April 10, 2018 / 2:49 PM / 15 days ago

N.J. legislature to vote on nuclear subsidy bill on Thursday

April 10 (Reuters) - New Jersey legislators are scheduled to vote on Thursday on a bill that would cost about $300 million a year to subsidize three nuclear reactors operated by New Jersey power company Public Service Enterprise Group Inc:

* PSEG has said it could shut the reactors - two at Salem and one at Hope Creek - in a couple of years if they do not receive some sort of federal or state assistance

* “Lawmakers have come to appreciate that the financial difficulties facing the plants are real, that there will be severe consequences ... if the plants were to close and that it will be less costly to preserve the plants than to replace them,” Michael Jennings, a spokesman for PSEG, said in an email

* The state’s ratepayer advocate, Stefanie Brand, however, has told legislators the bill was not necessary

* Brand said PJM Interconnection, the regional power grid operator, and federal and state entities already have the power to keep the reactors in service if they determine the units are needed to maintain grid reliability

* “There has been no demonstration that PSEG’s nuclear plants are in financial difficulty other than bald assertions and ultimatums issued by the company,” Brand said in recent legislative testimony

* PSEG has said the reactors are making money but said the units are not expected to keep making as much of a return in the future as the company is seeking. Brand said the company has said it is seeking an 18 percent return from the plants

* In related news, U.S. Energy Secretary Rick Perry suggested at a Bloomberg New Energy Finance summit on Monday that he may not support a request by a unit of Ohio power company FirstEnergy Corp to order PJM to negotiate a deal that would keep the company’s reactors in service

* FirstEnergy’s FirstEnergy Solutions unit, which filed for bankruptcy protection on March 31, said a couple of weeks ago that it would shut three nuclear plants in Ohio and Pennsylvania in 2020 and 2021 unless it receives some sort of state or federal support, and asked Perry to find that the reactors and some coal plants were needed to maintain grid reliability

* FirstEnergy’s request “may not be the way that we decide is the most appropriate, the most efficient way to address this,” Perry said at the Bloomberg summit. “It’s not the only way” (Reporting by Scott DiSavino; editing by Jonathan Oatis)

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