Is Cuomo’s fix against Indian Point already in?
Governor Andrew Cuomo has never tried to hide the fact that he wants to follow in his father’s footsteps.
Like Mario, Andrew became Governor of New York.
Like Mario, Andrew has established political and financial alliances with well-heeled donors that do not like nuclear energy.
Like Mario, Andrew would like to be remembered as a governor who succeeded in “protecting the safety” of a densely-populated area by closing an operable nuclear power plant.
For Mario, it was the 800 MWe Shoreham nuclear power station on Long Island that was finally completed and tested after nearly 20 years worth of controversial and poorly managed construction effort; for Andrew, it is the 2,200 MWe Indian Point facility that has been cleanly and reliably supplying 25% of New York City’s electricity for the past 40 years.
Like Mario, Andrew would prefer not to be remembered as a governor who saddled large numbers of electricity customers, all of whom are both taxpayers and voters, with several billions of dollars in costs associated with the closure.
Aside: There are, of course, many potential donors who clearly understand double entry accounting systems — something that is on the “expense” side for taxpayers is on the “revenue” side for entities like banks, underwriters, advisors, constructors, and fuel suppliers. End Aside.
Like Mario, Andrew would like to be remembered as a governor who is concerned about the environment, not as someone who is directly responsible for the millions of tons of CO2 and other more noxious air pollutants that will be the inevitable result of producing approximately 14 billion kilowatt hours of reliable electricity each year by any fuel source other than uranium.
Even though Andrew has been openly campaigning against Indian Point since his first attempt at running for governor in 2001, he recently denied that he is pursuing a planned and well-coordinated effort to follow through on his promises. Here is a quote from an October 2013 article describing a project that would add more transmission lines from northern New York into the more densely populated metropolitan areas near New York City.
Cuomo isn’t himself in a position to put Indian Point out of business. What he can do, as governor, is help make the state less reliant on the power it produces. The lines are a step in that direction.
On Wednesday, Cuomo reiterated his desire to see the closure of Indian Point, though he denied that the power line increase was part of an effort to close the plant.
“If there was a conspiracy, I would probably know,” he said.
As a fairly typical New York politician, however, he would probably feel no obligation to admit to his crucial participation in the planned effort — aka conspiracy — to take property from Entergy shareholders without appropriate compensation. The indicators are clear. Cuomo wants Indian Point to shut down.
He and his political allies are making plans to provide alternative power sources that will enable continued electricity supply, and they are expending funds, creating long-term obligations, and using state-controlled levers to force a closure decision.
Some observers are even beginning to talk about Indian Point’s demise as a done deal.
For example, Energywire, one of the subscription news services I follow, recently published an article titled NRG gets OK to restart upstate N.Y. power plant with gas. It describes how New York regulators gave NRG Energy Inc. permission to convert the Dunkirk power station from coal to natural gas. That article includes a couple of paragraphs that caught my eye.
The New York Public Service Commission approved NRG’s plan for bringing the upstate Dunkirk plant back to life, despite pleas from environmentalists to focus on transmission upgrades rather than bringing back older plants to the grid.
But the PSC is under pressure to line up power generation in New York due to the expected loss of 2,000 MW from the Indian Point nuclear facility and a federal capacity zone rule that has increased the cost of electricity in the downstate region to spur more generation.
That sounded more certain than most of the stories I’ve read about the scheming and maneuvering. Up until I read that intriguing statement, I knew nothing about the Dunkirk generating station, but it wasn’t hard to find plenty of material about the plant and its supporters.
Even though Dunkirk is a long way from New York City, its steady power output can enable more electricity to flow from Niagara Falls and Canada. It is also in a good location to take advantage of the growing supply of natural gas from hydraulic fracturing of the Marcellus Shale formation.
The Public Service Commission decision about Dunkirk was the latest step in a continuing saga that illustrates some of the complex interests and alignments that get involved in big energy-related decisions.
NRG shut most of the plant down in 2012, claiming it was no longer economical to operate due to the effect of low natural gas prices on wholesale electricity prices. NRG was probably also facing additional capital expenses associated with tightening emissions standards associated with burning coal.
