A nuclear bailout bill that appeared to be on a fast-track for approval in New Jersey before Gov. Christie departs office was abruptly derailed late Wednesday, much to the relief of critics, who said it would force consumers to subsidize a profitable business.
“This is a major victory for consumers,” Evelyn Liebman, AARP New Jersey’s director of advocacy, said in a conference call with reporters Thursday. She and other advocates lauded Assembly Speaker Vincent Prieto (D., Hudson) for declining to schedule the matter for a vote before a lame-duck session of the Legislature concludes next week.
The bill would have provided about $300 million in annual support for nuclear power through higher statewide electric rates, primarily benefiting Public Service Enterprise Group Inc., the powerful Newark energy company that operates the nation’s second-largest nuclear complex, in Salem County. PSEG also owns that state’s largest utility.
The bill would have added 0.4 cents per kilowatt hour to customer bills to support nuclear power, or about $36 a year for a customer with a monthly bill of 750 kilowatt hours.
New Jersey is the latest jurisdiction to consider a rescue for the embattled nuclear industry, which is under pressure to compete against a new deployment of high-efficiency natural-gas power plants. Pennsylvania lawmakers are also expected to take up some kind of measure to prop up the nuclear industry after Exelon Generation announced plans last year to prematurely retire Three Mile Island Unit 1 in 2019, absent state relief.
An embittered Stephen M. Sweeney, the powerful Senate president who sponsored the bill in the upper house, said in a statement he was “downright angry” at the Assembly’s refusal to take up the measure, and blamed the failure on Speaker Prieto, as “yet another example of his valueless word.”
Sweeney also singled out Gov.-elect Phil Murphy, who is set to take office Jan. 16. Murphy said through a spokesman Thursday that he planned to review a nuclear rescue as part of a larger effort to address clean energy.
“If the governor-elect has concerns with the legislation, then that is news to me, because his transition team has had the bill for over a month, and there has been no expression of concern or desired changes,” said Sweeney, whose South Jersey district includes the nuclear station.
The urgency of New Jersey’s legislation puzzled industry experts because PSEG acknowledged that its two Salem reactors and the adjacent Hope Creek plant are not in immediate financial peril. But PSEG had argued that support was needed sooner rather than later to ensure the survival of its three-unit nuclear complex on Delaware Bay, which employs 1,500 people.
The PSEG-sponsored website to promote the issue, NJNeedsNuclear.com, was temporarily decommissioned Thursday, though its advertisements still aired on television.
“The fate of New Jersey’s nuclear generation is an urgent concern,” PSEG spokesman Michael Jennings said in an emailed statement Thursday. “PSEG will continue to educate New Jersey’s legislators and policymakers on the economic threat facing the nuclear plants that serve our state — and the risk of increased air pollution, reduced resiliency, lost jobs, and higher energy bills.
“These risks warrant greater attention, as well as action that extends beyond the boundaries of any legislative calendar.”
PSEG shares traded sharply lower Thursday on the New York Stock Exchange, and closed at about $49.25, down 2.9 percent. Shares of Exelon Corp., which owns about 28 percent of the New Jersey complex’s 3,468-megawatt generation capacity, also closed lower, at $38.51, down 1.4 percent.
Critics were alarmed at the speed at which the measure was moving through the Legislature. Though there had been previous hearings addressing the industry’s plight, the legislation itself was unveiled Dec. 15, and opponents had only a few days to analyze its impact before Assembly and Senate committees approved the measures.
“There was never any good reason to rush this bill through lame duck,” said the AARP’s Liebman. “And now those of us who pay the bills and our elected representatives can take the time and approach this complex issue with all the facts and the analyses we need to determine the best course for our state.”
Some kind of nuclear bailout still appears to be in the making, however.
Incoming Gov. Murphy, a Democrat who campaigned on a clean-energy slate, signaled that he wants to address nuclear’s future in conjunction with other zero-emission energy sources. Nuclear energy, which provides about half of the state’s power, is the nation’s largest source of energy that does not emit greenhouse gases.
“Governor-elect Murphy is committed to building a 100 percent clean-energy economy in New Jersey by 2050, and he believes that our existing nuclear facilities remain a vital link to the future,” Dan Bryan, Murphy’s spokesman, said in a written statement. “He looks forward to working with all parties in the Legislature to pass a bill that includes nuclear and clean-energy components.”
Opponents, including New Jersey’s ratepayer advocate, accused the bill’s supporters of taking PSEG’s word about the need for an immediate bailout.
“I think it’s a terrible mistake,” Stefanie Brand, the head of the New Jersey Division of Rate Counsel, said on Tuesday, when the bill’s passage seemed certain. “We have really not adequately examined whether we need to do this at all.”
Critics also said that by exempting a large generation sector from competition, the measure would disrupt complex wholesale energy markets, undoing three decades of efforts to put investors, rather than ratepayers, at risk for the costs of building power plants.
“Are we deregulated, or are we not?” said Brand. “You can’t have it both ways.”
The New Jersey proposal was also under consideration at the same time as other regional and national initiatives are underway that might affect the financial viability of nuclear power.
The Federal Energy Regulatory Commission faces a Jan. 10 deadline to act on the Trump administration’s Grid Resiliency plan, which would provide support to nuclear and coal generators.
And New Jersey, under Murphy’s leadership, seems inclined to rejoin the Regional Greenhouse Gas Initiative, a multistate cap-and-trade system that provides support to clean-energy efforts. Energy planners have urged states to consider such regional market-based efforts to penalize carbon emitters and reward clean energy as more efficient than direct bailouts to an industry.
PJM Interconnection Inc., the regional grid operator, had urged New Jersey legislators to proceed cautiously, saying questions about how to reform wholesale energy markets are legitimate, but need a comprehensive approach.
“We just believe there is more time to solve these problems than maybe other people feel,” Andy Ott, PJM’s executive director, said in an interview this week.