Indian Point Reactors Bring Billions in Economic Benefits
Sept. 17, 2013—A nuclear energy facility creates a lot more than electricity. Apart from powering homes, factories and businesses, every operating nuclear plant creates jobs, stimulates economic development and generates tax revenue. They also help to stabilize electric grids and keep electricity prices in check.
The Indian Point Energy Center near Buchanan, N.Y., is one of the key generating stations in a region vital to the American economy. Operated by Entergy, the twin 1,069-megawatt reactors generate approximately a quarter of all the electricity consumed in Westchester County and New York City.
Over a 20 year period, the facility is expected to contribute $11.5 billion (in 2011 dollars) to the regional economy, said Howard Axelrod, president of Energy Strategies, who conducted a study on the economic impact of the plant.
Axelrod’s study, released in 2012, found that the facility directly supports 1,200 employees and 200 contractors living in and around Westchester County. Their paychecks, which amount to about $145 million annually, get pumped back into the local economy when plant employees shop, travel and buy goods.
“You’re looking at folks, many of who have worked here for 20 to 30 years, who have raised families in the community surrounding the plant, own homes, pay taxes, spend their money in New York, and perhaps own vacation homes upstate,” said Jerry Nappi, Entergy’s manager of communications. “That multiplier effect is significant when you’re looking at a $145 million payroll.”
Axelrod’s study estimates that Indian Point helps sustain 3,300 additional jobs in the region that would be lost if the plant were to close.
But more than jobs would be lost. Local and state tax receipts would also drop dramatically. Indian Point generates more than $75 million annually in property taxes and in revenue sharing with New York state, Nappi said.
“You would see impacts on things like education programs,” said Axelrod. “Communities tend to make investments in fire safety, police, infrastructure, library and public schools because they have steady revenue streams. Take that away, and communities sometimes can’t raise taxes to make up the difference.”
Entergy presents a contribution to the Peekskill City School District for technology enhancements
to their high school science laboratory
Axelrod also estimates in his study that Indian Point contributes about $2 million every year to local charities.
Electricity prices also have large multiplier effects. Electricity prices have soared 59 percent in Southern California since the outage and subsequent shutdown of the two reactors at San Onofre Nuclear Generating Station. If Indian Point were to shut down, Axelrod projects that local electricity rates would increase by 6.3 percent, with consumers paying more than $374 million per year in added electricity bills.
“We know that when gasoline prices go up, people use their cars less, they vacation less,” Axelrod said. “Electricity prices have a similar impact.”
There is also another, more intangible economic impact—grid stability. Like all U.S. nuclear energy facilities, Indian Point Energy Center runs all day long, every day, unless it’s in a maintenance and refueling outage, which occurs on average only once every two or three years. That helps to stabilize the grid by providing electricity around the clock, as opposed to intermittent sources of electricity like wind and solar. Without Indian Point, there would be an increased risk of blackouts in the region, as corroborated by a report last year from the New York State Energy Planning Board.
Axelrod added, “The New York Independent System Operator found that, without Indian Point, there would not be sufficient resources from 2016 through 2020 to meet reliability requirements in the region, and there would be an increased likelihood that customer load interruptions would be necessary to avoid wide-scale blackouts in southeast New York.”
He said that he undertook the study, in part, to engage the public and add clarity to the debate about energy choices.
“Communities have to make decisions and nuclear energy is politically charged, especially since Fukushima,” he said. “We have to make sure that elected officials and the public are aware of what the impacts of those decisions will be.”