Indian Point is a point of contention. While the nuclear facility located just outside of New York City is a major energy hub, it is drawing opposition from those who say it is too close to the population center. Now the Nuclear Regulatory Commission must decide on whether to grant it a 20-year renewal license.

Indian Point, which is owned by Entergy Corp., is considered to be the most hotly debated nuclear re-licensing case in recent years -- an issue that will go before a three-judge panel next month. Among its opponent’s are New York’s Governor, Andrew Cuomo, and its sitting attorney general. But the facility is also boasting a number of business supporters who are saying that without such power, the state’s electric rates will rise while its reliability will fall.

“Indian Point powers our rail lines, subways, schools, firehouses, police stations, businesses and homes with virtually no emissions. Indian Point's less expensive, clean and reliable energy plays a major role keeping our economy moving forward,” says Richard J. Smith, president of Entergy Wholesale Commodities.

Closing the plant, he says, would increase electric rates statewide by $10 billion to $12 billion by 2030. Meantime, 1,100 full-time workers would lose their jobs as well as 300 contractors. He is citing the city’s Department of Environmental Protection that commissioned Charles River Associates to look into the situation. Those numbers are similar to ones reached by the Business Council of Westchester, which said that the total payroll equates to $130 million annually.

So, it really comes down to safety: In light of Japan, the NRC is recommending that the 104 U.S. reactors get routinely inspected to see if their potential weaknesses are being addressed. Beyond that, those units must be reviewed every 10 years for seismic and flooding risks.

Plants are also required to have licensed, backup emergency equipment to ensure that the cooling pools containing the fuel rods would continue to operate in the event of a power failure -- the root of the Fukushima crisis. Industry here says that it has invested billions updating its plants, all of which would help mitigate a Japan-like situation.

In the case of Indian Point, it is generating 2,065 megawatts of electricity. Units 2 and 3 there were originally licensed for 40 years and through 2013 while Unit 1 has not been operational since 1974.

Reliability Risk

If the NRC were to decline the 20-year extension, the question then becomes what would replace that nuclear generation? The state is seeking to become 15 percent more energy efficient, which it could do but it is not there yet. And the county’s business council says that about 10,000 new windmills would need to become operational -- quickly, implying that it just won’t happen.

“It is critical for the continued economic vitality of this region that we clearly assess our future energy needs. While we encourage the development of alternative energy sources, it is important for everyone to understand the potential impacts on our economy and environment if Indian Point were to close,” says Marsha Gordon, president of Westchester Business Council.

Altogether, the plant provides a quarter of New York City’s electricity, says the business council. It specifically says that rates would rise by 6.3 percent a year while the probability of outages would increase by 280 percent by 2020. It is also noting that the energy generated is relatively clean and carbon free. Those are views generally supported by New York’s Independent System Operator that manages the grid and maintains the region’s reliability.

Synapse Energy has concluded, however, that the retirements of Indian Point Unit’s 2 and 3 would not affect the area’s reliability. The consulting firm, which was hired by Indian Point’s foes, says that there would still be enough electricity available from other nearby power plants, as well as from imported energy, to meet the expected demand when it is greatest.

Synapse is also advocating for “aggressive conservation programs” to help compensate for the loss of nuclear energy there. “In other words, electric power system reliability would be adequate in New York City, Westchester County and New York State, as a whole, even if both Indian Points were closed.”

Because others say that reliability would be jeopardized, the true focal point is over plant security. The NRC says that those units are safe and that they have been checked since the Fukushima nuclear disaster. “The NRC determined that overall, Indian Point Units 2 and 3 operated in a manner that preserved public health and safety and met all cornerstone objectives,” says Mel Gray, an investigator.

Indian Point’s opponents must then demonstrate that those plants are vulnerable to attack or natural disasters. Unless they are able to make a compelling case, the NRC is likely to grant the plant an extended license.


EnergyBiz Insider has been awarded the Gold for Original Web Commentary presented by the American Society of Business Press Editors. The column is also the Winner of the 2011 Online Column category awarded by Media Industry News, MIN. Ken Silverstein has been named one of the Top Economics Journalists by Wall Street Economists.

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energybizinsider@energycentral.com