By Stephen Sweeney
America's nuclear industry is struggling. Around the country, depressed wholesale electricity prices are driving productive nuclear power plants out of business. New Jersey's Salem and Hope Creek nuclear plants could be next -- and that would mean higher energy bills, increased air pollution and thousands of lost jobs.
The need to act is urgent. That's why I proposed legislation last month to provide a safety net for New Jersey's nuclear energy, and it is why I will push for its enactment early this year.
At first, low energy prices may sound like welcome news. But energy markets are complex, and New Jersey's nuclear industry is no ordinary business. If rock-bottom energy prices created by the surge in natural gas production force the closure of our nuclear plants, it means turning off the source of electricity for 3.8 million homes.
Wherever nuclear plants have closed, the result has been the same: higher prices for customers. Numerous studies have found that existing nuclear plants generate electricity more cheaply than renewable energy sources such as offshore wind or solar power, which require higher subsidies.
Once nuclear plants are closed, they cannot reopen. That's why New York state and Illinois -- two states very similar to us -- have already passed laws to provide the subsidies needed to prevent their nuclear power plants from shutting down.
In a recent report, the moderate think tank Third Way concluded: "Existing reactors should be considered a core component of an affordable low-carbon energy portfolio."
I am convinced that it is cheaper to preserve nuclear than to replace it.
Nuclear energy powers more than our homes -- it also drives hundreds of millions of dollars in business every year for New Jersey's economy. Nuclear plants support nearly 6,000 jobs throughout the state, most of which are at PSEG's three nuclear reactors in Salem County. And every year, the plants generate millions more in federal, state and local taxes.
Nuclear plants emit no air pollution or greenhouse gases, which is good for public health and the climate. And nuclear energy is one of many fuels used to generate electricity, a diverse mix that contributes to the reliability and resiliency of our electric grid.
Fortunately, our state is in a position to provide a safety net that can preserve the benefits of nuclear energy for all New Jersey customers -- and do it in a way that will cost less than allowing our nuclear plants to close.
My legislation creates a mechanism to compensate nuclear plants for benefits that today's energy markets neglect, such as their contributions to clean air and reliability. This support is intended to keep the nuclear plants in Salem County -- which generate one-third of New Jersey's electricity -- operating while regional solutions are formulated.
I have included in the bill several protections for New Jersey consumers:
- To be eligible, nuclear plants would have to prove immediate financial need by opening their books to state regulators;
- Nuclear plants would be required to stay open for as long as the safety net is in place; and
- Support for the plants would end if market conditions changed, and would be offset when protective measures were implemented at regional or national levels.
Let me be clear: I drafted this bill to protect New Jersey from harmful impacts if our state's nuclear plants were forced to close. Critics have been using scare tactics -- throwing out loaded words such as "bailout" and "nuclear tax." Let's not allow this kind of charged, political rhetoric distract from the crisis at hand.
There are a lot of myths that have been thrown around about this bill. This bill does not guarantee PSEG a subsidy. It only caps the subsidy and requires PSEG to open its books to the state Board of Public Utilities and make the case for why its nuclear plants should receive any ratepayer support at all to remain open.
Nor does this bill crowd out renewable energy alternatives such as solar energy or offshore wind. We already provide $460 million in subsidies to solar power -- even though it provides just 3.5 percent of the state's energy -- because solar power is important to our clean-energy portfolio.
And no one has been a bigger advocate of offshore wind than I have. I sponsored the 2010 legislation providing credits for offshore wind development that is still sitting before the BPU waiting to move forward, and I am optimistic we will move expeditiously this year to make New Jersey the center of the offshore wind industry.
But expanding solar energy and creating a new offshore wind industry does not mitigate the need for nuclear power.
These are the facts: Failing to preserve our nuclear plants will cost New Jersey's economy millions in taxes and put thousands of people out of work. What's more, closing our nuclear plants means everyone will pay higher prices for electricity, not lower. It will cost less to maintain these plants than to close them.
We cannot wait to act. Once a nuclear plant closes, it's closed for good. The plants -- and the thousands of highly skilled, highly sought-after employees they sustain -- will be gone forever.
Preserving nuclear energy is in New Jersey's best interest, for clean air and public health, for a safe, 24/7 energy supply. What's more, this legislation is the least-expensive solution to a costly problem. Even with the temporary cost of a nuclear safety net, based on today's rates, PSE&G's typical residential electric bill will still be about 4 percent less than it was in 2010.
If our state's nuclear plants are shut down while they're still able to generate safe, clean and around-the-clock electricity, it will mean more air pollution, fewer jobs and higher bills for New Jersey. That's moving us in the wrong direction.
Stephen Sweeney, D-Gloucester, is president of the New Jersey Senate.
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