A ruling by Federal Energy Regulatory Commission that state subsidies of nuclear and renewable energy are ‘unjust and unreasonable’ could unravel a range of NJ energy initiatives
Tom Johnson reports for NJ Spotlight:
With two new laws this spring promoting nuclear and clean energy the Murphy administration moved aggressively to combat climate change, but a decision by a federal agency may end up thwarting those policies.
The action by the Federal Energy Regulatory Commission this past June could have huge implications for how much customers pay for electricity to power their homes and businesses, and undermine state policies aimed at reducing greenhouse gas emissions.
In New Jersey, the state Board of Public Utilities last week asked FERC to reconsider the decision, a step also requested by the operator of the nation’s largest power grid, some of the biggest energy companies in the nation, as well as a coalition of the most prominent environmental organizations.
The long-running dispute revolves around what power suppliers are paid for providing extra capacity in reserve to supply electricity to the grid when energy demand peaks. State policies that provide incentives to nuclear plants and renewable energy are depressing those prices, according to some suppliers. The result has led to the early retirement of both coal and nuclear power plants.
‘Unjust and unreasonable’
In its decision, FERC ruled that a current tariff that sets prices for power suppliers within the PJM Interconnection — which serves the nation’s largest electricity market with 65 million people — is “unjust and unreasonable.’’ In essence, the agency sided with Calpine, the owner of a fleet of natural-gas plants, which argued that state subsidies to nuclear and renewables artificially drive down prices.
For New Jersey, the order by FERC could unravel long-standing legislative initiatives to promote cleaner sources of energy like solar power, as well as the state’s proposed subsidies to keep nuclear power a part of its energy mix by having ratepayers subsidize plants it deems uneconomic.
Like this? Click to receive free updates
