The state approved controversial subsidies totaling $300 million annually for three PSEG-owned Salem County nuclear units Thursday.
The Board of Public Utilities voted 4-1 to approve the subsidies, paid for by an increase in ratepayers’ electric bills, during its meeting in Trenton. Hundreds of supporters and critics of the financial incentives packed the Statehouse room to hear the decision.
Public Service Enterprise Group Inc. has said it needs the money to keep its three Lower Alloways Creek Township units operating, while environmental and consumer groups argued the energy company is financially healthy enough to keep the plants running without support from ratepayers.
At Thursday’s meeting, some commissioners expressed concern over the size of the subsidy, as set by a law passed by the state Legislature last year. But with the exception of one member, the board approved the incentives, fearing New Jersey would lose a significant portion of its carbon-free energy if PSEG were to shutter the plants.
“We do not make this decision lightly. ... We’ve concluded that now is not a time to move forward in a way that will remove nuclear from our energy mix,” said BPU President Joseph L. Fiordaliso.
Electric companies will now charge ratepayers an extra $0.004 per kilowatt hour, costing the average residential customer about $31 to $41 per year, according to PSEG. That money will be passed along to the energy giant.
Ratepayer advocate Stefanie Brand, who has reviewed PSEG’s financial information, has said the plants will be profitable without help from consumers. In an opinion published in February, she wrote that PSEG was “holding a gun to (the BPU’s) head.”
Her stance has been backed by the Independent Market Monitor for PJM Interconnection, the power grid operator.
Brand expects the increase in electricity prices to hit large businesses particularly hard, including supermarkets and factories. Residents, too, will be squeezed, she said.
“Businesses will be paying a lot more. ... And a lot of people can’t afford an extra $41,” Brand said after the meeting.
In a statement, PSEG said the subsidies will allow it to keep up to 1,500 people employed at the plants and maintain nuclear in New Jersey’s energy mix.
“Our next step is to review the BPU’s order to better understand today’s decision in greater detail,” the statement reads.
PSEG released its applications for the subsidies earlier this year, though all financial information was redacted. The Hope Creek Generating Station and two-unit Salem Nuclear Power Plant provide 40 percent of the state’s overall electricity generation, the application states.
Last year, Gov. Phil Murphy signed legislation creating the subsidy program, called the Zero Emissions Credit program. Lawmakers said the incentives were needed to reach the state’s renewable energy goals because nuclear generation does not release greenhouse gases. Under the law, the BPU could not change the amount in subsidies PSEG receives. Since then, $5 million was spent last year by groups opposing and supporting the bailout.
About $2.3 million was spent on behalf of the subsidies, and $2.8 million to oppose them, according to a report released by the New Jersey Election Law Enforcement Commission. Environmental and business groups have expressed concern over Thursday’s decision.
“Today’s decision is a huge loss for ratepayers, our environment and regulatory oversight,” said Amy Goldsmith, director of New Jersey’s Clean Water Action.
Ray Cantor, of the New Jersey Business and Industry Association, echoed that statement, saying the subsidies will negatively impact companies in the state.
The Rate Counsel has 45 days after the BPU issues its order to appeal the decision.