The High Cost of New Jersey Gas Utilities’ Leak-Prone Pipe Replacement Programs
Replacing or repairing actively leaking gas distribution pipes is in the interest of customers and the public in general, since leaking pipes pose safety concerns and emit methane, a harmful greenhouse gas (GHG), into the atmosphere. Yet, New Jersey's gas utilities are not only replacing actively leaking pipe; they are also replacing pipe that is not leaking but may be more likely to leak at some point in the future. To understand the potential impacts of pipe replacement on customers, Synapse conducted an analysis of the future costs of replacing the remaining leak-prone pipe (LPP) for the four main New Jersey gas utilities. Our analysis finds that LPP replacement leads to a burgeoning cumulative revenue requirement for New Jersey gas customers through 2080, which is 30 years after the state's Global Warming Response Act requires an 80 percent reduction in statewide greenhouse gas emissions relative to 2006 levels. The fact sheet describing this analysis highlights implications of this finding for New Jersey customers and policy compliance.