New Jersey governor signs nuclear power subsidy bill into law

(Reuters) - New Jersey Governor Phil Murphy signed several legislative initiatives on Wednesday to advance the state's clean energy goals, including a controversial bill that would subsidize the continued operation of nuclear power plants. The new nuclear law, which could cost about $300 million a year, establishes a Zero Emissions Certificate (ZEC) program to maintain New Jersey's nuclear energy supply, which contributes close to 40 percent of the state's electric capacity and is by far its largest source of carbon free energy. Plants seeking to participate in the program would be required, among other things, to demonstrate that they make a significant contribution to New Jersey air quality and are at risk of closure within three years. The four reactors operating in New Jersey are capable of generating over 4,100 megawatts (MW) of electricity. Three are located at the Salem-Hope Creek nuclear plant and are operated by a unit of Public Service Enterprise Group Inc, the state's biggest power company. One megawatt can power about 1,000 U.S. homes. The other reactor, Oyster Creek, is owned by Exelon Corp, which also owns part of the Salem reactors. Exelon plans to shut Oyster Creek in October 2018 under a long-standing agreement with the state. "Exelon commends New Jersey Governor Phil Murphy...by signing into law a package of legislation that will help to preserve 90 percent of New Jersey's carbon-free power, protect 5,800 jobs and save residents and businesses $400 million on their electric bills," Exelon said in a statement. PSEG has warned that it could shut its reactors if they do not receive some sort of federal or state assistance. Nuclear operators have shut several reactors over the past five years and plan to close more as cheap natural gas from shale fields has depressed power prices, making it uneconomic for generators to keep operating some nuclear plants. The new law makes New Jersey the fourth state after New York, Illinois and Connecticut to adopt a program to provide a new revenue stream to keep nuclear reactors in service to help meet the states' greenhouse gas reduction goals. Other states with reactors set to retire over the next few years for economic reasons, like Pennsylvania and Ohio, and officials in the U.S. Energy Department are also looking at programs to keep nuclear plants operating. In New Jersey, Murphy also signed legislation requiring 50 percent of the state's power come from renewable sources by 2030, a plan to build 3,500 MW of offshore wind by 2030, a plan to implement energy efficiency programs to reduce electric and gas usage, and a plan to achieve 2,000 MW of energy storage by 2030. The governor also signed an executive order directing state agencies to develop an Energy Master Plan by June 1, 2019 that provides a path to 100 percent clean energy by 2050. "These new laws will preserve and create good-paying jobs and spur billions of dollars in investment in clean energy and energy efficiency across the state," Ralph Izzo, Chief Executive Officer of PSEG said in a statement. But not everyone is happy with the new nuclear subsidy, including the state's ratepayer advocate, the Sierra Club, AARP and several power generators that would benefit if the nuclear reactors were to close. "This bill package will mean New Jersey stays hooked on nuclear power at the expense of renewables like solar and wind. It will essentially block our efforts to get to 100 percent renewable energy and will lead to a crash in our solar market," said Jeff Tittel, Director of the New Jersey Sierra Club, in a statement. (Reporting by Scott DiSavino; Editing by Chris Reese and Diane Craft)