Public Service Enterprise Group is backing a plan by the Trump administration to revive the nuclear industry, but it is keeping options open in seeking a state or other solution to keep plants from closing, according to its top executive.
In an earnings call, PSEG’s Ralph Izzo, its CEO, president, and chairman, called for approval of a proposal by the U.S. Department of Energy to prevent premature retirement of nuclear and coal units as an intermediate measure to help maintain fuel diversity and reliability of the power grid.
Izzo, and the company in a filing submitted to the Federal Energy Regulatory Commission, also are seeking a more long-term solution that addresses what they argue are problems in the competitive energy marketplace that undervalue certain baseload power plants.
The issue is surfacing in New Jersey, where PSEG has been lobbying lawmakers to approve financial incentives to keep its three nuclear units open, which company executives say face economic pressures from cheaper power from natural-gas plants. New York and Illinois have passed measures to have ratepayers subsidize nuclear plants in those states.
“A strong legal foundation has been established for state action,’’ said Izzo. During the call with analysts yesterday, however, he was relatively oblique about the status of negotiations here in New Jersey, where any incentives would have to be approved by the Legislature.
“We’re just in a series of conversations,’’ Izzo said, when asked how far along are the discussions in New Jersey. No legislation to provide a boost to the nuclear units has been introduced yet in the state, although rumors of a draft bill have been circulating for months.
In Washington, the DOE proposal was met with mostly negative comments earlier this month from environmental groups, much of the energy industry and clean-energy advocates. The proposal is supported by nuclear proponents and the coal sector.
PJM Interconnection, the operator of the regional power grid, also called the plan unworkable and said it would undermine competitive energy markets. The grid operator is working on its own proposal to deal with pricing problems in the market.
In other matters, Izzo said the company’s utility, Public Service Electric & Gas, would file for a modest rate increase by next month. The rate filing will also include a decoupling provision, a way to ensure the utility brings in enough revenue to maintain its infrastructure. Many states have adopted such provisions, which are backed by environmentalists who view it as crucial to encouraging utilities to invest in energy-efficiency programs.
If approved, PSE&G is likely to ramp up its proposed investments in energy efficiency, which have amounted to about $400 million to date.