The specific decision that the Public Service Commission made was to approve an agreement between National Grid and NRG. National Grid will pay NRG $20.41 million per year for ten years. In return, NRG will construct a natural gas pipeline from at least one of two local pipeline systems located within 6 miles of the Dunkirk power station and will convert the existing boilers to allow them to burn natural gas as well as coal. Though the payments will total $204 million, the PSC and the governor have reported the cost of the arrangement as $150 million since that is the computed net present value of the payments after factoring the time value of money at an assumed interest rate.
That payment is only for reliability-related capacity to produce electricity. It is not an agreement to purchase any electricity or the fuel required to produce electricity. That statement was explicitly made on page 39 of the PSC decision record since wholesale electricity markets are under the jurisdiction of the Federal Energy Regulatory Commission. (The document recording the decision can be found by going to the PSC document site and searching for case number 12-E-0577.)
It is unclear what recourse National Grid or its customers have if NRG determines that both coal and natural gas are too expensive in relation to the wholesale market price for electricity. It is difficult to understand how customers obtain the reliability that they will pay for if the company owning the facility decides it cannot afford to operate the plant due to market conditions.
By mid 2015, NRG will be the owner of a 55-65 year-old three-unit steam plant capable of producing 435 MWe burning natural gas or coal at a heat rate of approximately 10,000 BTU/kw-hr. That plant will provide approximately $8 million in annual revenue split between the host city, the host county and the local school board. That money is classified as “payment-in-lieu of taxes.”
The governor’s press release describing the project provided contradictory information; it stated that the project would “preserve permanent jobs at the site” and that it would “maintain the existing 68 jobs at least through mid-2015.” Since mid-2015 is just a year away, I was curious about what the governor was really saying, so I sent a query to NRG’s listed press contact. He informed me that Dunkirk would employ 46 people after the conversion.
That is one more step down in a sustained process of eliminating people from the process of producing power; when NRG purchased Dunkirk from Niagara Mohawk it employed about 230 people. I suspect it is not the final step in the workforce reduction effort. I also suspect that there will be substantial future expenditures in the process of extending the life of the Dunkirk facility to help enable the closure of the substantially younger, cleaner and more advantageously-located Indian Point.
The proposed plant at the conclusion of the dual fuel installation makes little or no sense from an economic point of view. Even when natural gas is “cheap,” it costs twice as much per unit of heat as the delivered price of Powder River Basin coal. In a dual-fuel-capable boiler, natural gas is burned with almost exactly the same efficiency as the coal alternative. The plant will require the same payroll expenditure whether it is burning coal or natural gas.
Natural gas can be an economically competitive fuel source, but only if it is burned in a modern, highly-efficient combined cycle plant that has the latest in automated controls that enable a bare-bones operating staff and its substantially reduced payroll expense. Combined cycle plants are also more valued if they can provide rapid response to changing power demand and to changes in power supplied by unreliable sources like wind and solar.
Buried in the governor’s press release is a single line that provides the clue to the destination configuration for the Dunkirk plant.
The project also will provide an opportunity to convert the plant to an advanced combined cycle facility if future market conditions warrant.
Once National Grid’s customers have paid the costs of supplying natural gas to the Dunkirk site, the next logical step will be for NRG to obtain sufficiently lucrative power purchase agreements to enable project finance for its already planned conversion of the site to a modern combined cycle gas turbine (CCGT) unit. That CCGT unit will produce at least 600 MWe using two modern gas turbines and a heat recovery steam generator to power one of the remaining steam turbines. That conversion will cost approximately $1,200 per kilowatt of capacity. It will take between 30-36 months and employ about 500 construction workers. When it is complete, the operating employee head count will be reduced once more to about 26 people.
I’m not really clairvoyant. That plan is clearly documented and available as NRG’s response to a request for information associated with Governor Cuomo’s Energy Highway initiative.
