The owners of Salem County’s nuclear power plants — the last still operating in the state — do not need ratepayer subsidies to keep the plants from closing in three years, according to a new report by the director of the Division of Rate Counsel.
Stefanie Brand said the request by PSEG Nuclear LLC and Exelon Generation Co. LLC for ratepayers to give the three reactors in Lower Alloways Township a combined total of up to $300 million per year should be denied by the New Jersey Board of Public Utilities.
“In making their case for ZEC (Zero Emission Credit) subsidies ... PSEG and Exelon have overstated their costs and understated their revenues,” said Brand. “In short, they skewed the analysis of future revenues in order to deflate those revenues and support their claim of financial distress.”
The New Jersey Board of Public Utilities approved a Zero Emission Credit program last week f…
PSEG spokesman Michael Jennings said the company has met the requirements of the ZEC act.
“The information submitted makes clear that the financial problems facing the nuclear plants are real and that there would be significant degradation of New Jersey’s air quality if the plants were to close,” said Jennings.
The BPU is expected to make a decision on the subsidies, estimated to cost the average residential customer about $31 to $41 a year, at its April 19 meeting.
PSEG owns 57 percent of the Salem I and Salem II reactors, while Exelon owns the other 43 percent; and PSEG alone owns the Hope Creek plant.
When the BPU approved the ZEC program last November, a spokesman said it would conduct a thorough and extensive application process, and that applicants would have to “demonstrate a clear need for these credits, ensuring ratepayer funding is allocated appropriately.”
“Nuclear power is an important part of the state’s carbon-free energy blueprint,” said BPU President Joseph L. Fiordaliso at the time. “As we review and rank applications, we will carefully analyze all of the information presented to us by applicants to determine whether credits should be awarded.”(tncms-asset)d18610a6-cce9-11e8-b513-00163ec2aa77(/tncms-asset)
Brand said the companies “assume that the subsidies should protect them from nearly all of the risks associated with their participation in wholesale markets.” She said it is inappropriate for ratepayers to assume risk for deregulated industries.
”In a classic example of ‘heads I win, tails you lose,’ ratepayers are being asked to absorb all of the risks these plants may face in the future without gaining credit for any of the profits they made in the past or will make going forward,” Brand said.
Jennings said the company is confident in the accuracy of its financial and environmental data.
”The plants face a genuine economic crisis that would lead to their closure without economic support that recognizes the benefits nuclear power provides,” Jennings said.
Brand also said the applicants’ environmental assumptions are flawed.
”They assume that if these plants close, they will be replaced in their entirety by gas plants, ignoring the state’s offshore wind, solar and energy efficiency initiatives,” she wrote.(tncms-asset)c8343a0e-5e1d-11e8-bcfe-00163ec2aa77(/tncms-asset)
The owners also fail to note they are already committed to providing electricity through the plants for three years, according to Brand.
The state Legislature passed a bill last year, which was signed by Gov. Phil Murphy, to allow ratepayers to be charged to send subsidies to the owners of nuclear plants that can prove they will close without financial help from electricity customers.
The bill is intended to help the state retain nuclear power as part of its energy generation mix, because it does not emit greenhouse gases that contribute to global warming. It was sponsored and championed by Senate President Steve Sweeney, whose district includes Salem County.
Murphy wants the state to reach 100 percent clean energy by 2050.
Jennings said the Salem and Hope Creek plants provide about 90 percent of New Jersey’s emissions-free generation, and 40 percent of the state’s overall electricity generation.