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NJ utility board going to court over $300M nuclear bailout

NJ utility board going to court over $300M nuclear bailout

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The state Board of Public Utilities is going in front of a court over hundreds of millions a year in ratepayer subsidies it approved for PSEG last month.

The New Jersey Rate Counsel, an independent agency representing consumers, filed an appeal Wednesday of the board’s decision to award PSEG $900 million over three years. The appeal will be heard in the state Superior Court’s Appellate Division.

BPU spokesman Peter Peretzman declined to comment on the pending litigation.

PSEG said it needed the hefty subsidy, paid for by an increase in people’s electric bills, or else it would close its three nuclear units in Salem County. The money, the company said, would maintain renewable nuclear as a significant portion of New Jersey’s energy mix.

But that assessment was disputed by the rate counsel and the Independent Market Monitor with grid operator PJM, who reviewed PSEG’s financial statements and argued the firm did not need support from New Jersey residents to stop its nuclear units from shuttering.

In its appeal, the rate counsel argued the BPU voted in PSEG’s favor despite contrary evidence and despite the increases not being “just and reasonable,” as required by law.

Electric companies have begun collecting an extra $0.004 per kilowatt hour, which will be passed onto PSEG at a later time. It will cost the average residential customer about $31 to $41 per year, said ratepayer advocate Stefanie Brand.

Brand said the board could have awarded a smaller subsidy.

“I’m glad we’re going to get this in front of a court,” Brand said.

During its April meeting, the board voted 4-1 to award the subsidies, but not before expressing resentment over the situation.

Commissioner Upendra Chivukula was the lone no vote, calling it “highway robbery.” Commissioner Bob Gordon, who voted for the subsidy, still voiced his concern over the bailout.

“The board is being directed to pay ransom, and the hostages are the citizens of New Jersey, Gordon said at the BPU’s April meeting to a packed room in Trenton.

“We do not make this decision lightly. ... We’ve concluded that now is not a time to move forward in a way that will remove nuclear from our energy mix,” BPU President Joseph L. Fiordaliso said in a statement after the meeting.

Brand said she hopes the appellate court makes a decision by July 2020, before the first $300 million subsidy would be given to PSEG.

Contact: 609-272-7258 Twitter @AvalonZoppo

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