New Jersey approves more nuclear incentives

New Jersey regulators today awarded a second round of zero-emissions certificates (ZECs) to three nuclear generators plants, citing the need to support the units as the state moves toward 100pc zero-emissions electricity supply by the middle of the century.

The Board of Public Utilities (BPU) voted unanimously to award ZECs at their full value to the Hope Creek, Salem 1 and Salem 2 nuclear stations, allotting about $100mn to each of the generators for a total of $300mn from June 2022-May 2025.

"The reality is that we need the nuclear plants to minimize harmful emissions that adversely affect the residents of the state of New Jersey," BPU president Joseph Fiordaliso said.

The other commissioners similarly voiced the need to safeguard the largest supply of New Jersey's carbon-free power as the state seeks 100pc clean energy by 2050. Without the full-value incentives, utility PSEG, which owns and operates Hope Creek and a share of the Salem plants, said it would close the facilities.

BPU staff found that a value less than the full amount, $10/MWh, "may not be sufficient" to prevent the three units from closing. It also determined that losing the plants would prompt the state to replace the lost electricity with regional coal- and natural gas-fired generation, raising CO2 and NOx emissions by over 13pc between 2022-25.

But the nuclear incentives have been a controversial part of the state's efforts to wean itself away from fossil fuels. Environmental advocates have frequently railed against the continued reliance on the plants, calling instead for New Jersey to use more renewables.

New Jersey Sierra Club director Jeff Tittel called the extended incentives "unneeded," arguing that BPU "once again sold out the ratepayers and renewable energy" with its decision.

Commissioner Mary-Anna Holden balked at the idea that BPU would allow the nuclear incentives to expire. While she says she supports renewable energy, Holden noted that ZECs are considerably less expensive at $10/MWh than incentives the state provides to solar or will provide to offshore wind.

The state's projected price for offshore RECs in 2024 is $59/MWh, while Argus yesterday assessed New Jersey solar RECs for 2021 at over $238/MWh.

With the nuclear plants already operating, they require no upfront capital investment to reap the carbon-free energy. "The cost of operation and maintenance is more of a burden to a plant nearer to an end of its useful life than it is to offshore wind or solar — they have profitable lives ahead," Holden said.

New Jersey created the ZEC program in 2018 to keep the state's nuclear plants afloat amid competition from natural gas and renewables. Under the program, electric suppliers are required to purchase ZECs from the nuclear units and will be able to recover the money through a charge on their customers' bills. The ZECs are meant to represent the environmental benefits of the nuclear plants' emissions-free generation.

At the end of the upcoming three-year stretch, the board will review the continued necessity of ZECs.

By Patrick Zemanek