Cap-and-innovate to combat climate change

PSEG has a 106-year history in New Jersey, where we serve more than 2 million electric and gas utility customers. We also own and operate a fleet of power plants in several states, with roughly half of our power coming from nuclear energy, most of the rest fueled by coal and natural gas, and a small but growing percentage generated by renewable sources.

Because we produce a substantial amount of nuclear energy, we have a smaller carbon footprint than many of our peers. But we are nevertheless part of an industry that represents the largest U.S. source of greenhouse gases: Power production accounts for 40 percent of the country's carbon emissions.

My company has a clear responsibility to combat climate change — and we're ready. Utility executives are used to making multibillion-dollar investments with time horizons of 40 years or longer, but to make these investments, we need to know the rules. We must be told that there will be a price on carbon, and we need to know how it will be set.

Even in the absence of a comprehensive nationwide program, PSEG has already taken steps toward lowering greenhouse gas emissions. We've started energy-efficiency programs for low-income customers as well as more sophisticated energy audits and efficiency measures geared toward businesses and hospitals. We are putting US$750 million into a range of solar energy initiatives, including an effort to mount grid-connected solar units on 200,000 utility poles and a loan program to help customers finance their own solar installations. And we are exploring offshore wind farms and new energy-storage technologies.

New Jersey's policies have enabled many of these investments, even as uncertainty at the national level has hindered others. Our state has set tough targets for carbon reduction and has established mechanisms that allow utilities to earn a return on investments in energy efficiency and renewables — an approach previously limited to traditional pipes-and-wires investments. Such policies are a key reason that New Jersey has the highest concentration of solar installations of any state and a growing, jobs-producing green energy sector.

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