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Outgoing NJ governor makes late legislative push for nuke subsidies

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Outgoing NJ governor makes late legislative push for nuke subsidies

Comments by New Jersey Gov. Chris Christie that he is considering backing a nuclear power subsidy bill on his way out of office have come under fire from opponents.

With a little more than a month to go before incoming Gov. Phil Murphy, a Democrat, assumes office Jan. 16, 2018, Christie, a Republican, at a Dec. 6 news conference expressed support for the state Legislature passing a draft nuclear subsidy bill. While Christie said he wants to see nuclear power plants continue to operate in the state for the benefit of energy security and the environment, he said he will not support a bill if it is "larded up" into a giant "wish list" for environmental groups and others.

"There will not be anything irresponsible done during lame duck, not on my watch, so don't be scared," the outgoing governor said. "'Remain calm. All is well,' as they said in [the comedy movie] Animal House."

Christie's comments follow the Dec. 4 warning to state lawmakers by Public Service Enterprise Group Inc. CEO Ralph Izzo that the company's Salem and Hope Creek nuclear plants will have to close if New Jersey does not intervene. The two facilities are profitable under power supply contracts, some of which are expiring soon, that shore up revenues in markets awash with cheap natural gas supplies. Elsewhere, New York and Illinois have implemented zero-emissions credit programs to pay uneconomic nuclear facilities for avoided emissions.

New Jersey's third nuclear facility, Oyster Creek, is slated to retire in 2019 and is owned by Exelon Corp., which also holds a nearly 43% stake in the Salem plant.

Izzo proposed a "safety net" for nuclear plants in financial need, but subsidy payments would be reduced to offset regional and national payments made to the facilities for environmental or fuel diversity attributes. The subsidy payments would be revisited every three years and would cease if a plant no longer needed the economic support.

PSEG spokesman Michael Jennings said in an email that the utility has been in talks over the past 18 months with New Jersey stakeholders on the "economic predicament" their nuclear plants are facing.

"The loss of the plants would have significant consequences for the state," Jennings said. "Nuclear accounts for nearly half the electricity produced in New Jersey and more than 90 percent of electricity that doesn't produce air pollution or carbon. Two recent economic analyses concluded that, if the plants closed, New Jersey electricity bills would go up $400 million a year — every year — and the state would [become] dependent on one fuel, natural gas, for almost all of its electricity."

'Plants are not going to close tomorrow'

Among those opposed to PSEG's proposal is independent generator NRG Energy Inc., which has opposed nuclear "bailouts" in other jurisdictions and is a member of the New Jersey Coalition for Fair Energy, a group made up of other competitive generators and advocacy group the Electric Power Supply Association.

"We don't see the need to hastily jam through a nuclear bailout bill during the lame-duck New Jersey legislative session for something this important, something that needs thoughtful consideration," NRG spokesman David Gaier said in a statement.

Gaier said NRG believes that the competitive energy markets overseen by the PJM Interconnection remain "the best way to ensure fair and reasonable power prices." The draft legislation to subsidize nuclear generation in New Jersey would instead pick "one winner and lots of losers," said Gaier. "New Jersey ratepayers will suffer and the state's business climate will become even more challenging."

The Natural Resources Defense Council criticized Christie for signaling that he opposes provisions in the "multibillion-dollar subsidy package for the state's (currently thriving) nuclear plants" to protect taxpayers and support the growth of renewable energy.

"There is broad support for keeping two plants open — Salem and Hope Creek," NRDC Chief Planning and Integration Officer Dale Bryk said in an online post. "The only question is whether we need to do this now — without a deliberate, thoughtful and transparent plan that narrowly tailors any financial support; truly protects workers and communities; and avoids hamstringing Governor-elect Murphy's ambitious clean energy agenda."

The NRDC urged lawmakers to take their time. The "plants are not going to close tomorrow," Bryk said. "The Murphy administration is about to take office with an ambitious clean energy agenda. If the state legislature decides to take action to avoid an abrupt closure of New Jersey's nuclear plants, it should do so as part of that agenda."