TESTIMONY
TO THE NATIONAL ACADEMY OF SCIENCES ON INDIAN POINT
April 14, 2005
Mr. James J. Zucchetto
Director
NAS Board on Energy and Environmental Systems
500 Fifth Street, N.W.
Washington, D.C. 2001
RE: Project Title: An Assessment of Alternatives to Indian Point
for Meeting Energy Needs
Project I.D. #: BEES-J-03-03-A
Dear Mr. Zucchetto:
The Business Council of New York State and The Independent Power Producers
of New York, appreciate this opportunity to provide the Board and its
Committee on Alternatives to Indian Point for Meeting Energy Needs with
input relevant to its study reviewing options for replacing current electric
power from the Indian Point Nuclear facility (Indian Point) with alternative
means for meeting electric power demand and associated energy services.
Since September 11, 2001, a number of people have called for the closing
of the Indian Point facility, maintaining that the plant is not safe.
The physical structure of the site has tremendous capabilities, designed
to safeguard plant personnel and the community even under the most catastrophic
scenarios. On-site security personnel maintain constant contact with
local, county, state and federal security forces. Access to the property
is restricted to identified personnel only, and the roadways are controlled
by multiple barricades. The fact is that Indian Point is one of the most
secure non-military facilities in the country.
Indian Point provides 20 to 30% of the power to the metropolitan New
York region. This “base-load” plant is capable of providing
2000 MW of electricity around the clock, 365 days a year. The power is
relatively low cost and produces electricity without emitting nitrogen
oxides, sulfur dioxide or carbon dioxide as do other fossil fuel generated
plants. The air quality benefit is an important feature of this facility
that should not be taken lightly in any examination of alternatives to
the plant. In addition, the plant provides crucial voltage support to
the electric grid.
Headlines have drawn attention to concerns about fuels, especially the
rising price of natural gas and oil. Fears of interruptions of oil exports
from the Middle East roil the energy market. Meanwhile, state attorneys
general seek stiffer enforcement of environmental rules which have brought
lawsuits against owners of coal-fired power plants. And a group of Northeastern
states are looking at a regional cap on carbon dioxide emissions. Electricity
consumers benefit when electric power supply is secure and stable. Diverse
fuel resources for power generation reduce the chance that embargoes,
strikes, transportation constraints, or acts of war or unrest will disrupt
power production. Fuel diversity also reduces exposure to soaring costs
of any single fuel.
Converting Indian point to natural gas generation (the only realistic
alternative given New York’s current regulatory climate) would
be a significant undertaking. It would mean retiring and decommissioning
the nuclear units and replacing the nuclear turbines with modern, efficient,
combined cycle gas turbines. The gas capacity requirements would necessitate
siting a pipeline at least as large as the proposed Millenium pipeline,
which is having difficulties in obtaining approval from New York’s
regulators. And committing such a large volume of gas to electricity
would increase upward pressure on natural gas prices. Even if all ran
smoothly, it would take 8 to 10 years to decommission this nuclear site
and construct a natural gas facility.
New York’s energy utility industry has been restructured in recent
years, and the state has adopted a competitive approach to acquiring
needed generation. Traditional utilities were required to divest themselves
of generation, and plants were purchased by independent companies who
sell power in an open, competitive and unregulated market. Unfortunately,
due to the collapse of ENRON and other problems, access to capital has
tightened, making it difficult for developers to build major generating
facilities.
Additionally, Article X, New York’s power plant siting law, expired
at the end of 2002, and to date the Legislature has failed to re-enact
a successor statute. By allowing this law to expire, the state sent a
clear message to the generation and development community that New York’s
legislative/regulatory climate is not conducive to investment in generation.
Under the new restructured environment, investors assume all the risks
involved, and are thus understandably hesitant to build in an uncertain
legislative/regulatory climate.
Over the last few years New York has had to take dramatic steps to meet
its growing power demands. This dire need for electricity (particularly
in the downstate, metropolitan region) has led the New York Power Authority
(NYPA) to placing emergency generation in New York City. The Independent
System Operator (ISO) and the New York State Energy Research and Development
Authority (NYSERDA) have instituted peak load reduction programs to curtail
load on high consumption days. While these stopgap measures have helped
avoid blackouts or brownouts, the key to alleviating shortages of power
will continue to be the addition of base load generation capacity.
Consequently, we believe that given all the constraints on building
new generation in New York, and the dire need for additional capacity
in the region, whatever funds are available should be used to build new
generation, and not to convert or replace existing generation that is
reliable, safe, environmentally benign and relatively inexpensive.
We thank the Committee for this opportunity to provide this information,
and we respectfully request that this letter be included in the formal
record being developed in this matter.
Sincerely,
Daniel B. Walsh
President President and CEO
The Business Council of New York State
152 Washington Avenue
Albany, New York 12210 |
Gavin Donohue
President & CEO
Independent Power Producers of New York State, Inc.
19 Dove Street
Albany, New York 12210 |
