PSEG Still Looking for Subsidies to Help Keep Nuclear Fleet Afloat
'This needs to be fixed or the plants will close,' according to Ralph Izzo, head of PSEG
Public Service Enterprise Group is still talking with state lawmakers about financial incentives for its fleet of nuclear power plants, but it is not saying much about the discussions, although it is raising the prospect of the units closing.
With electricity prices depressed, the Newark company has been quietly lobbying policymakers to help its plants, much the way New York has approved subsidies to keep reactors in the state operating.
The talks have yet to produce any legislation in Trenton, but Ralph Izzo, the chairman, president, and CEO of PSEG, which owns three units in South Jersey, acknowledged Friday the company is “having extensive discussions’’ with policymakers.
Word of the discussions hasand some environmentalists who question why the public should pay to help run those plants, which benefitted from more than a decade of ratepayer support, including just paying off so-called stranded costs associated with deregulation.
“PSEG is clearly raising the rhetoric,’’ said Doug O’Malley, director of Environment New Jersey. “This is saber-rattling, trying to shake out subsidies for their nuclear fleet.’’
In a call with NJ Spotlight after the company’s fourth-quarter earnings call, Izzo repeated earlier statements that the nuclear plants were currently profitable but noted that may not be the case when the current contracts for the power they produce expire.
“That needs to be fixed or those plants will be closed,’’ Izzo said, the first time he has raised publically the possibility that some power generators have used to convince other states to subsidize the carbon-free electricity the plants produce.
New Jersey gets roughly half of the electricity it needs from nuclear plants, the only conventional power source free of greenhouse-gas emissions. The company is trying to convince officials of the benefits of nuclear, include its lack of air pollution, reliability, and importance to South Jersey’s economy, Izzo said.
In the past, Izzo has frequently called on the federal government to adopt a national policy embracing ways to reduce carbon emissions from power plants and still believes it is the best way to deal with global warming.
More recently, historically low natural gas prices have driven power prices so low that nuclear plants have found it hard competing in the deregulated energy market, causing owners to seek subsidies or get out of the business.
At its own earnings call last week, FirstEnergy repeated its intention to leave the competitive power business and close or sell its power plants, including nuclear units, unless Ohio consider reregulating the business.
Last year, Exelon agreed to buy nuclear reactors in upstate New York after the governor agreed towith ratepayer payments amounting to nearly a half billion dollars a year.
The low gas prices also contributed to a decision by PSEG to close two coal-fire plants in New Jersey this June. The company reported a write-off of $555 million related to the Mercer and Hudson plants closing on its Friday earnings call.