Entergy Corp. and the state of New York have reached an agreement that will see the Indian Point nuclear power plant retired by 2021.
“Key considerations in our decision to shut down Indian Point ahead of schedule include sustained low current and projected wholesale energy prices that have reduced revenues, as well as increased operating costs. In addition, we foresee continuing costs for license renewal beyond the more than $200 million and 10 years we have already invested,” said Bill Mohl, president of Entergy Wholesale Commodities.
The two operational units—Units 2 and 3—began service in 1974 and 1976, respectively. They combine to produce about 2,070 MW—roughly 25% of New York City’s power. Unit 1, a 275-MW reactor, operated commercially from August 1962 until October 1974, when it was permanently shut down because its emergency core cooling system did not meet regulatory requirements. Unit 1 is currently in SAFSTOR status.
Under terms of the settlement, Unit 2 will cease operations by April 30, 2020, with Unit 3 shuttered one year later. As part of the deal, the state has agreed to drop legal challenges and support renewal of the reactor operating licenses, which Entergy applied for with the Nuclear Regulatory Commission (NRC) in April 2007. Other key terms include:
- New York State’s certification of Coastal Zone Management Act Consistency
- New York State’s certification of Water Quality and issuance of water discharge permit
- Primary intervenor Riverkeeper’s withdrawal of legal challenges to license renewal
- Entergy’s agreement to shorten the term of license renewal from 2033 and 2035 for Units 2 and 3, respectively, to 2024 and 2025
- Entergy’s agreement to provide $15 million as part of its continued commitment to community stakeholders and environmental stewardship
Gov. Andrew Cuomo (D) has held a long-standing position that the aging nuclear power plant should be closed. In May 2016, after the NRC said it would reexamine the impacts caused by severe accidents at Indian Point—located on the Hudson River about 35 miles north of New York City—Cuomo said, “Clearly, this facility poses too great a risk to the millions of people who live and work nearby.”
The New York Times reported that there is flexibility in the deal that would allow deadlines to be extended to 2024 and 2025, if both the state and Entergy agree. Operation would probably only be extended if replacement power could not be sourced within the original timeframe.
Entergy has announced several nuclear plant closings in recent years. The first to fall was Vermont Yankee in December 2014. Since that time, the company has announced the retirement of the Pilgrim, Palisades, and FitzPatrick stations.
In August, Exelon Corp. agreed to buy and save the FitzPatrick plant after New York approved subsidies for upstate nuclear facilities. A group of generators have since filed a lawsuit to block the incentive program, the outcome of which could presumably affect FitzPatrick’s fate.
Sustained low wholesale energy prices have been the driving force behind Entergy’s desire to exit the merchant power business.
“Record low gas prices, due primarily to supply from the Marcellus Shale formation, have driven down power prices by about 45 percent, or by about $36 per megawatt-hour, over the last ten years, to a record low of $28 per megawatt-hour. A $10 per megawatt-hour drop in power prices reduces annual revenues by approximately $160 million for nuclear power plants such as Indian Point,” Mohl said.
The Indian Point closure will mark the completion of Entergy’s exit from the merchant power business.
—Aaron Larson, associate editor (@AaronL_Power, @POWERmagazine)