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Gas Company Approved For Pipe Upgrades

New Jersey Natural Gas will spend $130 million to replace old pipes

New Jersey Natural Gas on Tuesday received the blessing of the state to begin upgrading half of its aging infrastructure, the company said in a release.

NJNG, based in Wall, was approved by the state Board of Public Utilities to begin a four-year project that will upgrade 276 miles – about 50 percent — of aging gas pipes, some of which are up to 50 years old, the release says.

The $130 million project – called the Safety Acceleration and Facility Enhancement (SAFE) program — seeks to replace the old cast iron and unprotected steel mains in NJNG’s system. The company estimates that about 95 percent of the leaks in its 7,000-mile system can be attributed to the aging pipes, which were the most commonly used in the industry prior to 1970, the release says.

The company said there would be no immediate impact on customer natural gas rates because of the investment, but it would seek a rate increase from the state board in the future to recover the cost, according to the release.

“Ensuring the safety of our customers and the reliability of our system is the most important thing we do,” Laurence M. Downes, company chairman and CEO, said in the release. “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.”

The project is scaled back from the $200 million, five-year project the company said in March it would pitch to the state board to replace 343 miles of aging pipe. It was not immediately known why the project was changed.

The infrastructure program could have a significant impact on the state’s economy. According to a study conducted by the Rutgers University Bloustein School of Planning and Public Policy, for every million dollars spent on infrastructure construction projects by NJNG, 10.2 jobs are created, the release says.

Using that formula, the company projects its upgrade program could create about 1,325 direct and indirect jobs, and $100 million in gross state product.  

“In addition to strengthening our system, our SAFE investments can help New Jersey’s economy continue to grow,” Downes said. “And, that’s good for our customers, company and state.”     

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