Sep 29, 2024: The case against restarting Three Mile Island’s Unit-1

If you can’t open it, there will be a service on Friday, March 1at 1PM at the Neill Funeral Home, 3501 Derry Street, Harrisburg, with a visitation for friends and family at noon.

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Feds step in and look to cover some costs of NJ nuclear plants

TOM JOHNSON, ENERGY/ENVIRONMENT WRITER | FEBRUARY 22, 2024 | ENERGY & ENVIRONMENT

Financial assistance from Washington could result in refunds for utility customers

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Hope Creek generating station, Unit 1

Major federal assistance is starting to roll into New Jersey from the federal Inflation Reduction Act, a 2021 law signed by President Joe Biden designed in part to help usher in a clean-energy economy, with its impact soon to be felt by the energy sector and its customers. 

Portions of the federal law started to take effect this past January, helping trigger the Murphy administration’s order last week that New Jersey’s electric utilities stop charging customers a controversial surcharge costing $300 million a year, a step taken to avert closing of three nuclear power plants in the state. 

The state’s more than 3 million utility customers will continue to pay the charge for another 15 months. But they could also be looking at a hefty refund eventually from the owners of the three nuclear power plants in South Jersey, which provide more than one-third of the state’s electricity. 

The end of the surcharge, effective June 1, 2025, is a significant step, given the wave of increases ratepayers have absorbed in recent years as New Jersey tries to transition away from fossil fuels and fight climate change.  

Modernizing the power grid, electrifying the transportation sector, investing in solar energy and reducing energy consumption have all led to higher prices for consumers with no signs of letting up anytime soon, advocates have said. The federal aid might provide some relief. 

“That’s good news for ratepayers,’’ said state Sen. Bob Smith, a Democrat from Middlesex County who has sponsored many bills aimed at curbing emissions contributing to climate change, referring to the federal tax credits replacing the state surcharge. “It’s time to strengthen the grid.’’ 

Transition to green energy 

New Jersey’s plan to decarbonize the economy focuses on electrifying two large sectors that are the largest sources of greenhouse gas emissions: transportation and buildings.  

The federal law, touted as the most ambitious climate legislation ever enacted, provides for $370 billion in investments to transition to clean energy. Among its provisions, it will provide lucrative production tax credits to the nation’s nuclear industry of approximately $30 billion. In New Jersey, its three operating nuclear units provide more than 90% of the state’s carbon-free electricity. 

Since 2019, utility ratepayers have been paying a surcharge on their monthly bills for the state’s nuclear power plants, a move that proponents argued was necessary to avert shutdown by their owners, Public Service Enterprise Group and Constellation Energy. 

At this point, neither the state Board of Public Utilities nor PSEG could say just how much the new tax credits will provide. The Internal Revenue Service issued draft guidance late last year, but it is too soon to say what its final form will be, according to a statement from the agency. 

End of ratepayer surcharge 

Since the state law creating the surcharge for the nuclear power plants stipulated any federal assistance would offset what ratepayers paid, PSEG and Constellation withdrew applications to renew the state surcharge for a new three-year cycle scheduled to begin in June 2025. 

Jesse Jenkins, an assistant professor at Princeton University, believes the eventual refund for ratepayers could be large. With interest, it may approach $450 million. 

William Smith, strategic communications manager for PSEG, said the company is still awaiting guidance from the Treasury Department on the terms needed to calculate the tax credit. “We can’t speculate on possible refunds until there’s clarity on those terms,’’ Smith said. 

But others, including clean-energy advocates were elated.  

“This is a big win for New Jersey,’’ said Doug O’Malley, director of Environment New Jersey, calling the eventual replacement of the surcharge the biggest down payment the state has received yet from the federal government to fight climate change. 

Lyle Rawlings, a longtime solar developer in Flemington, described the $300 million annual nuclear surcharge as a significant part of consumers’ monthly bill.  

