News that Indian Point Energy Center will shut down both its nuclear reactors by 2021 came via a press release from Gov. Andrew M. Cuomo at 9 a.m. on Jan. 9.
The news was confirmed shortly after by Entergy Corp., the plant’s operators. Three days earlier, The New York Times citing an unnamed source, reported that a deal to close the plant had been reached.
While Cuomo, a Democrat in his second term, cheered the future shutdown of a plant he long deemed a threat to a densely populated region, responses from political and business leaders in Westchester were much more grave.
The closing of the 2,000 megawatt Buchanan nuclear power plant has local business groups – which had called for relicensing of the plant – preparing for a potential hole in the region’s power supply and economy the plant’s absence could create.
“It’s a huge, huge blow,” said John Ravitz, executive vice president of The Business Council of Westchester. “And now the question really is to the governor, ‘OK you closed the plant, now what?’”
In a press conference on Jan. 9, officials with Entergy said the plant would be kept secure and operational through 2021 and that its current 1,000 employees would be kept until that time, then offered relocation to other Entergy facilities. The state has offered assistance as well for affected employees.
Elected officials and business leaders in the county spent the days after the announcement calling for more information on how Indian Point’s closure will affect electric rates and reliability, the taxes to the town, school district and county, as well as on the environmental impact of shutting down a plant that has operated for more than four decades.
“A lot has to be sorted out,” said Bill Mooney, president and CEO of the Westchester County Association business group. “It’s kind of like Obamacare. OK, you’ve been talking about this for years, you want to get rid of it… Now it’s your deal, what are you going to do with it? What’s going to replace it?”
“We have some extraordinarily positive things happening in Westchester, the most optimism I’ve seen in several years,” Mooney added. “What kind of cold water is this going to pour on that?”
Under the terms of the deal, Entergy Corp. will shut down Indian Point’s Unit 2 reactor by April 2020 and the Unit 3 reactor by April 2021. The Unit 1 reactor at the plant was shut down in 1974.
The agreement reached between the state and Entergy included Riverkeeper, an Ossining-based environmental group.
Entergy, a New Orleans-based company with an office in White Plains, has been trying to renew the 20-year federal licenses for its two active reactors since 2007, but has been challenged by state officials and environmental groups such as Riverkeeper throughout the process.
While the federal Nuclear Regulatory Commission has consistently deemed the plant safe to operate, there have been a number of highly publicized issues at the plant in recent years. In March, Entergy disclosed that it would have to repair faulty baffle bolts in the liner of its Unit 2 reactor. A month before that, elevated levels of the radioactive material tritium were found in groundwater samples beneath the plant. Adding to that were multiple unplanned shutdowns of reactors that Cuomo often used as evidence of the plant’s danger to the region.
Still Entergy officials stressed the plant’s strong safety record following the news Monday. The company pointed to $1.3 billion in investment to safety and reliability improvements in the past 15 years and 6,000 hours of inspections by the NRC last year.
The relicensing efforts were dealt a major blow in November, when New York’s highest court said the company was not exempt from a review by the New York Department of State’s coastal management program. Entergy had argued it wasn’t subject to the state’s coastal regulations, as the rules took effect after the reactors were already running. New York had refused to grant Indian Point a coastal consistency certification, which gives the plant authority to operate on the Hudson River.
The deal reached on Jan. 9 settles all litigation between the state and Entergy, as well as with Riverkeeper. Entergy will end its quest for a 20-year federal license and instead apply to the NRC for a six-year license.
At a State of the State address in New York City, Cuomo called Indian Point a “ticking time bomb.”
“For 15 years, I have been deeply concerned by the continuing safety violations at Indian Point, especially given its location in the largest and most densely populated metropolitan region in the country,” Cuomo said. “I am proud to have secured this agreement with Entergy to responsibly close the facility 14 years ahead of schedule to protect the safety of all New Yorkers.”
But Entergy said the decision to shut the plant was an economic one, separate from the pressures the company felt from state leadership. The company pointed to decreasing revenues from lower energy prices and increasing operating costs for nuclear plants hurting the entire nuclear power industry.
“It made sense for us to try to negotiate this settlement consistent with our point of view that we were going to have to make a decision to shut down the plant anyway because of poor financial conditions,” said Bill Mohl, president of Entergy Wholesale Commodities at a press conference following the announcement.
But Mohl acknowledged that the continued opposition to the plant’s relicensing, and the extended review period, drove up those costs and factored into the decision. Entergy has spent more than $200 million over 10 years on the review process, according to numbers provided by the company.
