PSEG Nukes Clear Auction: Subsidy is a Sham

The Public Service Enterprise Group (PSEG) subsidiary company, PSEG Power, today reported its results from the PJM-BGS auction. Results show that companies will be paid much more than last year for generating electric energy: $140 a megawatt-day. This is a 83% increase from a year earlier. This makes them more profitable than last year and less likely to need the subsidies given to them yesterday through Murphy’s new law. PSEG in our zone will making money hands over fist and their plants in the EMAAC zone still cleared for making money.

“Yesterday was a Banner Day for PSEG at the expense of the taxpayers; not only did they get a subsidy, but they got a windfall from the PJS auction. This shows that they never needed the subsidy since the plants will be profitable for at least five more years on their own. We had called for an analysis with PSEG opening their books and didn’t get it. This is because if we had known they were doing so well, they might not have gotten the subsidy. There was no analysis and the billion-dollar subsidy was signed off. said Jeff Tittel, Director of the new Jersey Sierra Club. “We said all along that they would clear auction and didn’t need the subsidy and we were correct. The plants aren’t going to close and will be selling power for money in the next for years, making money. This shows they didn’t need the subsidy.”

Yesterday Governor Murphy signed the controversial bill 2313 (Sweeney)/ A3724 (McKeon) to give PSEG subsidies for their nuclear plants. They signed the bill before auction results were released so the public didn’t see that PSEG is already viable for the 2025 auction. The prices have gone up not only because the price of natural gas, but the costs of infrastructure including pipelines and new power lines.

“The Legislature and Governor’s Office were either complicit in the scam or were duped by PSEG. Groups including the Sierra Club had asked them to wait to sign the bill until after the auction results, but they deliberately signed it beforehand. This shows that the subsidy is not about PSEG’s need; it’s about selling out the ratepayers. We fought to amend the bill to require an annual financial review, clawback provisions, a ten-year sunset provision, and clear participation by the NJ Division of Rate Council but none of this was added,” said Jeff Tittel. “The Murphy Administration not only gave PSEG a giant subsidy that they don’t need, but they did it in a way to hide from the public how unnecessary it is.”

As a result of President’s Trump tax cut, PSEG is expecting to record a one-time, noncash earnings benefit in the range of $660 million to $850.  Meanwhile Pennsylvania-New Jersey-Maryland Interconnection PJM, a regional grid operator that would raise prices and subsidizes nuclear power plants, has proposed a new pricing scheme that could give hundreds of millions of dollars to coal and nuclear plants. PSEG Power, the operator of Hope Creek and Salem 1 and 2 plants in South Jersey is expected to earn $530 million for as a result of the tax cut signed into law last month by President Trump.

“Trump’s tax cuts and PJM’s new pricing scheme proposal is even more evidence why PSEG don’t need a rate increase to subsidize its nuclear plants at the expense of New Jersey ratepayers. We should not have given them the nuclear subsidy deal when PSEG is already receiving up to $530 million in subsidies from Trump’s tax cut. Under energy deregulation these plants also received 2.5 billion in subsidies as Stranded Assets, despite being profitable. PSEG still want to take billions of NJ ratepayer money to subsidize nuclear their power plants that are already making money,” said Jeff Tittel. 

PSEG increased their lobbying expenses by 545% to push through the unneeded and unnecessary subsidy bill for their nuclear power plant. They said they could lose thousands of jobs but failed to mention that half of them are lobbying jobs. This is a shameful ploy by PSEG to spend millions on lobbying to get billions from New Jersey ratepayers. According to the New Jersey ELEC lobbying report, PSEG invested at least $2.4 million in lobbying to get $3 billion from us.

“This is about greed and not need. PSEG should stand for Public Service Empowers Greed. They are already getting a windfall from tax cuts and can afford to spend over $2 million on lobbyists so why do they need more taxpayer money? PSEG is lobbying to get money from nuclear plants which is the same thing as lobbying to take away from wind and solar funding. This bill means we would be paying millions of dollars to shut down solar and wind energy in New Jersey,” said Jeff Tittel.

The legislation requires consumers have to buy 40% of electricity coming from nuclear power plants. The bill does not have a sunset provision, so this can go on indefinitely. If we have to buy 40% of our electricity from nuclear, we will never get to Governor Murphy’s 100% clean energy renewable goals. Next year, when Oyster Creek Nuclear Plant closes, NJ will only be producing 31% of our power by nuclear. This means we’ll have to go out-of-state to get enough power to reach the 40%. If we expand more natural gas power plants, we’ll end up buying even more out-of-state nuclear power to make up for it.

“The results of the PJM auction prove that PSEG is doing well financially and in no way needed the nuclear subsidy signed off on by Governor Murphy yesterday. The price went up substantially, so they will be making a lot of money and don’t need subsidy. These plants will be selling their electricity with no chance to close at least until 2023, if not 2025. There is zero justification for any nuclear subsidies. It’s nothing more than giving Public Service Enterprise Greed a blank check from the ratepayer that will undermine progress for renewable energy in New Jersey,” said Jeff Tittel, Director of the New Jersey. “Just like nuclear waste, this is forever. Putting out all this hot air to defend the indefensible, saying that this will reduce greenhouse gasses when it won’t. In reality, the nuclear subsidy will hurt renewable energy.”