Lawmakers Try Yet Another Version of Contentious Nuclear Subsidy Bill

Intended to prop up PSEG nuclear plants, measure has gone through drastic revisions without gaining traction with legislators

Salem nuclear power plant
The Legislature will try to advance a controversial nuclear subsidy bill again this week — at least the fourth version of the measure drafted this year.

Designed primarily to prop up nuclear power plants operated by Public Service Enterprise Group, the legislation has gone through drastic revisions in a bid to win enough backing among lawmakers to win legislative passage. So far, it has not worked.

Many of the changes are aimed at addressing concerns raised by Gov. Phil Murphy, who wants the measure to focus more heavily on promoting his clean-energy agenda. In doing so, however, it bolstered critics’ fears that costs to utility customers — who will subsidize those efforts and pay to keep the nuclear units open — will soar.

The nuclear subsidies alone could cost $300 million annually, excluding what ratepayers may have to ante up to pay for solar and energy-efficiency projects, other goals espoused in the bill.

Ramping up rates

“What we end up with may be a $5 billion or $8 billion bill,” said Stefanie Brand, director of the New Jersey Division of Rate Counsel, Friday morning at a conference on nuclear energy before the latest version became public. “This is going to substantially increase rates.”

The legislation ramps up the state’s reliance on renewable energy. It will require 35 percent of the state’s electricity to come from renewable sources, such as solar and offshore wind, by 2025 and 50 percent renewables by 2030.

The new legislation, made public late Friday afternoon, will be discussed at a joint meeting of the Senate Budget and Assembly Telecommunications and Utilities Committee on Thursday. There also is a similar, but not identical, version in the Assembly on the agenda.

The new bill appears to leave much of the nuclear provisions untouched. It establishes a zero-emission credit for eligible nuclear units and retains a $0.004 per kilowatt hour charge for the credits. The credits would, for the first time, value the environmental benefits of the carbon-free electricity produced by nuclear power, which supplies more than 40 percent of the state’s electricity.

Opposing the subsidies

Consumer advocates, business groups, and others oppose the subsidies, arguing the company has not proven its plants are not economically viable and the incentives will spike utility bills.

PSEG has pushed for the incentives, saying nuclear plants are not properly rewarded for providing electricity that does not increase global warming, nor for providing a diverse fuel source that enhances the reliability of the power grid. Without financial help, the plants could close in a few years, the company said.

Critics say the legislation is not the way to develop energy policy.

“The whole approach is to mandate it and then study it later,” said Steven Goldenberg, an attorney representing large energy-users in the state. “That kind of approach is problematic. This is the regulatory equivalent of ready, shoot, and aim.”

The state Board of Public Utilities would be responsible for determining what nuclear units receive the credits, as well being directed to do a number of studies, including one on the effectiveness of the zero-emission credit program 10 years after its enactment.

The agency also would be required to overhaul the state’s energy-efficiency program and study how to promote and encourage the development of 600 megawatts of energy storage by 2021, and 2,000 megawatts by 2030. Energy storage is crucial to accelerating solar and wind energy, both of which are intermittent sources of power.

Some environmentalists are unconvinced. “Everything in this bill is an excuse for the nuclear subsidies, which are not needed,” said Jeff Tittel, director of the New Jersey Sierra Club. “They are shortchanging renewable energy as a cover for nuclear power.”

The state’s solar sector, irate about earlier versions of the bill, appears to still oppose the latest version.

“It’s a disaster for solar,” said Lyle Rawlings, founder of Advanced Solar Products of Flemington. A sector that is building up to 375 megawatts of solar capacity annually would see it slashed by about 85 percent, Rawlings said. “That essentially means a gradual solar shutdown.”

“We can’t sustain 7,000 jobs on 50 megawatts a year,” said Fred DeSanti of the New Jersey Solar Energy Coalition, referring to the new solar capacity that would be built under the legislation.

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