New Jersey awards ZECs to PSEG nuclear plants

New Jersey regulators today awarded zero-emission certificates (ZECs) to three nuclear power plants owned by US utility PSEG in a move that could help prevent CO2 emissions from rising in the Regional Greenhouse Gas Initiative (RGGI) cap-and-trade program.

The state Board of Public Utilities (BPU) voted to give potentially $3bn worth of ZECs to the 1,200MW Hope Creek nuclear plant and 2,300MW Salem plant in an attempt to keep the facilities operating against stiff competition from natural gas and renewables.

"The BPU just saved the people of the state hundreds of millions of dollars in what would have been higher energy costs, thousands of jobs lost and tons of environmentally damaging air emissions," PSEG said.

New Jersey is aiming to join the now nine-state RGGI program to reduce CO2 emissions from power plants next year. The loss of the nuclear plants, which provide about 90pc of the emissions-free electricity produced in New Jersey, could compromise the state's ability to comply with RGGI's CO2 limits.

PSEG yesterday told federal regulators that it planned to shutter the plants if they did not receive the ZECs. The utility has warned the loss of the nuclear plants could cause New Jersey's CO2 emissions to increase by 2.2mn metric tonnes/yr. The state is planning to join RGGI with an initial cap of 18mn short tons in 2020.

Opponents of the BPU's decision said it will siphon away funding that would better spent on efforts to increase renewable energy generation. New Jersey Rate Counsel director Stefanie Brand said her agency is "looking at" appealing the ruling, which she said will raise electricity costs in the state.

"The BPU sold out the ratepayers and renewable energy today by going along with this unnecessary nuclear subsidy," New Jersey Sierra Club director Jeff Tittel said.

The ZECs are meant to represent the environmental benefits of the nuclear plants' emissions-free generation. Under the program, electric suppliers will be required to purchase ZECs from the nuclear plants and would be able to recover the money through a 0.4¢/kWh charge on electric customers' bills. In total, PSEG could get as much as $300mn/yr for 10 years — a $3bn price tag — from the ZECs.