Located some 40 miles north of New York City, in Westchester County, the Indian Point Energy Center (IPEC) consists of two operating nuclear reactors, with a combined generating capacity of over 2,000 MW, and one long-retired reactor. IPECâ€™s size and location are the key factors in both the power it provides and the decades-long fight to shutter the plant permanently.
Although antinuclear sentiment is not new, opposition to IPECâ€™s continued operation was galvanized by the September 11, 2001, attacks on the World Trade Center. More recently, the March 2011 earthquake and subsequent tsunami that destroyed Japanâ€™s Fukushima Dai-ichi nuclear plant complex has reinvigorated the debate over IPECâ€™s safety and its environmental impacts.
Because IPEC provides significant quantities of round-the-clock electricity to the New York City area and because of long-standing constraints that limit how much electricity can be imported from upstate New York, New England, New Jersey, and elsewhere, closing IPEC would require the development of higher-cost alternatives. These alternatives include: building new natural gasâ€“fired generating plants in southeastern New York (SENY); building additional high-voltage transmission lines into SENY to increase the quantities of electricity that can be imported into the area; building renewable generation, such as wind and solar resources; implementing more aggressive energy-conservation measures; or combinations of all four approaches.
This paper examines the economic consequences of closing IPEC. Specifically, we consider the broader economic impacts of shutting down the plant and replacing its electricity-generating capacity. We evaluate how the resulting higher electric costs will manifest themselves in reduced economic growth and job losses throughout the state.
We conclude that closing IPEC would increase average annual electric expenditures in New York State by $1.5 billionâ€“$2.2 billion over the 15-year period 2016â€“30. For a typical residential customer, this would mean an increase in the household electric bill of $76â€“$112 each year. The average increase for a commercial customer would be $772â€“$1,132 per year. The average increase in industrial customersâ€™ electric bills would be $16,716â€“$24,517. The largest increase would be for transportation customers, such as the subway system, which would see increases of $1.26â€“$1.85 million per year.
The effects of these higher electricity costs absorbed by customers would ripple through the New York economy, leading to estimated reductions in output of $1.8 billionâ€“$2.7 billion per year over the 15-year period 2016â€“30. The resulting loss of jobs in the state could range from 26,000 to 40,000 per year, depending on the alternative chosen to replace IPEC.