As Public Service Enterprise Group prepares for the first hearing with the state Board of Public Utilities in regard to its application to extend the Zero Emission Certificates for the Salem and Hope Creek nuclear power plants in Salem County — a hearing that is scheduled to be held virtually Monday — Rick Thigpen has both a short answer and a long answer for why this is necessary.
First, the short answer.
Can New Jersey reach its clean energy goals without nuclear power?
“No,” Thigpen said.
Now, the long answer.
Is this a repeat of the battle two years ago, when PSEG was approved for the ZECs, what some called an unnecessary $300 million subsidy?
“This is not about us needing more, wanting more,” he said. “It’s about PSEG understanding the value of nuclear to New Jersey’s clean energy future. And we believe that this dialogue in this statutorily created process is the best way to address the issue.
“I don’t want people to think about this as PSEG wants more. That’s not what this is — even though people will try to characterize it that way. That’s why we’re trying to change that dialogue.
“What we want people to think of is, No. 1: Nuclear energy is an enormous asset for the state of New Jersey, as it provides all kinds of benefits — it creates jobs, it contributes to the economy, it keeps electric prices low, it helps keep our air clean and it helps fight climate change. And, No. 2: It’s a key pillar to our state’s clean energy future.
“We have made a decision as a corporation to apply for the extension of the zero emission credit to keep nuclear alive.”
Thigpen, PSEG’s senior vice president for corporate citizenship, said the plants are essential to the state’s ability to successfully achieve its goal of a 100% carbon-free energy supply by 2050. He said nearly 40% of New Jersey’s energy supply is carbon-free because of PSEG’s nuclear plants — and that the company provides more than 90% of all of the carbon-free power generated in the state.
ROI-NJ spoke with Thigpen about all this and more. Here’s a look at the conversation, edited down for clarity — and because no one wants to read too many long answers.
ROI-NJ: For those who only think about a BPU hearing every few years, explain what’s going on Monday?
Rick Thigpen: Monday are the public hearings on the ZEC application process. And then, in about a month, they will have evidentiary hearings, which will have more technical information involved with the parties to the case. There will be cross-examination. It’s all part of the process of making the decision more transparent.
ROI: Why is this so important, big picture?
RT: Because nuclear energy has an enormous impact on our environment and on the economy. It’s a prime job creator and it makes an enormous economic contribution in the state. Our studies have shown $1.2 billion in terms of the economic contribution to the state’s gross domestic product from running the nuclear generating stations. And it’s an enormous creator of jobs. More than 1,600 jobs at the site and close to 3,000 indirect jobs that are created because the site is up and running. So, it has enormous value to the state.
ROI: No one argues that. But, still, it seems to remain a losing book when it comes to operations — thus, the need for the ZEC. Why do you think that is?
RT: It’s because of the failure of Washington to recognize the cost of carbon when studying wholesale electric market prices. The opposition of some people in Washington to state support for carbon-free generation has resulted in fossil fuels being the cheapest option to generate electricity.
But the scientists and the political leaders in Washington are all telling us, ‘We’ve got to change because of climate change.’ So, this decision is a big deal. We’re committed to a clean energy future. And this is one of the key elements to making that happen. So, this hearing process has enormous consequences for the state.
ROI: Explain in simple terms what recognizing the cost of carbon is — and what it would do?
RT: The wholesale electric markets fail to recognize any of the costs of carbon. If we recognized the cost of carbon — the impact that it has on the environment, the impact that it has on the air quality — and included that in energy pricing, then, fossil fuels would no longer be the cheapest option, and the nuclear economic situation would potentially be solved that way.
ROI: So, you want Washington to set the pricing?
RT: Not exactly. We would want to have the price of electricity reflect the cost of carbon in it. Our regional grid operator, PJM, is a creature of the Federal Energy Regulatory Commission, which is a federal government agency. And they have the ability to set the rules on how prices are set.
Here’s another way of thinking about it. Cars have a fuel efficiency standard. The government might say companies need to increase this standard a few more miles per gallon. The government is not telling car companies how to make cars or how to get there, it’s just setting a standard.
ROI: Got it. But, let’s stay on cost. And let’s go back to the fiduciary responsibility PSEG has to investors — which is why the company repeatedly has said it cannot operate nuclear at a loss. This was a big part of the debate two years ago. Are the same economic conditions still in place?
RT: At the core of this issue is financial need. No question about it. And I will say that the financial situation is worse today than it was before. But, we are confident that, by following the statute and by applying the facts to the statute, that New Jersey will understand the situation we’re facing.
ROI: We’re guessing you’re also confident you will face some opposition?
RT: I think it’s appropriate that we are prepared to make the case of the importance of nuclear, the accuracy of our application and the appropriateness of our request. That’s as far as I will take that. As for what others do, we’ll see. But we’re ready for whatever is coming.