Recently, I encouraged Atlantic City Electric/Exelon and the state of New Jersey to embrace Starwood Energy’s plan for the early retirement of the last two coal plants in New Jersey — at no additional cost to ratepayers, resulting in a 4-million-ton reduction in CO2 emissions.
Consistent with Gov. Phil Murphy’s call for a stronger and fairer New Jersey, Starwood, the owner of the last two coal plants, has proposed a plan to permanently retire both plants. These plants, in Logan and Carney’s Point, currently sell their electric output to Atlantic City Electric Co. (ACE, an Exelon company) under contracts extending through 2024. The plants would be closed by the end of 2021, and the remaining supply obligations would be met with power from the PJM market at the existing contract price, with no incremental cost to ratepayers.
Intervening developments make Starwood’s retirement proposal even more compelling today.
First, the August 2021 report from the UN Intergovernmental Panel on Climate Change has heightened the urgency of reducing carbon emissions. “It is unequivocal that human influence has warmed the atmosphere, ocean and land. Widespread and rapid changes in the atmosphere, ocean, cryosphere and biosphere have occurred. Evidence of observed changes in extremes such as heatwaves, heavy precipitation, droughts, and tropical cyclones, and, in particular, their attribution to human influence, has strengthened,” the report states.
Second, the contractual purchaser of the plants’ output (ACE/Exelon) has enhanced its public commitment to reducing carbon emissions: “It is Exelon’s position that there is compelling scientific evidence that increasing greenhouse-gas (GHG) concentrations in the atmosphere are causing climatic changes and that the energy industry has a significant role to play in addressing this issue.” The company has committed to “drive overall emissions reductions at the grid level.”
Third, under Murphy’s leadership, New Jersey has issued its Climate Change Resiliency Strategy, strengthening its position on carbon: “Climate change is the most urgent, and complex, long-term threat society faces. Climate change poses an immediate and severe threat to the environment, human health and welfare, security, and the economy — in New Jersey, across the United States, and around the world.”
Fourth, favorable market conditions have allowed Starwood to enhance the monetary benefits of its proposal. Whereas Starwood previously proposed to make a $7.5 million contribution to benefit ratepayers, Starwood has increased that amount to $25 million, all without any increased costs to the ratepayers or any “buyout” payment, and with Starwood assuming all associated costs of retiring and decommissioning the plants.
Time, however, is of the essence, while market conditions remain favorable.
ACE and Exelon have been unwilling to accept any of Starwood’s no-cost proposals, despite Exelon’s ostensible commitment to reduce carbon emissions.
Starwood’s no-cost carbon elimination proposal is even more important in view of the business community’s concerns over the cost of carbon reduction plans. Regardless of the costs of other important efforts, Starwood is offering a major CO2 elimination measure that imposes no additional costs to any party.
Concerned citizens and ratepayers should call upon Exelon and Atlantic City Electric to act now and in accordance with their own public climate-change policy as well New Jersey’s climate policies and implement Starwood’s proposal to permanently close the last two coal plants in New Jersey.