PSEG Fined $39 Million for Lying to FERC

The Federal Energy Regulatory Commission (FERC) has signed a consent agreement with PSEG to settle their bidding errors with a $39 million fee. The violations are supposed to have taken place over a nine-year period from 2005 to 2014 by PSEG Energy Resources & Trade LLC, the company’s trading arm. According to FERC, the company made false and misleading claims when bidding into auction. PSEG incorrectly calculated cost-bidding at a minimum of $35 million. PSEG has threatened to close their three South Jersey plants as part of their effort to get the state government to sign a nuclear subsidy bill.

“FERC is fining PSEG $39 million for making false and misleading claims in their cost-bidding scheme that rips off consumers. FERC almost never goes after utilities, so this shows how blatantly abusive PSEG has been over the past nine years. We have said from the beginning that PSEG does not need the money and these charges from FERC proves it. If we can’t even trust PSEG to report $35 million to the rubberstamping agency that is FERC, how can we trust them in front of the BPU with $3 billion? This is especially since BPU has a worse utility oversight record than FERC. PSEG has lied and manipulated the system to get more money from the ratepayers and will continue to do so if we give them this massive subsidy,” said Jeff Tittel, Director of the New Jersey Sierra Club. “This nuclear subsidy scam is bad for the environment, the ratepayers, and the workers. We cannot give the company $3 billion a year for lying and misleading the ratepayers. This fine should question the entire scheme.”

The nuclear subsidies bill S2313 (Sweeney)/ A3724 (McKeon) is up for a floor vote in the Assembly and possible the Senate on Thursday. The bill directs the Board of Public Utilities (board) to establish a Zero Emission Certificate (ZEC) program. Under the bill, a ZEC is a certificate, issued by the board or its designee, representing the fuel diversity, air quality, and other environmental attributes of one megawatt-hour of electricity generated by an eligible nuclear power plant selected by the board to participate in the ZEC program.

“Governor Murphy must veto this bill because PSEG clearly cannot be trusted. There is no transparency in the bill and this is a disaster waiting to happen, especially consider this latest decision by FERC. This bill would hand PSEG a $3 billion subsidy for their nuclear plants that don’t need funding. The whole bill is just an excuse to subsidize the nuclear power plants. PSEG are getting $300 million a year whether they need it or not. We should not be moving forward with this nuclear subsidy deal when PSEG will get $800 million in subsidies from Trump’s tax cut. PJM is also looking to give them millions in subsidies. Under energy deregulation these plants also received $2.5 billion dollars in subsidies as Stranded Assets, despite being profitable,” said Jeff Tittel. “PSEG still want to take billions of NJ ratepayer money to subsidize nuclear their power plants that are already making money.”

The new nuclear bill still does not have language for replacing the plants when they close with renewables. This means that when the plants close, they can be replaced with natural gas. They must do an assessment to continue giving the subsidies but the documents they get from PSEG will be hidden from the public and Ratepayer Advocate. The new nuclear bill still does not guarantee the financial transparency needed to ensure ratepayers won’t subsidize profitable nuclear plant.

“This bill package also needs to be vetoed because it would help PSEG at the expense of renewable energy. The legislation will severely interfere with Governor Murphy’s clean energy goals. There is zero justification for any nuclear subsidies. It’s nothing more than giving Public Service Enterprise Greed a blank check from the ratepayer that will undermine progress for renewable energy in New Jersey. This bill hurts renewable energy and ratepayer’s wallets. The bill is nothing but a green scam to rip off ratepayers to raise their dividends and stock prices. The only green thing about the new nuclear bill is the money PSEG is getting from the ratepayers,” said Jeff Tittel, Director of the New Jersey Sierra Club. “FERC might as well be the ‘Federal Energy Rubberstamp Commission’ and the fact that they don’t trust PSEG should be an alarm bell. Governor Murphy must VETO this dangerous and unneeded nuclear subsidy bill!”