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Electric utilities tell committee: interconnection backlogs, transformer lead times and transparency gaps worsen rate and reliability risks
Summary
Executives from PSE&G, Atlantic City Electric and JCP&L/FirstEnergy told lawmakers that utility interconnection queues and long lead times for substation transformers are constraining the state’s ability to deliver power to new data centers and other large customers and urged coordinated state action and clearer cost allocation.
Senior officials from New Jersey utilities told the Senate committee that the state faces two intertwined problems: (1) wholesale capacity shortages signaled in PJM’s auctions and (2) distribution‑level constraints—aging substations, transformer lead times and interconnection queues—that limit how quickly new load can be served.
Joe Accardo, senior vice president for state regulatory affairs at Public Service Electric & Gas Company (PSE&G), said PSE&G’s interconnection queue for data centers rose from about 400 MW 12 months earlier to about 4,700 MW, a tenfold increase; he distinguished roughly 700 MW of near‑ready projects from a larger group of speculative requests and said PSE&G discounts speculative entries in its forecasting. Atlantic City Electric’s regional president, Philip Babala, said ACE has several feasibility studies for data centers and emphasized that colocation (co‑located generation and load) can be beneficial but must undergo targeted reliability studies and ensure equitable cost sharing so other customers do not shoulder disproportionate grid upgrade costs.
Representatives from FirstEnergy / JCP&L said system upgrades such as substation transformers can take years under pandemic‑era supply constraints but that lead times have improved as vendors and U.S. suppliers were onboarded. FirstEnergy officials also framed the problem as an “energy trilemma” requiring choices among reliability, affordability and sustainability and urged a portfolio approach: demand response, targeted procurements for dispatchable generation, storage and transmission investments.
All utilities told senators they are coordinating with PJM and the Board of Public Utilities and that state policy could accelerate targeted generation procurement, permit reforms, or tariff changes to ensure large customers bear appropriate interconnection costs. Committee members pressed utilities on customer protections for households on budget plans and on whether utilities could impose minimum charges or different tariffs for co‑located generation arrangements; utility witnesses said those are tariff and regulatory questions that can be developed with the BPU and the legislature.
No formal actions were taken. Witnesses agreed to provide additional data on queue composition, transformer lead times and the subset of data‑center requests judged farthest along.
