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A surcharge on all utility bills that provides an estimated $300 million annual subsidy for New Jersey nuclear power plants will be eliminated next summer under an order adopted Wednesday by the state Board of Public Utilities. 

The Zero-Emission Credits (ZEC) program was enacted in 2019 to provide the funds needed to keep open New Jersey’s nuclear plants, which provide about 42% of the state’s power needs and play a key role in helping the state meet its clean energy goals. 

The surcharge costs the average residential customer about $78 per year but can cost manufacturers and large commercial customers tens of thousands of dollars. 

During a public hearing on Wednesday, BPU staff told the board that in November PSEG Nuclear LLC and Constellation Energy LLC withdrew their letters of intent to file applications for third round ZECs covering the period June 1, 2025, through May 31, 2028.  

Since there were no third-round ZEC applications received by the Dec. 1, deadline, the BPU unanimously adopted its staff’s recommendation that New Jersey’s four investor-owned electric distribution companies and Butler Electric Company be ordered to cease collecting ZEC charges on utility bills beginning on June 1, 2025. 

PSEG and other nuclear power plant operators are expected to replace the ZEC subsidy with a new production tax credit available from the federal government through at least 2032.  The zero-emission nuclear power production credit provides up to $15 per megawatt-hour to keep existing reactors competitive with other power generators.