PSEG NUCLEAR SUBSIDY BILL COULD COST CUSTOMERS $350M ANNUALLY
The state’s more than 3 million electric customers could be slapped with a huge new surcharge of up to $350 million a year to keep three of New Jersey’s nuclear plants open under a controversial bill introduced late Thursday and made public today.
The legislation (S-3560), the subject of months of behind-the-scenes negotiation, is expected to be the subject of a legislative committee hearing next week and be voted on by the full Legislature before the end of the lame-duck session on January 9.
Sponsored by Senate President Steven Sweeney (D-Gloucester), the measure would increase the average residential customer bill between $30.72 to $40.88 a year, depending on estimates from PSEG and the Division of Rate Counsel. Businesses would pay much more in a state long saddled with a reputation as one of the highest energy-cost states in the nation.
PSEG pushes for subsidies
But Public Service Enterprise Group, the owner of three nuclear units in South Jersey, appears to have convinced legislative leaders it would shut down the plants, which supply 40 percent of the state’s electricity and are a major employer in the region, if it does not receive financial incentives.
Even though the bill was only made public today, it has generated enormous opposition from businesses, consumers, and energy competitors as unnecessary, as well as too complicated to be rushed through in a three-week time span, especially with a new governor taking office in mid-January.
PSEG welcomed the proposal, which they noted has been under discussion for 18 months. “The same financial pressures that have forced other nuclear plants around the country to close are knocking on New Jersey’s door,’’ said Michael Jennings, a spokesman.
The legislation, if enacted, establishes a $0.004 charge per kilowatt hour on customers’ bills to pay for the nuclear subsidy, which translates to a total cost of about $350 million annually, according to projections by the state Division of Rate Counsel. PSEG puts the cost at $280 million.
‘Manufactured deadline’
“It is going to cost too much money at a time when are a lot of things we need to do, but we won’t be able to afford,’’ said Rate Counsel Director Stefanie Brand. “There is no rush here other than a manufactured deadline.’’
Overseeing imposition and the establishment of the so-called Nuclear Diversity Certificate would be the New Jersey Board of Public Utilities. Once approved, the surcharge would be effective for four years, subject to renewal for another three-year period.
The subsidy is similar, although not in total cost, to incentives given to operators of nuclear plants in New York and Illinois to avert plant closures. In a deregulated energy environment, nuclear power has found it difficult to compete with cheaper natural gas plants, leading to the premature retirement of six facilities around the country.
