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Public Service Electric & Gas Co. plans to spend $888 million on energy infrastructure, efficiency initiatives and environmental programs to create about 1,700 jobs in New Jersey.

In a filing with the state Board of Public Utilities, New Jersey's largest utility, a unit of Public Service Enterprise Group Inc. (PEG), is seeking approval of $698 million in accelerated investments in electric and gas distribution system capital projects. PSE&G plans to recover the cost through an annual adjustment to electric and gas rates of not more than 1%.

A second filing seeks approval for PSE&G to spend $190 million more to encourage conservation and create green jobs.

The company asked for approval by April 1.

"PSE&G's proposals are in direct response to Gov. Jon Corzine's call for utilities to invigorate the economy," said PSE&G Chief Operating Officer Ralph LaRossa.

LaRossa said the utility will try to use local suppliers and contractors for the programs.

Under the $698 million program, PSE&G would spend $406 million to improve electric systems and $292 million on gas systems in the next two years. Planned are $62 million for replacing street lights and efficiency improvements at PSE&G facilities; replacement of aged underground cable facilities, network transformers and relays; and upgrading of overhead wire, cable and transformers.

Gas infrastructure investments include replacing and reinforcing aging gas cast-iron and bare-steel mains and services, purchasing specialized construction equipment, and upgrading meter and regulator stations. Less-efficient mercury-vapor municipal street lighting would be replaced with more-efficient induction-fluorescent lighting.

The $190 million would expand programs, approved by the BPU last year, to provide energy- and money-saving measures directly to families and businesses. These include free energy audits to identify ways to become more energy-efficient and funding for new technologies and demonstration projects.

-By Kathy Shwiff, Dow Jones Newswires; 201-938-5975; Kathy.Shwiff@dowjones.com

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