- The New Jersey Board of Public Utilities has launched a proceeding to create a Zero Emission Credit (ZEC) program for eligible nuclear power plants at the direction of a law signed by Gov. Phil Murphy in May.
- The state gets about 40% of its energy from nuclear power, and experts say allowing its plants to close would be a blow to greenhouse gas reduction efforts. At the same time Murphy signed the ZEC legislation, he also signed another bill raising the state's renewable portfolio standard (RPS) to 50% by 2030.
- New Jersey's program is similar to efforts in New York and Illinois that aim to support nuclear plants by compensating them for their emissions-free generation. Both of those programs have been challenged in court, and New Jersey's program could be as well.
New Jersey's ZEC program will be carefully crafted to try and avoid directly interfering in wholesale electricity markets, which are regulated by the Federal Energy Regulatory Commission. But with the Illinois and New York programs both in court, a challenge is likely.
The ZEC program will be constructed to value the emissions-free attributes of nuclear power, rather than the energy itself. But the BPU must work quickly: regulators face an April 2019 statutory deadline to complete the proceeding.
The board last week sketched out some of what must be included in the ZEC subsidies.
By November, the BPU must create the ZEC program, including an application process for eligibility review and a mechanism for each of the state’s electric companies to buy ZECs from the selected nuclear power plants. Regulators say they intend to hold "extensive" public hearings.
The BPU noted that "eligible nuclear energy generators ... could be approved to provide ZECs for the state's energy supply, which would then be purchased by the state's four electric companies."
"Under the ZEC program, eligible nuclear power units that demonstrate a need would be designated to receive credits to maintain the state's nuclear energy supply," the BPU said. The agency was tapped to create and administer the program and distribution mechanism through the authorizing legislation.
As part of the program, the BPU said it will also conduct a second proceeding to certify which nuclear power units are eligible to receive the credits, "and to establish a rank-ordered list of those plants that are eligible based upon the process the Board creates."