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Possible Indian Point Nuke Shutdown Heightens Economic Fears

For more than half a century Indian Point has been a prime employer and tax-revenue generator in the Westchester County region of New York

By Alice Kenny, SolveClimate News

Jul 11, 2011
Mayor Michael Bloomberg

According to an analysis called , which was updated and released by the Bloomberg administration in April 2011, the cost of replacing Indian Point's electricity with other power-generating sources, including gas-fired plants, would be over $2 billion.

While this amount would likely be borne by power companies constructing the new generators or transmission wires, the companies would be forced to pass expenses onto ratepayers. 

This could translate into at least $1.5 billion in higher energy costs for New Yorkers over the next decade, said the same report. For the average resident, this would mean a 6 percent increase in monthly utility bills or an average of $65 per year in electricity costs, according to figures from Con Edison, New York's biggest utility.

Many say this would be a small price to pay to no longer have to worry about Indian Point.

"The experts play the odds, and the odds are not as long as they seem," said Gary Shaw, a founding member of the Croton Close Indian Point group.

Decommissioning Costs

If the U.S. Nuclear Regulatory Commission (NRC) does not renew the licenses for reactors 2 and 3, the regulatory agency estimates that it would cost $407 million to decommission the plant, a five- to 10-year process, according to estimates. 

Entergy is mandated to have funds set aside for this purpose. The state could choose to purchase the plants from Entergy before they're decommissioned, the Levitan study says.

In so doing, Gov. Cuomo could follow his father's example. Responding to the urging of a vocal majority of voters, Gov. Mario Cuomo negotiated an agreement with the Long Island Lighting Company (LILCO), owner of the Shoreham nuclear power plant in Long Island, to close the $5.3 billion facility in 1989 and turn it over to the state in return for a $2.5 billion tax write-off and rate increases. 

Some observers argue that these increases, coupled with the absence of nuclear power, have contributed to Long Island's notoriety for having the highest electricity costs in the state.

The Levitan study also states that Entergy would be compensated between $500 million and $2.7 billion for closing Indian Point, depending on whether closure was voluntary or obtained through condemnation. This amount, the firm speculated, would be funded with tax-exempt general obligation bonds and paid by taxpayers. 

The site could then potentially be sold to developers to build gas-fired generating plants that may help prevent losses in electricity, jobs and tax revenues.

For Gov. Cuomo, however, the priority now is safety not cost. "I understand the power and the benefit," he said following the Japan disaster. "I also understand the risk, and this plant — in this proximity to New York City — was never a good risk."

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