Op-Ed: Why New Jersey needs to provide economic support for its nuclear plants

Rick Thigpen | September 21, 2020 | Opinion, Energy & Environment
PSEG spokesman makes the case that nuclear is ‘a critical pillar’ in the state’s clean energy ambitions
Credit: PSEG
Rick Thigpen

New Jersey is familiar with being on the front lines of environmental challenges. It’s no coincidence that we were one of the first states to create a cabinet-level Department of Environmental Protection. We are also the state that gave birth to the federal Superfund law, drafted by then-U.S. Rep. Jim Florio to deal with the cleanup of hazardous substances released into the environment. Our newest challenge, and perhaps the toughest yet, is climate change.

Tropical Storm Isaias and Hurricane Laura are vivid reminders of what climate scientists mean by stronger, more extreme weather that is being caused by our planet’s changing climate. As noted by C2ES, Yale University and others, hurricanes will grow far more costly without action. As a coastal state with a highly developed shoreline, New Jersey is extremely vulnerable to potential damages caused by rising sea levels.

Rather than sit on our hands, we need to answer the call — reduce our carbon footprint or face the consequences. On behalf of our children, this is a fight worth having.

Thankfully, in New Jersey, we already get nearly 40% of our electricity from a carbon-free source: nuclear energy. Nuclear provides more than 90% of the carbon-free power generated in New Jersey, making it a critical pillar in the state’s clean energy ambitions. Along with offshore wind and solar, nuclear makes up New Jersey’s Carbon-Free 3, and all are needed to get the Garden State’s electric supply to net-zero by 2050.

New Jersey’s clean energy agenda has once again placed us on the front lines. Despite the many benefits nuclear energy provides, its continued service in New Jersey is not guaranteed. As long as policymakers in Washington continue to refuse to recognize the costs of carbon when setting wholesale electric market prices and oppose state support for carbon-free generation, fossil fuels will be the lowest-cost option to generate electricity. Nothing would jeopardize New Jersey’s clean energy future more than standing by while productive nuclear plants shut down for lack of policy support.

Reducing carbon emissions

Three years ago, New Jersey lawmakers took action to prevent nuclear plants serving the state from retiring prematurely due to insufficient revenues from energy markets. This Zero Emissions Certificate (ZEC) law, which requires applicants to submit detailed financial data to the Board of Public Utilities to demonstrate the need for financial support, is the reason New Jersey continues to enjoy the benefits of nuclear power. Our critics have argued this law amounts to a subsidy of PSEG’s nuclear plants. And PSEG’s plants do benefit from this support. Have no doubt, without this law, Washington policies favoring fossil fuels would have forced them to close.

Today, the need to generate as much carbon-free electricity as possible has only grown more urgent. Soon, New Jersey will decide whether to continue to provide support for these nuclear plants, which generate enough electricity to power 3.8 million homes and also help avoid 14 million tons of carbon emissions every year — the equivalent of taking 3 million cars off the road. Never forget, it is cheaper for ratepayers to keep these plants open than it is to close them.

Without these nuclear plants, the state risks backsliding on carbon reductions we’ve worked so hard to achieve just as the need to address climate change and the demand for zero-carbon energy resources is continuing to grow. We cannot afford to move backward.

We know what happens when nuclear plants close. Oyster Creek was New Jersey’s smallest nuclear plant when it shut down permanently in October 2018. During the following year, more than two-thirds of the electricity generated to replace Oyster Creek’s production came from the increased use of New Jersey’s natural gas-burning power plants. The rest was supplied by out-of-state coal and natural gas. The result was an additional 3.1 million tons of carbon released into the air.

By contrast, New Jersey’s 3,500-megawatt Salem and Hope Creek nuclear plants are five times larger than Oyster Creek — which would magnify the carbon emissions impact if they were to close.

Why do we need to provide economic support for clean energy? Because — absent a nationwide price on carbon that exposes the real environmental costs — gas-fired generators will set an artificially low price for power below the costs to run a nuclear power plant. It doesn’t take an economist to see that it doesn’t make financial sense to run a nuclear power plant when its energy revenue is being set by a gas plant at a market price that is half of the cost to run the nuclear plant.

Unless, of course, you value its carbon-free electricity and the essential role it plays in protecting the environment and fighting climate change.

Nuclear plans being retired across the U.S.

And look around: The economics of nuclear energy are struggling across the U.S. — this issue is not unique to New Jersey. Eleven U.S. nuclear reactors have been retired since 2013, including Oyster Creek. Combined, they represent approximately 8,500 megawatts of generating capacity — equal to nearly 14 Oyster Creek plants.

Around the U.S., one in every three remaining nuclear plants are at risk for early retirement. Recently, Exelon announced plans to close two nuclear plants in Illinois with decades left on their operating licenses, even as they continue to generate power safely, reliably and efficiently. Why? Due to energy markets that fail to take account for environmental impacts, plants that burn fossil fuels are not held accountable for the environmental damage they cause which gives them an unfair competitive advantage compared to nuclear plants producing zero carbon emissions.

New Jersey’s ongoing support for nuclear energy is a wise investment in clean energy. According to a recent Rocky Mountain Institute report, New Jersey cannot meet its ambitious clean energy goals without nuclear energy in the mix, unless we’re ready to spend billions more.

At PSEG, we’re committed to supporting our state and doing what is in the best interests of our customers and communities. Working together, we can ensure the state is able to produce the electricity we need to power our homes and businesses without producing the carbon emissions we don’t.

If you believe that climate change is not only a global challenge, but also one that hits New Jersey particularly hard, then the battle to preserve New Jersey’s nuclear plants is one we can’t afford to lose.

Today, our shared priority is to preserve nuclear energy as an important part of New Jersey’s clean energy mix. To fight climate change, we’ll need as much carbon-free energy as we can make and to reduce our overall energy usage. Preserving New Jersey’s clean energy agenda at the lowest possible cost is worth fighting for.