By Scott DiSavino
March 14 (Reuters) - New York utility regulators on Thursdayapproved a proposal to seek 1,350 megawatts (MW) of generationor transmission later in March to keep the power grid reliablein case Entergy Corp's Indian Point nuclear power plantis closed.
The New York Public Service Commission (PSC) staff said thatif the 2,037-MW plant shuts in 2015 when its last reactoroperating license expires, the additional power would be neededby the summer of 2016.
One megawatt can power about 1,000 homes.
The PSC said it was not taking a position on whether IndianPoint, which produces about a quarter of the power used in NewYork City, should shut down.
New York Governor Andrew Cuomo wants the two reactors atIndian Point to shut when their operating licenses expire in2013 and 2015 in part because the plant is within the heavilypopulated New York metropolitan area, which is home to about 20million people.
The U.S. Nuclear Regulatory Commission (NRC), whichregulates the country's nuclear power plants, has said IndianPoint is safe.
Entergy is seeking new 20-year operating licenses from theNRC for the Indian Point reactors.
The NRC is not expected to decide on the license renewalsfor at least a few years, in part because it will take theagency a lot of time to hear arguments by mostly environmentalgroups and the state against the plant's continued operation.
"No one can predict how this will transpire," PSC ChairmanGarry Brown said during the meeting, noting, "If Indian Point isclosed in 2015, we will have reliability concerns."
The proposal the commissioners approved included a so-called"halting mechanism" that will allow the commission to stop ordelay a project if Indian Point continues to operate and theadditional power is no longer needed.
In the wake of Hurricane Sandy, which left millions of NewYorkers without power, the PSC in November ordered New Yorkpower company Consolidated Edison Inc to work with thestate-owned New York Power Authority (NYPA) to developcontingency plans in case the Indian Point nuclear plant shuts.
CONTINGENCY PLANS
Con Edison and NYPA filed their plan with the PSC in earlyFebruary. The plan recommended that Con Edison and NYPA upgradethree transmission lines and the need for 1,450 MW of generationor transmission resources. The PSC on Thursday took up the needfor the generation or transmission resources.
Con Edison said the transmission projects would cost about$500 million.
The PSC staff determined that 100 MW of resources could comefrom energy efficiency efforts and therefore reduced the amountof generation or transmission needed to 1,350 MW from Con Edisonand NYPA's proposed 1,450 MW.
If the request for proposals to supply the 1,350 MW ofgeneration or transmission goes forward in March, the PSC staffsaid bids could be due in May, allowing the staff to make finalrecommendations to the commissioners by about September.
Several energy companies have already proposed power plantsand transmission lines that could partially replace IndianPoint, including units of NRG Energy Inc, BrookfieldAsset Management Inc, BP Plc, Calpine Corp and Iberdrola SA.
Entergy has criticized the plan, saying the alternativeswould not replace the economic value of Indian Point or the airquality benefits it provides.
"Rather than asking New York customers to pay hundreds ofmillions of dollars for a contingency plan that might not beneeded, New York could support the license renewal effort forIndian Point now pending at the NRC to help ensure that thissafe, clean, and reliable resource remains part of New York'senergy portfolio," said Entergy spokesman Jim Steets.
Separately, the PSC staff said they expected to return tothe commissioners in April with a recommendation on Con Edisonand NYPA's proposal to upgrade the three transmission lines,which are located in the Ramapo area just north of New Jersey,on Staten Island and in upstate New York.
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