New Jersey Board of Public Utilities awards subsidies for nuclear power plants
The New Jersey Board of Public Utilities (NJBPU) awarded Zero Emission Certificates (ZECs) to the Salem One and Two and Hope Creek nuclear power plants.
This will result in $300 million per year in subsidies for the owners of these plants, Public Service Enterprise Group (PSEG) and Exelon. For taxpayers, this is expected to result in an increase in the average utility bill by $41 per year, according to NJ.com.
The state legislature passed the Zero Emissions Certificate Law in May 2018, noting the “moral imperative for the State to invest in energy infrastructure that does not produce greenhouse gases.” The law adds that “the abrupt retirement of existing, licensed, and operating nuclear power plants within and outside the State that provide electricity to customers in New Jersey, and any concomitant increase in the proportion of New Jersey’s electricity demand met by natural gas and coal, will result in a substantial increase in emissions of several serious pollutants, and associated adverse public health and environmental impacts.”
In deciding to offer the credits, NJBPU Board President Joseph Fiordaliso cited the potential environmental impacts of immediately closing down the nuclear plants, which currently provide approximately 32 percent of the state’s energy and 90 percent of its clean energy. He also cited the potential economic impacts if the plants should close. It would impact 750-1500 local jobs in addition to destabilizing the grid. The board approved it by a vote of 4-1.
“We do not make this decision lightly and the Board must balance protecting ratepayers with our responsibility to the citizens of the state,” Fiordaliso said. “We have a moral obligation to our fellow citizens to do everything we can to decrease carbon emissions. In making this decision, the Board considered fuel diversity, resiliency, RGGI, the New Jersey’s economy, and environmental impact and we’ve concluded that now is not a time to move forward in a way that will remove nuclear from our energy mix and ultimately increase air pollution and carbon emissions in our state.”
PSEG owns Hope Creek while it owns Salem One and Two with Exelon. All three are located in Lower Alloways Creek Township. The collection of funds to pay for the credits will begin immediately and will result in approximately $100 million in subsidies for each of the plants per year for three years at the statutorily mandated rate of $0.004 per kilowatt hour.
If more money is collected than is needed, the additional funds will be returned to ratepayers, the board said. The board will reevaluate the program in three years. If the utilities receive additional funding via state or federal subsidies, those funds would need to be reconciled against the ZECs.
“We are pleased with the decision to award ZECs to PSEG to help support New Jersey’s primary supply of zero-carbon electricity,” PSEG officials said in a statement. “The BPU just saved the people of the State hundreds of millions of dollars in what would have been higher energy costs, thousands of jobs lost and tons of environmentally damaging air emissions. Our next step is to review the BPU’s order to better understand today’s decision in greater detail. We appreciate the BPU’s detailed review and consideration of PSEG Nuclear’s ZEC applications.”
