US Entergy Corp on 9 January reached an agreement with New York state to close the Indian Point nuclear power plant in 2021, ending a long-running dispute over the future of the plant. Environmental groups and New York Governor Andrew Cuomo had pushed for years to close Indian Point, arguing that it posed environmental dangers to the city.
Indian Point unit 2 will shut down by 30 April 2020 and unit 3 by 30 April 2021. However, in the event of an emergency situation affecting electricity generation, the state may agree to allow the plant to continue operating for up to five more years.
Entergy said key considerations in its decision to shut down the two pressurised water reactor (PWR) units ahead of schedule include sustained low wholesale energy prices that have reduced revenues, as well as increased operating costs. “In addition, we foresee continuing costs for licence renewal beyond $200m,” said Bill Mohl, president of Entergy Wholesale Commodities. Mohl said record low gas prices have driven down power prices by about 45%, or $36 per MWh, over the last 10 years, to a record low of $28 per MWh. “A $10 per MWh drop in power prices reduces annual revenues by approximately $160m for NPPs such as Indian Point,” he said.
Entergy said it will recognise a pre-tax non-cash impairment charge of about $2.4bn in its fourth quarter results for 2016 from the agreement to shut Indian Point. It expects to record additional charges totalling about $180m related to severance and employee retention costs in the period to the end of 2021.
With the previously announced sale of the James A Fitzpatrick plant, the planned sale of the shut-down Vermont Yankee, planned shutdowns of Palisades in Michigan and Pilgrim in Massachusetts, and the sale of a gas-fired plant in Rhode Island, the closure of Indian Point will mark Entergy's exit from the merchant power business. The company says it will focus on growing its regulated utility, including nuclear power plants in southern US states.
The terms of the shutdown include an agreement by New York state and environmental group Riverkeeper, which has been campaigning for decades to shut the station, to withdraw a legal challenge to licence renewal for the units. Entergy will ask the Nuclear Regulatory Commission (NRC) to shorten the term of a renewed licence for unit 2 from 2033 to 2024 and for unit 3 from 2035 to 2025. Entergy filed a licence renewal application for both units in April 2007.
Entergy will provide $15m as part of its continued commitment to community stakeholders and environmental stewardship. The agreement also provides for various inspections of the plant to be conducted by Entergy and New York State, in addition to NRC inspections. Entergy will be required to transfer at least 24 casks of used fuel at the plant to dry cask storage by 2021.
The 1020MWe unit 2 began commercial operation in 1974 and the 1040 MWe unit 3 in 1976. Unit 1, a 257MWe PWR, began commercial operation in 1962 and was permanently shut down in 1974. Entergy purchased unit 3 in 2000 from the New York Power Authority, and unit 2, as well as the shut-down unit 1, in 2001 from Consolidated Edison.
“For 15 years, I have been deeply concerned by the continuing safety violations at Indian Point, especially given its location in the largest and most densely populated metropolitan region in the country,” Cuomo said in a statement. “I am proud to have secured this agreement with Entergy to responsibly close the facility 14 years ahead of schedule to protect the safety of all New Yorkers."
However, Cuomo has supported measures that would keep other reactors in upstate New York operating despite lower power prices. New York State last year adopted legislation explicitly recognising the zero-carbon contribution of nuclear power plants and protecting the continued operation of Nine Mile Point, RE Ginna and James A Fitzpatrick which are located in the "upstate" region.
Photo: Indian Point (Credit: Entergy)