1 JOINT HEARING BEFORE THE NEW YORK STATE
SENATE STANDING COMMITTEE ON ENERGY AND
2 TELECOMMUNICATIONS
AND
3 ASSEMBLY STANDING COMMITTEE ON ENERGY
-----------------------------------------------------
4
PUBLIC HEARING ON
5
INDIAN POINT NUCLEAR POWER PLANT SHUTDOWN
6
-----------------------------------------------------
7
8 Legislative Office Building
Hearing Room C
9 172 State Street
Albany, New York 12247
10
11 February 28, 2017, at 10:00 a.m.
12
13
PRESIDING:
14
Senator Joseph A. Griffo
15 Chairman
NYS Senate Standing Committee
16 on Energy and Telecommunications
17 Assemblywoman Amy Paulin
Chairman
18 Assembly Standing Committee on Energy
19
20
21
22
23
24
25
2
1
SENATE MEMBERS PRESENT:
2
Senator David Carlucci
3
Senator Leroy Comrie
4
Senator Tom Croci
5
Senator George S. Latimer
6
Senator Terrence P. Murphy
7
Senator Rob Ortt
8
Senator Kevin Parker
9
10 ASSEMBLY MEMBERS PRESENT:
11 Assemblyman Thomas J. Abinanti
12 Assemblyman William A. Barclay
13 Assemblyman David Buchwald
14 Assemblyman Kevin M. Byrne
15 Assemblyman Chris Friend
16 Assemblywoman Sandy Galef
17 Assemblyman Andrew R. Garbarino
18 Assemblywoman Pamela J. Hunter
19 Assemblyman Brian Kavanagh
20 Assemblywoman Shelley Mayer
21 Assemblyman Walter T. Mosley
22 Assemblyman Philip A. Palmesano
23 Assemblyman Angelo Santabarbara
24 Assemblywoman Jo Anne Simon
25
3
1
SPEAKERS: PAGE QUESTIONS
2
Richard L. Kauffman 11 26
3 Chairman
Energy and Finance for New York State
4
Audrey Zibelman 11 26
5 Chair
NYS Public Service Commission
6
T. Michael Twomey 184 195
7 Vice President, External Affairs
Entergy - Indian Point
8
Bruce Watson 304 314
9 Chief of the Reactor
Decommissioning Branch
10 U.S. Nuclear Regulatory Commission -
Nuclear Material Safety
11 and Safeguards
12 Jonathan Greaves 304 314
Regional State Liaison Officer
13 for Region 1
U.S. Nuclear Regulatory Commission
14
Brett Klukan 304 314
15 Regional Counsel for Region 1
U.S. Nuclear Regulatory Commission
16
Bradley Jones 339 342
17 President and CEO
New York Independent System Operator
18
Theresa Knickerbocker 373 396
19 Mayor
Village of Buchanan
20
Linda Puglisi 373 396
21 Supervisor
Town of Cortlandt
22
Joseph Hochreiter 373 396
23 Superintendent
Hendrick Hudson School District
24
25
4
1
SPEAKERS (continued): PAGE QUESTIONS
2
Craig Dickson 422 438
3 Business Agent, Local 1-2
Utility Workers Union of America
4
Louis Picani 422 438
5 President
Teamsters Local 456
6
John J. Murphy 422 438
7 International Representative
United Association of Journeymen and
8 Apprentices of the Plumbing and
Pipefitting Industry of the
9 United States and Canada
10 ---oOo---
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
5
1 SENATOR GRIFFO: Good morning, everyone.
2 I want to welcome everyone here today, and
3 thank you all for attending.
4 I am Senator Joe Griffo, and I am the
5 Chair of the Standing -- Senate Standing Committee
6 on Energy and Telecommunications.
7 I want to acknowledge, and thank, my
8 colleague, the Chairwoman of the Assembly Energy
9 Committee, Amy Paulin, who is with me today.
10 This is a joint committee meeting of the
11 Senate and Assembly Energy committees.
12 We want to extend our appreciation to all
13 those on the staff who helped organize this today;
14 appreciate that.
15 And we will -- today, on January -- we're
16 going to be discussing today what the Governor did
17 on January 9th.
