[Note: Due to today's small news saturday Star Ledger story reporting on Governor Corzine's Energy Plan's stealth embrace of PSEG plans for a new Nuke Plant in South Jersey, I thought I'd REPOST this March 10 post. Interested readers can listen to a WBAI radio interview on the issue by clicking on the mp3 Thursday March 27 6: 00 am link - listen at minutes 45:00 - 60:00 http://archive.wbai.org/ ]

BPU's "hands tied" by deregulation - deal would lead to more air pollution, greater global warming emissions, and higher rates for consumers. PSEG announces that new nuke plant planned for south jersey. New plants and transmission lines for north jersey

Trenton - PSEG's Executive Vice President and General Counsel appeared before the legislature today to try to justify PSEG's controversial plan to sell electric power to NY City produced by the plant in Ridgefield, Bergen County. The proposal had been blasted by NJ Rate Counsel as likely to lead to higher rates and a less reliable power system for NJ consumers.

Other NY City power export deals already under consideration would cost over $1.5 BILLION in new power plant construction and transmission lines to offset and mitigate the loss of NJ produced power (PJM testimony). NJ Rate Counsel,Stephanie Brand, testified that the Bergen deal would cost NJ ratepayers from $35 million to $120 million/year in higher electric rates, while providing windfall profits for PSEG

An Assembly Committee held hearings today to explore the impacts of the sale on NJ consumers and regional electric markets. The deal would allow PSEG to supply NY City with 550 MW of power generated by PSEG's Bergen power plant, which would abandon the "PJM" grid. A new 660 MW line would be buried under the Hudson River, providing additional capacity to export even more power.


The NJ Board of Public Utilities (BPU) raised major concerns about the impact of the deal on the reliability of the PJM grid and electricity prices. Joseph Fiordaliso, Commissioner of BPU warned the Assembly Committee about negative aspects of the deal, including higher prices for NJ consumers, more air pollution, and an increase of imports of dirty power from the mid-western coal plants. But he said BPU's "hands are tied". As a result of energy deregulation passed by the NJ Legislature, BPU has no power to block the PSEG deal, beyond sending a "protest letter" to the Federal Energy Regulatory Commission (FERC). Unfortunately, no legislator seemed willing to explore this predictable consequence and fatal flaw of energy deregulation.

NJ Rate Counsel,Stephanie Brand, strongly opposed the deal, calling it "grossly unfair". She testified that it would cost NJ ratepayers from $35 million to $120 million/year in higher electric rates, while providing windfall profits for PSEG. Brand also raised concerns about effects of reliability after the PSEG Bergen plant abandons the NJ energy market and PJM grid for the "greener" pastures of NY City. This deal would open the door to even more exports of NJ produced power to serve NY City, leaving NJ holding the bag for higher electric rates and more pollution. Brand took strong exception to PSEG's claim in its filing with the Federal Energy Regulatory Commission (FERC). According to Brand, PSEG's FERC filing claimed that when a private market entity behaves in a market driven way, then consumers are automatically better off! Free market fundamentalism. PSEG filing argued that FERC should not review the negative economic impacts on NJ and that impacts on reliability were beyond the scope of FERC's review and should be ignored. Brand implored the Committee to do everything within their powers to "stop this" deal.

Energy consultant Steve Gabel focused on the "big picture" of "dynamic energy markets". Gabel stressed "the benefits of interstate commerce" in energy markets.Gabel identified a "paradox" whereby NJ electric rates were tied to the low price of high polluting coal, a fact that makes investments in new cleaner power sources uneconomic. But just weeks ago, Gabel emphasized that interstate energy markets were a danger to efforts to combat global warming. During legislative consideration of the "Regional Greenhouse Gas Initiative" (RGGI) bill, Gabel joined PSEG and a chorus of energy lobbyists to warn of potential higher prices and increases in global warming emissions due to increasing imports of dirty coal power from the mid-west. What 8 weeks ago was criticized as "leakage" that would undermine global warming policy and increase rates, has now become a pro-consumer "dynamic market in interstate commerce".

The testimony of PJM representatives should be required reading - a primer on the economic and regulatory policy barriers to reducing coal based global warming emissions and market entry/access restrictions to renewable power technologies. The PJM primary goal is system reliability - with reliability viewed very narrowly as limited to increases in power production and distribution. As a result, economic regulatory policies provide incentives for more traditional power production that undermine energy conservation and renewable power.For example, no one mentioned the concept of a "carbon adder" to make dirty coal power prices reflect their true staggering environmental costs. The Committee took no testimony from environmental experts or those concerned about global warming.

During the recent legislative debate on the RGGI bill, energy lobbyists suggested that PSEG was involved in a "paradigm shift" from earning profits from producing power to earning profits from reducing and conserving power. They used this argument to justify new regulatory policies and economic incentives for "rate decoupling" and enhanced return on investment for conservation and efficiency. But today we heard a completely different tune. Today, we heard that PSEG is for sure in the power production business. PSEG cavalierly announced multi-billion plans to increase in-state power production (including, BTW, a new nuclear plant) and plans to construct more transmission lines. Few concerns were expressed about imports of dirty mid-west coal. So much for global warming and all that tree hugger stuff.

During the recent RGGI debate, energy lobbyists suggested that NJ power demand far outstripped instate energy supply, causing imports of dirty mid-west coal power. How can they now claim that EXPORT of NJ generated power to New York City will have no impact on system reliability or air quality?

The whole scene recalled the closing line of one of my favorite Jack Nicholson movies:

"Forget it, Jake. It's Chinatown."

According to PJM, the following NJ power exports are planned or underway: 1,200 MW (Bergen, proposed) 300 MW (Linden under construction) 200 MW (Linden, proposed) 660 MW (Neptune to Long Island, existing)