In 1972, Public Service Electric & Gas Company placed an order for two floating nuclear power plants to be located a few miles off the coast of Atlantic City. The plan called for construction of the 1.3-gigawatt plants in Jacksonville, with the reactors to be mounted on barges and towed up to New Jersey. The plants would have generated enough electricity to supply two million homes, sending the power back via underwater cables.

However, after revised electricity forecasts projected reduced growth in power demand, PSE&G cancelled its order for the offshore reactors. Westinghouse then shut down its Jacksonville factory and eventually dropped plans to build floating nuclear plants.

Today, the very future of nuclear power is in question. The electricity market is flashing warning signs that bad times are ahead for the nuclear industry and the U.S. fleet of 100 nuclear power plants.

Westinghouse is bankrupt. Only two new nuclear plants are being built in the U.S., and both are plagued with huge cost overruns. The nuclear industry has been rocked by plant closings and battered by an abundance of cheap natural gas, which has made it difficult for nuclear plants to compete. Since 2014, electricity companies have either closed or announced plans to shut down 14 existing U.S. nuclear plants, and odds are high that at least a dozen more nuclear plants will be shuttered. Among those in jeopardy are all four nuclear plants in New Jersey – PSE&G's Salem 1 and 2 plants and the Hope Creek plant and Exelon's Oyster Creek plant.

At a bare minimum, the policy choices ahead are difficult. And for PSE&G, the question is whether New Jersey needs the large amounts of baseload power that nuclear plants provide. Could New Jersey run on natural gas and renewable energy alone?

This may seem like an absurd question, given that nuclear power supplies 44 percent of the state's electricity. The answer is that low-cost natural gas – which accounts for 46 percent of New Jersey's electricity – will grow in importance, along with renewables and improvements in energy efficiency. Incredible as it might seem, nuclear power is just no longer needed to maintain grid reliability.

According to a study by the Brattle Group, the term "baseload generation," which has been synonymous with nuclear power and coal for decades, is no longer useful for the purposes of planning and operating today's electricity system. Instead, more flexible resources like natural gas and renewables are increasingly needed to cost effectively assist with meeting changing system loads, responding to local requirements and integrating the variable output of solar and wind power.

Despite changing market conditions, some states have approved generous subsidies to keep their financially-stressed nuclear plants afloat. Illinois and New York state have approved a zero-emission nuclear resource program that puts a price on nuclear power's attributes in meeting carbon reduction goals — though both efforts are being challenged legally by other electricity producers, who say the nuclear credits intrude into federal wholesale markets.

What is indisputable is that the Illinois and New York state measures are in fact subsidies requiring electricity users to pay an additional $700 million annually in higher rates. Several other states – Ohio, Pennsylvania, and Connecticut – are considering similar measures. But nuclear power's future is being questioned and challenged as never before.

It's now New Jersey's turn. PSE&G should recognize that nuclear power needs to survive on its own without financial incentives. If nuclear plants can produce competitive power, there's no need for subsidies.

Absent the need for baseload power, PSE&G should prepare for what had once been unthinkable: the early retirement of the Salem and Hope Creek nuclear plants. Exelon's Oyster Creek plant, the nation's oldest operating nuclear plant, is scheduled to be closed by the end of 2019.

Why this debate about an energy source that supplies 19 percent of the nation's electricity? There are the traditional concerns – energy security, diversification, and the need for U.S. leadership in nuclear technology. But nuclear power is also too valuable as a source of carbon-free electricity to be abandoned. Instead of trying to save money-losing plants, the emphasis should be on developing small modular and advanced nuclear plants that are potentially safer and more efficient than large conventional reactors, and can be built and operated at considerably less cost.

If small, low-cost reactors catch on in the electricity markets, that would lower the global growth curve for carbon emissions and keep nuclear power alive. In the meantime, forgoing the use of subsidies to save financially-distressed nuclear plants would not only benefit consumers and other electricity producers, but would be in nuclear power's best interests. That in itself is a big enough goal.

Mark J. Perry (@Mark_J_Perry) is a contributor to the Washington Examiner's Beltway Confidential blog. He is a scholar at the American Enterprise Institute and a professor of economics and finance at the University of Michigan's Flint campus.

If you would like to write an op-ed for the Washington Examiner, please read our guidelines on submissions here.