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  • A Sneak Attack on NYC's Electric Bill

    The New York Department of Environmental Conservation is guaranteeing that New Yorkers will soon have to pay even more for electricity — when they can get it.

    The department just rejected Indian Point’s request for a water-quality certificate, which the plant needs to keep operating one reactor running after 2013, and the other after 2015. (The plant also needs its license renewed by the federal Nuclear Regulatory Commission, but that’s a different battle.)

    A court fight is expected, but if this holds up, New York City in particular is in trouble: Indian Point provides about a third of Gotham’s power (and nuclear plants overall generate 31 percent of electricity statewide).

    Even assuming that power can be replaced, it won’t come cheap: Nuclear power is the least expensive form of electricity produced in the United States. And New Yorkers already pay more than a third above the US average for electricity (17.8 cents per killowatt-hour, six cents above average).

    Making this even more absurd, there’s no genuine environmental problem here — and the department is making things worse by insisting on a more expensive, and probably less effective, “solution.”

    The State denied the certificate largely because Indian Point’s water-intake system, which draws water from the Hudson to cool the reactors, kills about 1 billion aquatic organisms annually — mostly eggs, larvae and plankton.

    That sounds significant — but industry studies show that Indian Point has had virtually no impact on the populations of life in the Hudson as a whole. The plant draws only about 1 percent of the passing water, returning most of it — and the “kill rate” seems well within the bounds of the ecosystem’s ability to replace. (We’re largely talking microorganisms here.)

    The problem is that the regulation looks only at the mortality rate at the intake structure, not on how the intake structure affects overall environmental quality.

    Nevertheless, Entergy, the plants’ owner, has agreed to make changes. It would install a system of screens underwater to reduce the number of organisms killed by up to 90 percent. This retrofit would cost between $100 million and $200 million and could be in place in a few years.

    But the regulators aren’t satisfied: They’re demanding a larger system that would require the construction of cooling towers — a process of up to 15 years. Thanks to various regulatory delays (see below), these wouldn’t be online until about 2030. The system would cost more than a billion dollars and take the power plant offline for a year.

    It’s also fraught with problems:

    • During the decades of construction, nothing would be in place for decades to save the organisms that regulators claim to be protecting.
    • Cooling-tower systems are often criticized by environmentalists — they use about twice as much water as the current system. Indeed, thanks to evaporation (which is what the towers are for), we’re talking about a net loss to the Hudson of more than a billion gallons of water a day.
    • The project would also require a massive excavation of soil and bedrock. While this is environmentally manageable, it’s unnecessary, disruptive to the area — and very expensive.
    • Add the regulatory realities. For example, the huge cooling towers likely wouldn’t satisfy state visual-impact regulations. And building them would require a host of zoning and land-use authorizations from multiple local jurisdictions — many of which have said they won’t support tower construction.
    • Plus, about half of New England’s natural gas runs through pipelines that cross the Indian Point site. These would have to be rerouted and new right-of-ways established — a regulatory nightmare in and of itself, since the same sort of local activists that want Indian Point gone will also fight gas-pipeline construction.

    Bottom line: The Department of Environmental Conservation is basically imposing hurdles that Indian Point almost certainly can’t clear — which suggests what the real agenda is here. The fact that it’s demand in such an unfeasible system when better, more attainable alternatives are available is just confirmation.

    That is: The decision to deny Indian Point its water-quality certificate is a bid to close the plant down — possibly with an eye on then shuttering other nuclear plants with similar cooling systems across the state or even nationwide.

    This isn’t state bureaucrats doing their job — it’s an ideologically-driven move that could cost New York a vital source of clean, affordable energy.

    First printed in The New York Post.

    Posted in Energy [slideshow_deploy]

    9 Responses to A Sneak Attack on NYC's Electric Bill

    1. Richard Webster says:

      Take a look at this article:

      http://blogs.forbes.com/energysource/2010/04/08/i

      It states:

      "But don't shed too many tears for the plants' owner, Entergy. The plants are cash cows. According to an analysis done by longtime utility consultant and analyst Robert McCullough, in 2009 the two reactors brought in $982 million in sales and $436 million in profit before income taxes.

      The book value of the two plants is $1.6 billion, making for a return on investment for Entergy of 28%, a wonderful rate for a utility. (Regulated utilities, for example, are typically allowed to earn 10% to 12% on capital investments.) Even when the estimated $1 billion cost of the cooling towers is added to the book value, the plants would still earn 17%. And that assumes power prices stay at 2009 levels, an unlikely scenario. In 2009 wholesale power prices in New York fell 49%."

      What profit-maximizing company would shut down a plant that makes over $400M per year, over a cost of $1bn? This analysis show that Entergy can easily afford it and it would not affect the market price of electricity in New York at all. Shouldn't Heritage be happy when free markets allow us to deliver environmental benefits at no cost to consumers?

    2. Pingback: PA Pundits - International

    3. Tim AZ says:

      It will be interesting to observe how the citizens of New York respond after their electric bills necessarily sky rocket. Some will vote with their feet I suspect. Wile others will discover that they are not liberal oriented given the underlying cruelty of it all.

    4. Bob, Salt Lake City, says:

      Sounds like they need to destroy New York to save it. But considering what the Senators and Representatives of that state vote for, maybe its not such a bad idea after all.

    5. Ben C. Ann Arbor, MI says:

      What non-business people fail to realize is that profits are a good thing and return on investment is not instant. Profits pay for future developments of products and services. While a snap shot of a profit loss statement may look incriminating one has to look at the complete history. Despite the Readers Digest version of the New York power company financial picture by Forbes I suggest that trying to fix something that isn't really broken will have consequences down the road. Glad I moved from New York and Connecticut ten years ago. I can only imagine what its going to cost there now.

    6. Spiritof76, NH says:

      Entegry should shut the plant down. Let NYC go dark and become a demonstrator of a third world island.

    7. Drew Page, IL says:

      Sounds to me like those greedy power companies ought to be put out of business (like the greedy insurance companies) and be taken over by the government. Isn't it every person's Constitutional right to have free electricity? Who knows, maybe this is already in the health care reform bill; I guess we will be finding out.

      Bloomberg ought to be able to put up a few windmills, install some solar panels and bingo, problem solved.

    8. controllerman, Az. says:

      We should have at least 1 nuclear power plant in every state; there's is nothing any safer!! Has one drop of water ever left this planet? If so where did it go, Mars??? We've got too many ignorant so called experts who have never had a real job and lobby to get free handouts and grants from the government, making these stupid decisions It's got to stop!!! You need to figure what you paid out last year in income taxes and then add all the other hundreds maybe thousands of various taxes to it. The total will blow your mind! Figure the interest on your mortgage and everything else you buy on time; it's robbery!!

    9. Pingback: Water and energy: Obey the law on cooling systems « Don at Dawn

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