Indian Point safety boiling up on Pataki
Governor in middle of the two sides he's courted
By Philip Lentz
Crain’s New York Business
July 8, 2002

Sept. 11 gave Gov. George Pataki a soaring popularity that has made him a huge favorite to win re-election in November.

But last year's attack also left him with a major headache in Westchester County-his home county-and it is called Indian Point.

Anxiety over possible future terrorist attacks has re-ignited a dormant campaign to close the Indian Point nuclear plant, which is located 24 miles from the New York City border. Democrats, quick to sense political vulnerability, have pounced on the issue, which now dominates county politics.

H. Carl McCall and Andrew Cuomo, the Democratic candidates for governor, have called for closing the plant and reworking the state's evacuation plans in the event of an accident or attack.

The governor has tried to tiptoe around the issue. He concedes that evacuation procedures are lacking, but says the federal government should update its evacuation standards before he decides whether the plant should stay open. Meanwhile, his state energy plan, released last month, endorsed continued use of "safe" nuclear power.

Mr. Pataki, whose Garrison home is located about 10 miles from the plant, finds himself caught between two important constituencies he has courted throughout his tenure: environmentalists who want the plant closed, and business interests that fear the effect of the loss of 2,000 megawatts on the region's economy.

He has worked hard to keep both groups on his side. For environmentalists, he sponsored a huge environmental bond issue and endorsed new restrictions on greenhouse gases. For business, he revamped the state's plant siting law to expedite permit approvals and oversaw construction of 10 small city power plants last summer that helped avert a blackout during an August heat wave.

But that balancing act may not work with Indian Point. "He's in a bind and it's becoming a bigger and bigger issue," says one environmental advocate.

Ahead in the polls

The governor enters the final four months of the campaign in a strong position. Polls show him leading both Mr. McCall and Mr. Cuomo by 2-to-1 margins, he has yet to spend most of the $16 million in his campaign treasury, and a nasty primary could leave the eventual Democratic nominee battered and broke before the fall campaign even begins.

Democrats hope Indian Point can help them whittle down the governor's advantage with a key voting bloc-suburban moderates. Westchester is the fourth-largest county outside New York City, and the governor won it by a 3-to-2 margin in 1998.

"In Westchester, this goes right to Pataki's base, which are suburban commuter-types with families in the area," says Assemblyman Richard Brodsky, D-Westchester, an Indian Point opponent. "These people are paying attention and they are very unhappy with Pataki, and both Carl and Andrew know that."

But the governor is hemmed in by the potential economic fallout of closing Indian Point's two units. The facility's 2,000 megawatts provide nearly 20% of the electricity used in New York City and Westchester County on a hot summer day. (The area's record peak usage is 12,207 megawatts, reached last Aug. 9.)

Opponents minimize the impact of closing the plant, saying electric rates would go up only about 5%, and that there is ample supply of electricity upstate and in New England to replace Indian Point.

"We have choices other than higher prices," says Ashok Gupta, senior energy economist for the Natural Resources Defense Council. "Short term, there is conservation. Medium term, there is building new plants with more efficiency."

Most energy experts disagree. They say New York City has slightly more than enough electric supply to meet its current needs, a small cushion that would be endangered with the loss of Indian Point. Chances of a blackout would be greater without the plant, they say.

"Take 2,000 megawatts out and you're undermining reliability," says Catherine Luthin, an energy consultant to large institutional electric users.

Experts say there could also be substantial price hikes. Few new plants are being built because the credit markets have soured on the energy industry. So steadily rising demand would be chasing less supply. As for exports, it is more difficult to transport electricity into the city from New England or upstate than it is from Indian Point.

They note that the big price hikes in the summer of 2000 were caused in part by the fact that one of the Indian Point units was down for repairs.

Blackouts, higher prices?

William Museler, president of the New York Independent System Operator, recently told the New York City Council that closing the plant would double the city's wholesale energy prices in the summer and increase them by about a third in the winter. Commodity costs make up nearly half of the average monthly bill, so that translates into increases of 15% to 50%.

However, Indian Point has become more about politics than energy in this election year. The fear of another terrorist attack and the memories of Sept. 11 are vivid in the minds of many people who live near the plant, and that is driving the debate.

"In all the years I've been watching energy, I've never seen an issue resonate as much as it has at the grassroots level," Mr. Gupta says. "It came from the bottom up."

Entergy's Response

In addition to being vital to the New York area’s energy supply, the Indian Point Energy Center operates safely and is secure against terrorist attacks. There is no need to close the plants, and doing so could seriously disrupt the area’s economy through potential power blackouts and higher energy costs.

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