The months-long effort to provide New Jersey’s three nuclear power plants with an operating subsidy has morphed into a political deal that would be far more costly to consumers and businesses.
Now state Democrats claim that in order to give PSEG and Exelon $300 million a year for their Salem County nuclear plants, they’ve also got to give at least as much to the state’s solar industry and even revive the pointless Fishermen’s Energy demonstration offshore wind project.
Each of these subsidies would be charged entirely to New Jersey residents and businesses through their electric bills, which are already among the highest in the nation. And yet the deal ignores the interests of ratepayers in favor of simply paying off different clean-energy factions.
The three bills in the subsidies deal range from dubious to simply wasteful.
The premise for subsidizing the nuclear plants is they’re no longer profitable at current wholesale power prices driven low by cheap natural gas. Their owners, Public Service Enterprise Group and Exelon, have said they’ll close them without a subsidy.
Nuclear plants still provide 39 percent of the electricity in New Jersey, according to the U.S. Energy Information Administration. So shutting the plants may cause electric rates to rise — but perhaps by less than the $300 million a year subsidy.
Some other states already have enacted such nuclear subsides. Illinois is providing $235 million annually for 10 years, and New York is starting at $500 million annually and totaling $8 billion over 12 years.
Several other states, though, have let their nuclear generating stations close, and Ohio and Connecticut, like New Jersey, are struggling with the question of whether their plants actually need subsidies.
The New Jersey nuclear subsidy bill would have the Board of Public Utilities look at the corporate finances and sign off on the subsidies, but that’s not enough. If lawmakers feel there is sufficient benefit in keeping the multibillion-dollar investment in nuclear generation operating, they should have the BPU determine the subsidy with input from the Division of Rate Counsel, and after public hearings.
A companion bill backed by Gov. Phil Murphy and other clean-energy advocates reportedly would give the solar industry subsidies equal to or greater than those to nuclear. But New Jersey is already a national leader in solar, despite its small size and location far from optimal sunshine.
Last year then-president of the state Board of Public Utilities Richard Mroz said solar incentives no longer make sense now that the industry is mature. The state already has put $2.5 billion into solar and is scheduled to spend billions more without the new subsidies.
Supporters say dumping more electricity customer money into solar would help the state reach aggressive new goals of 50 percent renewable energy by 2030 and 100 percent by 2050. Yet even if those goals were reached, New Jersey’s reduction would make no meaningful difference in the world’s greenhouse gas levels.
The third bill, incredibly, would make ratepayers fund the Fishermen’s Energy plan to place six small wind turbines 3 miles off Atlantic City. The BPU has twice judged its energy too costly and rejected the project. The bill would exempt the 24-megawatt project from the requirement that it be cost-effective and make customers greatly overpay for its electricity indefinitely.
Sen. Bob Smith, D-Middlesex, Somerset, who is steering the bills through the Legislature, told NJ Spotlight they’ll be considered by the Assembly Appropriations Committee on Thursday and by both the Assembly and Senate on Monday.
Rushing bills through the Legislature that weren’t even introduced the week before looks like an attempt to avoid scrutiny of a wasteful political payoff.
Instead of soaking ratepayers for subsidies that will never lead to lower energy costs, the state should focus on its plan to develop 3,500 megawatts of offshore wind power in vast fields of giant turbines far at sea. That, too, would require customers to pay much more for electricity until the industry matures in the United States and brings costs down to European levels — but thereafter it might be cheaper even than natural gas generation.
New Jersey and the other East Coast states planning to take advantage of the great wind energy potential of their adjacent ocean should foster a cost-effective offshore wind industry quickly by forming a big market for the technology and infrastructure.
That’s the deal that would serve ratepayers in the long run and make the biggest difference in carbon dioxide emissions.