News Archive 2002

Squaring Off Over Energy
By MAREK FUCHS
The New York Times
July 14, 2002

CLOSE down Indian Point, one side says, and we will be faced with a grim electric future of soaring energy prices and flickering lights, with brownouts and blackouts part of the fabric of daily life. Categorically false, says the other side, with claims of their own: that Indian Point is superfluous and could be shuttered with little effect on energy supply or cost.

For years before Sept. 11, the debate over Indian Point, the nuclear power plant that sits on the bank of the Hudson in Buchanan, was waged mainly by environmentalists who argued over disposal of spent fuel and other issues that the general public took little interest in.

After the terrorist attacks, Indian Point became the subject of much wider concern, with discussion focusing on security. The nation has 103 commercial nuclear power plants in operation, but Indian Point, which is 30 miles upriver from the George Washington Bridge, is the one nearest the most people: more than 20 million people live within 50 miles of it. With diagrams of American nuclear power plants uncovered in Al Qaeda safe houses and caves, everyone from television pundits to the local P.T.A.'s now debate the safety issues: from the effectiveness of potassium iodide pills as a guard against thyroid cancer to whether, in the event of sabotage, Westchester residents would be trapped in a radioactive plume or are adequately prepared to escape.

This spring the debate turned to other practicalities. Studies commissioned by each side, which contradict each other, address the question of whether the 2,000 megawatts produced by Indian Point -- enough to power approximately two million homes -- were needed. Was Indian Point a key contributor to the area's power grid or could it be rendered unnecessary by conservation measures and alternative energy sources?

Indian Point's owner, Entergy Corporation, released a study in April that had been written by two independent research groups, General Electric Power Systems Energy Consulting and National Economic Research Associates. The study made the case -- not surprisingly -- that keeping Indian Point open was vital to the area's energy reliability, reserve margins and basic costs of what people would pay to light and cool their homes and toast bread.

In May, Riverkeeper, which is best known as an environmental group advocating for cleanup of the Hudson River but which has recently taken an active role in calling for the shutdown of Indian Point, along with the Pace Law School Energy Project, released not one but two studies. Those studies said that decommissioning Indian Point would not dent energy supply or cost.

Middle ground? There seems to be none.

Whether Indian Point should remain in operation has been a heated populist debate, discussed loudly on a grassroots level, and the studies -- from each side -- were commissioned to keep grassroots momentum rolling.

Alex Matthiessen, Riverkeeper's executive director, said that his group's studies were commissioned to persuade the public -- and politicians -- that ''they needn't worry about life without Indian Point.''

''The idea behind the reports -- the essential part of the campaign -- is to build that intellectual capital,'' Mr. Matthiessen said.

Together, the Riverkeeper studies cost $15,000 and several months to produce. Riverkeeper is trying to raise money to produce yet another report, this one focusing solely on the energy price implications of shutting down Indian Point and also to gather what the group says will be an independent panel of experts to provide a road map to deal with the tax, employment and energy effects of closing the plant.

State Assemblywoman Sandra R. Galef, who represents the 90th Assembly District, which includes Buchanan, said the forum of studies, no matter how contradictory, was a good one for this issue. ''You just can't have a public meeting on Indian Point,'' Mrs. Galef said. ''Everyone just yells at each other.''

But Assemblyman Richard L. Brodsky, whose district sits to the south of Indian Point, disagrees. Mr. Brodsky, who opposed the plant for many years, said that the pro-Indian Point study so thoroughly failed to consider the government's cost of securing Indian Point and cleaning up in the event of a catastrophic leak that, rather than being productive, ''the duel of competing studies is, in substance, a false duel.''

The Nuclear Regulatory Commission, which gives Indian Point 2 its highest level of scrutiny, currently has a team inspecting the plant and is scheduled to release its findings in late August.

''There were problems even before the February 2000 leak,'' said Neil Sheehan, a spokesman for the commission, ''but that brought to light other problems that were festering at the plant.'' Indian Point 3, which has a better safety record, receives less oversight by the commission.

For its part, the Entergy study spells out in detail its take on the consequences of taking Indian Point offline. It says that if the two operating plants, Indian Point 2 and 3, were permanently shut down, consumers would be out $3 billion over the next three years. At the same time, the study said, energy reliability would decrease by a factor of five, with reserve margins cut almost in half. The number of days emergency operation procedures would be required would quintuple, it said, causing a severe impact on the reliability of the area's basic energy.

The report also brings up the prospect that if opponents have their way and Indian Point is shut, next might be the closure of 23 other nuclear units, in which case energy costs would increase by $10 billion in the same three-year period. Under those circumstances, the study says, New York ''would not be able to meet expected peak requirements.''

The studies released by Riverkeeper and the Pace Law School Energy Project accuse the Entergy study of pulling facts out of thin air to understate potential supply and inflate future demand.

