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New York tells Con Ed to prepare in case Indian Point shuts

By Scott DiSavino

(Reuters) - New York energy regulators told power companies in New York City to develop plans to keep the lights on in the Big Apple in case the giant Indian Point nuclear power plant, which supplies about a quarter of the city's electricity, is forced to shut down.

New York Governor Andrew Cuomo wants the two reactors at Indian Point shut when their operating licenses expire in 2013 and 2015 in part because the nuclear plant is located in the New York metropolitan area, home to some 19 million people.

The governor has said even the most unlikely possibility of an accident is too much in the heavily populated area.

U.S. power company Entergy Corp, which owns Indian Point, says, however, the plant is safe, and the company is seeking to extend the reactors' licenses for another 20 years.

The 2,063-megawatt (MW) Indian Point plant is about 40 miles north of Manhattan along the Hudson River.

"Entergy and its employees continuously demonstrate the plants are safely operated, and is committed to safely operating this important facility for many more years to come," Entergy spokesman Jerry Nappi told Reuters Wednesday in an email.

On Tuesday, the state's energy regulator, New York Public Service Commission (NYPSC), directed New York City power company Consolidated Edison Inc to work with the New York Power Authority (NYPA) to develop a contingency plan to address the needs that would arise in the event Indian Point shuts down.

NYPA is a state-owned power generator that supplies electricity to government customers in New York City, including schools, hospitals, government buildings, subways and commuter trains.

"We will comply with the Commission's directive to work with the New York Power Authority to develop a contingency plan addressing the needs that would arise in the event of an Indian Point shutdown," Con Edison told Reuters in an emailed statement.

A shutdown of Indian Point, without sufficient alternatives, would threaten electric system reliability and potentially raise electric market prices, Con Ed said.

Several energy companies have already proposed power plants and transmission lines that could partially replace Indian Point, including units of NRG Energy Inc, Brookfield Asset Management Inc, BP Plc, Calpine Corp, GenOn Energy Inc and Iberdrola SA.

ENTERGY SEEKS NEW LICENSES

To keep the reactors running over the next couple of decades, Entergy filed with the U.S. Nuclear Regulatory Commission (NRC) in 2007 to renew the Indian Point licenses.

A decision by the NRC commissioners on the licenses might not happen for years, as agency judges are still holding hearings on challenges to the plant's continued operation.

Entergy, however, can continue to operate the reactors even after their licenses expire so long as the federal renewal process is ongoing.

The three judges at the NRC's Atomic Safety and Licensing Board (ASLB), which serves as the agency's judicial arm, started evidentiary hearings near the plant in October to consider 10 complaints raised by New York State and two public interest groups, Hudson River Sloop Clearwater Inc and Riverkeeper Inc.

The NRC has scheduled several days of hearings through at least mid-December. On Wednesday, the NRC said it did not know when, or if, a second round of hearings would be scheduled and that a decision on the challenges would likely come months after the hearings are done.

SANDY PROMPTS ACTION

The contingency plan for Indian Point was one of Governor Cuomo's Energy Highway Blueprint proposals issued by a task force in October.

Cuomo proposed the Energy Highway plan in January to modernize the state's energy infrastructure.

The state's Public Service Commission said it decided to move forward this week on three proposals in the Energy Highway Blueprint, including the Indian Point proposal, because of Superstorm Sandy.

Sandy caused billions of dollars of damage and left millions of New Yorkers in the dark - some for more than two weeks - after striking the U.S. East Coast in late October.

The other Blueprint recommendations the Public Service Commission said it has decided move forward on now are proposals to build over 1,000 MW of new transmission capacity between upstate New York and New York City, at an estimated cost of $1 billion, and proposals to expand the state's use of natural gas by residential and business customers.

One megawatt can power about 1,000 homes in New York.

(Reporting By Scott DiSavino; Editing by Carol Bishopric and Steve Orlofsky)

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