(Bloomberg) -- New Jersey Governor Phil Murphy signed a bill requiring utility customers to spend more than $300 million a year to rescue struggling nuclear power plants run by Exelon Corp. and Public Service Enterprise Group Inc.
The legislation signed Wednesday aims to keep nuclear plants operating in the state, after owners warned the facilities were no longer economic amid lower power prices. Murphy, a Democrat who took office in January, also signed a bill calling for half the state's energy to come from renewable power by 2030.
“To reach our clean energy goals we will need to keep these plants open and safely operating,” Murphy said at the bill signing at a solar farm under construction in Monmouth Junction. New Jersey's nuclear plants, he said, support 5,800 jobs vital to New Jersey's economy.
The legislation, approved by the state's Democratic legislature in April, comes as New York and Illinois have already thrown lifelines to reactors, which are struggling to turn profits as cheap natural gas and renewable energy have depressed power prices. More than a quarter of U.S. nuclear power plants don't make enough money to cover their operating costs, according to Bloomberg New Energy Finance. Supporters say keeping the reactors running saves jobs and helps states achieve clean-energy goals.
New Jersey is home to three nuclear plants, owned by PSEG and Exelon. PSEG rose 1.2 percent to $51.12 at 12:23 p.m. Wednesday in New York. Exelon rose 0.1 percent to $39.91.
Exelon heralded the move, saying in a statement that Murphy was “taking a national leadership role in recognizing the environmental value of the state's nuclear fleet.”
PSEG Chief Executive Officer Ralph Izzo said the “measures create a forward-looking energy policy that makes New Jersey a national leader in advancing clean energy.”
The Sierra Club opposed the both the nuclear and clean energy bills, saying one was a giveaway to reactor operators while the other would do little to promote growth of wind and solar.
“Today Governor Murphy has sold out the ratepayers by signing this greenscam bill,” Jeff Tittel, director of the Sierra Club's New Jersey chapter said in a statement. “All they're doing with this bill is enriching PSEG at the expense of clean energy.”
The governor's support of the measure underscores that nuclear-plant operators have been more successful in lining up governmental support than those who run coal plants, said Stephen Munro, a Washington-based analyst at Bloomberg New Energy Finance.
“It's a combination of effective pressure by nuclear operators and nuclear's zero-carbon emissions profile, which makes the subsidies more palatable to governors and ratepayers alike,” Munro said in an email.
--With assistance from Christopher Martin.
To contact the reporters on this story: Elise Young in Trenton at eyoung30@bloomberg.net;Brian Eckhouse in New York at beckhouse@bloomberg.net
To contact the editors responsible for this story: Lynn Doan at ldoan6@bloomberg.net, Joe Ryan, Margot Habiby
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