Home>Highlight>BPU unanimously approves second round of $300 million nuclear subsidies

Salem and Hope Creak nuclear reactors.

BPU unanimously approves second round of $300 million nuclear subsidies

By Nikita Biryukov, April 27 2021 3:34 pm

The Board of Public Utilities unanimously re-approved roughly $300 million in public subsidies for three South Jersey power plants, prolonging a rate hike that could cost consumers roughly $70 each year.

The award under the Zero Emission Credit Program is meant to underwrite the cost of running the aging plants, which were profitable when the subsidies were initially approved two years ago.

Press play to hear a narrated version of this story, presented by AudioHopper.

Commission staff and an outside consultant hired to examine the deal said that’s not the case this time around, and the Public Service Enterprise Group (PSEG), which owns the three plants, again said it would shut the facilities down without public assistance.

PSEG and Exelon, which co-owns two of the plants, balked at recommendations by the consultant to reduce the size of the subsidy, an option not available in 2019, threatening it would shut down the facilities unless it received the full award, to the chagrin of some BPU commissioners.

“I hoped, perhaps a naïve hope, that after careful analysis of the extensive data submitted by the asset owners, all parties would be able to agree to a subsidy level that provided adequate support to the facilities and could be supported by basic accounting standards,” Commissioner Bob Gordon said. “That, unfortunately never happened. Instead, Public Service and Exelon have told us it’s all or nothing.”

“Apparently the legislature’s call for data-based decision making, months of analysis by various consultants and the preparation of voluminous reports by numerous parties were a meaningless exercise,” he said.

Gordon and other commissioners said they believed PSEG when it said the plants would close absent the full award.

Those closures could threaten Gov. Phil Murphy’s energy master plan, which calls for half of the state’s power to come from clean sources by 2030.

So far, nuclear power is the state’s greatest source of carbon-free electricity, accounting for more than 90% of such power. The three plants, the only ones remaining in the state, also provide about 37% of the state’s electricity.

Though the state is making investments in renewable energy sources, wind in particular, those sources have yet to bear fruit and will likely require years to increase their output, on top of sizeable capital investment.

If the plants were to close between June 1, 2022, and May 31, 2025 — the period of the renewed subsidy — carbon emissions would increase by about 13% over that time, Gordon said.

Though the board offered begrudging, if unanimous, support, the subsidy renewal was met with celebration from one of New Jersey’s most powerful Democrats.

“Without our nuclear plants, New Jersey risks backsliding on the carbon reductions we’ve worked so hard to achieve just as the need to address climate change and the demand for zero-carbon energy resources continues to grow,” said Senate President Steve Sweeney (D-West Deptford). “I commend the BPU for today’s decision, which serves the best interests of New Jersey’s customers, economy and communities.”

In 2019, the plants employed roughly 1,600 individuals in Sweeney’s district. On Tuesday, he said they accounted for roughly 4,500 jobs in Salem County and elsewhere in the state.

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