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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.
The PA House Archives is proud to open its 2024 exhibit, “Accident at Three Mile Island: Pennsylvania House of Representatives’ Response to Disaster,” with an official opening for Members, staff, and the public, on Wednesday, February 21st from 10:00 to 4:00. Light refreshments will be available.
March 2024 is the 45th anniversary of the nuclear accident at Three Mile Island. Visitors will learn about the events leading up to and following the accident, how local Representatives responded to constituents, and more about how the event has been remembered locally and nationally since 1979.
Featured items include documents from the special committee created by the House in the aftermath of the accident and clean up. Other displayed items are on loan from neighboring archival institutions (Dickinson College, Penn State Harrisburg, and Historical Society of Dauphin County) such as vinyl records, mugs, bumper stickers, and more!
The PA House Archives is in 628 Irvis Office Building, Capitol Complex. The exhibit will be on display for the remainder of 2024. We hope to see you there!
The Palisades nuclear plant in Michigan will reportedly be awarded a $1.5 billion federal loan, aimed at restarting operations after a 2022 closure. The federal funding could bolster state efforts to keep nuclear power on the grid, as leaders seek to transition to carbon-free electricity. Courtesy of The Herald-Palladium
In the coming years, a nuclear power plant on the shores of Lake Michigan could become the first in the country to restart operations after shutting down.
The Palisades plant in southwest Michigan could be revived by a $1.5 billion loan from the U.S. Department of Energy, Bloomberg reported. Federal officials have not yet confirmed the funding, but Dr. Kathryn Huff, assistant secretary in the agency’s Office of Nuclear Energy, told Stateline that it would be “exciting” and “historic” to see the plant return to life.
The potential federal investment comes as state leaders in Michigan and elsewhere have worked to preserve their nuclear power capacity. Democratic Gov. Gretchen Whitmer successfully pushed for $150 million in state funding last year to support the Palisades restart. The plant is owned by Florida-based Holtec International, which bought it in 2022 to decommission it.
Reviving the plant “is really significant to make sure we can meet our clean-energy goals,” said Kara Cook, chief of staff with the Michigan Department of Environment, Great Lakes, and Energy. “This is really important to us not only from a climate perspective, but also the economic impact on the region.”
As states seek to transition to carbon-free electricity, some leaders acknowledge their climate change goals may be out of reach if they can’t keep their nuclear plants online. Nuclear has struggled to compete on cost with other power sources — while also facing concerns about safety risks and radioactive waste — but it provides 18% of the nation’s electricity. The closure of nuclear plants, some state officials fear, could lead to an expansion of fossil fuel-powered replacements, worsening the climate problem.
“You’re starting to see a lot of states transition to a position where they’re supportive of nuclear,” said Todd Allen, chair of the Nuclear Engineering and Radiological Sciences department at the University of Michigan. “And compared to 30 years ago, the amount of federal support for nuclear is unbelievable.”
California also received a boost of federal money in an award finalized last month to keep open a nuclear plant run by Pacific Gas and Electric, known as PG&E. Other states, including Connecticut, Illinois and New Jersey, have passed legislation in recent years to provide subsidies for existing nuclear plants.
Huff, the federal energy official, said U.S. nuclear production may need to reach 200 gigawatts — roughly double the current capacity — to provide clean, “always-on” power as less-constant solar and wind provide a growing share of the nation’s electricity. Last year, the Biden administration committed to an international pledge to triple nuclear capacity by 2050.
“We’re still going to need a significant amount of nuclear to back that all up,” she told Stateline. “Keeping existing plants online is the easiest way to ensure nuclear power can back up renewables.”
Meanwhile, both red and blue states have taken steps to allow for the development of small modular reactors, an emerging technology that backers say can help to power rural areas or industrial operations without the demands of a large plant. Six states — Connecticut, Illinois, Kentucky, Montana, West Virginia and Wisconsin — recently repealed bans on adding new nuclear power, in part to enable such reactors.
You’re starting to see a lot of states transition to a position where they’re supportive of nuclear.
– Todd Allen, chair of the Nuclear Engineering and Radiological Sciences department at the University of Michigan
While some environmental groups have embraced the nuclear investments, others have pointed to long-standing concerns about safety issues, citing infamous accidents such as those at Three Mile Island, Chernobyl and Fukushima. Opponents also note the long-term issue of radioactive waste storage, and in some cases assert that nuclear can stall the growth of renewables such as wind and solar.
“With the amount of money that’s gone into this [Palisades] restart scheme already, you could develop brand-new renewable energy proposals that would be online in the same time frame producing more electricity,” said Kevin Kamps, radioactive waste specialist at Beyond Nuclear, an environmental nonprofit that opposes nuclear energy.
While more states have passed policies to give nuclear a boost, federal funding in Michigan and elsewhere could supercharge efforts to ensure plants stay open. The Department of Energy is distributing $6 billion from the federal infrastructure law to help save reactors that were slated for closure. The agency awarded funding to the California plant in the first round but has not yet announced awardees from the second round, although applications closed last May.
The agency also is overseeing a loan program — which reportedly will provide the Palisades funding — to repower or repurpose energy infrastructure.
The Department of Energy is distributing $6 billion to help save reactors that were slated for closure.
The federal climate law passed in 2022 also opened tax credits for new and existing nuclear plants, designed to incentivize clean energy production in the same way existing credits support wind and solar. Since the passage of the tax credits, Huff said, federal regulators have seen an increased interest from plant operators pursuing license renewals to extend the operating life of their reactors.
Meanwhile, the CHIPS and Science Act passed by Congress also includes funding for federal nuclear research, university programs, new research reactors, isotope production and advanced reactors.
