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PSEG Nuclear Subsidy Bill Gets Behind-Closed-Doors Makeover

Revamped legislation said to have more to do with clean energy while still addressing nuclear

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It wasn’t a legislative day in Trenton yesterday but, apparently, there was a lot of talk behind closed doors about how to make an unpopular nuclear subsidy bill more palatable. It appears to have resulted in a new and more comprehensive bill.

The discussions focused on aligning the legislation more closely with the goals of clean-energy advocates and Gov. Phil Murphy, and less specifically with purported problems facing nuclear plants in New Jersey, according to various sources.

The amended bill, incorporating minor modifications to the nuclear aspect of the measure, is expected to be presented to the Senate Environment and Energy Committee when it convenes for a hearing this morning. While many details remain unclear, the measure is said to include a provision to help promote offshore wind, a priority of Murphy and Senate President Stephen Sweeney, as well as environmentalists.

Dan Bryan, a spokesman for Murphy, said the governor’s office does not comment on legislation until it gets to his desk. “But his statements on the policy behind the nuclear bill stands,’’ Bryan said. In the past, Murphy has insisted the nuclear bill include clean-energy components.

A spokeswoman for Sweeney, the sponsor of the bill and primary force behind the legislation, did not respond to questions from NJ Spotlight. The three nuclear units are in his legislative district in South Jersey.

The latest maneuvering on the bill, which became known only after rumors began circulating in Trenton at dinnertime, occurred on a day when records obtained by the Associated Press revealed PSEG had negotiated many elements of the bill with former Gov. Chris Christie’s staff. That bill, however, died in the lame-duck session before Christie could sign it.

PSEG, the owner of the nuclear plants, repeatedly has vowed to open its books to justify a lucrative subsidy for its three nuclear units, but correspondence obtained by the AP suggests otherwise.

Keeping secrets

According to records obtained by AP, the company worked with Christie’s staff to revamp legislation to add more stringent financial confidentiality language to prevent public disclosure of sensitive financial information.

The records and the correspondence were disclosed by the organization in a story that ramped up criticism from opponents of the bill that the company is not being transparent about its efforts to secure financial incentives from ratepayers to keep the plants open.

The disclosure of the cooperation between the governor’s office and PSEG on the bill is not all that surprising, but it does bolster complaints that the company has failed to demonstrate a need for what critics describe as a bailout. The bill would provide up to $300 million a year in ratepayer subsidies.

‘Asking for money’

“They are coming to us asking for money,’’ said Stefanie Brand, director of the New Jersey Division of Rate Counsel, which represents consumers and businesses in utility cases. “It’s incumbent on them to show they need it. At the same time, they are trying to keep information private. It’s very, very disturbing.’’

In the records obtained by the AP, PSEG’s Tamara Linde, the executive vice president and general counsel, sent language in a draft bill to the governor’s deputy chief counsel, adding “some more stringent language on confidentiality to ensure that the Legislature, not the (Board of Public Utilities) is determining the confidential nature of the financial information.’’

When asked about the language, Paul Rosengren, a spokesman, defended the company’s efforts to keep some confidential financial information from the general public.

“We are willing to open our books to the BPU and whichever consultant they choose to retain,’’ he said. “To open it to the public will put us at a severe disadvantage. Our competitors would find out what our hedge-fund strategy is, what our bidding strategy is, and actually work to make our financial situation worse.’’

The company has said it needs financial incentives similar to those New York and Illinois have handed out to nuclear plants in their states to avert the units premature closing. PSEG’s three units in South Jersey provide about 40 percent of the state’s electricity.

Cheap natural gas poses economic challenges to nuclear plants across the country. PSEG argues the state should not allow the plants to close because they provide reliability to the power grid, carbon-free electricity, and that costs would rise to consumers if the state had to replace that power.

But the latest disclosures, coming on the heels of the company’s own filing indicating its power unit would receive a one-time, noncash benefit of $650 million as a result of the Trump tax cut, fueled discontent with the company.

“It’s disturbing to read about back-room deals in the highest levels of government,’’ said Ev Liebman, associate director for AARP of New Jersey. “It adds up to our belief that this piece of legislation is not balanced and strongly favors with PSEG.’’

Dennis Hart, executive director of the Chemistry Industry Council of New Jersey, agreed. “If you have a process defined by PSEG to outline just how much money they want without any independent verification, it’s not an open process,’’ he said.

Paul Patterson, an energy analyst with Glenrock Associates, said he did not find it unusual, however, that PSEG had a hand in writing the bill. “It would be more surprising if they didn’t,’’ he said.

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