TRYING TO PASS A DEAL THAT HELPS THE BOTTOM LINE AND HURTS RATEPAYERS
PSEG is a Newark-based energy company that has owned the Hope Creek and Salem nuclear generating stations in Salem County since 2003 and 2001, respectively. Despite being on record saying both plants are set to remain cash-flow positive in the coming years, garnering $7.6 billion in revenue from them since 1999, and making $3 billion in gross profits during 2017 alone, PSEG wants a multi-billion dollar subsidy for its nuclear plants - when all the available evidence shows it’ll increase electric bills dramatically.
GIVING PSEG WHAT IT WANTS WILL COST RATEPAYERS AT LEAST AN EXTRA $300 MILLION PER YEAR, ALL TO SUPPORT PLANTS THAT REMAIN INTACT AND A COMPANY WHICH IS MAKING WINDFALLS.
Hope Creek and Salem are in no imminent danger, but New Jersey consumers could quickly be on the hook for a massive energy tax hike. PSEG is trying to get a proposal through under the public’s nose, but the facts are clear: subsidizing PSEG is just corporate profit-padding, at the expense of consumers.
TAXING NEW JERSEY TO FOREGO EXISTING RESOURCES
While PSEG has suggested its plants could face struggles in the future, it has failed to remind the public that existing, regionally funded solutions are in place should hard times come. One is the Regional Greenhouse Gas Initiative (RGGI), which Governor Murphy is working to have New Jersey rejoin. Under RGGI, which is a cross-state endeavor, the plants can receive tens of millions of dollars in extra revenue yearly. Another is PJM, the regional grid operator, which supports struggling generators and has unveiled new controls to prop up nuclear power. There’s also the federal government, which has examined national reforms to help nuclear providers in the wholesale power market.
Each of these solutions are funded regionally, and spread the burden of subsidizing needy producers. Since Hope Creek and Salem provide power outside of New Jersey, any efforts to provide financial assistance should be addressed regionally and not exclusively in-state. If the plants were truly struggling, PSEG would not doubt go that route.
PSEG KNOWS IT CAN MAKE A FORTUNE WITH A SPECIAL INSTATE DEAL, AND IS AVOIDING WELL KNOWN REGIONAL SYSTEMS THAT IT’D OTHERWISE RELY ON IF HELP WAS TRULY NEEDED.
THE FACTS ABOUT PSEG'S "STRUGGLES" IN NEW JERSEY
Despite being projected to earn less than $5 billion in market revenue since 1999, PSEG has made $7.6 billion from its two New Jersey plants since 1999.
Research from Daymark Energy Advisors found that "In all cases, the net present value of actual revenue exceeds the net present value of the forecasted revenues."
PSEG has also enjoyed billions of extra dollars via ratepayer-funded stranded costs. The data shows that, since 1999, PSEG has made $4.5 billion in such charges in New Jersey, $2.4 billion of which was explicitly for its nuclear units.
BOTTOM LINE: HIGHER COSTS FOR CONSUMERS, BIGGER PROFITS FOR PSEG
No matter how many ‘benefits’ PSEG argues would result from a special legislative deal, reality is that New Jersey consumers can’t afford (nor want) it. 75% of state residents oppose subsidizing nuclear plants, because they know it doesn’t pass the smell test. This proposal might mean bigger profits for PSEG, but for ratepayers it translates to hundreds of millions of dollars more in energy costs each year.