LACEY TOWNSHIP, N.J. - A year ago, New Jersey environmental officials reached a deal with the owners of the nation's oldest nuclear power plant to shut it down 10 years earlier than expected. In return, the Oyster Creek Nuclear Generating Station would not have to build costly cooling towers.

On Wednesday, state officials kept their end of the deal, granting Chicago-based Exelon Corp. a permit that will enable the plant to continue drawing water from Oyster Creek to help cool the nuclear reactor. It also will be able to keep discharging heated water into the creek and Barnegat Bay.

The hot water is suspected of contributing to algae blooms and increased numbers of stinging jellyfish in the bay.

The state says the early closure is a good trade-off, but environmentalists say the deal is bad for the bay.

Robert Martin, the state's environmental protection commissioner, said the early shutdown is a good enough compromise to justify letting the power plant keep drawing from and discharging into the creek and bay.

The agreement reached on Dec. 9, 2010, calls for the plant to shut by the end of 2019 instead of 2029, as called for in its current license.

"The early closure of the Oyster Creek plant is a major win for the long-term health of the Barnegat Bay ecosystem," Martin said. The Christie administration "took firm and decisive action in reaching this unprecedented agreement to close the nation's oldest commercial nuclear reactor. That closure is the key component of the governor's 10-point plan to restore the bay from decades of ecological decline."

But Jeff Tittel, director of the New Jersey Sierra Club and a leading critic of the plant, said the permit allowed Oyster Creek "to further destroy our bay."

The permit "will mean more superheated water going into the bay longer, not only killing fish, but undermining the health of the bay," Tittel said. "As long as we have this superheated water going into the bay, it will never be adequately protected and the governor's 10-point plan will never work."

The permit was "based on political science, not real science," he said.

Under the administration of Gov. Jon S. Corzine, a Democrat, New Jersey wanted Oyster Creek to build closed-cycle cooling towers to eliminate the need to draw water from the creek and prevent heated water from being discharged back into it. Exelon fought the proposal, saying it was too expensive.

In light of the early-shutdown deal reached with Exelon, Martin said the department determined that closed-cycle cooling was not the best technology available, given the length of time that would be required to retrofit the plant, and the limited life span of the facility after the new system was brought online.

It would take at least seven years to design, build, and get permits for such a system, compared with the agreement that will close the plant in eight years, he said.

Exelon welcomed the issuance of the permit.

"Exelon and our team of dedicated Oyster Creek employees remain committed, as always, to operating Oyster Creek safely, reliably, and with respect for the environment for the remainder of its operating life," company spokeswoman Suzanne D'Ambrosio said.