Increase on your energy bill sticking around 4 more years to keep N.J.’s nuclear plants running
New Jersey energy customers can expect an increase on their electric bills to stick around after the state Board of Public Utilities on Tuesday approved a second round of subsidies for three aging nuclear power plants.
The board voted unanimously to award the maximum amount of subsidies — about $300 million annually — to PSE&G and Exelon Generation, the operators of the South Jersey plants.
The board had to decide whether or not it would give zero emissions credits to PSE&G, which insists it will have to shutter the plants without help. Critics have argued that the company does not need the subsidies to keep the plants afloat, and should take the financial hit rather than pass it on to customers.
The nuclear plants produce 90% of the state’s carbon-free energy and around 40% of the state’s total energy. Wind and solar, other clean energy options, are costly and slow to develop. Without nuclear energy, New Jersey may be forced to turn back to energy sources that produce carbon emissions.
“Were these plants to close, we would lose the single largest sources of the state’s clean energy supply, and be forced to make up that supply with sources such as fossil fuels,” said Joseph Fiordaliso, the president of the board.
The plants include Salem 1 and 2 reactors owned by PSE&G and Exelon, as well as the Hope Creek Nuclear Generating Station owned solely by PSE&G. All are in Lower Alloways Creek in Salem County. The subsidies approved Tuesday will run from June 2022 to May 2025 and amount to the maximum allowed under a 2018 law that created the subsidies.
The program came alongside aggressive clean energy goals set by Gov. Phil Murphy. He wants New Jersey to use use 50% clean energy by 2030.
Wind and solar won’t get New Jersey there alone, but the nuclear plants can help, their supporters say.
Awarding the subsidies in 2019 proved controversial, and this time around was no different. There’s no guarantee from PSE&G that it will keep the plants open upon receiving the subsidies.
This won’t be new money on customers’ bills, but a continued rate hike. PSE&G first won the subsidies in 2019. The cost averages about $3 a month for the typical residential customer, according to the company. Other estimates put the cost at $70 annually, and as high as $1 million for large businesses.
While all commissioners on the board voted in favor of the subsidies, some expressed concerns that PSE&G insisted it needed the maximum subsidy amount, calling it an unnecessary “all-or-nothing approach” to the problem.
Bob Gordon, one of the board’s commissioner, said shutting down the plants could lead to a 13% spike in carbon emissions. The poor air quality in parts of the state concern him, he said, but so does the increase put onto residents.
“As much as I would have preferred a lower subsidy level, I do not want to shut down nuclear power in New Jersey,” he said.
Tuesday’s vote came on the heels of a state appellate court decision. The New Jersey Division of the Rate Counsel sued two years ago, arguing that the subsidies were not needed to keep the plants open. A state appellate court in March upheld the 2019 board decision. The Rate Counsel has asked the state Supreme Court to weigh in on the decision.
PSE&G applauded the decision.
“The BPU’s actions today helped the environment, saved jobs and avoided higher energy costs,” the company said in a statement. “We appreciate the BPU’s detailed review and consideration of PSEG Nuclear’s ZEC applications.”
Jeff Tittel, director of the New Jersey Sierra Club, blasted the decision. The state’s Energy Master Plan counts on keeping the nuclear plants in play until 2050, far longer their usual lifespan. In that time, New Jersey energy customers could pay as much as $10 billion if the subsidies continue, Tittel estimates.
“This money should be going into revamping solar and offshore wind to create clean, renewable energy and create new green jobs,” Tittel said in a statement.
“This unnecessary nuclear subsidy undermines our progress with renewable energy. More importantly, it will block us from reaching Governor Murphy’s 100% renewable energy goal by 2050. We will never be able to diversify our energy portfolio if we have to subsidize nuclear energy forever.”
Our journalism needs your support. Please subscribe today to NJ.com.