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May 2002

Council: Without Indian Point, New York City faces economic setbacks, social tumult

New York City depends on electricity generated at the Indian Point Energy Center. Closing it without simultaneously increasing New York's generating capacity elsewhere would do "irreversible harm to efforts to restore the city's economy," Business Council President Daniel B. Walsh has warned.

"Indian Point power is among the lowest-cost electricity in New York," Walsh wrote in a May 1 letter to New York City leaders. "To consider shutting it down without bringing new capacity on line is a certain prescription for brownouts at best."

Walsh sent the letter to Mayor Michael Bloomberg, City Council Speaker Gifford Miller, and other City Council members.

New York's energy gap: New York already faces "a growing and dangerous gap between the energy we have and what we need," Walsh wrote. He sent the city leaders a February research report on New York's electricity needs by The Public Policy Institute, The Council's research affiliate. That report, The Power To Grow, concluded that New York must add at least a dozen new power plants with at least 9,200 megawatts of capacity in the next five years.

Other expert organizations, including the New York Independent System Operator (ISO), have reached similar conclusions about New York's capacity shortfall, Walsh added. In fact, the ISO has said that New York City alone needs as much as 3,000 megawatts of new generating capacity by 2005.

The likely effects of closing Indian Point: This power plant supplies 2,000 megawatts to the grid, or 20 percent of the electricity used in the New York City area. If it closed, "our already-high energy costs would rise by more than $1 billion a year, with price spikes of as much as 40 percent," Walsh wrote. " Such price increases would have the greatest impact on New York City's lower-income residents-those who can least afford them."

What's more, chances of rolling blackouts would increase five-fold, with potentially dangerous consequences for many New Yorkers, Walsh added.

Why New York City needs increased capacity: Walsh rebutted arguments by some Indian Point opponents that the loss of Indian Point power could be offset by power imports from other states.

"That is just not factual. Constraints in the state's transmission system, particularly the parts that serve southeastern New York, severely limit the amount of power that can be brought in from elsewhere," he wrote.

Nor will conservation ease the shortfall that would follow the closure of Indian Point. "Even the most optimistic projections say conservation could capture only 500 megawatts," he wrote.

"Likewise, converting Indian Point to a gas-fired plant would require overcoming the intense local opposition to building a whole new gas pipeline through the Hudson Valley, and then 10 years to complete the conversion. How do we replace Indian Point's power during that time?"