The federal support is providing “huge stimulation” to nuclear power while working in tandem with existing state efforts, said Christine Csizmadia, senior director of state governmental affairs and advocacy with the Nuclear Energy Institute, an industry trade association.
Michigan reboot
When Palisades closed amid financial struggles in 2022, it represented roughly 5% of Michigan’s electricity supply. That has been replaced largely with natural gas generation, Cook said. The expansion of fossil fuel-based power conflicts with legislation passed last year requiring the state to move to 100% clean energy by 2040.
So when the plant’s new owner, Holtec International, announced that it was aiming to bringing the 800-megawatt plant back online, state leaders were on board. The company plans to add a pair of small modular reactors to the existing plant, bringing its capacity to 1,400 megawatts — enough to power more than a million homes. Holtec did not respond to interview requests, but company spokesperson Nick Culp told Reuters the company expects the plant to have full power operation by the end of 2025.
The $150 million in last year’s Michigan state budget to support the plant’s restart will help pay for fuel purchases and infrastructure upgrades, Cook said. Whitmer has requested an additional $150 million in this year’s budget to help bring Palisades online.
“This is really an all-hands-on-deck approach,” said Cook, citing the hundreds of union jobs that could return to the region if the plant reopens. She said the state funding was critical to show both Holtec and federal officials that there was strong support in Michigan to save Palisades. Holtec has said it could employ about 520 people at the plant.
States’ support
In recent years, many states have provided financial support to struggling nuclear plants, made nuclear eligible for clean energy credits or repealed long-standing bans on the construction of new reactors.
“We’ve seen this incredible uptick of nuclear energy legislation,” said Csizmadia, with the nuclear trade association.
Huff, the federal official, noted that several of the states that recently repealed bans on new nuclear power have many coal-dependent communities that could be “left behind” if their coal plants retire. Backers of nuclear, especially the emerging small modular reactor technology, believe old coal plants could be revived to put existing infrastructure to use in service of nuclear power and bring back high-wage jobs.
Nuclear electricity production across the country has been relatively stagnant for two decades, with plants struggling to compete with lower-cost options such as natural gas. Construction of new reactors has almost completely stopped amid regulatory hurdles and spiking project costs.
Opponents of nuclear point to the canceled projects, delays and cost overruns as proof that nuclear isn’t viable.
“This is just throwing good money after bad,” said Kamps, the anti-nuclear advocate. “We stand horrified at the actions being taken by Congress and certain state governments.”
Kamps also cited previous nuclear disasters and warned of the risks of extending aging plants.
But as states look to clean up their energy grids, some leaders say they can’t afford to lose their nuclear power.
“A lot of people believe we can power California with renewables alone and batteries,” said Carl Wurtz, executive director of Fission Transition, a pro-nuclear advocacy group. “We’re going to be tied to natural gas indefinitely if we try to do it that way.”
Wurtz was among the advocates who pushed California to extend the life of PG&E’s Diablo Canyon nuclear plant, which had been scheduled to close in 2025. He and others argued that the loss of the plant’s 2,240 megawatts — 9% of California’s electricity — would force the state to import more power generated from fossil fuels.
As with the Michigan plant, state leaders in California, including Democratic Gov. Gavin Newsom, successfully lobbied the feds for money to keep Diablo Canyon open. Last month, the Department of Energy finalized a $1.1 billion payout to extend the plant’s operations. That followed a vote from state regulators to push the plant’s shutdown date back to 2030.
Supporters of nuclear say it’s a necessary complement to wind and solar because of the reliability it provides.
“We need baseload power that runs 24/7,” said Lisa Marshall, vice president of the American Nuclear Society and assistant extension professor with the North Carolina State University Department of Nuclear Engineering. “If we’re going to make [carbon-free electricity] happen, nuclear has to be part of that mix.”
The California plant is still awaiting the renewal of its license from the Nuclear Regulatory Commission. PG&E did not respond to an interview request.
France's EDF shuts down two nuclear reactors after fire at Chinon plant Nuclear energy operator EDF has shut down two reactors at Chinon in western France after a fire in a non-nuclear sector of the plant in the early hours of Saturday, the company said.
New Jersey's Attorney General announceda $5 million fine, and three years of probationary supervision, for Holtec, after its latest series of lies to the NJ Economic Development Authority (NJEDA). As reported by NJ Spotlight News, Holtec sought twice the tax break for which it was eligible, and after the deadline, backdating documents. In 2019, the story broke that Holtec provided false answers on its application for $260 million in tax breaks. Also, its fired Chief Financial Officer continues his whistleblower lawsuit, alleging Holtec concealed $750 million in projected losses at its consolidated interim storage facility in New Mexico. Federal appeals against this CISF have been scheduled for oral argument on March 5 at the District of Columbia Circuit Court.
The longtime UK anti-nuclear group, Campaign for Nuclear Disarmament (CND) has responded to compelling evidence that US nuclear weapons are about to return to UK soil. Files show construction plans for guard shacks at the US air base at Lakenheath in Suffolk, designed for ballistic protection. An earlier US Air Force report outlined plans for a dormitory to house the additional personnel needed to handle nuclear weapons at the base. The latest US capable jet fighter, the F-35A, is already at Lakenheath, designed to drop the B61-12 guided nuclear bomb. 110 US free-fall B61 nuclear bombs were removed from Lakenheath in 2008, following sustained protest. The return of US nuclear weapons to Britain makes the country a nuclear target, says CND.
Bloomberg broke the story that the U.S. Department of Energy's Loan Programs Office is poised to award Holtec a loan guarantee for $1.5 billion, for the unprecedented, extremely high-risk restart of Michigan...
