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Leonard Hyman & William Tilles

Leonard Hyman & William Tilles

Leonard S. Hyman is an economist and financial analyst specializing in the energy sector. He headed utility equity research at a major brokerage house and…

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Is It Game Over For Nuclear Power In New York?

Toshiba nuclear plant

(IPEC) announced that the three unit nuclear power station on the Hudson River will close fully by 2021. The power station has been a source of controversy through most of its 40 plus year life, beginning when its construction almost bankrupted Consolidated Edison Co. of New York, its builder. It was subsequently owned by the state's power authority and then eventually purchased by a subsidiary of New Orleans based Entergy Corp. The original Indian Point site contained a waterfront amusement park. We doubt at this stage that anyone is still amused.

Controversy surrounding this facility has always centered on two questions. What harm is this facility causing to Hudson river ecology? And, with a large nuclear power station 36 miles north of midtown Manhattan, can authorities safely evacuate the surrounding areas in case of accident?

The Nuclear Regulatory Commission has identified two emergency pathway zones around nuclear power plants. We can think of them as two concentric circles. The first circle with a 10 mile radius poses risk of exposure and inhalation of airborne radioactive particles. The second, wider circle, with a 50 mile radius is the ingestion pathway zone. Foods and liquids within this zone are at risk of contamination in the event of nuclear accident. So much for eating locally.

Let 's step back for a moment. These zones are intended presumably to provide civil authorities with some guidelines in case of need for evacuation. The first zone incorporates about 500,000 people and the second, wider zone about 21 million people. Realistically, when asked about evacuating these numbers there have typically been only two answers: "Of course we can." Or, our preferred response, "Are you insane?" (The plant, in addition to its proximity to New York City, virtually sits alongside the major north-south arterial roadways as well as the main rail lines. The scenic lower Hudson River would prevent westward evacuation.) Related: Trump’s Advisers Draft First-Day Energy Policy Changes

Opposing nuclear power plants has been something of a family business for the Cuomo's. Our present Governor Cuomo (Andrew) has been on record as opposing Indian Point since 2007 primarly on environmental grounds. His father, Governor Mario Cuomo, was instrumental in shuttering the Long Island Lighting Co.'s Shoreham nuclear power station after it was fully completed and irradiated for final testing. Cuomo pere used the other available rationale for denying a nuclear plant an operating license--that safely evacuating large numbers of people from a long, narrow island (120 miles long and only 20 miles wide) was simply not feasible.

However, our current Governor Cuomo recently sponsored a settlement to keep open uneconomic upstate nuclear power stations (Ginna, Fitzpatrick and 9 Mile Point). Ironically perhaps, his administration cited nuclear's considerable contribution to the state's evironmental goals in terms of producing low carbon electricity. A typical nuclear plant probably pays about $50 million per year in taxes and employs 1,000 people. We're sure neither of these considerations were a factor in economically challenged areas upstate.

The Indian Point Energy Center is big. Units 2 and 3 are Westinghouse designed pressurized water reactors capable of producing 2083 MWs. On a really hot day, Con Ed might need upwards of 13,000 mws. 2083 mws is a big chunk of that demand.

As an aside we should point out that Indian Point unit 1 first entered commercial service in 1962. This 275 mw PWR was shuttered in 1974 and defueled. Thorium fans will be pleased to learn that early fuel cores at Indian Point unit 1 were thorium based.

Whenever there is a public discussion about power plant closures two issues typially arise: grid reliability and "keeping the lights on." Pardon our lack of sympathy here, but the Governor first began publicly advocating for Indian Point's closure ten years ago. Was there no thought given in the ensuing decade to replacing this large, base load resource?

The governor’s staff says they've identified 2800 MWs of renewable energy sources to replace the electricity from Indian Point. The Champlain Power Express, a DC transmission line from Canada, makes up 1000 MW of that total and is scheduled for 2021 service. It awaits approval. But the county executive of Rockland County talks about it only bring “disruption” and he favors upgrades at existing, underutilized power stations to pick up some of the slack. So the line may face delays in receiving approval. Keep in mind, as well, that environmentalists have objected to importation of Canadian power. Also uncertain is the Trump administration's positon on NAFTA and trade arrangements with Canada.

