The New Jersey Division of Rate Counsel, the state-run advocacy group for utility rates, has released a study that could jeopardize controversial legislation that would provide subsidies to Public Service Enterprise Group’s nuclear energy program.
The study, “Report on Nuclear Portion of Senate Bill 877,” conducted by Acadian Consulting Group, concluded that passage of the bill would cost PSE&G customers $300.1 million annually, along with “broader ripple effects throughout the New Jersey Economy.”
The study also said passage would reduce expenditures by area businesses, lower consumer incomes as well as cause losses in individual spending. It also estimates that an additional $244 million per year in “lost economic output” would result due to unrealized economic opportunity over the next decade as a result of making the bill law.
The bill, which will be further debated this year in the state Legislature, would essentially subsidize PSE&G to replace three nuclear power plants in Southern New Jersey. The subsidies would cost taxpayers roughly $300 million per year. PSEG has long stated the plants needed financial assistance from the state to be maintained since they provide over a million customers with a reliable source of carbon-free electricity.
Groups that have been protesting the bill since last year, such as the New Jersey Coalition for Fair Energy, jumped on the report’s conclusions.
“The findings of the latest research into PSEG’s subsidy bill are sobering, but unfortunately not surprising,” said coalition spokesperson Matt Fossen. “All the available evidence indicates this legislation will wreak havoc on consumers, and, subsequently, New Jersey’s economy. This by itself should convince officials to disavow PSEG’s proposal, but what’s worse is that the company is demanding this handout while the plants are rolling in money.”
A PSE&G spokesperson told NJBIZ in an email: “The rate counsel’s analysis confirms what we have been saying – that it will cost New Jersey residents less to preserve the plants than to replace them.
“Studies by the Brattle Group and IHS Markit conclude that New Jersey's economy would suffer an $800 million a year loss in economic activity on top of a $400 million increase in electricity bills if the plants were to close,” the spokesperson said. “If you add up all the costs outlined in IHS study, which include environmental and public health costs, losing the nuclear plants would cost the state $1.7 billion a year.”