Similar Northeast antinuclear/pro-fossil fuel activism
There is a rather depressing similarity between the way that state and local officials reacted to the news that Dunkirk, New York’s roughly 600 MWe, 55-65 year old coal fired steam plant will be given another ten — or more year — lease on life and the way that some state and local officials reacted to the news that Vernon, Vermont’s 620 MWe 42 year-old nuclear heated steam plant will be closed at the end of this year. In both cases, celebrations occurred.
Here is a quote from NRG Power Plant to stay open, setting off glee in Dunkirk.
he atmosphere was absolutely electric as hundreds of people crowded into a banquet room in the Clarion Hotel on Sunday to cheer Gov. Andrew M. Cuomo’s announcement that the nearby NRG Power Plant would not be closing.
Over the previous objections of some competitors and environmentalists, but with the support of nearly everyone else, the aging coal-fired facility on Dunkirk Harbor will be converted to burn natural gas, solving the two biggest problems facing owner NRG Energy: the cost of its fuel and the significant pollution that it causes.
…
State Sen. Catharine M. Young, R-Olean, who helped rewrite the factors the PSC must consider when making energy decisions – including the economics of the community, system stability and effects on the environment – was exuberant over the outcome of what she described as a “sometimes traumatic journey.”“We couldn’t let it happen. We would lose our tax base, we would lose our jobs, we would lose our future,” she said. “This agreement saves us. It gives us a foundation on which to build our economy. It gives us hope. This is our community’s Christmas miracle!”
Cuomo noted that the generating plant has a 10-year guarantee for the energy it produces. Also, he said, “The New York Power Authority will be providing $15 million to the project, because this adds to the reliability and stability of the entire power system.”
I almost forgot to mention that direct subsidy provided by other New York taxpayers/ratepayers.
And here is a quote from Vermont Yankee Nuclear Plant To Close. (Note: The section of the quote involving Governor Shumlin is transcribed from the audio interview provided on the story page.)
Anti-nuclear power activists are celebrating today’s announcement that Vermont Yankee will close, with the decommissioning process beginning late next year.
But despite a legal battle with the state and nearly constant protests since it opened in 1972, the the plant’s owner, Entergy, says activists can’t take all the credit; costly regulations and an aging facility played a part in the shut-down decision.
…
Sacha Pfeiffer – Joining me now to talk about what the plant’s closure means for New England is Vermont Governor Peter Shumlin. Welcome to Radio Boston.Gov. Peter Shumlin – Thank you. It’s great to be with you.
Sacha Pfeiffer – And Governor, you are a prominent opponent of the plant. You have been for years. How did you feel when you got this news?
Gov. Peter Shumlin – Well, Entergy’s making the right decision for Vermont, the right decision for Massachusetts, the right decision for New Hampshire and the region. You know that plant is old and tired, and I have believed for a long time that it should have been retired on schedule in 2012. That’s when it was designed to be shut down. So they’ve made the right decision. I applaud the new leadership at Entergy for facing the music on this one and now our object will be to work together with Governor Patrick and Governor Hassan in New Hampshire to find the 650 employees some great employment in our region and we can move forward.
Instead of gifts from the state, Vermont Yankee owners kept getting hit with additional fees, taxes, revenue sharing and special assessments. Perhaps someone from Entergy will provide a concise list of those additional operational disincentives over just the past couple of years before the decision to close the plant due to “poor economics.”
“Like Mario, Andrew has established political and financial alliances with well-heeled donors that do not like nuclear energy”
Like who??? I don’t doubt it, but I’m curious who he has these “financial alliances” with. And how is he allied with these entities? Through his own investment? By recieving political donations?
@POA
Interesting question. I started to write the answer as part of my initial post, but became worried that the information was too sordid and soap opera-like.
Cuomo’s ex-wife’s maiden name is Kerry Kennedy. She is Robert F. Kennedy Jr’s sister. Through that connection, Cuomo met a couple named the Colley’s. The husband is the heir to a several hundred million dollar estate built on McDonalds franchises. The wife is a member of the board of directors of Riverkeeper, RFK’s antinuclear (specifically anti-Indian Point) organization. Cuomo is also an FOB (Friend of Bill Clinton.)
I’ll let you use your searching skills to see why I decided that I was not ready to talk about all of Cuomo’s wealthy connections with a long history of opposition to nuclear energy. I got as far as three broken marriages, a suicide, and three political dynasties.
