Public Service Enterprise Group and the minority shareholder of its Salem nuclear plant will stop funding capital projects as a result of the delay in passing a nuclear subsidy bill in the Legislature, according to a Securities & Exchange Commission filing Friday.
Exelon and PSEG filed the 8-K statement following a co-owners meeting on February 28.
A copy of the filing, obtained by ROI-NJ, shows the two companies will continue to fund improvements mandated by regulations, but will refrain from other improvement projects unless the bill is passed.
“As a result of recent postponements in the New Jersey legislative process regarding a bill that would sufficiently value the attributes of nuclear generating stations serving New Jersey and the decline in the market energy revenues, Exelon Generation and PSEG Nuclear agreed, at a co-owners meeting held on February 28, 2018, to cancel the funding of future capital projects at the Salem generating station that are not required to meet Nuclear Regulatory Commission or other regulatory requirements or that are not required to ensure its safe operation,” the companies said in the filing.
“Exelon Generation and PSEG Nuclear agreed that the funding of these projects may be restored when and if legislation is enacted in New Jersey that sufficiently values the attributes of nuclear generation and Salem benefits from such legislation.”
This is the latest step in the contentious battle in Trenton, which many have criticized as a game of chicken between the energy companies and the state.
“PSEG Nuclear anticipates that similar actions may be appropriate at its wholly-owned Hope Creek generating station in New Jersey as well, and the assessment of this is continuing,” the filing said.
The bill that would provide hundreds of millions in subsidies to the nuclear plants was slated for a vote in the Senate on Monday, but was pulled at the last minute due to a lack of votes.
PSEG has maintained the need to support its nuclear energy production is good for the state to reduce carbon emissions while renewable energy becomes more affordable.
Critics have said the company should not be leaning on taxpayer money to subsidize a private company with shareholders.
(READ MORE from ROI-NJ on PSEG and the subsidy.)
The nuclear market in New Jersey is unregulated and operates in a competitive market.
In recent years, cheaper and more abundant natural gas has resulted in a negative outlook for nuclear.
Nuclear plants around the country are facing similar issues, and some have been bailed out in New York and Illinois.
The New Jersey Coalition for Fair Energy, which opposes the bill, said in a statement Friday that the company is holding the state hostage.
“This is yet another example of nuclear owners holding their states hostage. It’s ironic that PSEG will pass on lavish dividends to their New York-based investors while at the same time threatening to withhold much-needed investments from local communities,” according to the statement. “PSEG should drop ‘public service’ from their name, because the only people they’re looking to serve are their shareholders.”