Economic Impact of Closing the Indian Point Nuclear Facility

The close proximity of the Indian Point (IP) nuclear plant to the heavily populated New York City area has raised questions relating to the economic effects that would likely result if the plant were closed.

GAO found that: (1) IP nuclear power is generated at about one-fourth the cost of that generated by comparable oil-fired units in the Con Edison (CE) system; (2) IP units provide nearly one-third of the electric energy needed for the CE franchise area customers, but currently available non-nuclear generating capacity is sufficient to meet normal demands on the system; (3) continued reliability of service without IP will depend on the successful completion of planned generating facilities and transmission line improvements; (4) the loss of IP could increase residual oil comsumption in New York by about 20 million barrels the first year with declining amounts thereafter; (5) use of high cost low-sulfur oil to generate replacement energy could cost Con Edison and Power Authority of New York customers over $600 million during the first year; (6) incremental revenue requirements for CE to cover all costs resulting from closing IP could amount to over $18 billion during the next 15 years and as much as $600 million annually for the Power Authority of New York; and (7) there are few, if any, options available to reduce oil consumption and costs that are not already being undertaken by the utility companies and included in revenue requirements forecasts.