PSEG CEO, Ralph Izzo, has told members of the New Jersey legislature that the Salem and Hope Creek nuclear plants will be shut down unless they receive financial support. Speaking to the state Senate Environment and Energy Committee and the Assembly Telecommunications and Utilities Committee, citing data from a study PSEG commissioned from the Brattle Group, Izzo said that as current hedging contracts expire, current market pricing will erode plant profits and force the closure of the plants. The announcement sparked immediate outcry from the PJM Independent Market Monitor (IMM), the New Jersey chapter of the American Petroleum Institute, and opponents of nuclear subsidies.
PSEG is the latest nuclear generator to request subsidies from state legislatures, following Exelon in IL and PA, Dominion in CT, and nuclear generators in NY. If these two plants were to close, there would no longer be any nuclear energy generation or state nuclear regulator in New Jersey, as the states only other plant, Oyster Creek, is scheduled to be closed in 2019. As cheap natural gas and increased supply of renewables continues to put downward pressure on power prices, nuclear generators feel that subsidies are the only way to produce safe, clean, and reliable energy in the future. PJM’s IMM has described power subsidies as being “contagious,” but PJM is already looking at changing how it sets prices to provide incentives for “inflexible” generating units such as coal, nuclear, and large gas units. If New Jersey’s legislature agrees to grant subsidies to nuclear generators, look for this trend to continue in other states
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Additional Contributing Author: Frank Nelms
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