Sunday, April 4, 2010

New York takes another swing at Indian Point

The State of New York denied a water quality permit to Entergy’s Indian Point nuclear power station saying it’s once through cooling system kills too many fish.

cooling towers You knew it was coming. In January the State of New Jersey issued a draft water quality permit to the Oyster Creek nuclear plant demanding that Exelon (NYSE:EXC), its owner, replace the once through cooling system with a $600-800 million cooling tower to protect fish in Barnegat Bay. Now in a copy cat move, the State of New York on April 2 denied a water quality permit under the Clean Water Act to Entergy”s (NYSE:ETR)Indian Point nuclear plants located on the Hudson River about 35 miles north of New York City. The action isn’t final as Entergy has 30 days to request a public hearing on the issue.

Shortnose sturgeon - source Canadian Museum of NatureAccording to local news media in the lower Hudson region, the 23-page letter was sent late Friday April 2. It reportedly says the permit is denied because the plant harms shortnose and Atlantic sturgeon, an endangered species, when they are pulled against intake screens for the cooling system which uses 2.5 billion gallons a day. The water is returned to the Hudson 20-to-30 degrees warmer.

The denial of the permit is a potential roadblock to relicensing the two reactors at the Indian Point plant. The U.S. Nuclear Regulatory Commission (NRC) requires all state environmental permits to be in place, and the plant in compliance, before it will extend the licenses for the two reactors for another 20 years. The plant licenses expire in 2013 and 2015.

In its letter, the New York state Department of Environmental Conservation wrote that because Indian Point is causing “fish mortality,” the plant is “not in compliance.”

leverage This is exactly the type of fulcrum for political leverage that environmental groups like Riverkeeper have been seeking for years. Their objective, which now appears to be reaching its intended conclusion, is to impose regulatory burdens on the plant that make it too expensive to operate forcing Entergy to shut it down rather than pass along the costs to stockholders.

The political environment in New York is so hostile to the power station that there is no certainty even if Entergy agreed to build the cooling towers that the state Public Utility Commission would allow the firm to recover the costs from rate payers. Last month the state’s utility regulatory agency rejected a financial plan submitted by Entergy to spin-off six nuclear reactors into a new merchant corporation. The staff wrote in a letter to the commission the plan had too much debt and was not in the public interest.

Cost of cooling towers

Entergy said in a series of statements to the New York Times and the Wall Street Journal that new cooling towers, which would support a closed loop system, would cost $1 billion and take the plant out of operation for as long as 42 weeks. Permit approvals could take years before the the first shovel of dirt was moved to build them.

In New Jersey Exelon officials made no bones about their response to the cooling tower issue. A spokesman for the firm said at a public hearing it would close the plant taking its 600+ MW of carbon emission free power permanently offline. By comparison, according to the Energy Information Administration, the two reactors at Indian Point provide three times this amount of electricity at 2,045 MW with a capacity factor of 97%. If Entergy chose to close the plants rather than build the cooling towers, the electricity supplied to the New York city region would also have to come from fossil sources.

Is this really about fish?

Alexa Matthiessen RiverkeeperAccording to the Wall Street Journal, Alex Matthiessen, (right) president of Riverkeeper, said the power generated from Indian Point “is replaceable,” but he did not say from what sources. In a more telling comment to the New York Times, he said, “For all we know, this is it – the beginning of the end.”

Entergy spokesperson Jim Steets told a lower Hudson newspaper, “We disagree with the findings.” He declined to say anything further except that the letter has been turned over to the firm’s lawyers for review.

At the heart of the disputes in New Jersey and New York is the question of what constitutes “best available technology” for preventing fish kills with once through cooling systems. Cost effectiveness is a critical component of the finding required by the Clean Water Act. In New Jersey, until this year, prior efforts to impose cooling towers on Oyster Creek have been found to be financially onerous. However, the new administration of Gov Chris Chistie has other things on its mind like a mind boggling budget deficit. The cooling tower issue for Oyster Creek has been put on a back burner.

Andrew_CuomoThis is not the case in New York. There State Attorney General Andrew Cuomo, (right) a leading candidate for governor, has filed multiple contentions with the NRC opposing the renewal of the operating licenses for the two reactors. The difference in New York is that the focused political ambitions of a top state official are driving the attacks on continued operation of the plant.

Cuomo knows he needs the “green” vote to win the election. His efforts to put roadblocks in the path to license renewal for Indian Point are designed to win those votes. Neither the green groups nor Cuomo seem to have given any thought to the cost of the replacement power imposed on rate payers or the fact that it will come from fossil sources.

Entergy may yet prevail either as a result of a public hearing or in court, citing evidence that improved fish screens are far more cost effective than a $1 billion set of cooling towers. The Clean Water Act was never intended to be a bludgeon to be used in defense of sturgeon. In the meantime, the NRC licensing process still has a way to go. Stay tuned.

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Meredith Angwin said...

Somehow or other, these guys running for governor (Shumlin in Vermont, Cuomo in New York) think that shutting down a nuclear plant would be the quick way to win votes. Let's hope they are wrong. A couple of political defeats of rabid anti-s would send a clear message.

Rod Adams said...

I'll restate Meredith's comment another way - let's do all we can to ENSURE that the effort to shut down well run nuclear plants results in a huge defeat in the election booth.

One of the surest ways to do that is to show the numbers for the costs - both financial and environmental of the inevitable replacement power. Do not let anyone try to assert that Indian Point is going to be replaced by wind and solar because the reality is that it will be natural gas and coal.

Replacing Indian Point will require roughly 500 million cubic feet of natural gas every single day. That is an $800 million per year bill even at today's relatively low natural gas prices. Anyone who believes that the prices will stay low in the face of increased demand needs a review of Econ 101.

Joffan said...

It seems to me that there is a straightforward case that Cuomo is using the legal system to attack the Indian Point plant, which falls easily within the definition of barratry. Certainly criminal prosecutions have often succeeded on much scantier evidence of a pattern of behaviour that indicates illegal activity. His statements in regard of IP and his actions both indicate that he will not stop attacking this plant.

The NRC desparately needs to change its rules to avoid being held hostage to intransigent local authorities. The obligation should on those authorities to make the best effort to fit in with the nuclear plant, as for instance the evauation plans for Shoreham, rather than allowing them a veto over infrastructure of national significance. Perhaps this is a case that can be used to springboard such change.