New Jersey’s New Nuclear Subsidy Bill Adds Clean Energy Initiatives

New Jersey lawmakers rewrote a controversial bill that could force ratepayers to bail out the state’s nuclear power plants.

A nuclear power plant. JEAN-CHRISTOPHE VERHAEGEN/AFP/Getty Images

New Jersey lawmakers on Thursday rewrote a controversial bill that could force ratepayers to bail out the state’s nuclear power plants, adding clean energy initiatives to promote solar power and offshore wind.

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The bill (S877) would still effectively impose a surcharge on New Jerseyans’ energy bills to prop up nuclear power plants if a state board determines the plants need financial assistance. The legislation is expected to see a vote in the Senate Budget and Appropriations Committee on Feb. 5, Senate President Steve Sweeney said.

It’s unclear how much the new bill would cost ratepayers.

The original bill was expected to cost roughly $300 million per year, with ratepayers seeing their energy bills rise about $41 per year, according to the state Division of Rate Counsel. The new legislation would still allow utilities to impose a $0.004 per kilowatt hour surcharge on customers to cover the cost of the subsidy.

Lawmakers added language on Thursday to support clean energy by accelerating a credit program that promotes solar power, expanding residential access to solar units, requiring utilities to meet energy efficiency standards and charging the Economic Development Authority with providing assistance to offshore wind projects.

“If you want a clean environment, there’s a cost associated with a clean environment,” Sweeney (D-Gloucester) told reporters just before the new bill was unveiled.

Those clean energy initiatives didn’t make the bill more palatable for environmental groups, which have opposed the potential nuclear subsidies. Jeff Tittel, director of the New Jersey Sierra Club, said the changes amounted to a “green cover for a bad bill.”

PSEG, the state’s largest energy company, has said it will shut down its two Salem County nuclear power plants if it doesn’t get the ratepayer subsidies, claiming the plants won’t be profitable within two years because cheap natural gas is driving down energy prices.

Proponents of the subsidy bill say closing the nuclear plants could cost roughly 1,600 jobs and harm the environment, since the state would have to rely more on other energy sources that emit carbon dioxide. Nuclear power produces roughly 40 percent of the state’s electricity needs, according to lawmakers.

“New Jersey is specifically in a unique situation where, in the absence of nuclear power, we would essentially be 100 percent natural gas,” said Ralph Izzo, PSEG’s chief executive.

The new bill comes after the Associated Press reported that PSEG lobbyists worked with former Gov. Chris Christie’s administration to craft the legislation to hide the company’s financial information from the public. Critics of the nuclear subsidy bill argue PSEG has failed to prove its finances will be in such dire shape in the next few years.

Under the bill, nuclear power plants would have to provide financial data to the state Board of Public Utilities, which would determine whether the plants qualify for subsidies. But that financial information would not be made available to the public.

Sen. Bob Smith (D-Middlesex), a prime sponsor of the subsidy bill, said the changes made to the bill on Thursday weren’t about making it less controversial, but reflect the new reality of having a Democrat in the governor’s office.

Christie, a Republican, wanted no clean energy initiatives in a previous version of the nuclear subsidy bill that died in the last legislative session. Gov. Phil Murphy, a Democrat, campaigned on promoting clean energy and wants the state to eventually reach 100 percent carbon-free electricity.

“The representation to us always was you would be able to get your clean energy stuff passed in the next administration,” Smith said. “So now we have the new bill in the new administration, and now we want a really clean bill and a green bill, and I’m suggesting that it’s greener than Ireland.”

Sweeney and Smith said they were working with the Murphy administration on the bill. A spokesman for the governor declined to comment on the bill before it reaches Murphy’s desk.

The new version of the bill was unveiled during a Senate Environment and Energy Committee hearing that started three and a half hours late as lawmakers added 38 pages’ worth of amendments to the legislation.

New Jersey’s New Nuclear Subsidy Bill Adds Clean Energy Initiatives