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New Jersey bill filed to aid struggling nuclear units

Washington (Platts)--15 Dec 2017 600 pm EST/2300 GMT


A bill has been introduced in the New Jersey Legislature to create a program to assist nuclear power plants that are facing premature closure, and PSEG, owner of three of the state's four power reactors, said it expected to qualify for the program should the legislation become law.

The legislation, Senate Bill 3560, introduced late Thursday, directs the state Board of Public Utilities to establish a "nuclear diversity certificate" program that could result in customers paying a monthly surcharge to nuclear plant owners designated by the board.

To participate, plants would have to be licensed by the US Nuclear Regulatory Commission to operate through 2030 or later; provide financial information showing the plant would cease operations within three years otherwise; and pay a fee set by the board.

A plant would also have to certify each year that it does not receive any payment or credit under state or federal law and meet other requirements.

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Any plant selected would receive the credit -- set at $0.004 per kilowatt-hour -- for three years plus the year in which the bill becomes law. After that, eligibility for each additional three-year period would be subject to board review.

Exelon Generation operates the 670-MW Oyster Creek, but that plant will shut permanently in 2019 under an agreement with state officials.

PSEG Nuclear owns a majority interest and Exelon a minority share of the 1,254-MW Salem-1 and the 1,232-MW Salem-2, with PSEG Nuclear owning a third reactor at an adjacent site, the 1,240-MW Hope Creek-1.

PSEG Chairman and CEO Ralph Izzo testified December 4 before a New Jersey senate committee that without support PSEG would be forced to shut its nuclear units.

PSEG said in a statement Friday that the state has "much to lose if its nuclear plants were forced to close" and that a pair of economic analyses concluded that loss of the plants would mean $400 million a year in higher electricity rates.

PSEG spokesman Paul Rosengren said in an interview Friday the average PSE&G customer pays approximately $1,255 a year for electricity and that would increase by just under $30 a year should the bill become law.

The Natural Resources Defense Council, the Environmental Defense Fund, and ReThink Energy NJ said in a joint letter Wednesday to members of the Legislature that "a customer-funded bailout now" of the Salem and Hope Creek reactors "would unnecessarily cost most New Jerseyeans between $350 million and $400 million a year over the next 10 years."

--Michael McAuliffe, newsdesk@spglobal.com



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