Report: New Jersey nuclear plants getting subsidy are viable
TRENTON, N.J. (AP) — A report commissioned by New Jersey regulators before they voted to grant $300 million in utility customer-financed subsidies for the state’s nuclear industry found the plants are profitable.
The Board of Public Utilities voted Thursday to approve subsidies for the three nuclear power plants operated by the state’s biggest utility, Public Service Enterprise Group. The vote means all of the state’s electric utility customers will pay the subsidies, which could be as high as $41 a year for residential customers.
The report by Levitan and Associates Inc. says PSEG included operational and market “risks” when calculating costs to three southern New Jersey plants. It’s the finding that the board’s own staff also mentioned before Thursday’s vote.
“We found that PSEG’s projections of energy and capacity revenues were reasonable. However, (Levitan and Associates) had a number of concerns about PSEG’s cost projections,” the report said.
The report found such risks are not “true costs,” and that PSEG has not historically included them.
The report says factoring out those risks “would make the plants profitable.”
Among its other findings are that the firm could decide to shutter the plants even though it’s been approved for the subsidy.
PSEG said it isn’t commenting on the findings.
The report also considered other criteria required under the law authorizing the subsides signed one year ago by Democratic Gov. Phil Murphy.
It found, for example, that the loss of the plants would contribute to higher levels of carbon dioxide in the air. Nuclear plants emit zero carbon dioxide.
The report wasn’t available before the vote. It was financed out of the application costs for the subsidy program. Its exact cost is unclear.
The question of subsidies goes back at least two years when PSEG lobbied lawmakers for a bailout of its three plants, saying that considering cheaper natural gas in the market they would become financial unviable without help.
The company argued that keeping the plants open would save thousands of jobs and help the state reach its clean-energy goals because retiring the plants would mean making up the 40% production load from nuclear with fossil fuel plants.
It said that if it didn’t get the subsidies they’d close the plants.
Opponents of the subsidies included large businesses in the state, like pharmaceutical firms.
“It’s a sad, sad day for the citizens and businesses of New Jersey when the BPU ... admits that PSEG does not need a subsidy to stay profitable but they go against their own staff and the independent (consultants’) recommendations,” said Dennis Hart, the executive director of the Chemistry Council of New Jersey.
The board commissioners compared the scenario to hostage-taking, though voted 4-1 to approve the bailout.
Board President Joseph Fiordaliso voted in favor of it. He said Thursday that despite the plants’ apparent financial viability, he thought the panel had a responsibility to consider the diversity of fuel sources in the state, and the impact on the environment of shuttering plants that emit no carbon.