Testimony to U.S. Nuclear Regulatory Commission Public Hearing on the extension of the operating license for the Indian Point Nuclear Power Plant
President & CEO
February 12, 2009
My name is Kenneth Adams. I am the President and CEO of the Business Council of New York State, the largest statewide employer association in New York, representing more than 3,000 private sector employers and local employer groups across the state.
The largest component of our membership is manufacturing (more than 1,100 employers) – a sector for which the reliability and cost of electric power costs is a significant concern. We also represent many businesses in the energy field, including Entergy, which has been a Council member since 2000.
Because of the importance of energy issues to our broad membership, we welcome the opportunity to testify in support of the Indian Point Energy Center, and the important role this site plays in maintaining the economic health of the state.
The most recent data from the US Energy Information Administration show electric rates in New York for residential and commercial customers about 64 percent above the national average, and for industrial customers about 47 percent above the national average.
Several years ago, we estimated that this electric energy “premium” costs the state’s economy more than $6 billion per year.
Given price pressures, and continuing increases in energy consumption and peak demand, there is an obvious need to maintain and add to our existing generating capacity. Energy supply and price remains a key factor for the competitiveness of the state’s economy.
Given transmission constraints, maintaining and adding to energy supply is of particular concern in the New York City metropolitan area. With the state’s still-limited ability to wheel power into the metro area, the need for regional generating capacity remains high.
One company that is paying an extraordinarily excessive cost for conducting business in New York is Entergy.
We need to remember that Entergy was invited to become the state’s business partner in running two of the three nuclear plants the company purchased in New York back in 2000.
At that time, the company’s background and expertise was thoroughly scrutinized by the state, and after an extensive vetting and licensing process, the company “won” the right to run Indian Point 3 and the James A. Fitzpatrick nuclear facility in upstate New York
In addition to their initial $1 billion investment in buying the plants, Entergy has invested hundreds-of-millions of dollars to run these assets, making marked improvements in their performance.
Entergy’s operations also directly benefit the state through a substantial revenue-sharing agreement; support many other in-state businesses through the goods and services they buy; pay significant taxes to the local communities and schools; invest millions in emergency planning upgrades; invest millions more into regional non-profit organizations; and most importantly, employs thousands in the state at a time when many other companies are making significant cutbacks in their New York State employment.
In upstate New York, where Entergy is a welcome member of the Oswego County community, there is interest in expanding nuclear power, and rightly so.
The Fitzpatrick plant is just as well-run, just as critical and provides a stabilizing economic force in an area suffering with this recession.
Downstate, some try and portray Indian Point’s potential closure as being far less consequential to the area than a similar potential closure in upstate New York, but this assumption is wildly incorrect. Indian Point provides 2,000 megawatts of affordable, reliable green power – sometimes as much as 40% of this region’s energy supply during peak times.
Overall, nuclear power is essential to the state’s energy grid. Last year, through the end of October, nuclear plants provided 30.3% of all kilowatt hours of electric power produced in New York – nearly the same level as natural gas generation (31.9%).
Importantly, in the “carbon restricted” regulatory environment imposed by the Regional Greenhouse Gas Initiative, these 35 million megawatt hours were produced at nuclear facilities without significant greenhouse gas emissions from power generation.
Both public and private studies, including extensive analyses done by Westchester County and the federal government, have shown the critical importance of Indian Point, the lack of viable replacement power and the consequences of shutting the facility down.
According to the New York Independent Systems Operator, the closing of Indian Point Energy Center “would cause an immediate violation of reliability standards.” Closing Indian Point will significantly weaken the State’s energy grid.
Every day, the demand grows for affordable, reliable, low-carbon electric power generation. Indian Point meets all three of these needs in the lower Hudson Valley, making the plant an invaluable partner in this region. Nuclear power is an environmentally sound and carbon-clean source of power.
If Indian Point is not re-licensed, replacement power will have to come from sources already deemed inadequate to replace Indian Point. Furthermore, studies show that replacing Indian Point’s power with fossil-fuel based plants will likely create a rise in carbon dioxide emissions, a 19% jump in nitrous oxide emissions, and an 11% hike in sulfur dioxide emissions.
For the aforementioned reasons, as well as the $1 billion in annual economic stimulus Indian Point provides to the state, the Business Council of New York State strongly supports the re-licensing of the Indian Point Energy Center. Given these times, the state cannot afford the closure of Indian Point and the loss of another major corporation. We urge the Nuclear Regulatory Commission to extend the site’s operating license for another 20 years.