PSEG Power must decide whether to repair plants or take them offline

By: Tom Johnson |

Beyond the tens of thousands of power lines downed by Hurricane Sandy up and down the state, New Jersey’s worst storm ever damaged at least four power plants, perhaps permanently for some of them.

At least that is the assessment of one analyst’s report, which suggested the power plants, all operated by PSEG Power, most of them old and already facing issues concerning retirement, may no longer make economic sense to keep running.

The damage at the plants is still being assessed by the company, according to Ralph Izzo, chairman, president, and chief executive officer of Public Service Enterprise Company, the parent of PSEG Power.

“We had some issues at some of the peakers at Essex, Kearny, and Sewaren,’’ Izzo said during an earnings call with analysts at the beginning of November. “The combined cycle plant at Linden also was affected.’’

PSEG already was facing tough economic decisions about whether to keep about 2,900 megawatts of aging power plants in operation. The plants need major investments to comply with tougher air pollution rules or face retirement in 2015.

Most of the units, including those affected by the storm in Newark, Sewaren, and Kearney, are older, less efficient and more polluting plants, which typically run during times of peak demand.

In a note by UBS Investment Research, several of the units remained out of commission because of flooding from the storm. “It remains unclear if all the units will merit the investment to bring them back to service for their remaining years,’’ according to the note.

PSEG officials said no decision on what plants will be retired has been made.

“Hurricane Sandy caused damage to some of our generation sites in northern New Jersey that were in low-lying areas of waterways,’’ said Michael Jennings, a spokesman for PSEG Power. “All sites have assessment and recovery efforts underway to return equipment to service.’’

The Linden plant is not a peaking facility, but a 1,230-megawatt unit that is not expected to be affected by storm problems, according to analysts.

The potential plant closings come at a time when the Christie administration is trying to incent new power plant development in New Jersey as a way of curbing high electricity costs for both consumers and businesses. Those efforts have been opposed by incumbent power suppliers, including PSEG.

The superstorm also raised questions about the nation’s oldest nuclear generating station, Oyster Creek in Forked River.

In the wake of the storm, environmental groups raised questions about the safety of the plant, citing a report to the Nuclear Regulatory Commission about the discovery of cracks in pipes providing cooling water to the nuclear reactor.

Neil Sheehan, a spokesman for the Nuclear Regulatory Commission, said the problems in the pipes were identified prior to the storm, when Oyster Creek was in a refueling shutdown. The problems with the cracks are being corrected by Exelon, the owner of the facility, he said.

Sue D’Ambrosio, a spokeswoman for Exelon, agreed. “All safety system worked as designed,’’ she said.

Some environmentalists disagreed.

“Until this plant is proven safe it cannot be allowed to go online,’’ said Jeff Tittel, director of the New Jersey Sierra Club. “There needs to be an independent investigation not just the NRC to make sure this is plant safe. So far we are lucky that we have had no disaster at this plant but one day . . . “