Customers throughout New Jersey and across the country are experiencing higher electricity prices today, thanks in part to the cost of maintaining and upgrading the grid to accommodate growing power demand. America’s competitive power producers are hard at work, bringing new generation capacity online, and more generation of all types are needed to meet the growing demand. But it’s also important to understand who foots the bill when new power plants are built.
Learn more about what’s driving rising electricity costs.
New Jersey state Senate Environment and Energy Committee Chair Bob Smith introduced a bill last week that could put New Jersey customers on the hook for billions of dollars. The proposed legislation would open the door for the state’s largest utility, PSEG, to build an advanced nuclear reactor capable of generating 1.2 gigawatts of power.
While nuclear energy remains a clean and reliable way to generate electricity, lawmakers should consider key factors in nuclear power development, including lead times and costs –especially when New Jersey residents are paying.
It would take a decade or more to build a new nuclear plant, but it can take data centers just 18 months to get up and running. We need solutions that are both quick and affordable.
Despite their benefits, nuclear reactors are costly. A Department of Energy report about advanced nuclear reactors found that they would likely cost between $6,000 and $10,000 per kilowatt. For comparison, a modern combined cycle natural gas-fired plant costs about $2,400 per kilowatt and can be brought online in approximately half the time, depending on the project.
If utilities like PSEG are allowed to build a non-competitive nuclear plant, New Jersey customers will be paying long before the plant ever starts generating power. If the project faces delays, gets cancelled, or the projected demand never materializes, New Jersey residents are still on the hook for those investments.
Look no further than South Carolina’s Virgil C. Summer Nuclear Generating Station, which has operated one unit since the 1980s. Development began on an additional two units in 2013, but after about four years of construction delays and bankruptcy, both were abandoned in 2017. South Carolina customers are still paying the $9 billion bill for nuclear generation that never delivered. Talks are underway to potentially revive and complete this facility, but questions remain about additional cost burdens for South Carolina consumers.
Independent power producers are better equipped to build new generation because it’s their investors, not New Jersey customers, that bear the risk of new investments. They assume the risk of building new generation and have decades of experience doing so efficiently. EPSA’s members own and operate 34 gigawatts of nuclear generation across the country. It’s competitive power producers that have a proven track record of bringing generation online quickly and affordably. Perhaps most importantly, if an independent power producer begins building a nuclear power plant – or any generation – and must abandon the project, customers won’t pay a dime.
Nuclear generation remains an important part of the generation mix, but unlike competitive power producers, PSEG doesn’t want to use its own money to build it. Rather, the utility will happily gamble your money instead.