“That coming off frees up a lot,’’ he said. 

Raymond Cantor, deputy government affairs director for the New Jersey Business & Industry Association, said the tax credits will help lessen the cost of the state’s and nation’s aggressive clean-energy agenda, but other big bills remain in the future.  

“Still, the price tag on everything is astronomical and unknown,’’ Cantor said. 

Most meetings are being held in person, but some are still remote or virtual. Go to eastham-ma.gov/calendar-by-event-type/16 and click on the meeting you are interested in to learn about meeting locations and any remote options that may be offered.

Thursday, Sept. 16

• Affordable Housing Trust, 11 a.m., virtual
• Housing Authority, 4 p.m., Small Meeting Room, Eastham Rec. Dept.
• T-Time Committee Public Forum, 5 p.m., virtual

Monday, Sept. 20

• Strategic Planning Committee, 3 p.m.

Tuesday, Sept. 21

• Historical Commission workshop, 10:30 a.m., Public Library
• Elementary School Committee, 4 p.m.
• T-Time Development Committee, 5 p.m., Town Hall

Wednesday, Sept. 22

• T-Time Committee Public Forum #2, 5 p.m., Salt Pond Visitor Center Amphitheater

Conversation Starters

Vacancies in the Firehouse

At the select board’s meeting this past Monday, Town Administrator Jacqui Beebe announced the retirement of Fire Chief Kent Farrenkopf. His retirement comes after nearly six years as Eastham chief and more than 37 years in total service. Beebe said she is heartbroken about the news and left his letter on her desk for two days before reading it. She called Farrenkopt a “very fine chief.”

Chief Farrenkopf will be replaced by Deputy Chief Dan Keene, who was hired in 2018.

The town now has three openings in the firehouse following two other recent resignations. Beebe said one of the departures was for personal reasons while another department employee is moving out of state.

Select board chair Arthur Autorino asked whether Beebe thought the search would be successful. “I’ve heard they’re very hard to fill, these openings,” he said. Beebe responded that it’s a difficult job and a “long haul” for anyone looking to become certified. Applicants must be certified EMTs or paramedics, complete the Entry Level Firefighter I and I certification, and attend the Mass. Fire Academy, according to the job description.

Assistant Town Administrator and Finance Director Rich Bienvenue called the openings a “long-term problem” affecting the entire town across departments. Select board member Jamie Demetri agreed, saying she felt the issue was larger than simply filling the positions in the present moment but rather that “people who work for the town can’t afford to live in the town.” —Cam Blair

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Ratepayers remain on hook for nuclear subsidies — for now

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The Hope Creek nuclear power-generating plant in Salem County

An unpopular surcharge on every New Jersey utility customer’s monthly bill — amounting to $70 annually for the typical homeowner and much more for manufacturers — will end next year when the state eliminates a $300 million annual subsidy aimed to keep its three nuclear plants from closing. 

The state Board of Public Utilities on Wednesday adopted an order directing the utilities to stop collecting the surcharge, effective June 1, 2025. The subsidy, enacted in 2019 after a bitter legislative fight, has raised about a half-billion dollars thus far, for Public Service Enterprise Group and Constellation Energy, the owners of the units in South Jersey. 

The energy companies had submitted applications to the BPU to continue the surcharge for another three years but decided to withdraw from the process in late November. No one else applied for the subsidy, dubbed zero-emission certificates (ZECs), leading the agency to cancel a third round of any ratepayer-supported subsidies. 

Feds to pick up tab  

PSEG and Constellation are expected to replace the subsidy with federally funded production tax credits (PTCs) created by Congress and the Biden administration. In a statement, PSEG said while the rules from the U.S. Treasury Department still have not been issued, the company is confident that the PTC will proceed as intended and sufficiently support the nuclear generating units. 

