(Reuters) - Three state senators in New Jersey sponsored a bill that could cost electric ratepayers about $320 million a year to subsidize nuclear reactors that could otherwise be closed.
Last week, Ralph Izzo, chief executive of Public Service Enterprise Group Inc, which operates three reactors in the state at the Salem and Hope Creek plants, said he may be forced to shut the units unless the state provides subsidies.
Izzo, who made his comments at a joint committee session in the New Jersey legislature, said the reactors were profitable now but could start losing money over the next couple of years because cheap natural gas has depressed power prices.
“Unless market prices change, we will no longer be covering our costs, within the next two years,” Izzo said.
The bill is expected to go before a joint legislative committee next Wednesday. If it ultimately passes and becomes law, it would require utilities to recover 0.4 cent per kilowatt hour from customers to cover the cost of the subsidy.
Stefanie Brand, the state’s ratepayer advocate, said that could cost the average residential customer using about 850 kilowatt hours per month about $3.40 each month.
“We think the bill has a lot of problems. The process is very rushed ... It’s going to be very difficult to do the kind of probing review that we do before we can decide if this bill is even needed,” Brand said.
PSEG defended the bill.
“The state has much to lose if its nuclear plants were forced to close,” PSEG spokesman Paul Rosengren said in an emailed statement.
PSEG said economic studies show the loss of its plants would result in $400 million a year in higher electricity rates, 14 million tons a year of additional air pollution and the loss of 5,800 or more jobs.
Last week, New Jersey Governor Chris Christie, who is in his last month in office, said he wants to see nuclear power plants continue to operate in the state and that he would consider a bill to subsidize the reactors.
New Jersey is one of several states exploring ways to keep reactors in service to preserve carbon-free energy, jobs and taxes.
In 2016, New York and Illinois adopted rules to subsidize some reactors that were in danger of closing.
Ohio, Pennsylvania and Connecticut have also considered proposals to protect their reactors.
Reporting by Scott DiSavino; Editing by David Gregorio
Our Standards: The Thomson Reuters Trust Principles.