PSEG: Unless things change, Salem nuclear plants may close in two years
For nearly three hours Monday, state lawmakers heard testimony about a concept that isn’t yet legislation – though could be passed within five weeks and cost millions or even billions for New Jersey ratepayers.
At issue is the future of the nuclear power plants in Salem County. Public Service Enterprise Group contends that they could be closed in about two years, if financial trends continue and the formerly profitable plants begun running at a loss. Lawmakers might consider a rate hike to subsidize the plants.
Chief executive officer Ralph Izzo and consultants who analyzed the issue for PSEG said that could cost ratepayers as much as $400 million a year, reduce state tax collections by $37 million and lead to a loss of jobs indirectly by raising costs for businesses, leaving less money to spend on other investments.
“You add those numbers up and that is why we say that it is far, far cheaper to keep nuclear than it is to see it go away,” said Izzo, who said it would be its
“We are not asking for a bailout,” Izzo said. “We are asking you to join us in the correction of these market flaws.”
That’s not the job of lawmakers, said Steven Goldenberg of the New Jersey Large Energy Users Coalition, made of up big industrial and commercial businesses.
“The state should not be correcting market issues. That is not for you to do. It’s not for the state of New Jersey to pick winners or losers,” Goldenberg said.
Slow down, said Ratepayer Advocate Stefanie Brand, who – in a point made by others, as well – said Public Service Enterprise Group should have to provide much more financial information to show why such help is merited.
“As the representative of the ratepayers of the state, we also don’t want to see these nuclear power plants close. That’s not in anyone’s interest. The fact of the matter is, however, that they’re not going to,” Brand said.
Izzo said the prospect of closing the plants isn’t a scare tactic.
Brand said that if lawmakers rush a solution in the lame-duck session, residents could wind up paying multiple times if a subsidy is approved, the state rejoins the Regional Greenhouse Gas Initiative and the Federal Energy Regulatory Commission makes pricing changes that are under consideration.
Proponents of subsidizing the Salem and Hope Creek nuclear plants said it would set back New Jersey’s environmental goals if a zero-emission industry that provides 40 percent of New Jersey’s electricity was replaced by other sources in the regional grid such as coal plants in Pennsylvania.
While renewable energy is the future, it couldn’t be ramped up quickly enough to make up for a potential closure of the South Jersey nuclear plants, says Armond Cohen of the Clean Air Task Force.
“Just to replace the output of the existing New Jersey plants would require siting 12 of the largest offshore wind farms in the world off New Jersey’s coast,” Cohen said.
Business groups that testified at the hearing expressed concerns about costs and competitiveness.
Jennifer Jones, executive director of the Salem County Chamber of Commerce, said the rural county has only a handful of large employers that support its predominantly small businesses. Jones said that when Ardagh Glass closed in 2014, the local grocery store also went out of business.
“So I can’t even imagine what it would be like if PSEG wasn’t there anymore,” Jones said.
Ray Long, NRG Energy’s vice president of national, state and federal government affairs, said his company chose to put its corporate offices in West Windsor and loves New Jersey – but that the PSEG idea would have ramifications for the state’s business climate
“This legislation sends the signal to folks like NRG that you need not invest in New Jersey going forward,” Long said. “It says specifically we will violate the markets in the place that you play and we will pick one New Jersey company over everybody else that’s out there.”