PSE&G Proposes Experimental Energy Pricing Service to Preserve Steel Mill and Jobs

Strategic Insights -

Public Service Electric and Gas Company (PSE&G) has submitted a plan to the New Jersey Board of Public Utilities (BPU) to approve a competitive electric rate for Co-Steel Raritan, a steel mill in Perth Amboy, New Jersey. The proposal includes a new experimental hourly energy pricing service rate schedule that would result in a significant reduction in Co-Steel Raritan's annual electric bill, allowing the company to remain in New Jersey and invest $37 million in refurbishing and upgrading its facility.

Key Takeaways:

  • PSE&G has proposed an experimental hourly energy pricing service rate schedule to provide Co-Steel Raritan with a competitive electric rate, resulting in a $7.3 million reduction in its annual $26 million electric bill.
  • The plan aims to keep Co-Steel Raritan's 500 jobs in Perth Amboy, New Jersey, and facilitate its expansion and upgrade without impacting PSE&G's other electric or gas ratepayers.
  • In return for the new rate, Co-Steel Raritan has agreed to invest $37 million in refurbishing and upgrading its facility and remain in New Jersey.
  • The steel mill, PSE&G's second-largest customer at a single location, has an 80 megawatt peak electric load and consumes 440,000 megawatthours of electricity annually.
  • Co-Steel Raritan employs 500 people, maintains a $36 million annual payroll, and purchases $50 million worth of goods and services from New Jersey companies annually.
  • The company recycles approximately 730,000 tons of scrap metal a year and pays around $2.5 million in state and local taxes.

Statistics:

  • $7.3 million: The approximate annual reduction in Co-Steel Raritan's electric bill.
  • $26 million: The annual electric bill of Co-Steel Raritan before the proposed rate change.
  • $37 million: The amount Co-Steel Raritan has agreed to invest in refurbishing and upgrading its facility.
  • 500: The number of people employed by Co-Steel Raritan.
  • $36 million: The annual payroll of Co-Steel Raritan.
  • $50 million: The amount Co-Steel Raritan purchases in goods and services from New Jersey companies annually.
  • 440,000: The amount of megawatthours of electricity Co-Steel Raritan consumes annually.
  • 80: The megawatt peak electric load of the steel mill.
  • $2.5 million: The amount Co-Steel Raritan pays in state and local taxes annually.
  • 730,000: The number of tons of scrap metal Co-Steel Raritan recycles annually.

Sources:

  • Public Service Electric and Gas Company (PSE&G)
  • New Jersey Board of Public Utilities (BPU)
  • Co-Steel Raritan
  • Press release: "PSE&G Proposes Experimental Energy Pricing Service to Preserve Steel Mill and Jobs" (January 17, 1995)