Nuclear Subsidy Bill Re-Engineered as Three Separate Measures

Nuclear power, clean energy, and offshore wind will each get dedicated bill, but all three will move together through the Legislature

Sen. Bob Smith (D-Middlesex)
Trying to break an impasse, lawmakers and the governor’s office have apparently agreed to jointly move three bills to subsidize nuclear power, promote clean energy, and revive an offshore wind project off Atlantic City.

The bills, expected to be introduced yesterday but not yet available, aim to advance a key priority of Senate President Steven Sweeney to prop up nuclear power plants in South Jersey, as well as enact significant parts of Gov. Phil Murphy’s ambitious clean-energy agenda.

Those issues were tied together in a single bill, but that proved too comprehensive, hugely controversial, and much too expensive to garner enough support in the Legislature. Advocates hope to push the separate bills through before lawmakers break for their budget deliberations at the end of this month.

Beyond forging new energy policies for the state for the next couple of decades, the legislation could impose billions of dollars in additional costs on utility customers. It may force ratepayers to pay $300 million in subsidies annually just to support nuclear power — and at least as much to keep the state’s solar sector growing.

To business lobbyists and consumer advocates, the price is too high in a state already saddled with some of the highest energy costs in the nation. They also question whether Public Service Enterprise Group, the owner of the plants, has proved its three nuclear units are in financial distress and need subsidies to keep them from closing.

No choice

Sen. Bob Smith, who has helped steer the bills through the Legislature, said the state has no choice. “We have a problem with nuclear energy in this nation, and not just New Jersey,’’ he said, citing the six plants that have already closed, soon to be joined by Oyster Creek in Ocean County. “There’s a problem.’’

Smith said the three bills would move together through the Legislature — in the Assembly Appropriations Committee on March 22 and both houses on March 26.

Some environmentalists are not happy, particularly having the clean-energy component still linked, however, tenuously with the nuclear bill, which is virtually unchanged from the original version, which died in the lame-duck session in January.

“The price of a clean-energy bill shouldn’t be a bailout for the nuclear sector,’’ said Doug O’Malley, director of Environment New Jersey.

Lights out

“Before we give PSEG a billion dollar subsidy for nuclear power, shouldn’t we make sure the lights stay on when we have a storm?’’ asked Jeff Tittel, director of the New Jersey Sierra Club. A snowstorm last week left hundreds of thousands of customers of Public Service Electric & Gas, a subsidiary, without power, many for days.

But other environmentalists were happy the clean-energy portion of the bill is moving. It would establish aggressive new goals to have at least 50 percent of the state’s electricity come from renewable sources, such as solar and offshore wind, by 2030.

“This clearly puts us on a path toward 100 percent clean energy by 2050,’’ said Ed Potosnak, director of the League of Conservation Voters of New Jersey, referring to a goal set by Murphy during his gubernatorial campaign.

The latest version of the clean-energy bill makes several changes in the state’s solar program, including phasing out an existing system for financing solar projects by June 2021. Even solar developers acknowledge the current system is far too expensive to ratepayers and needs to be changed.

“It’s a fair bill that will keep the industry working through a transition period,’’ said Fred DeSanti, a lobbyist for solar developers. “We need to create a new platform so it will be less expensive to ratepayers.”

Changing caps

The new bill also revises a cap designed to rein in costs to subsidize solar for ratepayers. The rationale is to limit future costs utility customers pay to promote solar energy in New Jersey.

More significantly, it exempts offshore-wind projects from being included in that cap, a provision clean-energy advocates say would have undermined aggressive goals to develop the technology. Murphy campaigned on a goal to develop 3,500 megawatts of offshore wind in New Jersey. No offshore wind is operating in the state, and only one project is online in the United States.

Offshore wind farms are projected to be much more expensive than conventional ways of producing electricity in the short term, a concern that led the Christie administration to block efforts to promote the technology.

Finally, a third bill would seek to revive the Fishermen’s Energy offshore wind project three miles off Atlantic City. The state Board of Public Utilities repeatedly blocked the project, saying it was not cost-effective. The bill would eliminate a requirement that the project be cost-effective to be approved, according to Smith.

The Fishermen’s Energy project, while small and basically a pilot, would give the Murphy administration, a way to demonstrate it is moving ahead with one of the technologies it touted during the campaign.