PSEG is accelerating its greenhouse gas reduction efforts to reach net-zero emissions by 2030, 20 years earlier than its previous target, by modernizing its natural gas and electric transmission and distribution networks and investing in new technologies that enhance electrification and improve efficiency.

In an announcement June 24 the company said it has already cut emissions by 50% from 2005 levels and will now focus on transitioning further to zero-carbon electricity generation and reducing emissions related to providing natural gas to almost 2 million New Jersey customers.

PSEG said the initiative stems partly from the company’s recognition of the “importance of sustainability and environmental, social and governance considerations in the strategic planning and decision-making process.”

The company said in July 2019 that it would cut its power fleet’s carbon emission by 80% from 2005 levels by 2046 and attain net-zero emissions by 2050. The decision to move that target early is “in line” with President Biden’s desire for the U.S. electric sector to be carbon-free by 2035, the company said.

“The federal goal of achieving a 100% carbon-free electric supply by 2035 is an ambitious one that will require technology innovation, new policy frameworks, and a commitment by businesses and consumers across the economy,” PSEG CEO Ralph Izzo said. “With our new comprehensive vision for net-zero by 2030, we’ve set an ambitious goal to reduce or eliminate greenhouse gas emissions across our business — including our facilities and vehicles — in less than a decade, doing our part to support state and national objectives.”

Top 5%

The new target puts PSEG in the top 5% of utilities studied nationwide by EQ Research, a North Carolina-based policy research, analysis and data services consulting company. However, that study did not include utilities in New York and New Jersey because they are not required to publish integrated resource plans, CEO Miriam Makhyoun said. The same study of 94 utilities nationwide found 45 had set goals by 2030, yet only five of those set a target of 100% emissions reduction, she said.

PSEG said it will direct half its capital spending program of $14 billion to $16 billion from 2021 to 2025 toward decarbonization, emission reduction, methane reduction, clean energy transition and adapting to climate change, including readiness for storms.

Programs to replace old cast-iron and unprotected steel gas mains and evaluate alternatives to natural gas will help reduce methane and other emissions, such as sulfur hexafluoride, the company said. And if the company cannot reduce its carbon footprint entirely, “PSEG will explore high-quality offsets,” the company said.

Greg Gorman, conservation chair for Sierra Club New Jersey, said PSEG “deserves credit for recognizing the urgency of the climate crisis and accelerating their net-zero pledge to 2030.”

“PSEG’s climate plan is a good step forward and opens the door for awesome innovations, job creations and lucrative opportunities,” Gorman said. “We also fully support PSEG’s decision to invest in offshore wind development. In addition to fully decarbonizing its business operations, the utility must plan for eventual replacement of its nuclear units with clean, renewable generation.

“However, we believe that PSEG could do a whole lot more,” he added. “Their plan involves purchasing carbon offsets instead of reducing their direct emissions by phasing out gas delivery completely and helping their customers to fully electrify their buildings and vehicles.”

Responding to a question from NetZero Insider, PSEG declined to specify the extent of its use of offsets.

Changing Business Model

The utility’s latest announcement comes in a period of significant company milestones. In April, the New Jersey Board of Public Utilities voted to award $300 million in annual subsidies over three years to the state’s three nuclear power plants, which are mainly operated by PSEG. The plants are key to the state’s ability to reach the goal of 100% emission reduction by 2050. (See NJ Nukes Awarded $300 Million in ZECs.)

PSEG said last year said it is exploring “strategic alternatives” for its fleet of fossil fuel-fired generating facilities that generate more than 6,750 MW of power in New Jersey, Connecticut, New York and Maryland. And the 1,100-MW Ocean Wind offshore wind project, of which PSEG owns a quarter share, to put 98 wind turbines 15 miles off the Jersey Shore is moving ahead. Construction on the project, the remainder of which is owned by Ørsted, is expected to begin next year.

Raymond Cantor, a lobbyist for the New Jersey Business & Industry Association, one of the state’s largest business groups, said that although PSEG is divesting its fossil fuel plants, they will still be used to generate electricity for the state.

“Those plants aren’t going away,” and the state will continue to rely on natural gas for a while, he said. “From a company perspective, PSEG is making the decision to go in a certain direction. But from a New Jersey overall generation perspective, we’re relying on natural gas and we will be for quite some time.”

Pam Kiely, associate vice president of U.S. climate at the Environmental Defense Fund, welcomed the move and noted PSEG’s support for regional and national decarbonization efforts, which she called “absolutely essential and a critical component of leadership.”

“Taking action across your own system is valuable, but PSEG has really stepped up to the plate when it comes to advocating for solutions that will help accelerate the decarbonization trajectory across the industry,” she said. She added that PSEG was a signatory to a letter sent to the Biden administration pledging support for its emissions-reduction policies.

“To have companies like PSEG stepping up to affirm that not only is that level of ambition feasible, but also necessary, is a critical addition to the discussion,” she said.