Environmental groups in New Jersey are trying to force Excelon (NYSE:EXC), the owner and operator of the Oyster Creek nuclear reactor, into a corner. They’ve convinced the State of New Jersey to issue a draft water quality permit for the plant that would require the utility to build cooling towers. The reason is their claim the once-through cooling system is killing fish and heating area waters along the New Jersey shorelines.
For it part Exelon has repeatedly objected saying that if its is forced to pay $600-800 million to build the cooling towers, it will close the plant. In doing so it will eliminate 700 high paying jobs and a big chunk of carbon emission free electricity for one of the most urbanized states in the country.
“If cooling towers are required, we’re going to have to shut the plant down,” Exelon spokesman David Benson said. “The cost is more than the plant is worth.”
Greens win if Exelon loses fight over water permit
Here’s why the environmental groups win if Exelon makes good on its threat to close the plant if the cooling towers are required in the water permit. These groups will have succeeded in forcing the owner to close the reactor after having failed to convince the NRC to deny a 20-year license renewal last year.
Forcing a politically pliant regulatory agency in the final days of the previous governor’s administration foists a flawed process on to the new governor as an unwelcome legacy of the now out-of-power Democratic party.
The new governor can’t just turn off the water quality permit process like a tap over the kitchen sink. He has to let the wheels of administrative procedure work themselves out. He also has much bigger issues such as dealing with a nightmarish budget battle with the state legislature.
Greens want Exelon to hit the red switch
In the meantime, what the environmental groups hope is that Exelon will indeed make good on its threat and close the reactor over the cooling tower issues. It will do itself what they failed to do. Green groups will win and the Garden State will become a consumer of an additional 600 MW of higher priced fossil fueled electricity.
Let’s be clear about the inside game the environmental groups are playing in New Jersey. Their objective is to close the reactor – period. They can fend off criticism that they are "playing chicken" with the future of the reactor. The reason they can make this case is that they don't want any future for the reactor so this isn't a game of chicken. It is end game.
When regulation becomes a tool of politically motivated activist groups, it ceases to be a impartial regulator of the public good. Public confidence in the environmental agency’s integrity and credibility will become suspect poisoning the legal environmental as surely as the effects of a major oil spill in Barnegat Bay.
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