The nuclear subsidy bill that died in the lame-duck session a few weeks ago did not stay buried very long.
The controversial bill providing lucrative subsidies to keep three nuclear units operated by Public Service Enterprise Group afloat is up for a vote in a key Senate committee on Thursday.
The revival of the bill is less surprising than its suddenness — given that Gov. Phil Murphy’s incoming administration had expressed qualms about the legislation not including clean-energy components along with providing a safety net to the nuclear plants.
Senate President Steven Sweeney reacted angrily when the bill faltered, promising to bring it back quickly in the new session, but few expected it to resurface this soon, especially opponents.
“This bad idea obviously needs a good wooden stake,’’ said Steven Goldenberg, an attorney representing large energy users and part of a coalition of business groups, consumer advocates, and environmentalists fighting the proposed subsidies.
The fact the bill (S-877) is identical to one that Murphy appeared to help torpedo a few weeks ago might also reignite speculation that the incumbent Senate President and new governor are not on the same page, or maybe even the same book.
PSEG caught napping
It also appeared to take PSEG by surprise. In an artfully worded statement, the Newark company said, “We understand that a nuclear bill will be considered by the Senate Environment & Energy Committee on Thursday. This is a continuation of the dialogue on this critical issue and we believe that avoiding the premature closing of the nuclear plants serving New Jersey is consistent with Gov. Phil Murphy’s clean energy agenda.’’
PSEG said the need to protect nuclear energy remains urgent. “We encourage the Legislature to move quickly and look forward to working with the administration and Legislature to bring about a clean energy future that includes nuclear,’’ the statement concluded.
Jeff Tittel, director of the New Jersey Sierra Club, was not as diplomatic about the quick posting of the identical bill. “The Legislature is rushing this forward without having any consideration of what the Murphy administration thinks,’’ he said. “They are telling the governor we don’t care what you think.’’
The governor’s office did not respond to a request for comment.
$300M annual subsidy
The bill would provide up to $300 million a year in subsidies paid by ratepayers to the nuclear units if the state Board of Public Utilities determines the plants are in economic distress. Nuclear plants across the nation face challenges because of cheap natural gas, leading to the premature closing of at least six nuclear facilities.
Without some sort of financial incentives, PSEG has threatened to close the three units, which the company claims could turn unprofitable within the next two years. “The need to act is urgent,’’ Sweeney wrote in an op-ed published Sunday in the Star-Ledger, “it is why I will push for enactment early this year.’’
But critics argue the company has yet to prove its case, citing its recent disclosure in a financial filing that PSEG Power, the operator of the plants, stands to gain from a one-time, noncash benefit of between $550 million to $650 million from the Trump administration tax plan enacted last month.
“It is to be expected,’’ said Paul Patterson, an energy analyst at Glenrock Associates in New York City. “Given the economics of the industry, it is not surprising we’re seeing it in New Jersey as well.’’