Professor Karl Rábago, utility and energy expert at nearby Pace University’s Energy and Climate Center, commented publicly he was sure that the state could make up for the loss of Indian Point’s output with a combination of renewables and energy efficiency. And he is probably right. Although his reassurance does not address issues of execution and timing. We will all know the answer in about three years.

The IPEC closure announcement brings up a number of other issues apart from reliability of electricity service in the NY metro region.

First, after a long struggle Entergy Corp. decided to retire these two units. Presumably if they remained profitable Entergy would have persevered. Clearly the power market in New York State is not paying for nuclear power’s supposed benefit: no carbon emissions, or at least not enough to keep an old, fully depreciated plant running. Does that imply something is wrong with the market for electricity? Answer: yes. Related: Solar Could Be A Cheaper Power Source Than Coal Within A Decade

Second, although the Federal government has primacy in most energy matters, including nuclear power, states can influence outcomes, especially for environmental reasons. A recent NY Court of Appeals ruling upheld the Cuomo administration's challenge to IPEC's operating license. The appeals court found that the NRC's grant of an operating license had to be viewed in light of the state's coastal management programs. The NYS Department of Environmental Conservation had found the plant in violation of coastal manage-ment requirements. Whether this also may also have triggered a plant closure is now moot.

Third, energy planning becomes more difficult when politicians use their influence and public subsidies to open or shut power generating facilities. In the current deregulated environment, no single organization has an obligation to build facilities to ensure reliable service for present as well as future energy users. And New York remains heavily dependent on its aging nuclear infrastructure. Unit 1 at 9 Mile Point is in fact the oldest operating nuclear facility in the US.

The decision to eventually shutter Indian Point seems to us like a long overdue realization that the facility is in the wrong place despite its proximity to one of the biggest electrical load centers in the world. Con Ed executives thought this was a suitable site for a nuclear power station in 1954--two years into Eisenhower's first term as President. And they were probably right given what they knew at the time. Heck, the next year Ford even prototyped a nuclear powered version of its Ranchero, the Nucleon, with optional tail fins.

As for the two full spent fuel pools at the site, they are served by multiple, redundant back up cooling systems. After five years "in the pool" so to speak, irradiated fuel can be relocated to onsite, dry cask storage. A process that began in 2008. Longer term, this is where public focus should shift.

Sooner or later this was going to happen. Either the environmental or the evacuation issues had to be seriously addressed. Politicians of varied stripe can pass the buck. But it stops with us the ratepayers paying some of the highest electricity rates in the country.

By Leonard Hyman and Bill Tilles

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  • Bob Magyar on January 23 2017 said:
    This article is perhaps one the more common sense pieces offered on the Indian Point nuclear plant closings. It should also be mentioned NYS initiated its Reforming The Energy Vision (REV) Program several years back with the objective to find ways to drive more market side deployment of Distributed Energy Resources in such a manner as to not penalized in state electric utilities.
  • G.R.L. Cowan on January 23 2017 said:
    ... the Governor first began publicly advocating for Indian Point's closure ten years ago. Was there no thought given in the ensuing decade to replacing this large, base load resource?

    Absolutely there was thought given to that; and action too. From http://www.politico.com/states... ,

    The CPV Energy Center plant has received a series of approvals from the Cuomo administration over the years. The 650-megawatt plant in Orange County is viewed by the Cuomo administration as a key part of its plan to find replacement power for the Indian Point nuclear center, should Gov. Andrew Cuomo succeed in his effort to get it shut down.

    ...

    CPV has spent more than $140,000 lobbying the Cuomo administration and lawmakers in recent years, state lobbying disclosures show. CPV, and a host of connected LLCs, also donated at least $80,000 to Gov. Andrew Cuomo.

    Maybe you understand that power sources that are alternative to Indian Point, and aren't updated nuclear power plants, are much more hazardous than Indian Point, and also much more lucrative for government, through fuel taxation.

    Much more lucrative for government, and also for one particular civil servant. If you haven't got $80,000 to spare, maybe you should just shut up.

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