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New York Post


The High Cost of Closing Indian Point

August 07, 2012

By Robert Bryce

Gov. Cuomo has repeatedly said he wants to close down Indian Point, the 2,083-megawatt nuclear plant 35 miles north of Midtown. He may have the leverage to do it — but he’d better look at the costs before he does.

Indian Point provides about 25 percent of New York City’s electricity — and replacing it will mean a host of costly and protracted permitting and legal battles over how, and where, to build new generation capacity.

Cuomo doesn’t have much say in the Nuclear Regulatory Commission’s review of whether to extend the plant’s license. But Indian Point also needs a water-quality permit from the state — which Gov. David Paterson’s administration denied.

Entergy, the plant’s operator, objected to the denial and has requested an administrative hearing. That leaves Cuomo’s team with the potential power to close Indian Point (though lawsuits would surely follow).

But talking about closing the nuclear plant is easy. Replacing it would be a monumental challenge — and expensive.

The electricity produced by Indian Point is not only reliable, it’s cheap. By our calculations, replacing that electricity would mean a $100-per-year jump in the average residential ratepayer’s bill. A typical small business might see an increase of $1,000.

And larger customers would see much larger increases. The MTA, for one, would pay another $1 million to $2 million per year for electricity — a bill to be passed on to straphangers and taxpayers.

Costs will be high because replacing Indian Point will require a combination of four different resources: new natural gas-fired plants; high-voltage transmission lines to import electricity from Quebec; rapid development of wind- and solar-energy projects, and stepped-up energy conservation and efficiency programs.

But those alternatives will be difficult to develop rapidly. For instance, building new natural gas-fired generators in the city or in the Lower Hudson Valley, would require not only navigating through the state’s siting maze, but also building new interstate gas pipelines.

It’s a major understatement to point out that building those lines will not be easy. Many would have to run through heavily populated areas, such as Westchester County. The safety measures needed in these "high-consequence" areas will increase costs.

Geology is a problem, too. The bedrock in much of Westchester extends to the surface, making underground pipelines exorbitantly expensive to build. Consider: Spectra Energy finally won approval (after years of skirmishing) to expand a gas pipeline into southern Manhattan. The cost of the 20-mile project: $850 million, more than $40 million a mile.

New transmission lines would allow New York to import hydroelectric power from Quebec. But the proposed Champlain-Hudson Power Express from the Canadian border to the Lower Hudson wouldn’t be finished until 2016 at the earliest (assuming it can triumph in its own regulatory and legal battles). And it would only replace half of Indian Point’s output.

How about wind and solar? Both are expensive, despite heavy subsidies. And wind energy has a particularly unfortunate characteristic: During the hot and humid days of the East Coast summer, the wind tends not to blow. No wind, no wind energy.

And to produce power on the scale that’s needed here, wind and solar projects both require vast swaths of vacant land — a commodity that’s in short supply on the East Coast. (And offshore wind-energy projects are twice as expensive to install as land-based ones, and far more expensive to maintain.)

Which brings us to energy efficiency. The problem here is that efficiency programs run by utilities like ConEd have saved less energy than projected. Worse, they’re not reliable: You simply can’t tell millions of sweating people to turn off their air conditioners and expect them all to comply.

And for all the publicity paid to "demand-response" programs, which require large commercial and industrial firms to agree to reduce their electricity use when called upon, the number of firms agreeing to such deals has been falling.

The operating license for Unit 2 at Indian Point expires late next year; for Unit 3, at the end of 2015. It’s impossible to see the alternatives listed above being developed in time to replace Indian Point’s output by 2015.

So, as you try to stay cool this summer, give a brief thought to Indian Point. If its opponents succeed in closing it prematurely, you’ll probably be hotter, and you’ll surely be poorer.

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