S.3560. Establishes Nuclear Diversity Certificate program.

New Jersey Senate
Last action 2 months ago
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                    This bill directs the Board of Public Utilities (board) to establish a Nuclear Diversity Certificate (NDC) program. Under the bill, an NDC is a certificate, issued by the board or its designee, representing the environmental and fuel diversity attributes of one megawatt-hour of electricity generated by an eligible nuclear power plant selected by the board to participate in the NDC program.

     Under the bill, to participate in the NDC program, a nuclear power plant is to: be licensed to operate by the United States Nuclear Regulatory Commission by the effective date of this bill and through 2030 or later; (2) demonstrate to the satisfaction of the board that it makes a significant and material contribution to the diversity and resiliency of the energy resource mix for electricity delivered in this State; (3) demonstrate to the satisfaction of the board that it makes a significant and material contribution to the air quality in this State by minimizing emissions that result from electricity consumed in New Jersey; (4) provide financial information demonstrating that the plant will cease operations; (5) certify annually that the nuclear power plant does not receive any direct or indirect payment or credit under a law of this State, other state or federal law, or regional compact, despite its reasonable best efforts to obtain any such payment or credit; and (6) submit an application fee to the board in an amount to be determined by the board, but which is not to exceed $250,000, to be used to defray the costs incurred by the board to administer the NDC program.       The board is to determine the price of a NDC each energy year under the formula provided in the bill.  Within 90 days after the conclusion of an energy year, each electric public utility (utility) in this State is to be required to pay each nuclear power plant that received NDCs for that prior energy year for a quantity of NDCs equal to the total number of NDCs received by the nuclear power plant multiplied by the percentage of electricity the utility distributed in this State as compared to other utilities in this State.  The board is to order the full recovery of all costs associated with the utility’s procurement of NDCs through a non-bypassable, irrevocable charge imposed on the customers of the utility.

     A selected nuclear power plant is to initially receive NDCs through the end of the first energy year in which the plant was selected, plus an additional three energy years thereafter, and then is subject to review by the board triennially for renewed eligibility for additional, three energy year periods.        A selected nuclear power plant may suspend or cease operations under certain circumstances, including circumstances in which events prevent the selected nuclear power plant from continuing operations despite the selected nuclear power plant’s reasonable efforts continue operations.  If a selected nuclear power plant ceases operations during an eligibility period for any reason other than those specified in the bill, the selected nuclear power plant is to pay a charge to the utilities that purchased NDCs from the selected nuclear power plant in an amount equal to the compensation received for the sale of NDCs since the board’s last determination of the selected nuclear power plant’s eligibility to receive NDCs.

     New Jersey has historically relied on a diverse mix of energy supply sources, including nuclear power, to meet the needs of its residents and businesses.  An increase in the proportion of New Jersey’s electricity demand met by natural gas and coal caused by the premature retirement of nuclear power plants will result in a substantial increase in emissions of several pollutants and associated adverse public health and environmental impacts.       In this State, the model of providing credits to zero- or low-emission energy generation sources as compensation for their environmental attributes has proven successful for generators of Class I and Class II renewable energy, which receive renewable energy certificates, including solar electric power generators, which receive solar renewable energy certificates.

     A program that recognizes and compensates nuclear power plant operators in a manner similar to other non-emitting energy generation resources, to the extent required to prevent the loss of nuclear energy, which the State’s residents and businesses rely on for approximately 40 percent of their electricity needs, would further this State’s interest in maintaining a diverse mix of energy sources and in environmental protection.

In an effort to be an unbiased source of information, all text in this summary comes directly from government resources.


  • Reported out of Senate Committee with Amendments, 2nd Reading

    Wed, Dec 20th 2017
  • Introduced in the Senate, Referred to Senate Environment and Energy Committee

    Thu, Dec 14th 2017