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Fuel Diversity: Guaranteeing Reliable, Affordable Energy

While the low price of natural gas is welcomed by consumers, we need to be sure that we do not become too dependent on one fuel to heat our homes and power them with electricity

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Credit: PSEG Power

As days grow colder, many New Jersey families are relying on natural gas to keep their homes warm and comfortable.

Increasingly, in many parts of the United States, we’re also turning to inexpensive, abundant natural gas to generate the electricity that powers our homes and businesses.

In New Jersey, we traditionally have relied on a diverse mix of fuel to generate electricity — about half our energy has come from nuclear, with the remainder split between natural gas and coal, and more recently a small but growing amount of solar (currently in the range of 4 percent).

But new technology for drilling has opened up large quantities of natural gas. The resulting plunge in natural-gas prices has put pressure on other energy sources. Coal, which a decade ago provided one-fifth of New Jersey’s energy, is heading to zero. Many coal plants have closed or announced that they will close — including PSEG Power’s two coal plants in New Jersey.

Meanwhile, low electricity prices are also putting pressure on the nuclear industry. Nationwide, eight nuclear plants have closed or announced they are closing.

While the low price of natural gas is certainly welcomed by consumers, we need to be concerned that we do not become too dependent on just one fuel to both heat our homes and power them with electricity.

The adage that you should not put all of your eggs in one basket certainly applies here.

Gas supplies can be disrupted. Recently, an accident along a gas pipeline in Pennsylvania impacted other lines in the same corridor, stopping 1 billion cubic feet of natural gas from reaching its mid-Atlantic destination for several days. Luckily, the accident occurred during spring, a low-use time for natural gas. Had it occurred in the middle of a cold snap (when the system is already stretched thin) it could have led to rolling blackouts or interruptions in gas delivery to homes and businesses.

If New Jersey’s nuclear plants were forced to close under economic pressure and be replaced by natural-gas plants, customers would be at a much greater risk for a delivery disruption caused by accidents or severe weather. And it is simply technologically infeasible – not to mention cost-prohibitive – to think we can replace nuclear completely with renewables.

Growth in demand for natural gas also requires upgrades to the delivery system. The current gas system was built to supply heat for homes. If we were to replace nuclear with natural gas, it would require a much more robust natural gas delivery system — with the construction of additional pipelines throughout the state.

PSEG Power’s nuclear plants are not currently at risk, but the economic pressure on those plants is growing. It is important that we understand the implications of ongoing changes in the electricity marketplace and put safeguards in place to ensure that we do not unduly increase reliability risks or other unintended consequences.

Preserving our nuclear plants helps preserve a diverse energy portfolio, providing for a more reliable, affordable energy supply.

Bill Levis is president and chief operating officer of PSEG Power.

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