If the state cannot find a replacement for Indian Point’s power by 2021, both the state and Entergy can agree to extend the plant’s operation in two-year increments until April 2024 for Unit 2 and April 2025 for Unit 3.
Other terms of the deal include:
- New York State will approve a coastal zone management act consistency certification and all other necessary water permits for Entergy.
- Entergy will provide $15 million to “support environmental restoration and community benefit projects.”
- New York state will have authority, along with the NRC, for various inspections at Indian Point through the duration of its operation.
- Entergy’s previously agreed upon payments in lieu of taxes agreement with the town of Cortlandt, the county and school districts will continue through 2021, according to the governor’s statement, before being stepped down at a negotiated level following Indian Point’s shutdown.
- Entergy will move a set number of spent fuel rods yearly from storage pools to dry cask storage on site, a solution environmental advocates said is safer for radioactive material.
The Business of Council of Westchester commissioned a report in 2012 by Energy Strategies Inc. that estimated a drain of $11.5 billion from the local economy if Indian Point were to close. The New York Independent System Operator, the nonprofit that manages the state’s electrical grid, said this year in a filing to the state Public Service Commission that “retaining all existing nuclear generators is critical to the state’s carbon emission reduction requirements as well as maintaining electric system reliability.”
Concerns about the impact on energy costs and reliability, as well as to the overall economy of Westchester, were voiced immediately following the announcement.
Local 1-2 New York, a union representing 350 Indian Point operators. released a statement critical of Cuomo.
“The fact remains that there is absolutely no infrastructure in place now, nor will there be in 2021, that will provide clean, zero emission power that Indian Point supplies today,” said James T. Slevin, president of the union.
Arthur Kremer, chairman of the New York Affordable Reliable Electricity Alliance, a group that advocated for the relicensing of the plant, blamed a “toxic business environment” for the closure.
“Indian Point has been the backbone of New York’s electricity system for over 40 years,” Kremer said. “Its closure in 2021 will mean fewer jobs, higher electricity costs, lost economic opportunity, higher taxes and higher emissions for Westchester and the region.”
But the deal was widely praised by environmental groups in the Hudson Valley. Riverkeeper called the deal a “landmark agreement.”
“This agreement provides what we’ve been fighting for for decades: a definite early closing date for Indian Point – our biggest existential threat in the region,” Riverkeeper President Paul Gallay said. “It’s a win for the safety of our communities, a win for the Hudson River and all the rich variety of life within it and a win for a clean, sustainable energy future.”
Both local and national environmental advocacy groups, including Scenic Hudson, the National Resources Defense Council, Hudson River Sloop Clearwater and Friends of the Earth, released statements praising the decision as well.
“The accelerated closure and other provisions of the settlement will protect the health and safety of New Yorkers and the integrity of the Hudson River,” said Ned Sullivan, president of Scenic Hudson in the joint press release with Riverkeeper.
At a press conference, Westchester County Executive Robert P. Astorino pointed to Cuomo’s advocacy for a multibillion-dollar ratepayer subsidy to three upstate nuclear plants, approved in 2016 as part of the state’s Clean Energy Standard, which he called “incredible hypocrisy.”
“Are lives in the southern part of the state more precious than lives upstate,” asked Astorino, a Republican who opposed Cuomo for governor in 2014. “How do you equate that in his mind? That it is unsafe here, but OK up there.”
Cuomo has pitched upstate nuclear plants as an emission-free energy bridge to a future where the state draws at least half of its energy from renewable sources. But he also maintained that Indian Point’s location in the New York metropolitan region made it too dangerous.
Astorino recognized the economic factors that Entergy cited in its closure, but said Cuomo’s actions helped force the plant’s closing as well.
“It is very hard to do business in this state if you are getting beat to death by the state,” Astorino said, adding Cuomo was antagonistic to Entergy to the point it “cried uncle and gave up.”
Astorino said the county stands to lose $4.5 million it gets yearly from Entergy. The town of Cortlandt will lose about $1 million per year and the village of Buchanan about 46 percent of its tax levy, according to Linda Puglisi, the Cortlandt town supervisor.
“Everyone will be significantly impacted financially, most importantly our taxpayers,” Puglisi said at the press conference following Astorino.
Puglisi called on Cuomo to create a panel to study the economic and environmental impacts of the plant’s shutdown.
Those impacts will include the Hendrick Hudson School District. Superintendent Joseph E. Hochreiter said the school district stands to lose more than $23 million from its operating budget without tax dollars from Entergy.
“I can tell you that if 30 percent of our revenue dries up, we’re going to have to make some very dangerous and very unfortunate decisions,” Hochreiter said.