Slow down on flawed nuclear subsidy plan
A proposal that could generate up to $300 million in annual subsidies for two PSE&G’s nuclear reactors — raising residential utility bills $40 a year — was unanimously approved by two state legislative committees last week. It sets the stage for full Senate and Assembly votes in the final lame-duck sessions next month.
The plan is so riddled with flaws and premature assumptions that it’s hard to conceive there wasn’t a single committee member in either chamber that didn’t speak out against the rush to judgment. Apparently the lawmakers, none of whom commented on the proposal before casting their votes, were more focused on finishing preparations for Christmas or catching an early flight out.
The company says competition created by low natural gas prices has undercut the profitability of its nuclear plants. Failure to act quickly on a subsidy, it argues, could lead to the shutdown of its two Salem reactors, cutting off about a third of the state’s power supply.
That’s a problem, but it’s not that simple. The lights wouldn’t suddenly go out. The state would be able to tap into other regional power sources, and the lifespan of different plans may vary. Prices would presumably rise, but it’s not clear by how much.
It’s telling that lawmakers aren’t focused on determining if subsidies to the already heavily subsidized nuclear industry are actually needed. Instead, they are essentially deferring to industry claims. Ralph Izzo, president of PSEG, said he knows more than anyone about the economics of nuclear plants, and while that may well be true, that doesn’t mean he’s honest about it in lobbying for PSEG’s benefit.
Also troubling is the absence of any accompanying renewable energy incentives. Other states have developed nuclear subsidy plans that include solar and wind incentives, but Gov. Chris Christie has signaled support only without a renewable energy component.
Proponents at last week’s hearing also used two other dubious claims to bolster its case for the subsidies: Failure to do so would cause severe harm to the state’s environment and economy.
