12.20.17: Statement On S. 3560

For Immediate Release: December 20, 2017

"WE ALL KNOW A SPECIAL DEAL FOR PSEG WILL BE A COSTLY DISASTER FOR NEW JERSEY RATEPAYERS"

 

Trenton, NJ - Matt Fossen, spokesperson for the NJ Coalition for Fair Energy, released the following statement today regarding S. 3560, a bill pertaining to the Hope Creek and Salem Nuclear stations, owned and operated by PSEG. The bill was formally introduced today in a joint hearing by the Senate Environment and Energy Committee and the Assembly Telecommunications and Utilities Committee:  

“The bottom line is that this bill creates a multi-hundred million dollar per year energy tax hike, taking direct aim at New Jersey ratepayers just to help the wallets of PSEG investors. Despite PSEG’s scare tactics and suggestions that now is the time to act, all the data shows that the plants are financially secure, and that a lame duck session is not the right way to evaluate this issue. Today’s hearing shows that we aren’t the only ones who feel this way, and who think that New Jerseyans should not be subjected to corporate welfare.” 

Among those who testified today included Mauricio Gutierrez, President and CEO of NRG; John Shelk, President and CEO of the Electric Power Supply Association; Joe Kerecman, Director of Regulatory and Government Affairs for Calpine; and Tanya Bodell, Executive Director of Energyzt Advisors, LLC. In her testimony, Bodell noted that both plants are slated to remain profitable through at least 2021, and that the proposal at hand would send ratepayer money directly to PSEG equity holders. She further testified that special legislative assistance was unwarranted.

“The New Jersey nuclear plants have always been profitable and will continue to be so through at least 2021 under current conditions due to lucrative hedges and market prices that more than cover costs and provide a positive return to investors,” said Bodell. “Therefore, any support payments from the state to the owners of the nuclear power plants in New Jersey that have not announced retirement will simply flow to the equity investors who already have achieved significant returns on their investment.”

Bodell additionally criticized research done by The Brattle Group which claimed that failing to pass a PSEG subsidy would raise rates and destroy the state’s economy. She offered several rebuttals to these arguments, including the fact that “the study does not account for negative economic impacts of potential out-of-market support, including higher energy costs in the event subsidies are not required to keep the plants operational, and the risk differential between uncertain benefits versus certain costs,” while adding that the research is merely “a summary report. It does not include the detailed backup or description of assumptions required to reproduce the results. Without any basis for ensuring that the results can be tested, the conclusions should not be relied upon.”

“The Brattle Group report is inadequate and incomplete,” Bodell summarized.  “It should not be relied upon to make any decision regarding support for the New Jersey Nuclear Power Plants.”

Swaths of data attest to the fact that PSEG’s plants are financially healthy and that no legislative assistance is necessary. Company officials are on the record saying the plants are and will remain through at least 2019, while Ralph Izzo, PSEG’s CEO, has reiterated elsewhere that both plants are undeniably “in the black.” Further evidence shows that the company has earned over $753 million in net income this year alone. As such, the majority of New Jersey residents also disagree with giving a PSEG an energy tax-funded subsidy. One survey showed that “69 percent of voters oppose the state legislature giving a financial subsidy to a nuclear power company that would be in addition to the revenue that company already receives from New Jersey customers.” Another, by the Rutgers Eagleton Center for Public Polling, demonstrated that 75% “are not interested in subsidizing already profitable nuclear power companies.” Several reports have shown that subsidizing the plants will cost New Jersey ratepayers over $300 million per year, equalling a $35 increase on their energy bills at least.

“There aren’t many issues that AARP, environment organizations, consumer advocacy groups, and power producers agree on, but one thing is clear after today: we all know a special deal for PSEG will be a costly disaster for New Jersey ratepayers,” Fossen concluded.  “The facts are simple: PSEG’s nuclear units have earned windfall profits, don’t need a subsidy, and giving them one would create a multi-billion dollar tax hike for New Jersey consumers. With all the available evidence and existing regional systems in place, there is simply no reason to cut a special legislative deal with PSEG.”

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