newjerseynewsroom.com

BY ROGER WITHERSPOON

NEWJERSEYNEWSROOM.COM

For the past decade, Entergy and supporters have proclaimed that its twin Indian Point reactors are all that keeps the trains running, the street lights on and school buildings operating throughout New York City and neighboring Westchester County.

Entergy, which actually provides about 5 percent of the electricity used in the area, can get away with its misleading advertising for only one more year. The New York Power Authority, which provides all of the 1,900 megawatts of electricity used to run the subways, power the street lights, schools, municipal buildings, public housing, LaGuardia and Westchester County airports, is ending its relationship with Indian Point and will get its electricity elsewhere.

After Sept. 28, 2013, “we will not be extending the Entergy Contract,” said Paul DiMichelle, NYPA spokesman. “If the contract expired tomorrow we would walk away and purchase the power elsewhere because there is an excess supply. When that contract was first put into place it was on behalf of our governmental customers in New York City and Westchester County who came to us and said we want you to secure this amount of power. What we did was lock in that price.

“The current contract won’t be extended. Energy prices are so low that we would go into the marketplace and purchase power as needed. There is an excess supply out there, and that would be the most cost effective way to handle power needs on behalf of our customers.”

The decision by NYPA to stop using electricity from Indian Point to fulfill its municipal contracts in the New York City/Westchester County section of the state’s energy grid ends a 50 year relationship with the nuclear plants. It is also a testimonial to the work of the New York Independent System Operator in developing the state’s power grid since deregulation in 1998 and nurturing the electricity commodities market.

The system is connected with the six-state New England ISO and the 13-state, Mid-Atlantic PJM Interconnection, providing a marketplace stretching from Main to Ohio. And it allows power generators such as Indian Point to sell electricity to a wide variety of large users and, in turn, allows these users to seek the best prices available.

NYPA’s conclusion that the nuclear plants on the Hudson River are not necessary are in line with the latest Reliability Needs Assessment  from the ISO that there is more than enough electricity available in the near future .

“If Indian Point 2 closed at the end of 2012 (when its license expires) it would not be a problem,” said ISO vice president Tom Rumsey. “Between 2013 and 2016 if one reactor went away we don’t foresee a megawatt shortage. We believe there would be adequate resources.

“Beginning in 2017 there would be a gap of 250 megawatts and that gap would continue to increase by 250 megawatts annually thereafter.”

There are two caveats in the ISO report, however. First, the projected shortfall in 2017 develops only if the economy has picked up and electric use increases at a rapid pace. A sluggish economy would not produce a shortfall until 2022. Secondly, the shortfall could be made up by a combination of new generation, conservation, or new transmission.

NYPA was created by the State to provide lower cost electricity to municipal governments and businesses in designated economic development areas. In the early 1970s, the agency was pressured by the state to take over the construction of Indian Point 3 because cost overruns were threatening the financial health of Consolidated Edison. NYPA gets 80 percent of its electricity from several hydroelectric plants upstate and most of the remainder from gas plants. It provides electricity through regional transmission companies including ConEd. Owning Indian Point 3 provided local generation of a bit more than half the 1,900 megawatts NYPA needed to serve its New York City/Westchester County municipal customers.

When Entergy sought to buy Indian Point 2 from ConEd and Indian Point 3 from NYPA in 2000, the deregulated marketplace was only a year old and it was not clear how well it would work. And it was uncertain if the newly formed ISO could improve the state’s power transmission network, which limited the amount of upstate electricity that could flow to the downstate region. Because of that uncertainty, the plants were sold with the stipulation that ConEd and NYPA could purchase – at a contracted price – the full output of each plant.