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South Jersey nuclear power stations headed for big profits, but still beg for subsidies

PSEG DISPUTES NEW ESTIMATE OF NUCLEAR PROFITS, AWAITS ANSWER ON STATE SUBSIDIES, NJ Spotlight,  | MARCH 15, 2019

Independent market monitor concludes that South Jersey plants, for which company is seeking $300 million in annual state aid, will net big profits over the next few years.

Coal and nuclear plants increased their profits last year, a finding in a new report that might undercut efforts to win subsidies for New Jersey’s three nuclear power plants.

In its annual State of the Market Report for the regional transmission organization PJM, the independent market monitor concluded that energy prices are not too low in the nation’s largest power grid, which includes New Jersey. Net revenues increased for all types of power plants, significantly so for coal and nuclear units, in 2018, according to the report.

The assessment differs sharply from what PSEG Nuclear has argued to legislators and state regulators in seeking up to $300 million in annual ratepayer subsidies to avert the closing of its three nuclear units in South Jersey. Without the subsidies, PSEG executives have said the plants will close, possibly beginning this fall with its Hope Creek unit.

The report, prepared by Joseph Bowring, the market monitor, used publicly available data, to assess the competitiveness of the energy market and to address, the economic viability of nuclear units within the PJM. Bowring also is an intervenor in the nuclear subsidy case before the New Jersey Board of Public Utilities.

Of 18 nuclear plants in the region only three are operating with shortfalls, and these are scheduled to close, according to the report. (Two of the three plants are in Ohio; the other is Three Mile Island in Pennsylvania.)

Proof the plants ‘do not need’ to be subsidized

On the other hand, PSEG’s plants would net a surplus over each of the next three years, ranging about $50 million annually for Hope Creek, and around $100 million a year for the two Salem units, according to the report.

“This is confirmation that the plants do not need to be subsidized,’’ said John Shelk, president and CEO of the Electric Power Supply Association, a trade group of power companies that has opposed the subsidies……..

The report also downplayed the prospect of increased retirement of coal and nuclear plants. “The level of retirements does not pose a reliability issue in PJM and does not imply a fuel security issue,’’ according to the report.

The state is expected to make a decision on whether to give the nuclear units a subsidy by mid-April. However, that may not end the debate over the future of nuclear power in New Jersey, according to one analyst.

“Regardless of what happens over the next three years, there’s more to this issue over the long term,’’ said Paul Patterson, an energy analyst at Glenrock Associates. “You are looking at efforts to reduce energy consumption and increase the use of renewables by 50 percent in 10 years. You have to wonder what this means for nuclear power.’’ https://www.njspotlight.com/stories/19/03/14/pseg-disputes-new-assessment-of-nuclear-profits-awaits-answer-on-state-subsidies/

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March 16, 2019 - Posted by | politics, USA

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