Report: Closure of Indian Point nuclear plant will raise energy costs, increase pollution in NY

By Dorothy Davis

The closure of the Indian Point nuclear power plant could lead to higher pollution and electricity rates for New York, according to a report prepared by Boston-based Charles River Associates for the New York City Department of Environmental Protection.

The report, which examines the impact of closing the Indian Point Energy Center (IPEC) located in Buchanan, New York, concludes retirement of IPEC nuclear reactors would lead to higher electricity costs and more pollution, and result in a shortage of power generation that would affect grid reliability in the state.

Concerning the possible economic impact of IPEC’s retirement, the report highlights:

“The state market would see wholesale cost increases of approximately $1.5 billion per year, or roughly a 10% increase under most scenarios. NYC consumers would pay approximately $300 million per year more for wholesale energy, or approximately a 5-10% increase.”

The report then explores the probable negative environmental effects of IPEC’s closure:

“IPEC is able to provide approximately 2 GW of generation with no direct air emissions. Its retirement will cause a substantial increase in the air emissions from power plants. Our analysis indicates that both the City and State would see approximately a 15% increase in carbon emissions under most conventional replacement scenarios, with roughly a 7-8% increase in NOx emissions. NYC would see similar carbon emissions increases.”

Addressing grid reliability, the report states:

“The critical date is the summer of 2016, the first summer peak following IP3’s (Indian Point Unit 3) scheduled retirement in December of 2015. Our analysis indicates that given the current prospects for new capacity in New York, resource adequacy will fall below acceptable levels at that point.”

The licenses for IPEC are scheduled for renewal in 2013 and 2015. According to the report, the 2,040-megawatts produced by IPEC account for as much as 25 percent of the power consumed in Consolidated Edison’s service area, which includes New York City and Westchester County.

The report also outlines that projects to replace IPEC’s generation capacity should have already begun. While there are several generation and transmission projects being proposed, there are no new replacement plants or transmission lines currently being built.

There has been an ongoing debate surrounding the Indian Point nuclear site with strong arguments for both its relicensing and its closure even amongst New York’s elected government officials.

Those who support the closure of the plant, such as New York Governor Andrew Como, argue that IPEC having operated for nearly 40 years is past its prime as a reliable and safe facility for power generation. Recent events at Japan’s Fukushima Daiichi nuclear complex have also heightened concerns about IPEC’s ability to withstand natural disasters and the risks associated with its proximity to New York City.

Those supporting relicensing of IPEC, such as New York City Mayor Michael Bloomberg, contend that IPEC not only meets, but exceeds safety standards for operating nuclear power plants in the US. Supporters also argue that New York simply can not afford the loss of IPEC’s generation capacity environmentally and economically.

Not surprisingly, the report also concludes:

“The principal and most obvious uncertainty is the shutdown of IPEC itself. While positions have been staked out regarding environmental permits and license reissuance, there is a substantial chance that the decision whether and under what circumstances to retire IPEC will be decided in the regulatory arena, and ultimately by litigation.”


The full report is available for review here: Indian Point Retirement Economic Analysis Draft Report



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