New Jersey lawmakers unveiled a bill Friday that would force ratepayers to subsidize nuclear power after the state’s largest energy company warned it would close its plants without financial assistance.
The bill (S3560) would effectively impose a surcharge on ratepayers of up to $41 per year to cover the cost of the subsidies. The bill is being fast tracked through the lame duck Legislature with committee hearings on the bill scheduled for Wednesday.
PSEG has threatened to close its plants in Salem and Hope Creek without the ratepayer subsidies, claiming the plants won’t be profitable within two years because cheap natural gas is driving down energy prices. But environmental and consumer groups have opposed the proposed subsidies, arguing PSEG has failed prove it needs ratepayers to prop up the plants.
The legislation would require electric utilities to pay for credits from qualifying nuclear plants, with the utilities covering the cost by imposing a surcharge on customers of $0.004 per kilowatt hour. Nuclear plants would have to provide financial data to the state Board of Public Utilities to participate in the program, according to the bill.
Stephanie Brand, director of the state Division of Rate Counsel, estimates ratepayers could pay up to $41 more per year, or $3.40 per month, if the bill becomes law. She pegged the overall cost of the legislation at roughly $320 million per year based on energy consumption figures across the state.
PSEG had a lower estimate, predicting the typical customer would pay an additional $31 per year, or $2.56 per month, if the subsidy bill becomes law. That figure is based on the average customer’s electric consumption of 7,800 kilowatt hours per year, according to a PSEG spokesman. The company claims the average electric bill would go up $44 per year if its nuclear plants shut down, adding that the closures would lead to job loss and increased pollution. Nuclear energy provides 40 percent of the state’s electricity needs, according to the bill.
“We have suggested a safety net for New Jersey nuclear – a temporary framework to prevent the closure of plants, which also includes strong consumer protections,” PSEG spokesman Michael Jennings said in a statement. “We believe the bill includes that framework to protect consumers while ensuring that the state continues to receive nuclear’s economic, environmental and resiliency benefits.”
Jeff Tittel, director of the New Jersey Sierra Club, called the bill “a direct subsidy from the ratepayers hidden in gobbledygoop.”
“The Legislature and Governor Christie are trying to rush through the biggest energy tax and corporate subsidy in state history,” he said in a statement. “What’s worse is that they’re rushing it through in lame duck without proper scrutiny and oversight. This is how you know they’re up to no good.”
A spokesperson AARP, an interest group for retired Americans, said the group was still analyzing the bill but said it was concerned that even profitable companies could “collect a windfall from taxpayers” if it becomes law.
The legislation is sponsored by Senate President Steve Sweeney (D-Gloucester), Sen. Bob Smith (D-Middlesex) and Sen. Jeff Van Drew (D-Cape May). The bill must pass both houses of the Legislature by Jan. 9 and be signed by Gov. Chris Christie in order to become law.