''The only argument Entergy thought it could use to fool the public into supporting the plant is the notion that we can not survive without Indian Point's power,'' Mr. Matthiessen said.

One of the Riverkeeper/Pace Law School Energy Project reports was written by the Synapse Energy Economics, a consulting firm based in Cambridge, Mass. Synapse called the Entergy report incorrect and biased and largely dependent upon ''unreasonable assumptions'' that pay little mind to basic facts.

Synapse refers to the New York Independent Systems Operator, a nonprofit organization established and regulated by the Federal Energy Regulatory Commission. That organization projected that in this summer there would be a 14.3 percent reserve margin, a figure calculated by dividing capacity by projected demand. Entergy's reserve margin forecast is 8.4 percent.

Synapse's claim: ''By inflating projected peak demands, the Entergy study artificially reduces the forecast system reserve margins.''

Entergy, Synapse said, exaggerates demand by ignoring the loss of the World Trade Center load, the impact of the recession on energy demand and the transfer of energy load from the New York control area to the Pennsylvania-New Jersey-Maryland system.

All these ''important developments,'' Synapse said, were ignored by the Entergy study.

On the supply side, Synapse said that the Entergy study does not acknowledge all existing capacity and overlooks a new plant that New York State has approved to come online. The plant, the Bethlehem Energy Center Repowering Project, is scheduled to open in the third quarter of 2004.

Synapse also dismisses a set of projections made by the Entergy report, which assume that two dozen additional nuclear plants would be decommissioned in the wake of an Indian Point closing. But any analysis centered upon wholesale closing of nuclear plants around the state because Indian Point is taken offline is wrongheaded, Synapse concluded, saying: ''It is not realistic to assume that any other plants would be retired if Indian Point was closed.''

THE second report released by Riverkeeper and Pace Law School Entergy Project was prepared by Charles Komanoff, an independent energy consultant in Manhattan. Mr. Komanoff said that Indian Point could be closed without impairing the reliability or cost of the power supply. This can be done, he said, by replicating the legislation, policy and behaviors that helped California cut peak demand by 10 percent during its energy crisis last summer.

The Komanoff study indicates that ''a California-type program of electricity conservation could permit the Indian Point nuclear station to be shut as early as this summer without impairing the reliability of power supply in New York City and the downstate New York region.''

In addition to public awareness of the need for conservation, Mr. Komanoff proposes that the loss of Indian Point energy could be recouped by charging large customers more in peak periods to keep them from using so much energy. He also contends consumer rebates for energy reduction and the purchase of energy efficient appliances could help make up the difference, as well as basic day-to-day conservation by consumers and businesses. In California, that meant turning off lights, turning down air-conditioners and limiting time in the hot tub.

Based on California's results, Mr. Komanoff offers a range of power savings that he says can be achieved in New York this summer. Under the best-case scenario, enough energy can be conserved to overcompensate for Indian Point's shutdown. Not only would the energy that is produced by Indian Point not be missed, he says, but there would also be a 57 percent energy surplus. The worst-case scenario, however, is far less rosy: a 40 percent energy deficit.

Still, the Komanoff report says, any potential shortfall in capacity could be made up with imports of power from New England and the Mid-Atlantic region, which, Mr. Komanoff said, have surplus capacity.

Jim Steets, a spokesman for Entergy, said that all of the power for public buildings and uses in Westchester and New York City comes from Indian Point 3. This includes all schools, street lights, firehouses, town halls, municipal buildings, subways and Metro-North trains in both Westchester and New York City. Indian Point 2 supplies 10 to 15 percent of all the power to customers of Consolidated Edison in Westchester and New York.

Mr. Steets said that the study was commissioned by Entergy to help the public better realize Indian Point's precise contribution. ''It had become apparent,'' said Mr. Steets, ''that people didn't understand the importance of Indian Point, its role in the availability and cost of electricity.

''We knew the study was going to be favorable,'' he said. ''We didn't know what the numbers were going to be.''

The study is for public consumption and will not be submitted to regulatory agencies.

''The Nuclear Regulatory Commission,'' Mr. Steets said, ''does not care if electricity costs a zillion dollars a kilowatt, as long as the plant is operated safely.'' Mr. Steets said the study took several months to complete, but would not reveal its cost.

''We were pretty aggressive about supplying the study to the Westchester County legislature and other policy and decision makers,'' Mr. Steets said. ''But it's not something the average Joe on the street has been asking to read. We've gotten an occasional call.''

As for the battle of studies between Entergy and Riverkeeper, Mr. Steets said that it is not being fought on equal footing. Entergy, he said, ''wouldn't pretend to tell Riverkeeper how to best protect the river from things we know nothing about.''

''Chances are,'' he said, ''we know a little more about electricity than they do.''

