Trenton, N.J. (Nov. 9, 2020) –– As a $300 million annual nuclear subsidy continues to burden New Jersey consumers, a coalition has formed to oppose another proposed major energy policy initiative from PSEG and Exelon that would enable the companies to transform the state’s electricity capacity market and obtain windfall profits.
NJ Ratepayers United (NJRU) is a diverse coalition of New Jersey consumers, business groups, consumer advocates, grassroots organizations and energy providers that have joined forces to stop the proposed Fixed Resource Requirement (FRR). This proposed overhaul would transform how the state procures power, eliminating ratepayer protections and empowering select companies to leverage their market power to further increase electricity costs.
NJRU members include AARP New Jersey, the New Jersey Large Energy Users Coalition, New Jersey Citizen Action, Electric Power Supply Association and others. See below for a complete list.
“Hundreds of thousands of New Jersey consumers are struggling due to the financial and health impacts of the COVID-19 pandemic — many can’t afford to pay their bills now,” said Evelyn Liebman, AARP NJ’s director of advocacy. “Affordable utility service is especially important for older residents and their families, many of whom struggle to balance paying utility bills with other household expenses, food and medicine. Exiting our current regional market would create more uncertainty and higher electricity rates at a time when the state’s consumers can ill afford to pay even more.”
The PJM Independent Market Monitor estimates that adoption of FRR would cost New Jersey ratepayers $300 million or more per year, while other experts project increases of up to $700 million per year. These increases would be in addition to the current nuclear subsidy payments of $300 million annually.
“New Jersey ratepayers deserve to continue having the consumer and regulatory protections that the regional transmission organization and the NJ Board of Public Utilities provides,” said Dena Mottola Jaborka, associate director of NJ Citizen Action. “Giving more market power to a few corporations will lead to higher prices at a time when many New jersey families are already struggling to pay their energy bills. Our residents deserve more protections and access to affordable energy, not a complicated energy scheme that only benefits corporate profits.”
The New Jersey Board of Public Utilities (BPU) is investigating the companies’ FRR proposals. The New Jersey Senate voted recently to advance Senate Bill 2804, which requires the BPU to study whether the state should consider withdrawing from the PJM Interconnection — the wholesale power grid — and develop its own independent transmission system and FRR capacity procurement option.
Currently, PJM coordinates the competitive procurement and open access operation of electric power for New Jersey and other mid-Atlantic states and the interstate transmission grid. Understanding the value, New Jersey has participated in PJM dating to 1927 when the organization was formed as the Pennsylvania-New Jersey Interconnection. In its FRR investigation, the state is weighing abandoning the regional competitive capacity market in favor of a non-market based program that would create unnecessary risks and expose ratepayers to potentially billions of dollars in additional costs.
“FRR is a largely untested mechanism that is predicated on burdensome and complex rules that would be difficult for the state to enforce,” said Steven Goldenberg, counsel to the New Jersey Large Energy Users Coalition. “It also carries huge potential financial risks, including the potential to create opportunities for the exercise of market power by PSEG and Exelon that will further increase energy costs. These risks greatly exceed the limited benefits the state would receive from adoption of FRR.”
In 2018, under the threat of nuclear plant closures and job losses, New Jersey lawmakers enacted an annual $300 million Zero Emissions Credit energy tax which provided nuclear subsidies to PSEG and Exelon for three years. Despite overwhelming evidence from independent experts and BPU’s own consultant that these subsidies were not needed, PSEG and Exelon last year were approved to receive the first $300 million windfall that is already being passed on to ratepayers’ monthly energy bills.
The companies recently indicated that they would be willing to forego their current $300 million per year subsidies if they are successful on the FRR proposal, demonstrating the potential financial value of making this transition. However, at the same time, they are working to secure another three years of $300 million per year ZEC tax from New Jersey ratepayers while continuing to pursue the costly FRR proposal.
NJ Ratepayers United encourages New Jersey elected officials and the BPU to support continued participation in the regional competitive energy market that ensures consumers are protected and continue to have access to affordable, reliable electricity.
(Download audio and video soundbites from a NJRU Dropbox folder by clicking here.)
New Jersey ratepayers can also visit NJRU’s Action Center to take action in opposition to the proposed FRR.
Members of NJ Ratepayers United include:
AARP New Jersey
Americans for Prosperity – New Jersey
Chemistry Council of New Jersey
Electric Power Supply Association
ENGIE North America
New Jersey Attractions Association
New Jersey Citizens Action
New Jersey Large Energy Users Coalition
About NJ Ratepayers United
NJ Ratepayers United formed to protect New Jersey’s electricity ratepayers from corporate greed. Learn about who we are and why we’re fighting the FRR proposal.