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The Grid

New Laws Secure New Jersey’s Clean Energy Future


​​Last week, New Jersey Governor Phil Murphy acted on his vision to make New Jersey a national clean energy leader by signing into law legislation that will help the state achieve its carbon footprint reduction goals and drive new, clean energy options for New Jersey energy consumers. The legislative package will put New Jersey on a path to 90 percent clean power by 2050. A big part of that is preserving the 40 percent of the state’s energy that comes from nuclear power, which will protect 5,800 jobs and save residents and businesses $400 million in electric bills.

How? By recognizing and valuing the environmental attributes of New Jersey’s nuclear power plants, which produce zero emissions and operate 24 hours a day, seven days a week, 365 days a year. These plants power half of New Jersey’s electricity needs and help avoid 14 million metric tons of emissions annually, according to the Brattle Group. That’s the equivalent of taking 3 million cars off the road.  

Prior to the bill’s passage, New Jersey’s energy policies had taken significant strides in advancing and financially incentivizing the adoption of some clean energy sources, such as solar and wind, but they did nothing to fairly value nuclear, which has the same clean attributes. This policy gap made it fiscally challenging to maintain this reliable source of clean power because nuclear plants were not paid for their environmental attributes – and in most other markets, this remains the case

Now, the New Jersey state legislature and the Governor have enacted a program that compensates nuclear plants for maintaining clean air and reducing New Jersey’s carbon footprint through a zero-emissions certificate (ZEC) program.  

The legislation also drives a workforce development initiative aimed at creating thousands of new energy sector jobs across the state. During the press conference where Governor Murphy signed the bills into law, he applauded Atlantic City Electric’s plan to launch a $6.5 million workforce development program later this year.

Why It Matters

According to the Brattle Group, if just two of New Jersey’s nuclear power plants – Salem and Hope Creek – shut down, it would cause electricity prices to rise, costing New Jersey families and businesses $400 million more per year for electricity, on average over 10 years. The Brattle Group’s research shows that the state would also see a $585 million increase in carbon dioxide emissions costs and $148 million in sulfur dioxide, nitrogen oxide and particulate matter costs if the Salem and Hope Creek plants closed. 

Furthermore, if all of New Jersey’s nuclear power plants went away, the state would lose an industry that contributes nearly $40 million annually in state taxes – funding schools, community services and state agencies – and provides nearly 6,000 direct and indirect jobs, to boot. 

Additionally, Governor Murphy understands that when nuclear plants shut down prematurely, they are replaced by fossil fuels, effectively erasing years of environmental progress. Independent environmental organization C2ES found that if a 1,000-megawatt nuclear plant retired, it could lead to an increase of between 2 million and more than 5 million metric tons of carbon dioxide being emitted into the air each year, depending on the retiring plant’s location. New Jersey would need to take more than a million cars off the road to offset that much additional carbon dioxide. 

​How It Works

The Board of Public Utilities (BPU) will have strict oversight of the ZEC program to ensure it operates fairly and with New Jerseyans’ best interests at heart. Only the BPU can approve qualifying plants for the program, after a thorough review – including a review of each plant’s finances to ensure their financial need. To be eligible, each plant must make a significant contribution to the state’s air quality, and the plant owners must demonstrate that the state would have a substantially more difficult time meeting its air pollution reduction requirements if the plants shut down. 

Additional protections include:

  • A certification of retirement: To be eligible to enroll in the ZEC program, a nuclear plant must certify that it will shut down if the BPU does not select it.
  • Funding caps: The amount of credits an approved plant can receive is capped, and any excess funds will be returned to New Jersey consumers.
  • BPU verification: The BPU can reduce future ZEC pricing if it finds it necessary to ensure affordability, assuming the reduced charge will still meet the state’s objectives.
  • ​Defined time periods: A plant can only qualify for ZECs for an initial three-year period and then must reapply every three years.
  • Performance reviews: An approved nuclear plant must meet performance obligations or risk having to repay any ZEC funding it has received.
  • An anti-double dipping clause: The ZEC program stipulates that the amount that a nuclear plant receives will be reduced if the plant is receiving compensation under any other state or federal program for its environmental or resilience attributes. 

Governor Murphy also signed another bill that enhances the state’s renewable energy portfolio standards, supports additional solar and off-shore wind development and calls for the analysis of energy storage opportunities across the state. The law also includes new and aggressive targets for energy efficiency savings, all while maintaining affordability for New Jersey’s energy consumers. 

Combined, the package not only supports the ongoing viability of the Salem nuclear power plant, of which Exelon owns a minority share, but also the 550,000 customers powered by Atlantic City Electric, one of Exelon’s six energy delivery companies. 

For more information on Exelon’s family of energy companies, visit or follow us on Twitter @Exelon, @ExelonGeneration and @ACElecConnect​.

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