Egads. I’m jaundiced enough already. I’ll pass, and just take your word for it.
I wish these liar kooks would shut up with this “designed to be shut down after 40 years” crap. That is absolutely a lie. I have designed nuclear plants. I know that they are designed with an indefinite lifetime, as any well designed and well maintained facility is. The engineering lifetime of a nuclear unit is a function of operational history. There are low-leakage cores in place that will extend the lifetime of the pressure vessel (embrittlement of the PV is often the limiting operational factor) well beyond 40 years, certainly as long as 60, and likely 80 years. I have done strength-of-materials tests on surveillance capsule specimens taken from pressure vessels in any number of plants and I can say that in almost every case the embrittlement of the pressure vessel steel is occurring at a slower rate than predicted by models, mainly because of steps taken to reduce fast neutron flux at the vessel walls. There is no “40 year design life”. The bottom line is, these plants can run a long time beyond 40 years, if they are allowed to. That they are not is only a result of the declining power of men themselves.
No small part of me says ‘good, let them close it down and let the voters of NY get a taste of what they have been craving’. Maybe when congestion fees quadruple overnight people might actually be forced to put 2 and 2 together and see how their lives are dependant on these systems.
The 40 year period is the duration of the original licenses, as specified in the Atomic Energy Act. As Wayne says above, that is not at all the same as “the design life” of the units.
So what *is* the basis for the 40 years? As far as I can tell, the Act limited the license period because granting a longer time would be an unfair advantage to the licensee – it might inhibit future competition in the service area of the unit. The 40 years is supposedly picked consistent with similar federal license time limits for large hydro dams and maybe radio licenses issued by the FCC.
I imagine the same thing that happened when the Fresh Kills trash dump was closed will happen. Specifically, Western Pennsylvania’s environment will once again have to “take one for the team” so that NY won’t have to know where their electricity comes from either.
“We have one transfer facility in New Jersey that is a waste energy facility, but most of the waste ends up in probably a dozen or more landfills in Pennsylvania, Ohio, and Virginia,” Doherty explains. (http://cooperator.com/articles/1323/1/Where-Does-the-Garbage-Go/Page1.html)
Pennsylvania’s legislature doesn’t seem to mind gas wells and fracking, and there’s already a lot of infrastructure to get electricity from PA to New York and New Jersey, since there’s always been coal fired (and nuclear) plants there.
The AEC had no experience to go on since nuclear plants were a new breed. They based the 40 year license term in part on the time it took to retire construction bonds for steam electric power stations, which were all fossil-fueled at the time except for a few large hydro plants here and there. So, yes, it is somewhat of an artificial limit to put power plants on a level playing field in terms of their license lifetime. But, from an engineering and physics viewpoint, there is no 40 year life limit for nuclear plants. A well-maintained nuclear plant with a low neutron leakage core design can easily run 60 years, probably 80, before embrittlement causes issues with heatup and cooldown rates and perhaps overpressure limits.
Rod, if you are looking for a conspiracy, don’t stop at Albany. Keep looking farther north. Ask yourself who benefits if power flows south easier. Personally I suspect Canada. They just got all their nukes back online for the first time in years after major refits. They now seem to be on a buying spree south of the border (central Hudson just got bought). They have a lot if excess generating capacity looking for customers.
Just a fact-check, Rod. Indian Point provides about 5% of the electricity used daily in NYC and Westchester County — not 25%, which they are incapable of. The daily peak load in summer is around 13,000 MWe. 25% of that is 3,250 MW — a bit of a stretch for a plant with a max output of 2100MW.
In addition, under deregulation ConEd sold off its nuke plant, IP2 to Entergy and the NY Power Authority sold IP3 to Entergy. ConEd now buys electricity for its 4 million residential and 250,000 business customers. NYPA has hydro plants of its own upstate, and buys what else it needs for its municipal customers — street lights, city hall, schools, airports, public housing, and the subways. ConEd buys only 560 MW from IP and NYPA let its contract lapse last year since they got better terms for long term contracts elsewhere. The free market has already largely replaced IP in this market. If they close, it will not affect the rates of the subway system at all since they are providing no electricity there anyway.
