PSEG wants $300 million a year bailout 

PSEG is threatening to shut down New Jersey’s three nuclear power plants unless lawmakers approve a multimillion dollar in ratepayer subsidies but environmental and consumer advocates are calling the scheme hasty and unnecessary.

Senate President Steve Sweeney, Senator Robert Smith and Senator Jeff VanDrew introduced legislation, S-3560, that would establish a nuclear diversity certificate (NDC) program.

If passed, the legislation would create a process for the state Board of Public Utilities (BPU) to develop regulations to allow nuclear power plants that deliver electricity to New Jersey to establish a tariff of $0.004 per kilowatt hour to cover the costs.

Closing the plants would eliminate 1,600 jobs and create a need to replace the 40 percent of New Jersey’s electricity that nuclear power plants currently supply, according to advocates.

Ratepayers could pay from $31 to $41 more on utility bills, each year.

The surcharge would cost a typical New Jersey household about $3.40 a month, or $40.80 a year, according to the state Division of Rate Counsel.

PSEG estimates the lower cost, but Ralph Izzo, president of Public Service Enterprise Group, told members of a joint legislative committee that he will shut down the company’s three New Jersey nuclear power plants unless it gets the new ratepayer subsidies because, the facilities at Salem and Hope Creek will no longer be profitable within two years.

“Once a nuclear plant closes, it is closed forever,” said Izzo. “It is my fiduciary responsibility as CEO of the company to close those plants at that time. It would be an extraordinarily painful decision, because of how much we value the importance to New Jersey, but it is a cut and dry decision.”

Closing the plants could increase energy costs for New Jersey ratepayers by $400 million a year, according to Izzo.

“We are not asking for a bailout. We are asking you to join us in correction of these market flaws,” he said, blaming lower natural gas prices for an imminent change in the energy market despite current profitability from nuclear energy.

Izzo said he is willing to let the company’s financial records be independently examined, and would offset any federal subsidies to the PJM regional power grid.

A study prepared by the Brattle group for PSEG said closing the plants would cost 5,800 jobs; reduce state tax revenue by $37 million while raising utility rates by $400 million annually over the next decade.

Replacing the nuclear energy with electric produced using fossil fuel would deposit 14 tons of carbon into the atmosphere, adding more than $733 million in health care and other expenses.

“If enacted, this customer-funded bailout would require all New Jersey electric customers to pay $300 million for an unlimited number of years to keep the aging plants in operation, adding an extra $40 a year to each customer’s electric bill,” said Mary Barber, director of New Jersey Clean Energy. “PSEG, PSE&G’s parent company, has not provided any documentation or analysis to show these facilities are in need of financial assistance.”

Stefanie A. Brand, director of the state’s Division of Rate Counsel, which represents utility consumers, said PSE&G has not demonstrated a need “other than bald assertions and ultimatums issued by the company.”

“The Legislature has a duty to to its constituents to test those assertions and not simply succumb to the company’s threats,” said Brand, arguing that the legislation is insufficient to protect consumers and the state should not rush into a fix during the waning days of the Christie administration.

Fred Krupp, president of the Environmental Defense Fund, advised lawmakers not to “hastily approve its $300 million, customer-funded bailout in the lame duck session.”

“The New Jersey legislature isn’t the only venue in which PSEG is seeking a bailout,” said Krupp. “It was one of a handful of electric utilities that submitted comments in support of U.S. Energy Secretary Rick Perry’s proposed rule currently before the Federal Electricity Regulatory Commission (FERC) to prop up aging coal and nuclear plants, rather than allowing competition to work freely in markets.’

Republican Gov. Chris Christie leaves office in January, when Democratic Gov.-elect Phil Murphy is sworn in and a new legislative session begins.

 

 


Connect with NJTODAY.NET


Join NJTODAY.NET's free Email List to receive occasional updates delivered right to your email address!
Email ads@njtoday.net for advertising information Send stuff to NJTODAY.NET Like Us On Facebook Follow Us On Twitter Download this week's issue of NJTODAY.NET
Print Friendly

Leave a Reply