PSEG Warns Energy Tax to Subsidize Power Plants (A3442) Will Cost New Jersey Residents and Businesses

TRENTON, N.J., Jan. 6, 2011 /PRNewswire/ -- PSEG today announced its strong opposition to legislation (A3442) that will subsidize the construction of new power plants through guaranteed long-term payments.  

"This is essentially an energy tax that will cost New Jersey residential and business customers more than a billion dollars," said Anne Hoskins, Senior Vice President, Public Affairs and Sustainability, PSEG.  

"Customers have been put through this before with disastrous results for customers," Hoskins warned. In the 1970's, government required New Jersey's utilities to enter into long-term contracts with power generators and set prices and production targets for the energy industry. That resulted in billions of dollars in excess payments by consumers. Over the next six years, PSE&G customers alone will pay more than $1 billion for the remaining costs of these long-term contracts. Atlantic City Electric recently received approval to raise its customers' bills by roughly five percent to recover the costs of its out-of-market contracts.  

"The resulting customer surcharges will have long-term impacts," Hoskins said. "Subsidies are a slippery slope and will drive away other non-subsidized private investment in New Jersey."

"This bill is trying to fix a problem that does not exist," added Hoskins.  Since 2007, New Jersey's wholesale electric markets have spurred significant investment in new generation, environmental retrofits, upgrades on existing generation, and investments to reduce electric usage through demand response.  

"These investments totaled billions of dollars -- all made at the risk of private investors, not customers. PSEG alone has invested approximately $1.5 billion in generating plants in New Jersey since 2007," Hoskins said.  

"It is best when investors, not government, determine when new generation is needed, where it is built, what technology to use and what price to pay for it," said Hoskins.

"Supporters of A3442 hope to create jobs, but real jobs will be lost in the process," said Hoskins. "Subsidized generation will replace non-subsidized generation and threaten hundreds of existing jobs."  

Public Service Enterprise Group (NYSE: PEG) is a publicly traded diversified energy company with annual revenues of more than $12 billion, and three principal subsidiaries: PSEG Power, Public Service Electric and Gas Company (PSE&G) and PSEG Energy Holdings.

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SOURCE Public Service Enterprise Group (PSEG)