Westchester County Executive Andrew J. Spano, whose budget would be affected by a change in energy costs, said: ''I prefer for this plant to be closed, period. If it closes, energy will be affected. To what extent, I don't know.'' STEPPING back from the claims of the dueling studies, Mrs. Galef, who represents Buchanan, where Entergy pays 95 percent of the village taxes, half the school taxes and employs 1,500 people, said that aiming for California-style savings in demand, while noble and needed, may not be entirely realistic. For one, she said, there is no evidence that conservation savings are anything other than short-lived and, besides, New York's climate tends to be muggier than California's, making summer savings more problematic. Also, Mrs. Galef added, saving energy realistically costs money: incentives have to be provided in the form of rebates for energy-efficient appliances and the area must be blanketed with public service announcements and other education.

''I just don't know that it can make up for all of Indian Point,'' she said, ''especially since our area is growing in terms of population and the number of things we have that we plug in.''

Another problem, she said, is that while people generally stay with conservation for short bursts, it's an open question whether they will continue over the long term.

''We only do things when we have to do them,'' said Mrs. Galef. ''And then we don't do it. Before we turn off the plant we need to make sure.''

But Mr. Brodsky, who is chairman of the State Assembly's committee on environmental conservation, said that California, in rebounding from its energy crisis of last summer in large part thanks to conservation, has provided the New York metropolitan area with an adequate map for taming demand to the point where Indian Point's production will be irrelevant.

Mrs. Galef said that before Indian Point is ever closed, time is needed to see if energy demand can ever be reduced in the long term.

''Homeowners can deal with brownouts,'' she said. ''But hospitals can't. And businesses can't. In a brownout, I.B.M. can lose its programs. If they do, they'll eventually go out of state where the power is good.''

Any discussion of costs to businesses or to taxpayers must, Mr. Brodsky said, consider the many costs of Indian Point, both current and potential, which are absorbed not by Entergy but by the government. These sums are much greater anything it would cost to educate consumers about conservation or transmit energy from other sources, he said.

There is the cost of security: the Coast Guard, the National Guard, the local police. Then there is the cost of the county's evacuation plan and, the considerable cost of cleaning up after an accident or sabotage.

Getting replacement power is not easy, Mrs. Galef said. The Millennium Pipeline, a proposed 425-mile natural gas conduit from Lake Erie to Westchester, has been the subject of fierce public opposition since it was proposed in 1997.

''No one wants anything new in their community,'' said Mrs. Galef, but a real-world consequence of closing Indian Point -- one that even most of its opponents acknowledge -- is that energy would have to be brought in from elsewhere through means like the Millennium Pipeline.

''The entire issue is difficult,'' Mrs. Galef said. ''You hear so many different things. But I just haven't been convinced that turning off 2,000 megawatts will not have an effect.

''And as much as some wish Indian Point would go away tomorrow,'' Mrs. Galef said, ''I just don't think it's going to happen.''

Whether the reports are swaying the public in either direction remains to be seen. Mr. Matthiessen of Riverkeepers said that while there has been a great deal of interest in what the studies say about Indian Point, he allowed that not too many people have requested a copy of the actual hefty reports. ''I wouldn't say there has been a public clamor for the documents,'' he said.

11 Months Without the Power Plant

INDIAN POINT was closed once. On the day after Valentine's Day in 2000, pipes cracked in a steam generator of Indian Point 2, releasing a small amount of radioactive steam. The Nuclear Regulatory Committee assigned Indian Point 2 its worst performance rating and Con Edison, which owned Indian Point until Entergy bought it just before the Sept. 11 attacks, closed the entire plant for repairs. For 11 months, until January 2001, Indian Point was offline. During the shutdown, which took place around the time power markets were being deregulated, Con Edison bought replacement energy from out-of-state suppliers.

At the time, demand was rising and, coupled with this decrease in supply from Indian Point, there was a regional power shortage. Electricity prices hit record highs, but those record highs, according to Con Edison, amounted to only $20 extra over the 11 months for the average residential resident and more for business, for a total of about $200 million ($250 million, according to the state).

Though he is currently battling in court to bar Consolidated Edison from passing the costs onto consumers (earlier this month, a federal appeals court struck down a New York State law co-authored by Assemblyman Richard L. Brodsky that denied Con Edison the right to bill for the money), Mr. Brodsky pointed out that Indian Point's absence did not have a large effect on consumers.

Consolidated Edison officials said that during the time of Indian Point's closure, the average price per kilowatt hour was 20.25 cents for the average New York City residential customer. From the re-opening of Indian Point until now, that price has been 18.65 cents per kilowatt hour. Joseph Petta, a Consolidated Edison spokesman, cautioned that there are plenty of variables besides Indian Point's re-opening that account for the shift, including an agreement made by Consolidated Edison when they sold the plant to Entergy to buy back power at a lower price.

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