Last spring, when the Board of Public Utilities first considered a $300 million a year state subsidy for New Jersey’s three nuclear plants, analysis by staff and experts suggested a smaller amount would be enough to keep the plants profitable and open.
That’s important for many reasons, among them because they generate 40% of the state’s electricity and 90% of its carbon-free power.
The BPU’s consultant, Levitan Associates, last year said plant owners PSEG and Exelon didn’t need the subsidies, a position in accord with that of the state Office of the Rate Counsel and the market monitor for the regional power grid. BPU commissioners nonetheless voted 4-1 to grant the subsidies, not taking a chance the plants might close. The plants employ 4,500 and PSEG says replacing their power with carbon-emitting natural gas plants would cost New Jersey residents billions more for their electricity.
Now Levitan has told the BPU the plants are no longer profitable. BPU staff has supported that position in a letter, according to NJ Spotlight. The staff said that even realistic revenue estimates — as opposed to the companies’ forecasts tilted low to favor subsidies — wouldn’t make the plants profitable.
Nuclear plants, which were made needlessly costly by excessive regulation and unscientific safety standards, struggle to compete with generating stations fired with cheap natural gas. Seven plants have closed the past few years and a dozen more may follow them, causing substantial increases in greenhouse gas emissions.
The rate counsel and grid monitor still doubt the need for the subsidy, but it is strongly supported by business, labor and environmental groups.
The nuclear plants are essential to meeting the state’s Energy Master Plan goals of using 50% clean energy by 2030 and nothing but clean energy by mid-century.
A renewal of the $300 million subsidy seems likely, or a slight reduction of it at most. Nothing can be done about the government-imposed excessive costs to build and operate the plants now.
But New Jersey might have an opportunity to try a new generation nuclear plant.
Camden-based Holtec International, which is decommissioning the former Oyster Creek nuclear plant in Lacey Township, would like to build a prototype plant there, according to the company and the U.S. Energy Department.
Recently the department awarded Holtec $116 million to design and build a small, modular nuclear reactor incapable of overheating.
That one presumably wouldn’t need state subsidies to operate.