opinion

EDITORIAL: Nuclear subsidy plan bows to PSEG demand

If New Jersey’s nuclear bailout bill becomes law, ratepayers could be ponying up as much as $300 million annually to boost the profits for owners of two South Jersey nuclear plants.

That’s the reality of the proposal, and considered in that context it’s difficult to stomach. All indications are that the plants remain profitable for Public Service Enterprise Group — at least for now — just not profitable enough for owners’ tastes.

What also may very well be true, however, is that those smaller profits might not be just a disappointment for PSEG. They might be enough to decide to pull the plug, especially if they anticipate those profits dwindling even more. If that happens, New Jersey could be worse off than with the bailout.

Could be. But we don’t know, and precious little meaningful public discussion has illuminated the alternatives. That remains a major sticking point.

So the bottom-line question is whether New Jersey lawmakers think PSEG is bluffing. They’re clearly not willing to take that chance, and we can’t exactly blame them. That said, legislators can come up with a better approach than the proposal heading to the full Assembly and Senate this week.

That bill establishes the now-familiar $300 million annual subsidy that has remained throughout several versions of the plan bouncing through the Legislature since a rush-job attempt during last year’s lame-duck period was derailed. Proponents note that the subsidies would expire after a maximum of 10 years, and that the proposal calls for up to $300 million. The subsidies are also still subject to a review by the Board of Public Utilities.

But this is a stacked deck. Remember that the PSEG goal here isn’t coming up with a minimal amount that will keep the plants afloat. This is about what owners want in their profit margins, recrafted as a need. PSEG will present its claims and rationale, and BPU won’t do much more than accept them at face value. The Legislature will already have signed off on the $300 million; there will be little incentive for BPU to do anything other than grant the full amount, or very close to it. It’s telling about legislative intent that the Division of Rate Counsel, the group that would represent consumer interests, appears to be left out of the review process.

So if the bill passes, expect PSEG to get its $300 million. That’s a whopping $3 billion over 10 years out of ratepayer pockets to keep plant investors happy.

Is the alternative worse? We are repeatedly told that it would be; the South Jersey plants provide about 40 percent of New Jersey’s power. Replacing that through other energy sources would supposedly be more costly than the subsidies, and would increase harmful emissions, since nuclear is essentially a “clean” energy in relation to climate change, despite other environmental hazards.

But how would New Jersey replace that energy? A primary pressure point on nuclear these days is the abundance of cheaper natural gas, yet replacing nuclear will be more expensive? That might be true, given the supply-and-demand mechanics of energy delivery. But ratepayers deserve realistic numbers and examples of what New Jersey’s energy landscape would look like with the loss of the nuclear plants to allow for proper comparisons. And that means more than PSEG’s own perspective.

A green-energy component designed to boost renewable energy has been in and out of this subsidy plan as well, and now sits as a companion bill that’s also headed to the full Legislature. That portion is designed to increase New Jersey’s reliance on renewable energy with a goal of generating half the state’s electricity through clean energy by 2030. But related incentives are costly as well.

It seems as if lawmakers are throwing money toward every energy source to satisfy competing interests and keep open as many options as possible. Maybe we’re at a transitional point when that makes a certain amount of sense, as haphazard as it may appear.

But officials owe the public a more honest, upfront discussion about those options. We continue to urge lawmakers to pursue a level of scrutiny of PSEG’s claims that goes beyond a BPU rubber stamp, and that the review take place before the Legislature finalizes a subsidy number that becomes a target.

We’re open to the idea that some level of subsidization would be in consumer’s best interests. But simply giving PSEG what it wants almost certainly goes beyond that point.