A deeply resentful Board of Public Utilities figuratively held its nose and voted four to one to award almost $1 billion over three years in ratepayer subsidies to PSEG’s three South Jersey nuclear power plants. Board of Public Utilities Commissioner Bob Gordon claimed the utility giant threatened to shut them down, killing 37% of New Jersey’s electrical power unless it got the money.
“The board is being directed to pay ransom and the hostages are the citizens of New Jersey,” said Gordon.
The one defiant no vote came from Commissioner Upendra Chivukula.
“When I look at this thing, I think this is highway robbery,” Chivukula said. “When will the real people stand up and say, ‘We want to fight for the people of the state of New Jersey?’ People who have tough time?”
The vote unfolded in a room packed with PSEG workers in orange shirts, and opponents from AARP in red. The subsidies — $300 million a year — will hit all New Jersey ratepayers, not just PSE&G customers, with an estimated $30 to $40 more per year, on average. Business and manufacturing customers could see bills soar.
“I did not hear anything in those comments that struck a balance between the needs of ratepayers, the concerns of ratepayers, and their ability to afford their bills and that of a very wealthy corporation,” said Evelyn Liebman, the director of advocacy for the NJ AARP.
PSEG had called its plants uncompetitive, doomed to fail without subsidies, in an energy marketplace awash in cheap natural gas. But two competing financial analyses and the BPU’s own staff found the plants are actually profitable.
“These plants are viable and they are financially making money. And yet the threat of ‘It doesn’t matter, I’m going to close them down anyway’ seems to have worked,” said Director of the New Jersey Division of Rate Counsel Stefanie Brand.
But nuclear plants provide 90% of New Jersey’s emissions-free energy in a state committed to 100% clean, renewable energy by 2050. That persuaded the reluctant votes.
“If the nuclear power plants were to be retired, that retirement would significantly and negatively impact New Jersey’s ability to comply with state air emission reduction requirements,” said Board of Public Utilities President Joseph Fiordaliso.
“The replacement power, as we’ve heard, would be generated by natural gas and coal-fired facilities which would greatly increase greenhouse gas emissions and other hazardous pollutants,” said Gordon.
“I, for one, will not play the equivalent of a generation chicken game with our nuclear power plants. We are talking about the future,” said Board of Public Utilities Commissioner Mary-Anna Holden.
Commissioners criticized the enabling statute which didn’t let them award a smaller subsidy. They want that amended. Meanwhile, PSEG said in a statement that it’s pleased, noting “The BPU just saved the people of the State hundreds of millions of dollars in what would have been higher energy costs, thousands of jobs lost and tons of environmentally damaging air emissions.”
Environmental advocates bitterly disagreed.
“The largest subsidy in state history to a corporation that doesn’t need it that will not only hurt ratepayers but will hurt the environment because the money that’s going into the subsidies is money that will be taken away from developing offshore wind or for moving our solar program forward,” said New Jersey Sierra Club Director Jeff Tittel.
The State Rate Counsel is considering a lawsuit, saying even the board’s yes votes were so negative. It could only help their claim.
Note: PSE&G, a subsidiary of PSEG, is a funder of NJTV News.