TRENTON, N.J. (AP) - New Jersey regulators are expected to decide this week whether to approve a $300 million bailout of the state’s three nuclear power plants, operated by the state’s biggest utility company.
The Board of Public Utilities is expected to decide on the customer-financed subsidy during its meeting Thursday, under a law Democratic Gov. Phil Murphy signed last year.
The measure gave the board the responsibility to determine whether Public Service Enterprise Group’s nuclear plants, all based in southern New Jersey, will get the financial rescue that the company lobbied intensely for last year.
A closer look at the issue:
WHAT DOES THIS MEAN FOR UTLITY CUSTOMERS?
If the subsidy is approved by the five-member board, the average residential utility customer’s bill would go up an estimated $41 a year, through a fee passed on by all the state’s utility operators, not just the owner of the nuclear plants.
Commercial customers say they expect to see big spikes if the subsidies go through. The Chemistry Council of New Jersey, which advocates on behalf of chemical firms, estimates that its biggest members would see their bills climb from about $700,000 a year to about $1 million per year.
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WHY IS SUCH A SUBSIDY NEEDED?
PSEG forecasts the three plants at two locations in Salem and at Hope Creek would fail financially without the help from ratepayers. That’s because, the company says, it’s much cheaper to produce electricity using natural gas than from nuclear power.
PSEG says keeping the plants operating requires an investment of $100 million to $200 million every year. “The evidence submitted by PSEG proves the nuclear plants’ projected revenues do not support continued investment,” the company said in a statement. “It would be irresponsible for PSEG to invest on that scale in a business that is not expected to earn a profit.”
The utility says the closure of the plants would cost about 2,000 jobs.
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HOW WOULD THE CLOSURE OF THE PLANTS AFFECT ENERGY SUPPLIES?
The utility estimates nuclear power accounts for nearly 40 percent of the state’s electricity production, and that losing the plants would weaken New Jersey’s grid.
The plants also produce electricity carbon-free, which was a factor in gaining Murphy’s support since he’s pledged to move the state to 100 percent clean energy by 2050.
If the plants go offline, the utility has said, and then the difference would likely be made up by carbon-producing sources like natural gas. PSEG says electricity generation would be replaced by existing fossil fuel plants if the nuclear plants go offline. Those plants are located within the regional power market, which includes Pennsylvania, New Jersey and Maryland.
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HOW DO WE KNOW FOR SURE THE SUBSIDY IS NEEDED?
So far, the public doesn’t know for certain.
That’s because the legislation allows PSEG to keep market-sensitive information confidential. The board is authorized by law to access the information but is barred from divulging details publicly by the law.
The confidentiality language goes back to Republican Gov. Chris Christie, whose administration PSEG petitioned for legislative language to shield its financial data from the public.
That language survived in the bill Murphy signed. Murphy has said he’s confident that customers would be represented in the process.
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WHAT DO CUSTOMER ADVOCATES SAY?
The state’s director of the division of rate counsel - the ratepayer advocate in proceedings before the board - has argued that the regulators shouldn’t effectively leave the decision to grant the bailout up to the utility that would be getting the bailout.
“The BPU has an obligation not to blindly accept PSEG’s interpretation of the language of the statute, but to develop its own interpretation,” wrote Stefanie Brand, the division of rate counsel director in a comment to the board.
The Board commissioned a report to review the merits of the subsidy, but its findings have not been made public. A spokesman for the board has said doing so would require a vote, which has not occurred.
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