The state’s deregulated electric system grew out of the old utility monopolies, which had limited transmission capabilities between downstate and upstate. And while upstate nuclear plants have on occasion, in the past year, had to actually pay the grid to take their electricity, that has not been a problem for IP because of the limited transmission capabilities.
Cuomo’s energy highway would significantly increase transmission capabilities throughout the state, but particularly between the wind farms in the Great Lakes region and hydro upstate. The new transmission would, as you stated, prove enticing for firms like NRG, which has plans to replace a shuttered coal plant near IP with a combined cycle gas plant.
Essentially, rather than order IP shut, Cuomo is opening up the market to let competitors run IP out of town.
However, the NY Department of State may yet deny Entergy a certificate of compatibility with its coastal management plan — which would mean IP would have to close. Or Cuomo’s Department of Environmental Conservation’s decision to deny IP a discharge permit unless they install closed cycle cooling may be upheld. Either of these actions would be problematic for Entergy.
@Roger Witherspoon
Please check your own facts again. Peak load has little to do with the daily electricity consumption as measured in kilowatt-hours. In addition, electricity itself does not obey contracts, electrons flow based on wires and locations, not based on the kind of manipulative wheeling and dealing that passes for a “competitive” electricity market.
If you take 2100 MW of reliable, emission-free electricity generation that runs at about a 90% capacity factor out of the grid, that amount of electricity is going to have to be generated at the same time and delivered to the same places as it always was since it is unlikely that customers will change their use very much. That means that to a very high degree of correlation, the electricity generated by Indian Point will be produced by burning natural gas, oil or coal.
Please do not make the mistake of telling me that oil is no longer used in the US power grid. In the Northeast, partially due to a lengthy campaign of eliminating both nuclear and coal plants that can store fuel on site and are not burdens on the frequently inadequate natural gas delivery pipelines, oil is more and more frequently used as the last available option for both electricity generation and heat production on certain days. Last winter, fully 25% of the electricity delivered by the New England ISO came from running diesel engines and dual fuel capable gas turbines on diesel fuel.
I am pretty sure that Dunkirk will end up running on coal part of the time until it finishes the planned conversion to a combined cycle gas turbine plant. Once it is in that condition, the dual fuel option will be petroleum. Fortunately, Dunkirk will probably have a reliable natural gas supply, especially if the pro-frackers have their way in Western New York.
Remember too that last winter the ISO in New England had generators burning jet fuel because the natural gas supply was so limited. Vermont Yankee is a goner at the end of the year, about the right time for another polar vortex. They’d better have more jet fuel available then because they aren’t going to have any more gas pipelines ready by then (if ever).
This kind of thing is what gives life to the lie that the grid can “get by” without nuclear plants. The iron rule of electricity generation is that if you throw away one source of generation you have to replace it with another that is equivalent to meet the same demand. So they’ll do whatever they have to do to replace the power, and that means burning something, anything, be it coal, oil, jet fuel, natural gas, wood pulled out of fences, furniture, newspapers, unicorn flatulence, whatever it takes. The survival instinct is strong, and people will do what they have to do. I for one would rather not have that kind of chaos.
Only true for Ontario. Quebec, the idiots, shut down Gentilly II, when they could use it’s capacity to export more revenue generating electricity to the USA in the winter months.
And the worst and most pathetic thing about it, Wayne, is that this mad scramble for “alternatives” is perfectly unnecessary when you already have a proven clean and low impact working solution who’s sole fault and hamstring and curse is implacable fear!
James Greenidge
Queens NY
And Cuomo lives with his concubine Sandra Day in open adultery while receiving Holy Communion in a state of mortal sin. I despise both Cuomos. Their anti-nuclearism is only the tip of the ice berg for me.
@Paul W Primavera
Cuomo’s personal life is of interest to me primarily as it relates to his energy policies. There is a disturbing tale there that involves serial adultery, big money, the kind of political dynasties that our Founding Fathers were hoping to avoid, and a sustained effort to combat nuclear energy, probably for monetary gain. Try searching for “Kerry Kennedy Cuomo Bruce Colley.”
