TILTING AT NUCLEAR WINDMILLS
By William Tucker, Columnist
New York Post
July 22, 2002

As the dog days of summer arrive, it is becoming obvious the campaign for closing down Indian Point is running out of gas.

On July 3, Con Edison's consumption hit its fourth highest level in history - 12,000 megawatts. (Last week's high was 11,500 MW.) The city itself generates only 8,700 MW and Indian Point adds another 2,000 MW. That leaves 1,300 MW - plus the recommended 2,400 MW in "spinning reserve" - to be imported from upstate and New England.

And relying on long-distance transmission lines is inherently dangerous. The Great Blackout of 1977 occurred when power lines carrying kilowatts from Westchester County became overloaded.

Still, none of this has impressed environmentalists. Only last week Riverkeeper, the Hudson Valley group, was touting a report from Synapse, a Cambridge consulting firm, which supposedly shows that closing down Indian Point should be a snap.

Released last May, the Synapse study projected that fears of coming power shortages were exaggerated. Forecasters were ignoring "the loss of the World Trade Center load, the impact of the recession, and the transfer of energy load from the New York control area to the Pennsylvania-New Jersey-Maryland system." (That means importing more power.) "The public doesn't have to worry about life without Indian Point," exuded Alex Matthiessen, executive director of Riverkeeper, last week.

That's interesting, because two months ago Matthiessen was using the same report to draw exactly opposite conclusions. In a May 26 New York Times article ("Fuel Rods and Brass Tacks"), Matthiessen argued that closing Indian Point would create energy shortages - and that this would be a good thing.

One of New York's current problems, you see, is Wall Street's refusal to fund Reliant Energy's proposed 1,000-MW natural gas plant in Astoria. Investors are spooked, both by the collapse of Enron and by the uncertainties created by environmental opposition, particularly to the Millenium Pipeline, which is supposed to bring gas supplies to the plant.

Not to worry. "Removing 2,000 MW from the system, [Indian Point] opponents say, . . . would crimp the regional electricity supply and send a signal to Wall Street, which would see an opportunity to make money and so throw open the money spigot," said the article. "The plants on the drawing board would be built and Indian Point's electricity gap, they say, would be resolved. . . . 'The loss of Indian Point Units 2 and 3 would allow market forced to essentially trump any Enron effect,' said Alex Matthiessen, the executive director of Riverkeeper, Inc. . . . 'It's essentially a supply-and-demand question.' "

Now that's interesting. Matthiessen was arguing that - as most experts predict - closing Indian Point would create a big spike in electrical prices. Most consumers would see this as a "conspiracy." But no, says Matthiessen, it would be a convoluted way of encouraging more investment in environmentally benign natural gas plants.

The question is this: If we did close down Indian Point, would environmentalists stand firm against the public outcry, reassuring everyone that price increases were a necessary step to eliminating nuclear power? Or would they join the baying hounds, crying of "unconscionable and unfair" price hikes?

An instructive example comes from California's recent electrical crisis. California utilities, you may recall, signed an agreement saying they wouldn't raise consumer prices until they had sold off all their obsolete plants. When supplies grew short and wholesale prices spiked, the utilities were caught in a price squeeze. San Diego Gas & Electric, however, resolved its "stranded costs" early and was released from the agreement. The utility raised its consumer prices - and electrical consumption in San Diego immediately dropped 10 percent.

Did environmentalists cheer? Did everyone celebrate the triumph in "energy conservation"? No, San Diego residents ran to Sacramento and demanded that SDG&E be put back under price controls. The Legislature complied, and consumption jumped right back up to its former levels. Environmentalists said not a word.

Conservation is a great idea. Unfortunately, the only thing that persuades people to conserve is price increases. Do environmentalists support price increases? Never. Instead, they join the baying pack or hide under the table.

So let's pose a question. Suppose we did close down Indian Point in order to create a price spike that would attract Wall Street investment for the Astoria plant. Could we expect environmentalists to stand firm against the public outcry, arguing that price hikes were needed to resolve New York's energy problems? Would they end their opposition to Millennium Pipeline? What do you think?

The U.S. Senate finally got serious two weeks ago and approved a permanent nuclear fuel repository at Yucca Mountain. It showed that, when push comes to shove, the nation's leaders can still act responsibly on important matters. As for environmentalists, they will be forever be chasing their will-o'-the-wisp of soft, cheap, clean, imaginary energy.

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