Gov. Cuomo Forms Task Force as Hearings Convene on Indian Point Closure

John Jordan | March 2017

ALBANY—Gov. Andrew Cuomo announced the formation of an Indian Point Closure Task Force the same day as a joint meeting of committees of the State Assembly and Senate convened on the business and economic impacts the planned closure of the nuclear facility in Buchanan might have on the state and local economies.

The newly formed Indian Point Closure Task Force, announced on Feb. 28 by Gov. Cuomo, is to provide guidance and support to affected local municipalities and employees. The task force will partner with local governments to address employment and property tax impacts, develop new economic opportunities and work force retraining. The task force will also monitor compliance with the closure agreement, coordinate ongoing safety inspections and review reliability and environmental concerns, among other issues, the governor stated in his press announcement.

“The landmark agreement to close Indian Point 14 years ahead of schedule will protect the health and safety of all New Yorkers,” Governor Cuomo said. “The creation of this new task force will help ensure potential impacts on the local community will be minimized and that an open dialogue is maintained throughout this transition process.”

On Jan 9, Gov. Cuomo announced an agreement with Indian Point Energy Center operator Entergy Corp. to close the Indian Point facilities by April 2021. The deal calls for Entergy to cease all operations at Indian Point and will shut down the Unit 2 reactor in April 2020. Unit 3 will be shut down in April of 2021. The Unit 1 reactor was permanently shut down in October 1974. In the event of an emergency situation, such as a terrorist attack affecting electricity generation, the state may agree to allow Indian Point to continue operating in two-year increments, but no later than April 2024 and April 2025 for Units 2 and 3 respectively. After the closure, the decommissioning process of the property will begin.

From left: State Assemblywoman, Sandy Galef; State Senator, Terrence Murphy and Buchanan Mayor, Theresa Knickerbocker

Thus far, the task force will consist of State Senator Terrence Murphy; State Assemblywoman Sandy Galef; Catherine Borgia, majority leader, Westchester County Board of Legislators; John G. Testa, minority leader, Westchester County Board of Legislators; Linda D. Puglisi, supervisor, Town of Cortlandt; Joseph Hochreiter, superintendent, Hendrick Hudson School District; and Theresa Knickerbocker, mayor, Village of Buchanan. Other appointments to the task force are expected. The New York State Department of Public Service will be responsible for convening the task force.

State agencies on the task force will include: the Department of Public Service, Department of Environmental Conservation, Department of Labor, Office of Real Property Services within the Department of Taxation and Finance, Empire State Development, New York State Energy Research and Development Authority, Department of State, Division of Homeland Security and Emergency Services, education representatives, and the New York Power Authority.

The same day the task force was announced a joint Senate-Assembly hearing in Albany was held on the Indian Point closure convened by State Sen. Joseph A. Griffo, chair of the Senate Committee on Energy & Telecommunications, and State Assemblywoman Amy Paulin, chair of the Assembly Committee on Energy.

At the session, state energy officials as well as a representative of Entergy testified on the specifics of the agreement and how the state and Entergy will deal with the expected economic fallout involving replacement energy as well as the loss of more than 1,000 jobs and significant reductions in municipal and school tax revenue.

A public hearing on the Indian Point closure has been organized by State Sen. Terrence Murphy on Thursday, March 2 at the Plumbers and Steamfitters Local 21 meeting hall at 1024 McKinley St. in Peekskill beginning at 6:30 p.m. Sens. Murphy, Griffo and Thomas Croci will act as moderators. Among the expected speakers at the hearing include: Westchester County Executive Rob Astorino, Westchester County Legislator John Testa, Cortlandt Town Supervisor Puglisi, Buchanan Mayor Knickerbocker, Deb Milone, Executive Director for the Hudson Valley Gateway Chamber of Commerce, and John Ravitz, executive vice president for the Business Council of Westchester.

“There has been a lack of transparency, a dearth of information and a shocking lack of planning since the closing was announced,” Sen. Murphy said. “There are numerous questions that still have to be answered regarding jobs, the loss of generated energy, loss of revenue and safety. Until now the public has been locked out of the process by Governor Cuomo.”

The recurring theme from the state officials who testified at the Feb. 28th hearing in Albany, including Audrey Zibelman, chairman of the state Public Service Commission, and Richard Kaufman, chair of Energy and Finance for Gov. Cuomo, was that the agreement provides ample time for the state to find replacement energy for the 2,000 megawatts of power it supplies to the Hudson Valley region and New York City. Zibelman, testified that she has “a very high degree of confidence” that the state will find replacement power by the time the Indian Point Energy Center shuts down in 2021.

She said that there are energy efficiencies in place, as well as 700 megawatts of new transmission additions to serve downstate, as well as 1,000 megawatts of upstate transmission capability to downstate, including wind-generated power. Zibelman added that there are host of proposed merchant generators that have proposed to replace Indian Point’s power, including some owners of “mothballed” projects that are currently not in service. Other potential new sources of energy include two gas-fired power plants—the CPV Valley Energy Center under construction in Wawayanda in Orange County and the Cricket Valley Energy Center project in Dover (Dutchess County) that is expected to break ground later this year. A major project that could also provide power to the region is the proposed Champlain Hudson Power Express a $2.2-billion project to bring 1,000 megawatts of hydropower from Canada to New York. That project has yet to break ground. For a list of power replacement projects and sources see the chart obtained by Real Estate In-Depth from the New York State Public Service Commission.

“I am not concerned about the replacement power,” Zibelman said. “We have a robust market with a lot of capital. People are very interested and there is a lot of new technology in gas generation making it highly efficient.” She added that with energy efficiencies put in place, along with current transmission loads and future transmission in development, “makes me extremely comfortable that we will not have a scarcity (energy supply) issue.”

Kaufman, who is also chairman of the New York State Energy Research and Development Authority (NYSERDA), testified that Gov. Cuomo’s main concern was the safety of the Indian Point Energy Center. He said, “Simply put, the human and environmental safety risks posed by the plant’s continued operation were untenable.”

He noted that the agreement reached between the state and Entergy provides “ample time” to deal with the economic and energy related issues. He noted that Entergy will continue to make payments under its existing PILOT (Payment in Lieu of Taxes) agreements with local municipalities and school districts will continue through 2021 “before gradually stepping down at a negotiated level following shutdown.”

T. Michael Twomey, vice president of external affairs for Entergy-Indian Point, disagreed with the state and said that the Indian Point Energy Center is a “world class, safely operated facility.” He stressed that Entergy will offer all of its estimated 1,200 workers jobs at its other facilities and will assist all in finding employment after the facilities cease operation. He said that Indian Point will be fully staffed through April 2024.

While the driving force behind the agreement for the state was safety, Twomey stressed Entergy’s was “overwhelmingly economic.”

“The key considerations in our decision to close Indian Point were sustained low current and projected energy prices that have reduced revenues and do not adequately value zero-emission energy and record low gas prices due primarily to supply from the Marcellus Shale formation that have driven down energy prices over the last 10 years to a record low of $29 per megawatt hour…”

Other factors in the decision were increased plant operational costs and the protracted license approval process that has thus far taken 10 years and cost the company more than $200 million, he noted.

 

John Jordan
Editor, Real Estate In-Depth