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NJ governor signs bill to aid PSEG nukes, boost renewables

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NJ governor signs bill to aid PSEG nukes, boost renewables

New Jersey, which gets about 40% of its electricity from nuclear resources, became the third state in the U.S. to adopt a program that pays existing nuclear plants extra for not producing any emissions.

Gov. Phil Murphy on May 23 signed Senate Bill 2313, which uses a zero-emissions credit, or ZEC, program to pay nuclear plants for their environmental and fuel diversity benefits. At an event in South Brunswick, N.J., broadcast through Facebook, Murphy also signed a clean energy bill, A. 3723/S. 2314, that expands renewable energy supplies and signed an executive order requiring revisions to the state's energy plan by June 1, 2019.

In a statement, Murphy noted nuclear is the state's largest source of carbon-free energy. He also said the bill gives the New Jersey Board of Public Utilities "broad latitude" to consult experts and adjust the ZEC payments to make sure they represent a plant owner's actual need.

With the nuclear bill adopted, New Jersey follows Illinois and New York, which both enacted ZEC programs in 2016 to support nuclear plants in their states. Other states with large nuclear resources such as Connecticut, Ohio and Pennsylvania are considering similar policies. The U.S. Department of Energy has also considered federal means to intervene on behalf of financially struggling nuclear and coal plants.

Critics of the New Jersey nuclear bill say it lacks enough consumer protections and offers local utility holding company Public Service Enterprise Group Inc., or PSEG, $300 million a year in subsidies to save its 1,172-MW Hope Creek plant and the 2,328-MW Salem plant it co-owns with Exelon Corp.

PSEG Chairman, President and CEO Ralph Izzo said S. 2313 "institutes a detailed regulatory framework for supporting the nuclear generation that considers a plant's environmental and economic attributes and comes with strong consumer protections, requiring nuclear plant operators to open their books and demonstrate financial need."

Opponents such as Environment New Jersey, the New Jersey Sierra Club, Clean Water Action, and AARP New Jersey, which advocates for seniors, worry the nuclear bill will raise costs for customers. They also worry that S. 2313 limits the ability of the state's consumer advocate, the Division of Rate Counsel, to object to subsidies by having the state attorney general and the Board of Public Utilities filter who has access to the financial information that generators use to justify subsidies.

Rate counsel Director Stefanie Brand intends to participate in proceedings at the BPU related to clean energy and the nuclear credits. "We are hoping it will be a comprehensive and full review of the facilities' finances to see if any subsidies are needed," Brand said.

Some opponents of S. 2313 were quick to consider litigation. Competitive generators represented by the New Jersey Coalition for Fair Energy said, "This issue is not over — and it's unfortunate the courts may be necessary to bring a dose of reason to the debate."

Jeff Tittel, director of the New Jersey Sierra Club, told media on a May 23 call that he would definitely look into a legal challenge at the state level.

Renewables requirement increased

The clean energy bill, A. 3723, requires 50% of the state's energy by 2030 to come from renewables considered Class I, a category including resources such as solar, wind and batteries. The state's earlier requirement was for 17.9% of its power by 2021 to come from Class I renewables. In addition, the legislation moves up a goal to have 5.1% of the state's power come specifically from solar by 2021 instead of 4.1% by 2028. The governor's goals to have 2,000 MW of storage by 2030 and 3,500 MW of offshore wind are codified in A. 3723.

The clean energy bill received broad support from trade groups including the Energy Storage Association, American Wind Energy Association and the Solar Energy Industries Association. Though the bill ends a solar incentive program by 2021, solar advocates said it closes the program in an "orderly way" and starts a process to set up the "next generation of solar programs," according to a joint statement by SEIA, Vote Solar, the Coalition for Community Solar Access and Earthjustice.

Both A. 3723 and S. 2313 passed the Senate and House on April 12 as part of a three-bill package. Murphy, however, did not act on the third bill, S. 1217/A. 2485, which orders the BPU to reconsider a 25-MW offshore wind rejected by former Gov. Chris Christie. If Murphy fails to act by the end of May, the bill automatically becomes law.