A coalition of business, consumer, labor and environmental groups have asked Gov. Phil Murphy to conditionally veto the nuclear subsidy bill that passed the New Jersey legislature last month.
The bill, which passed both houses of the Legislature and now sits on the governor’s desk, gives the Board of Public Utilities a set amount of time to examine the finances of the owners of nuclear power plants in the state. If the owners can show subsidies are needed to keep the plants open, they will receive $300 million a year from ratepayers.
Public Service Enterprise Group, which owns the Salem and Hope Creek nuclear power plants in Salem County, has said the plants will soon become unprofitable because of competition from cheaper natural gas plants. I
The groups said in a May 2 letter to the governor S2313 “fails to strike a proper balance between utility consumers and the nuclear power industry, fails to protect New Jersey’s economy from unfair competition, is counter to the principles of open and transparent government and will compromise New Jersey’s clean energy future.”
Sponsors such as Sen. Jeff Van Drew, D-Atlantic, Cape May, Cumberland, and State Senate President Steve Sweeney, have said the plants provide more than 30 percent of New Jersey’s energy without emitting greenhouse gasses. They warn that the state’s energy supply will be in jeopardy and become more expensive if they close.
Sweeney’s district includes Salem County, where the plants are an important source of jobs.
The amount of subsidy is set in the legislation, and critics have questioned how lawmakers can know what level of subsidy is needed when they don’t have documentation of the companies’ financial status.
Oyster Creek Nuclear Generating Station in Lacey Township, owned by Exelon Corp., is the oldest operating nuclear plant in the country and is set to permanently close in October.
The state’s remaining two nuclear power plants in operation are in Salem County and owned by Public Service Enterprise Group, the parent company of Public Service Gas & Electric. One is co-owned by Exelon.
The groups that signed the letter opposing the subsidies are AARP New Jersey, NJ Working Families Alliance, Health Professionals & Allied Employees, New Jersey Large Energy Users Coalition, NJ Citizen Action, the Main Street Alliance, Blue Wave NJ, NJ Policy Perspective, GreenFaith, Clean Water Action, Environment New Jersey, NJ Sierra Club, Koubiadis Anti-Poverty Network, UU Faith Action, Banking on New Jersey and the Chemistry Council of New Jersey.
They oppose the bill as written because the plant owners have not proven subsidies are needed and the amounts were “established behind closed doors by the interested parties and without ratepayer participation,” the letter said.
They want these changes in the legislation:
• Require nuclear power corporations to satisfy a burden of proof of financial distress rather than allowing considerations of “cost of capital,” “market risk” and assumed minimum returns on equity to determine whether a bailout is appropriate.
• Guarantee the full inclusion and participation of the state Division of Rate Counsel to protect ratepayers and avoid setting an anti-consumer precedent.
• Establish a process for an annual financial review, with ratepayer refunds as needed, of each nuclear plant receiving subsidies. S2013 could provide windfall profits to PSEG over a 10-year period or longer.
• Require a 10-year sunset provision similar to the ones included in both the New York and Illinois Zero Emission Credit programs.
• Deduct from the subsidy any payments the plants may receive from PJM, FERC, DOE, RGGI or other entities for fuel diversity, baseload, reliability value or other things. S2313 does not ensure such deductions will be made.
• Credit back to ratepayers any financial gain to the plants or increases in market prices due to the pricing of carbon that result from the state rejoining the Regional Greenhouse Gas Initiative.
• Include clawback provisions to protect consumers. The subsidies should not be irrevocable as the bill provides.
• Ensure that no state-funded subsidies are paid to out-of-state nuclear facilities owned by PSEG or Exelon, such as the Peach Bottom, Limerick or Three Mile Island facilities.
• Protect workers against layoffs or contractors being brought in to replace them through the life of the subsidy.