New Jersey Mulls $320 Million-A-Year Lifeline for Nuke Power
(Bloomberg) -- New Jersey became the latest state to consider subsidizing nuclear power with a $320 million-a-year plan to keep struggling reactors from going out of business.
The state’s two plants would get extra payments for providing emission-free power under legislation introduced Thursday in Trenton. The move follows similar efforts by New York and Illinois and comes amid pressure from Public Service Enterprise Group Inc., which owns and operates the reactors in New Jersey.
“It’s another shoe dropping,” said Kit Konolige, a New York-based analyst for Bloomberg Intelligence. “If there’s the political will to do this, it will get done.”
Nuclear reactors, which struggle to compete with low natural gas prices, offer a singular advantage in the fight against global warming because they produce round-the-clock electricity without emitting greenhouse gases. The debate over bailing them out has reached the national stage, with Energy Secretary Rick Perry calling for reactors to be rewarded, alongside coal plants, for their ability to stockpile fuel on site. Critics argue the move would undermine competitive markets.
The New Jersey legislation, whose sponsors include Democratic state Senate President Stephen Sweeney, calls for awarding credits to financially strapped nuclear plants that don’t qualify for other assistance. Electric utilities would be required to buy those credits and pass the cost onto customers.
The projected annual cost of $320 million would break down to about $40.80 per household, said Stefanie Brand, New Jersey’s ratepayer advocate.
New Jersey Governor Chris Christie, whose term expires next month, indicated support earlier this month for a bill to help keep the state’s reactors running.
“It’s important for our energy security,” Christie said at a Dec. 6 news conference in Trenton. “And I think it’s a positive thing from an environmental perspective.”
PSEG welcomed the proposal for a “nuclear safety net.”
“The same financial pressures that have forced other nuclear plants around the country to close are knocking on New Jersey’s door,” the utility said in a statement Friday.
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