If and when Gov. Phil Murphy signs a controversial bill to subsidize nuclear power, out-of-state plants could be among the beneficiaries.
At least that is the view of Ralph Izzo, chairman, CEO, and president of Public Service Enterprise Group, the giant energy company that lobbied and pushed the subsidy bill through the New Jersey Legislature.
In a quarterly earnings call with analysts Monday, Izzo acknowledged out-of-state nuclear units would be eligible to receive the subsidies, a point critics of the bill occasionally made during the months-long debate on the legislation. They were largely ignored.
“The bill simply says that New Jersey wants 40 percent of its power supply by nuclear energy and it does not limit it geographically,’’ Izzo said, responding to a question from an analyst.
Among the nuclear units Izzo mentioned as potentially qualifying for the subsidies would be Peach Bottom in Pennsylvania, a unit half-owned by PSEG, as well as other nuclear plants in the state, Limerick and Susquehanna.
If so, it would mean not only would New Jersey ratepayers be paying for electricity that they subsidize in the state that is exported out-of-state, but also to companies located in other states.
Shuttering New Jersey nuclear
The nuclear subsidy legislation, passed easily by the Legislature earlier this month, is among the more contentious bills taken up by lawmakers in recent years. Without the subsidies, which could amount to up to $300 million a year, PSEG said it might have to shutter its three nuclear units in South Jersey because they no longer would be economical.
But critics argued the company never demonstrated that its plants were not profitable, as well as questioning why New Jersey customers ought to subsidize power that is delivered to out-of-state customers.
“It’s not helpful for New Jersey’s energy to be subsidizing out-of state corporations and out-of-state customers,’’ said Ev Liebman, associate director of AARP of New Jersey. “It’s the wrong way to build New Jersey’s economy.’’
Others also noted the irony of PSEG acknowledging what critics have said repeatedly.
“It’s been well-known for months that PSEG’s nuclear bailout bill would send money to generators outside of New Jersey, yet only now has the company conceded this could be true,’’ said Matt Fossen, spokesman for the New Jersey Coalition for Fair Energy, a group of rival energy companies and the Electric Power Supply Association.
Acknowledging the truth
“It’s incredibly rich that PSEG would deflect this point at every turn, just to acknowledge the truth yesterday — well after the proposal has gone through its main debate and deliberation,’’ he added.
Murphy has until early June to decide whether to sign the bill, although he is expected to do so. The bill is loosely tied to a companion measure that would ramp up New Jersey’s reliance on renewable energy by requiring 50 percent be produced by cleaner sources, such as wind and solar, by 2030. It also ramps up the state’s efforts to reduce how much gas and electricity customers use.
PSEG is expected to be a player in both of those areas, according to the earnings call.
When it comes to wind, Izzo indicated the company is more interested in building the transmission component of an offshore wind project than the actual wind farm. As NJ Spotlight reported earlier this month, the company has revived a partnership with Deepwater Wind to build a 200-megawatt offshore wind farm 16 miles from Cape May.
As for energy efficiency, Izzo suggested the company is prepared to make a new filing with the state Board of Public Utilities to help customers cut their bills by reducing energy use. To date, the company has spent more than $400 million on such programs approved by the agency, but the new filing is expected to dwarf previous petitions.
Izzo declined, however, to be specific, although not suppressing his enthusiasm. “We are just too excited not to tell you a lot more,’’ he said in a response to an analyst’s question.