The CEO of PSEG, Ralph Izzo, unveiled a radioactive proposal but for a joint legislative committee warning he’ll shut down the utility’s three New Jersey nuclear power plants at Salem and Hope Creek unless PSEG gets millions in ratepayer subsidies because, Izzo estimates, the plants will no longer be profitable within two years.
“Once a nuclear plant closes, it is closed forever,” he said.
“It is my fiduciary responsibility as CEO of the company to close those plants at that time. It would be an extraordinarily painful decision, because of how much we value the importance to New Jersey, but it is a cut and dry decision,” said Izzo.
Izzo admitted the plants currently run in the black, but said low natural gas prices have steadily eroded their profitability. He warned, closing the nuke plants could increase energy costs for New Jersey ratepayers by $400 million a year, and urged state lawmakers to follow the example of New York and Illinois, which subsidized failing nuclear power plants to keep the juice flowing and the lights on. He noted 40 percent of New Jersey’s energy comes from nuclear power.
“We are not asking for a bailout. We are asking you to join us in correction of these market flaws,” he continued.
Izzo allowed he was willing to let the company’s financial records be independently examined, and would offset any federal subsidies to the PJM regional power grid. A study prepared for PSEG by the Brattle group found closing the plants, which produce no air pollution, would cost 5,800 jobs; reduce state tax receipts by $37 million on top of raising utility rates by $400 million per year over the next decade; and dump 14 tons of carbon into the air, adding more than $733 million in health care and other expenses.
“If nuclear power plants in New Jersey were to close, it’d be replaced by fossil fuels, in the form of natural gas, or perhaps even out-of-state coal-generated electricity,” said former governor Jim Florio.
But, opponents argued, the state could impose a carbon tax instead of burdening ratepayers with nuclear power subsidies. And an Eagleton poll released Monday showed 75 percent of New Jersey residents aren’t interested in subsidizing profitable nuclear plants. Opponents asked, ‘what’s the rush?’
“Revenues are greater than costs. There is no urgent need to act. These units are not facing a retirement signal from the market,” said Joseph Bowring, an independent market monitor for PJM.
“To rush this through lame duck and not take the time, really really pay attention, it really puts ratepayers at risk,” said the director of the NJ Division of Rate Counsel, Stefanie Brand.
Many also questioned PSEG’s profit projections.
“Anybody that goes for a car loan has to provide more information than I think they’ve given…When they say they’re going to lose money in two years, is it $1 million a year? Is it $100 million? We think we know what they’re asking for. They’re asking for a lot of money,” said Steve Goldenberg, a lobbyist for New Jersey Large Energy Users.
The joint session of the Senate Environment and Energy Committee and Assembly Telecommunications and Utilities Committee adjourned with no decisions. The chair of the Senate Environment and Energy Committee, Sen. Bob Smith weighed in.
Smith: I think there’s a case being made here we have a serious issue in New Jersey.
Reporter: But is it serious enough to push it through in lame duck?
Smith: Well first, I don’t know if anybody’s pushing anything. All right? Is there a bill?
Reporter: That’s the question: is there a bill?
Smith: There is no bill at this time. But I’ll tell you, I think I learned enough today to perhaps start that discussion.
The committee chairman says there probably will be a bill in this lame duck legislature, but he promises it will go to committee and be debated properly.