(Bloomberg) -- New Jersey Governor Phil Murphy plans to sign a bill requiring utility customers to spend more than $300 million a year to rescue struggling nuclear power plants run by Exelon Corp. and Public Service Enterprise Group Inc., according to a person familiar with the matter.
The legislation, approved in April by the state’s Democratic legislature, aims to keep nuclear plants operating in the state, after owners warned the facilities were no longer economic amid lower power prices.
Murphy, a Democrat who was sworn-in in January, has not said publicly if he supports the measure, which some environmentalists oppose. A schedule released by his office Tuesday said he planned to sign “energy bills” at 11 a.m. Wednesday.
The governor will sign the nuclear legislation along with legislation promoting wind and solar energy, according to the person, who asked not to be identified because the matter isn’t public. The non-nuclear bill calls for half the state’s energy to come from renewable energy by 2030.
Murphy’s decision comes after New York and Illinois have already thrown lifelines to reactors, which are struggling to turn profits as cheap natural gas and renewable energy have depressed power prices. More than a quarter of U.S. nuclear power plants don’t make enough money to cover their operating costs, according to Bloomberg New Energy Finance. Supporters say keeping the reactors operating saves jobs and helps states achieve clean-energy goals.
New Jersey is home to three nuclear plants, owned by PSEG and Exelon. PSEG rose 0.3 percent to $50.71 Wednesday at 9:31 a.m. in New York. Exelon rose 0.2 percent to $39.96.
The governor’s support of the measure underscores that nuclear-plant operators have been more successful in lining up governmental support than those who run coal plants, said Stephen Munro, a Washington-based analyst at Bloomberg New Energy Finance.
“It’s a combination of effective pressure by nuclear operators and nuclear’s zero-carbon emissions profile, which makes the subsidies more palatable to governors and ratepayers alike,” Munro said in an email.
PSEG and Exelon didn’t immediately comment. A spokesman for the Electric Power Supply Association, which represents independent power producers and has opposed subsidies for coal and nuclear plants, called the move “disconcerting.”
“If news reports are true that Governor Murphy will sign the nuclear bailout legislation without seeking amendments, it is a sad day for New Jersey consumers and the future of competition in the state,” John Shelk, president of the Washington-based association, said in an email.
PSEG Chief Executive Officer Ralph Izzo warned investors in February that closing the reactors would have a “crushing economic impact.”
The Sierra Club is one of several environmental groups that have criticized the plan, calling it the “biggest corporate subsidy in state history.”
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