Nuclear subsidy bill OK’d by legislative committee

The nuclear subsidy bill that would provide up to $300 million to Public Service Enterprise Group passed out of a joint legislative committee Thursday — but just barely.

Some Democrats who voted “yes” to release the bill weren’t entirely convinced they should support it. Republicans unanimously opposed it.

The bill will go up for a vote in the Senate on Monday. The Assembly is expected to vote on it in March.

The biggest criticism was the bill has evolved from a simple nuclear subsidy bill, pending an assessment by the Board of Public Utilities, into what some are calling an energy master plan, which would require months, not weeks, to evaluate.

Assemblyman Christopher DePhillips (R-Midland Park) highlighted the complexity of the newest draft of the bill in his comments, before voting “no.”

“I don’t think anyone in this room really knows what this legislation will cost the ratepayers and taxpayers of the state,” he said. “Even OLS (Office of Legislative Services) doesn’t know.”

Sarah Blum, a vice president at the New Jersey Business & Industry Association, said that businesses account for 64 percent of energy consumption in the state, and potential increased costs could hurt further increase the cost of doing business in the state.

“We are covering a lot in this bill,” Blum said. “It grew from just looking at our nuclear power plants to solar, wind, energy efficiency, gas efficiency, training, economic dev credits — there’s a lot in here.

“What we are missing from this is our comprehensive planning. If the utilities are doing energy efficiency, what is the BPU doing with its energy efficiency program? That’s not covered in here.”

Dennis Hart at the Chemistry Council said his members are considering moving to sister sites in different states to avoid the additional electricity costs.

For businesses, electricity bills, as a result of the subsidy, could increase as much as $100,000 or more than $1 million, Hart said.

Part of the frustration was that the bill already was on the Senate schedule for Monday before it had been voted out of committee Thursday.

“The people (we) want to keep in the state, they pay 54 percent higher for electricity than competitors in other states,” Hart said. “These executives have the same mentality as (PSEG CEO) Ralph Izzo, they are very dispassionate, they look at data.”

Izzo, Senate President Stephen Sweeney (D-West Deptford), union officials, manufacturing officials and renewable energy companies and interest groups all testified Thursday.

Sweeney testified on behalf of the potential jobs lost and negative economic impact if the bill doesn’t go through and the nuclear plants have to eventually shut down.

Izzo told the committee he understood the concerns of those opposed, but that the bill, which he stressed required BPU oversight, was, in fact, saving the state’s ratepayers money.

If the bill doesn’t pass, the cost to customers would increase by one-third more than what it would increase under the bill.

“I would never insult this committee and come to you to solve a PSEG problem,” Izzo said. “You should not pay one penny more than what it would cost if the plants go away.”

(READ MORE from ROI-NJ on the subsidy bill.)

When asked why the state should aid a company that relies on private money to operate, and why the existing profits couldn’t be spread to support the plant from other energy sources, Izzo explained it was similar to retailers closing stores that do not perform well.

“We talk about this wholesale power market as if it were a free market. It is designed,” Izzo said. “(The) rules put no value on fuel diversity and put no value on carbon. So, nuclear plants in regulated markets are doing quite well. It’s nuclear plants in competitive markets where states have had to step in because the federal government has not stepped in and done its job in correcting market flaws.”

Sarah Spaff, with Mothers for Nuclear, said the existing renewable sources aren’t strong enough to support the loss of the best zero-emission energy source — nuclear — today, and the state’s energy system should not be set up to fail.

With the loss of the nuclear plants, the state would have to rely on more out-of-state energy sources.

Sweeney said the large mix of opposition and support Thursday was proof the bill, which has been through several iterations and been pulled from hearing schedules in the recent past, was good.

“When everyone is angry, it means you’ve hit a sweet spot,” he said.