For the past 26 years, Atlantic City Electric (ACE) customers have been contractually forced to pay for New Jersey’s last two dirty, polluting coal-burning plants. Last year alone, the contracts, which end in 2024, were estimated to cost ACE ratepayers $105 million. Families and businesses across the state are feeling the economic impact of the pandemic. Replacing these outdated expensive coal plants could provide badly needed savings in a time of crisis.
ACE customers could start saving money now if the majority owner of the coal plants, private equity firm Starwood, and ACE can reach a good deal that could be approved by the New Jersey Board of Public Utilities to retire the coal plants and focus on advancing cleaner energy. Starwood has put an offer on the table to shut them down at the end of this year, with $7.5 million in direct benefits to ACE ratepayers.
That is a good start, and such an agreement could not only provide a measure of immediate relief to customers but help communities in New Jersey breathe easier and reduce the state’s health- and climate-damaging pollution. In 2017, these last two dirty coal plants were responsible for more than 10% of climate pollution from New Jersey’s power plants. Starwood estimates shutting them down would reduce climate pollution by nearly 4 million tons through 2024. They are by far the largest sources of health-damaging sulfur dioxide pollution from power plants in the state. Starwood and ACE reaching a deal that can be approved by the BPU could eliminate this significant amount of pollution and the associated health risks that impact vulnerable frontline communities.
Yielding millions more in savings
However, replacing these dirty coal plants now with a focus on clean energy would deliver many more millions in total potential savings annually over the next three years than just that. That could be more fairly split up between Starwood, consumers, workers and the communities, yielding benefits for everyone. The coal plant owners could use their portion of the savings to remediate the sites, including toxic coal ash; provide steam heat to neighboring chemical plants, and provide a return to their investors. It’s crucial that any deal reached also delivers a meaningful transition plan with benefits for impacted workers, the communities who have hosted these polluting plants, and ACE ratepayers who have paid for these plants for decades.
This may be the last chance to make a deal: Since the contracts will end in 2024, the last two coal plants in New Jersey will likely shut down then anyway. The only thing keeping ACE customers from saving money sooner, and all of us breathing a little bit easier, is Starwood and ACE making a fair deal that shares the savings equitably, instead of sending millions in hard-earned money out of state for the next three years and leaving us with the pollution. If they don’t go back to the table and reach an agreement that the BPU can approve, everyone loses. Maybe Gov. Murphy can bring them together to make a deal.