worst days for the power grid — from the 2003 blackout to Superstorm Sandy — and seen the incredibly positive results of the infrastructure upgrades that followed.
With major weather events becoming the norm, Hanemann is convinced of one thing: New Jersey can’t navigate its next energy crunch without a real long-term plan and deep collaboration across government and industry — one that brings more generation along with more infrastructure.
Hanemann, speaking Wednesday on a panel at the New Jersey Utilities Association event in Jersey City that wraps up this morning, noted the key is an all-of-the-above approach, one that relies on different ideas, including solar, natural gas and, perhaps most of all, more energy efficiency.
It’s the only way to confront the supply-and-demand issue that is now among the biggest concerns of business leaders in the state, she said.
“There’s going to be short-term, medium-term, and long-term solutions that get us there, because some of these assets take more than a decade to build,” she said.
Even the state’s aggressive solar ambitions, she said, reinforce the need for more steel in the ground.
“The administration wants to interconnect like 3,000 megawatts of solar, but in order to interconnect those kinds of things, we’ll require more utility investments,” she said.
Lt. Governor Dale Caldwell, who gave opening remarks at the conference, said the Sherrill administration is eager to listen.
“We’re committed to this, and we’re focused, and we’re not doing it alone,” he told the crowd of a few hundred. “We’re here because we want to hear from you; we want to get your ideas.
“And we’re not approaching this ideologically; we’re approaching it practically. We are acting decisively to deliver results.”
Panelist Mike Renna, CEO of South Jersey Industries, praised the current administration for its early willingness to engage.
“We’ve all been really impressed with the Sherrill administration and their willingness to work together and collaborate,” he said.
Renna called it a noticeable change, with both the administration and Legislature showing an appetite for reform — a key element in addressing the challenges the state is facing.
But he also warned that the state must understand it is part of the problem: The massive capital needs for investment are colliding with a political environment that can change every few years.
Utilities rely on investors who want the certainty of a utility return, he said.
“To fund capital intensive infrastructure, you need to provide certainty, and in today’s political climate, there is a high degree of uncertainty,” he said.
Renna pointed to the whiplash in New Jersey’s energy master plans — from a Christie focus on natural gas to Murphy’s emphasis on electrification and renewables, most notably offshore wind.
He also pointed to the PennEast pipeline, saying it died because the political climate changed drastically.
At the same time, Renna argued the gas network is an overlooked asset.
“Our infrastructure can play a vital role in the energy transition,” he said.
Modernized pipelines can move decarbonized molecules safely and reliably mixed with the existing geologic gas stream, he said, lowering the carbon intensity of what flows through the system in the process.
“We look at it as an accelerant to the energy transition,” he said. “That infrastructure exists now, it doesn’t need to be built, so we can deliver this cleaner energy in the future.”
While clean energy is great, Mark McDonough, president of N.J. American Water, noted clean water is even more important.
And it is often a forgotten piece of the utility puzzle — one that has its own unique infrastructure challenges, McDonough said.
“Water is in a very different place,” he said. “It is a highly fragmented utility. It is the only utility that sustains public health, because you have to ingest it to survive.”
The fact that the vast majority of water assets are underground is a problem, McDonough said.
“Out of sight, out of mind,” he said.
The result, McDonough said, is a quiet crisis of aging pipes, climate stress and emerging contaminants.
“This is not your mother and father’s water system that’s being run,” he said. “The challenges between the climate, emerging contaminants, aging infrastructure are vast and complex, but you can’t see it.
“You have to convince people to invest in an infrastructure that they take for granted and don’t see until the last minute.”
Technology is helping make the case, McDonough said.
“We put sounders on fire hydrants: They tell us this pipe is weak, this pipe is leaking, because it is 10 to 100 times more expensive to run the break than to invest in advance proactively,” he said. “Everybody knows about putting treatment in for PFAS or 1,4-dioxane, but it’s really the pipe in the ground that has an equally important job to deliver safe and affordable water.”
McDonough said infrastructure updates remain a winning play.
“We have a great story,” he said. “For less than the price of a happy meal, we can continue to put resilient infrastructure that will protect you every day, and the cost value analysis is actually there.”