The three nuclear plants — Salem I, Salem II, and Hope Creek — are an integral part of the Murphy administration’s clean-energy plan, providing 30% of the carbon-free electricity in the state. If they stopped operating, New Jersey would never achieve its aggressive goals of cutting carbon pollution by 80% below 2006 levels by 2050, according to state officials. 

‘This wasn’t needed. Now, with federal dollars kicking in, it should end sooner and give ratepayers a break.’ — Jeff Tittel, longtime environmental activist 

PSEG won the subsidies in 2019 after a long legislative battle that began during the Christie administration and was achieved early in Gov. Phil Murphy’s term. PSEG repeatedly threatened to close the plants, which employ more than 6,000 people, if state aid was not forthcoming.

In withdrawing their applications, the companies are counting on winning lucrative production tax credits from the Biden administration’s Inflation Reduction Act, a law passed by Congress in 2021. The tax credits are expected to be available sometime this year. 

Big bills for big businesses  

Currently, the surcharge amounts to roughly $70 a year for typical residential customers but can run as much as tens of thousands of dollars or much more for businesses that use a lot of energy. At the time the surcharge was adopted, at least six nuclear plants had shut down, unable to compete with cheaper sources of electricity, primarily natural gas. 

The surcharge was widely supported by major business groups and many prominent environmental organizations, primarily as nuclear was the largest source of zero-emission electricity at the time. 

Dennis Hart, executive director of the Chemistry Industry Council of New Jersey, noted manufacturers pay an added $78,000 to $586,000 because of the surcharge.

At the same time, the Division of Rate Counsel, an independent monitor for the regional power grid, and consumer advocates argued unsuccessfully that the plants were profitable and did not need any subsidy, a stance endorsed by a consultant hired by the BPU. The agency nevertheless approved an initial three-year subsidy, followed by a second one in 2021.

Jeff Tittel, a longtime environmental activist who was president of the state’s Sierra Club at the time, said the ZEC program should have never been approved.

“This wasn’t needed. Now, with federal dollars kicking in, it should end sooner and give ratepayers a break,’’ he said. 

The board had no comment on Wednesday in cancelling the third round of funding for ZECs.  

The right time for a rate reduction  

But the pending cut in utility bills is viewed by many as a positive step, given a series of rate increases approved by the agency as part of the clean-energy transition and push to modernize the power grid. 

‘It’s very good news,’’ said Brian Lipman, director of the Division of Rate Counsel a vocal critic of rising electric and gas bills. “For three years, this surcharge will fall off customers’ bills and hopefully will stay off.’’ 

In its order, the BPU left the door open for a fourth eligibility period to qualify for ZECs, beginning June 1, 2028 and ending May 31, 2031. “Who knows what happens three years from now? Who knows if the nuclear plants need subsidies or not?’’ asked Lipman. 

PSEG noted it would revisit the need for ZECs if federal support for the industry is insufficient. 

Dennis Hart, executive director of the Chemistry Industry Council of New Jersey, noted manufacturers pay an added $78,000 to $586,000 because of the surcharge. “These rates are unsustainable, and the reductions will go a long way towards maintaining the important jobs and economic benefits of manufacturing in New Jersey,’’ he said. 

Under state law, any money received from the federal government is to be used to offset the cost of the ratepayer surcharge, if both are awarded at the same time. There is $30 billion available under the federal production tax credit. 

Rich Henning, president of the New Jersey Utilities Association, said this is what many energy officials have been seeking for some time. “From a standpoint of customers, utilities and power companies, it is a win all the way around,’’ he said. 

“It highlights the federal support for nuclear power,’’ said Paul Patterson, an energy analyst at Glenrock Associates. 

In the meantime, energy rates continue to rise elsewhere. The BPU approved an $85 million increase in revenue for Jersey Central Power & Light, a step that will raise bills for its customers by an average of $4 a month per homeowner. In addition, New Jersey Natural Gas filed a $225 million rate petition with the BPU, which will, if approved, raise rates by $29 a month.