New Jersey Rescues Nukes, Aids Wind -- And Some Enviros Boo
(Bloomberg) -- New Jersey lawmakers passed a series of sweeping measures promoting emission-free power, including one that could have utility customers spending more than $300 million a year to rescue struggling nuclear power plants.
The bills approved Thursday by the Democratic-controlled legislature revive a long-stalled plan to build a wind farm off the coast of Atlantic City and would require half the state’s energy to come from renewable energy by 2030. The nuclear measure would reward reactors run by Exelon Corp. and Public Service Enterprise Group Inc. for generating electricity without emitting greenhouse gases.
The legislation marks a shift from the administration of former Republican Governor Chris Christie, who shunned offshore wind and pulled New Jersey out of a multistate carbon market designed to lower greenhouse gases. But it drew mixed responses from environmental groups, with the Sierra Club calling the clean energy bills “green cover” for the measure to subsidize nuclear power.
Jeff Tittel, director of the Sierra Club’s New Jersey chapter, called the nuclear bill the “biggest corporate subsidy in state history.” He said the proposed 24-megawatt offshore wind farm is too expensive and too close to shore. And he criticized the clean-energy bill for including a cost cap, saying it would make it impossible for the state to meet its own goals.
“It really sets back New Jersey’s efforts on clean energy and the environment,” Tittel said in an interview.
The Natural Resources Defense Council was more positive. “New Jersey is showing that economic prosperity and a healthy environment go hand in hand,” Dale Bryk, a senior strategic adviser for the organization, said in a statement.
If Christie’s successor, Democratic Governor Phil Murphy, signs the nuclear measure, New Jersey will join a growing group of states including New York and Illinois throwing lifelines to reactors. Cheap natural gas and surging renewables have squeezed reactors’ profits, forcing some plants into retirement and pushing others toward the chopping block. Some operators have fought for aid to preserve jobs at the plants. Others have argued they’re necessary to achieve clean-energy goals.
Shares of Chicago-based Exelon, owner of the largest U.S. nuclear fleet, rose as much as 2.5 percent to $38.72, the biggest intraday gain since March 22. Public Service Enterprise Group rose as much as 2 percent, the biggest intraday gain since March 29.
Public Service Enterprise Group Chief Executive Officer Ralph Izzo warned investors in February that shuttering its New Jersey reactors would have a “crushing economic impact.” The company has two nuclear plants in the state. Reactors outside New Jersey may also be eligible for aid though the measure if they can prove economic hardship and demonstrate that the state’s air quality could decline if they shut.
The Electric Power Supply Association, a trade group representing generators, called the legislation “deeply flawed,” saying it would undermine competition.
Murphy has declined to comment publicly on the legislation but told reporters in December that he was “all in” on efforts to keep reactors so long as they are run responsibly. “They are the biggest bridge we’ve got to the 100 percent clean-energy future,” he said.
Murphy’s press secretary, Daniel Bryan, said the governor was reviewing the legislation.
A Feb. 6 report prepared for New Jersey’s utility consumer advocate estimated that direct and indirect costs of nuclear aid could total $544 million a year. Separately, the Brattle Group estimated in November that New Jersey consumers would pay $400 million more for electricity annually if Public Service Enterprise’s reactors in New Jersey close.
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