PLEASANTVILLE — Atlantic City Electric executives on Thursday discussed new and upgraded substations and transmission line replacement projects designed to make the power system more robust and reliable during storms.

Officials of the investor-owned utility spoke at an editorial board meeting with The Press of Atlantic City regarding infrastructure, the future of a smart energy grid and a recent 7 percent rate increase request.

By next December, the Mays Landing-based utility will build and operate a new 69,000-volt substation in Port Republic to handle increased load to the area, which includes Galloway Township, said Ray Rouault, senior supervising engineer for Pepco Holdings Inc., the parent of Atlantic City Electric.

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A substation servicing Margate and Ventnor will be replaced by May 2014.

“That’s some of the level of investment that was going to get pushed out, but we wanted to do that now, because they’ve had some reliability problems,” the utility’s Region President, Vincent Maione, said.

In Sea Isle City, the utility plans to upgrade transmission lines by May to increase reliability, Pepco Supervising Engineer Jason Tucker said.

“Our general direction is, with a lot of recent storms and things like that, we want to reinforce and rebuild the feeds to the barrier islands,” he said.

The reliability of electricity has been a major issue the past two years with Tropical Storm Irene and Hurricane Sandy knocking out power to millions statewide, with some outages lasting weeks.

In the region, a smart grid is already helping in several areas of Atlantic County, letting the utility remotely reroute power to where it is needed.

And the utility wants to move to smart meters, too, as its parent company is doing in Delaware, Maryland and Washington, D.C. — if New Jersey allows.

The cost of these smart meters can be substantial. At about $150 each, they are almost three times more expensive than traditional ones and may cost a combined $150 million to install in Atlantic Electric’s territory, Maione said.

But the intelligent meters can have economic benefits. Through dynamic pricing, the meters can tell customers when energy generation is the most expensive at peak times and encourage them to cut back, Maione said.

That could save customer’s money and give them rebates, which is occurring in other areas served by Pepco Holdings using smart meters, he said.

“We’re hoping we can share that information with the Board of Public Utilities, which we plan on doing very shortly … to let them know what our experiences are with it, and where there’s value to the consumer,” he said.

Burying more electrical wires underground — a concept that has gained attention in New Jersey after recent storms due to trees knocking down lines — is costly, Maione said.

“It is very expensive to retire systems already in place and install new underground ones,” Maione said. “If the state were to prefer if any new systems (go) underground, that would be a lot more feasible and would probably be a lot less expensive.”

Underground lines are prone to other problems, including flooding and difficulty in accessing the lines, which can make repairs costlier and more time-consuming, he said.

About 72 percent of Atlantic City Electric’s system involves overhead wires, officials said.

Utility executives also spoke about the company’s recent $70 million rate-increase request, which would raise the average residential bill by 7 percent, or more than $12 a month. The company in October received state approval to raise rates by about 2 percent.

A residential customer now using 1,000 kilowatt hours per month pays about $182. This latest request involves distribution rates — or what Atlantic City Electric charges to deliver power and maintain the electric system. Customers pay Atlantic City Electric’s distribution rates regardless of whether they use another supplier for wholesale energy.

Maione said the request is the first step of a review process by the Board of Public Utilities and state Division of Rate Counsel than can take a year or longer.

The request includes about $16 million to cover costs from Hurricane Sandy and the June “derecho” wind storm.

“Because of the level of investment we’re making, we wanted to get this filing in and reviewed,” he said.

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