For me, integrity is far more important than religion, especially for people who aspire to be leaders. Cuomo appears to have been standing in line with a tiny thimble on the day they were handing out that particular trait. It looks like he might have stumbled and spilled out the tiny amount he initially received.
One important proof of that can be found in his personal relationships and the way that he has treated those to whom he swore a solemn oath.
Well, the apple doesn’t fall far from the tree. Mario hung Shoreham’s head on his trophy wall. I have no doubts that Andrew will gladly sacrifice the air quality of New York State and thereby the health of its citizens for the political prize of destroying Indian Point. Two generations of Cuomos, two nuclear plants ruined. Quite a legacy for a couple of ‘Rats.
“I wish these liar kooks would shut up with this “designed to be shut down after 40 years” crap.”
@Wayne SW
How about “designed to be retrofitted after 40 years” (involving significant new capital requirements). Is that that any more correct in your view?
France just published a review of refurbishment costs on it’s reactors (due after 40 years), and is due to release next week policy recommendations on the basis of this report. “The report details uncertainty about future spending in areas like dismantling, waste treatment and disposal, and whether it’s worthwhile extending the lives of reactors beyond four decades … The total cost of keeping the existing fleet working would be around 3 billion euros a reactor, Baupin said at a press conference.”
With refurbishment costs very high (and uncertain) … is this a defacto lifetime? We’ll see what the French decide later this week.
@EL
How about “designed to be retrofitted after 40 years” (involving significant new capital requirements). Is that that any more correct in your view?
No. It is not more correct.
The license period was chosen based on political, not technical assumptions. Plant maintenance and repair are based on planned, engineered preventive maintenance schedules and condition based repairs when necessary. There is nothing magic about 40 years.
In this case, the US is the leader in determining the actions required to extend life to 60 or beyond. I would not look to France and their Socialist Party influenced study for guidance.
No, not more correct. A well-maintained plant has an ongoing maintenance program. Some things are refurbished/replaced before 40 years, some at 40 years, some well beyond 40 years. I have designed nuclear plants. I know that there is nothing magical about 40 years, that when that mark is passed everything falls to pieces, or all the alarms go off and say, oh, my God, you’re beyond you’re “designed lifetime”. Some things are replaced even prior to their operational lifetimes are up simply because there are better things available. Ultrasonic flow meters are a good example. When those became available operators went with them because they are more accurate and allow recapture of measurement uncertainty. I am working now on fiber optic-based sensors which I think will, in time, replace many other types of sensors and allow further reduction in measurement uncertainty.
Thanks … that’s a helpful response . I would agree with WNA (and what has been said here), that operating lifetimes within a specified range are “essentially an economic decision.” NRC says pretty much the same, and adds antitrust considerations to the list.
It seems the Cuomos were particularly concerned with another concern regarding provisions for public safety and changing demographic circumstances over the operating license of nuclear plants: emergency planning zones. Shoreham never had it’s evacuation plan certified, and some consider the logistics of emergency evacuation around Indian Point (of some 300,000 people) as not particularly practical. Different from design lifetime, but also a factor relevant to licensing decisions (and site based considerations of operating power plants with such long operating lifetimes).
Shoreham’s emergency plan was never certified because of political action. At the time, the NRC required that emergency plans be certified only if there was local participation in drills by emergency response personnel. Suffolk County political leaders refused to participate in the emergency drills, even though the plant had adequate resources to conduct them. They knew that if they didn’t participate, the plan wouldn’t be certified, and the NRC would not grant a full-power operating license. Thus, local (non-federal) personnel exercised a back-door veto of the plant’s operating license.
As far as feasibility of evacuation is concerned, Cuomo and Suffolk County believed as you do. You and they were proved wrong when a hurricane (I think it was Hurricane Bob) came up the coast and evacuation of some parts of LI was ordered. To do that, they dusted off the evacuation plans that were developed for Shoreham. Worked like a charm. Not a lot of people know that, and it certainly didn’t make the papers.