Entergy suit says New York overstepped bounds on Indian Point regulation

Entergy (NYSE:ETR) has filed a federal lawsuit against the New York State Department of State (NYSDOS) saying that its coastal zone management oversight has encroached upon the turf of the U.S. Nuclear Regulatory Commission (NRC).

The New York entity is pre-empted from regulated nuclear plant safety issues by the federal Atomic Energy Act (AEA) of 1954, according to Entergy Nuclear Operations. The federal act give NRC “exclusive authority” to regulate nuclear plants based on safety concerns, according to the company lawsuit.

The suit arises out of an application by the plaintiffs that include both the company’s operating unit and Entergy Nuclear Indian Point 2, LLC, and Entergy Nuclear Indian Point 3 LLC, to the NRC for renewal of the operating licenses for the nuclear power plants Indian Point 2 and Indian Point 3.

Absent an exemption, the federal Coastal Zone Management Act (CZMA) allows a state agency to object to the granting of a federal license on the ground that the facility is inconsistent with the state’s coastal management program (CMP). Such an objection, unless overturned by a court or the U.S. Secretary of Commerce, prevents the federal agency from issuing the license, Entergy said.

Despite a ruling by the New York Supreme Court, Appellate Division, Third Department, holding that Indian Point is exempt from CMP and CZMA review in November, NYSDOS issued an objection concerning Indian Point’s federal license renewal application, the company said.

The court’s ruling is currently being appealed to the New York Court of Appeals.

The objection repeatedly relies on nuclear safety concerns. And the objection’s “purportedly” non-nuclear safety rationale, which argues that Indian Point harms aquatic species in the Hudson River, is “merely a pretext for NYSDOS’s nuclear safety concerns,” Entergy contends.

New York Secretary of State Cesar A. Perales is also named as a defendant in the litigation. The Entergy litigation was filed Jan. 14 in the U.S. District Court for the Northern District of New York.

Indian Point 2 and 3 are both pressurized water reactors (PWRs). Each has a generating capacity of more than 1,000 MW. The units are located on the Hudson River, less than 30 miles outside of New York City.

The combined Indian Point station generates approximately 25% of the energy demanded by New York City and Westchester County, and is essential to the reliability of New York’s electric system, Entergy said.

Because Indian Point uses nuclear fuel rather than a fossil fuel such as natural gas, it generates this electricity with minimal emissions of carbon and air pollutants, and it helps to protect the electricity markets against natural gas shortages and price volatility during peak operating periods. Indian Point employs approximately 1,000 people, pays tens of millions of dollars in taxes, and makes significant contributions to the local and state economies, the company said.

Contrary to assertions by the New York department, Indian Point is carefully operated and does not pose a safety risk to the surrounding population. Indian Point is also “comprehensively regulated by NRC,” Entergy said.

“More importantly for purposes of this suit, nuclear safety concerns cannot as a matter of law serve as a basis for state regulatory action against a nuclear power plant,” Entergy said.

Upstate nuclear plants treated differently than Indian Point, Entergy says

Entergy also said that the New York department had not raised similar objections to continued operation of three nuclear plants in upstate New York —  Ginna, Nine Mile Point, and FitzPatrick.

Two of the three are operated by Exelon (NYSE:EXC). FitzPatrick is, like Indian Point, operated by an Entergy subsidiary. Entergy announced retirement plans for FitzPatrick.

Each of the three plants located in upstate New York “withdraws cooling water from local water bodies,” Entergy said in the complaint.

For the three upstate nuclear plants, NYSDOS issued concurrences (not objections) under the CZMA, relying on the New York State Department of Environmental Conservation (NYSDEC) to address aquatic impact, Entergy said.

When it comes to Indian Point, however, “NYSDOS itself purports to have concluded without explanation that the only possible response to Indian Point’s potential environmental impact on the Hudson River is to shut Indian Point down,” Entergy said.

In various ways, New York’s approach to the upstate nuclear plants stands in stark contrast to its treatment of Indian Point, Entergy asserts.

Gov. Andrew Cuomo (D), who appointed and Secretary of State Perales, has declared that elimination of upstate nuclear plants, “’would eviscerate the emission reductions achieved through the State’s renewable energy programs, diminish fuel diversity, increase price volatility, and financially harm[] host communities’,” Entergy said.

But when it comes to Indian Point, however, the state has said that “’Although Indian Point’s nuclear facilities do not contribute air pollutants or greenhouse gasses as part of their operations, these are not environmental benefits.’” The state says nuclear facilities “’have a neutral effect on air quality.’”

“Again, the clear explanation for New York’s disparate treatment of Indian Point is that, according to NYSDOS and Governor Cuomo, Indian Point poses a nuclear safety risk that the Upstate nuclear plants do not,” Entergy said.

Entergy versus Cesar Perales, in his official capacity as Secretary of the New York State Department of State, is Case 1:16-cv-00051-LEK-DJS.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.