2 min read October 2022 — In an interview with Invest:, Mike Renna, president and CEO of energy services holding company South Jersey Industries (SJI), talked about the vital role infrastructure, renewable natural gas and hydrogen will play in the region’s successful energy transition and decarbonization.
How is the decision to join forces with the Infrastructure Investment Fund (IIF) aligned with SJI’s decarbonization and clean energy initiatives?
We are extremely excited about the partnership with IIF because it will better enable us to execute on our clean energy and decarbonization initiatives in support of the environmental goals of our State and region. At present, we are going through the process of seeking our regulatory approvals, which we expect to wrap up by the end of 2022. SJI is at the forefront of energy decarbonization with investments across our utility and non-utility entities and we are really looking forward to working with IIF in these efforts. Our vision aligns, our mission aligns, our priorities align. As a private company and with IIF’s long-term approach to utility and energy investments we will have efficient access to resources to modernize our critical infrastructure and maintain our high standard of customer service. Also important, once the transaction with IIF closes, SJI will remain a New Jersey-based company with our headquarters in Folsom, just as it has been for many decades. Maintaining the continuity of our leadership and management teams, doubling down on our commitment to supporting the communities we serve in New Jersey, and building an even stronger company with more career opportunities for our NJ-based workforce of over 1,100 employees, were all integral components of the decision to enter into this strategic partnership. SJI has been a trusted leader in the energy industry in New Jersey for over a century and IIF’s support will serve to enhance the critically important role that we intend to play in the next generation of energy delivery in our State.
What is the state of infrastructure at SJI?
Infrastructure modernization continues to be central to our strategy. South Jersey Gas and Elizabethtown Gas are currently undertaking several multi-year infrastructure investment programs to enhance the safety and reliability of our gas-utility systems while also furthering the economic development in our region. By replacing our aging infrastructure and upgrading leak detection, we are significantly reducing fugitive methane emissions and achieving our carbon-reduction goals, while also making our systems safer and more resilient. Thanks to the investments that we have made at both utilities, we are proud to operate two of the most modern gas utilities in the country.
How is SJI tackling its digital transformation?
Our customer service, work management, financial, and Human Resource systems are best-in-class. We enjoy the benefits of operating those systems and the efficiencies that they afford. We’ve invested in upgrading and modernizing our infrastructure with minimum impact on customer bills, which largely stems from these investments in technology—all the efficiencies gained, and productivity improvements have helped us keep costs down. As far as future technologies, our priority is always safety, including cybersecurity. As an industry, we are partnering with the government to reinforce and secure our systems. Beyond that, we will look at some form of smart meters in our utilities toward the latter part of this five-year planning period to help customers better manage their energy.
What strides are you making on the hydrogen side of the energy transition equation?
We are developing a pilot project in Southern New Jersey that will take the electricity from a solar array and power an electrolyzer to create green hydrogen that will then be injected into our South Jersey Gas system. It will begin with low volumes and will serve as a platform for us to learn and experience green hydrogen and how that can, ultimately, along with renewable natural gas, significantly bring down the carbon content of the energy that is moving through our pipes.
SJI has committed to making significant investments in decarbonization, including at least 25% of our annual CAPEX dedicated to decarbonization and sustainability investments. Green hydrogen blended in at low volumes will prove to be a highly cost-effective means to achieve decarbonization. We also have a memorandum of understanding with Atlantic Shores Offshore Wind, which is building one of the largest offshore wind projects off the coast of New Jersey. We are partnering with them to produce larger-scale green hydrogen, ultimately for injection into our system when that wind project comes online.
What is your outlook for the energy and utilities sector in New Jersey?
While we look to transition to a clean energy future, our infrastructure will be an integral and lasting part of it. There is this shift underway that’s moving the conversation away from the actual energy that is flowing through the pipes and onto the infrastructure itself. We can decarbonize and lower the carbon intensity of natural gas to a point where we can achieve carbon neutrality in combination with all of the other things we are doing across the clean energy front. This infrastructure, given how safe it is, how reliable it is, and that it is underground, is essential to a clean energy future. Five years from now, the real change you are going to see is the level of investment not only in New Jersey but across the country in terms of biofuels, biogas and green hydrogen.
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