Public Service Enterprise Group (PSEG) has again told New Jersey officials it needs subsidies to continue operating its three nuclear power units in the state, reiterating that without financial help it will begin closing its Hope Creek Generating Station and Salem Nuclear Power Plant as early as 2022.

The three reactors are the only remaining nuclear units operating in New Jersey, after the closure of the Oyster Creek Nuclear Generating Station in September of last year.

New Jersey regulators on Jan. 22 published applications sent by PSEG to the state’s Board of Public Utilities (BPU) in December, in which the company said it should qualify for as much as $300 million in yearly subsidies, or zero emissions credits (ZEC), under the state’s ZEC Act, which was approved in May 2018. Gov. Phil Murphy (D) signed legislation that requires the BPU to establish a program to help maintain the state’s nuclear plants, as part of the effort for the state to reduce carbon emissions by 80% by 2050.

Permanent Closure Within Three Years

PSEG in its letter to the BPU regarding Hope Creek said, “As demonstrated in the materials and certifications provided to the Board as part of this application, PSEG has determined that it will permanently close Hope Creek within three years, absent a material financial change, as this plant is not projected to cover the hundreds of millions of dollars in annual expenditures required for safe operation and the inherent risks of running a nuclear power plant.” The utility said the same thing in its letter asking for subsidies for the Salem plant.

The Hope Creek plant has a single reactor, a 1,200-MW General Electric boiling water reactor that came online in 1986. The plant’s operating license expires in April 2046, according to the Nuclear Regulatory Commission. The Salem plant has two units, each with a Westinghouse pressurized water reactor, and with combined generation capacity of about 2,300 MW. Unit 1 came online in 1977 and is licensed to operate until August 2036. Unit 2 entered service in 1981, and is licensed to operate until April 2040. The Hope Creek and Salem plants are adjacent to each other at a site in Lower Alloways Creek in Salem County.

The state’s Division of the Rate Counsel, an agency representing consumer interests in New Jersey, has said PSEG does need subsidies to continue operating the nuclear plants. Stefanie Brand, director of the Rate Counsel, at a hearing in Hackensack, N.J., in October of last year asked that nuclear operators provide the state with financial information so a determination can be made about whether subsidies are warranted. The filings released Tuesday are redacted, and do not include financial information that PSEG provided in its application for subsidies.

BPU spokesman Peter Peretzman in an emailed statement said, “The financial information is confidential in nature and not available to anyone outside the proceeding, beyond Rate Counsel and the Independent Market Monitor.”

Subsidies Would Impact Ratepayers

As part of New Jersey’s ZEC program, utilities could charge ratepayers an extra $0.004/kWh if a subsidy is approved, and that money would go to the nuclear plants. The $300 million figure from PSEG would be equal to about $31 to $41 per year for the average residential ratepayer.

Brand this week said her office is reviewing the applications and will comment later this month. She said the BPU must determine whether the $0.004/kWh surcharge would be an excessive charge; under state law, New Jersey ratepayers have the right to utility rates that aren’t considered excessive.

Brand on Wednesday said the subsidies could be unfair for ratepayers, particularly if they are paying higher rates to support nuclear plants that are not actually financially troubled. She previously said the PSEG facilities are making money but acknowledged the plants are not receiving the revenues they have expected.

Brand at the October hearing also said the impact of closing nuclear units in the state could be a positive development. “So an assumption cannot be made that if a nuclear plant shuts down it will be replaced by a natural gas or coal plant,” she said. “It is just as likely that the lost capacity will be replaced by a renewable resource. To the extent that energy from the nuclear facility is replaced with renewable resources, the loss of the nuclear plant may have no adverse impact on air quality or other environmental benefits in New Jersey. In fact, the impact may be positive.”

PSEG in its application said the three nuclear units provide more than 90% of the carbon-free power generation in New Jersey. PSEG said the closure of just one unit would increase the state’s greenhouse gas emissions by 40%.

Darrell Proctor is a POWER associate editor (@DarrellProctor1, @POWERmagazine).