Dan Cregg has an easy way about him. Some would say, a quick wit and an engaging personality.
But he is a chief financial officer. And if there’s one thing everyone knows about CFOs, it’s that they don’t joke around when it comes to business. It’s their job to be serious.
That is why Cregg’s matter-of-fact answers, explanations and prognostications surrounding the Thursday morning meeting of the state Board of Public Utilities — the one where the state agency essentially will determine the future of nuclear energy in New Jersey — need to be taken seriously.
The BPU, in accordance with a bill signed by the Legislature last spring, will determine if PSEG does, in fact, need $300 million in Zero Emission Credits to continue running its three remaining nuclear facilities in the state: Hope Creek, Salem 1 and Salem 2.
“We’ve said we’re going to shut down if the ZECs are not awarded,” he told ROI-NJ. “We are preparing very seriously for the contingency of not receiving the certificates because we don’t know what the answer is.
“Hope Creek’s next refueling outage is this fall. We would not do that refueling. We would shut down. Salem 2’s next refueling outage is in the spring. They would shut down. And Salem 1 would be next fall. So, all of that contingency planning is in place, and it continues to move along because those dates are near.
“This is not a threat. This is the reality that we would shut down to the extent that we do not receive ZECs. We’ve said that within the applications, we’ve said it within our SEC documents.
“It just is what it is.”
Some, however, feel it is a threat. Feel it is a major company — with major profits — trying to wrestle $300 million away from a state that already has way too many bills it cannot pay.
They point to PSEG announcing just this week that it is beginning the process of shutting down by not participating in the next energy auction — an event it needs to be a part of to keep operating.
Cregg — always the numbers guy — offered a sound explanation for the move.
“You may have heard over the last day or so that we’re playing hardball, we’re putting a gun to people’s heads, we’re threatening people — and we’re being cute with the timing of the filing of these things,” he said. “That’s not the case at all.
“It is simply the required filing dates lined up across two totally different processes by two totally different organizations that ended up being two days away from each other.”
BPU was told by the Legislature it needed to make a decision within 330 days of the passage of the legislation. That is this week.
PJM, the regional organization that holds the energy auction, told generators it needed to know if they are participating in this August’s auction by April 16. That’s obviously this week, too.
Cregg laughed at the idea that PSEG was playing the heavy.
“You don’t make idle threats through SEC documents,” he said.
PSEG said its stance from the start has been strictly business.
Its officials repeatedly have said it’s their fiduciary responsibility to their investors to make sound and prudent financial decisions — and that closing these plants would be that decision, barring help from the state.
Cregg said the company has provided all the documentation it could to support this position.
“The application answered a series of questions,” he said. “It equaled something like 200 boxes of paper that were actually submitted.
“They had all kinds of information, everything from the financial condition of the facilities to environmental impacts. It was things that aligned with what the legislation required. In our view, our application very clearly met the standard that was in the legislation.”
Cregg doesn’t feel PSEG is asking for too much, saying others have asked for more money and for a longer period.
And he doesn’t feel there are green energy alternatives if the plants close, pointing to the closing of Oyster Creek last fall.
“If you just take a look at how much nuclear power was generated and how much natural gas power was generated — basically the nuclear reduction by Oyster Creek not running has been replaced by natural gas,” he said.
“That’s one of the discussions that folks have had, saying nuclear could be replaced by something other than natural gas. That has been proven to not be the case.
“What you’re going to have is fossil fuels, mainly natural gas — or it could be some coal — that could pick up. But you will not have the clean energy that’s coming from these nuclear plants if they shut down.”
This is what befuddles PSEG executives the most, Cregg said: Keeping the plants open fits the energy plan pushed by Gov. Phil Murphy.
“The governor’s policy has a very strong green element to it, and we are completely aligned with that,” he said.
Business, however, is business.
“We have said extremely clearly that the economic realities of where we are is that without a material financial change — and that’s what these ZECs would be — we will announce the closure of the units,” Cregg said.
That’s no joke.