18 The Governor and Entergy, on that day,
19 announced that Indian Point would be closing by
20 2021.
21 So we're here to get more details about this
22 closure; its implications to the state and the
23 affected municipalities.
24 The closure of Indian Point requires the
25 development of new sources of electricity, that will
6
1 have local financial impact.
2 And all of that needs to be addressed and
3 assessed, and this is an opportunity that we will
4 undertake during this proceeding today.
5 I am pleased today to be joined by
6 Senator Terrence Murphy, whose district is impacted
7 by the proposal that has been presented.
8 Also joining me is Senator Rob Ortt, a member
9 of the Energy Committee.
10 With him, Senator Tom Croci, also a member of
11 the Energy Committee.
12 And, I see Senator Leroy Comrie also joining
13 us, and a newest member to the Energy Committee.
14 So I want to thank Senators Comrie, Croci,
15 Ortt, and Murphy for being here.
16 And, again, I want to extend my thanks to
17 Chairwoman Paulin for her cooperation and assistance
18 in, both, putting this together, and bringing some
19 of the testifiers, that I think we have an
20 interesting group of testifiers, here today.
21 So I'll let Assemblywoman Paulin open it up,
22 and then we'll -- I'll just go over some logistics
23 at that point.
24 ASSEMBLYWOMAN PAULIN: Good morning,
25 everyone.
7
1 Thank you all for coming.
2 I want to also thank the Senator for joining
3 with the Assembly, or us joining with him.
4 You know, we have a great working
5 relationship and we're very proud to do this
6 together.
7 The reason for the hearing, you know, the
8 safety of Indian Point and its close proximity to
9 such a large population center has been, and
10 continues to be, a concern.
11 Now, with the agreement in place for its
12 closure, we must ensure that the shutdown proceeds
13 in a safe and environmentally-friendly manner.
14 Indian Point is a significant local source of
15 jobs, tax revenue, and power, and it's an important
16 power producer for the state of New York.
17 In fact, it's the largest power producer for
18 the state of New York.
19 As such, it's critical that we anticipate and
20 plan for the impacts of its closure.
21 I look forward to hearing from each of you on
22 this topic, but, first, just a few minutes of
23 housekeeping.
24 I ask all individuals who are testifying
25 today to please state your name, position, and the
8
1 organization you are providing testimony for, for
2 the record, prior to speaking.
3 Please also feel free to summarize your
4 testimony rather than read it to us word for word.
5 Your written testimony will be included as
6 part of the public record.
7 Those of you who did not have the opportunity
8 to testify, and would like to submit written
9 testimony, should submit your testimony via e-mail
10 or mail as soon as you can, but, please, no later
11 than two weeks from today.
12 It will be added to the written hearing
13 record.
14 We've already received comments -- written
15 comments from Riverkeeper, and from former
16 Assembly Member Richard Brodsky, which will be part
17 of the record.
18 We are joined today by many Assemblymembers.
19 Pamela Hunter, up there.
20 And then to my left and down the line, my --
21 the Ranker on the Committee for Energy, I didn't say
22 that -- I didn't even announce who I was. I let Joe
23 do that.
24 Amy Paulin, and I'm the Chair of the
25 Committee on Energy for the New York State Assembly.
9
1 And the Minority Ranker, to my left here, is
2 Phil Palmesano.
3 And then, Sandy Galef, who is the legislator,
4 the Assemblymember, whose district Indian Point
5 falls within.
6 David Buchwald, also from Westchester County.
7 And, Will Barclay, all the way at the end.
8 Did I forget anyone?
9 Ah.
10 And Mr. Garbarino down at the right-hand
11 side on the -- over there.
12 So, I'm sure we're going to see
13 Assemblymembers come in and out, and we will
14 announce them as we -- as we can.
15 And with that...
16 SENATOR GRIFFO: Thank you,
17 Chairwoman Paulin.
18 And I want to acknowledge the arrival of
19 Senator David Carlucci, who is also joining us here
20 today.
21 And again to reiterate some of the
22 housekeeping that Chairwoman Paulin indicated, we'd
23 ask the presenters to summarize, if at all possible,
24 to allow more opportunity to interact with the
25 members.
10
1 And, I would ask the members today, that
2 we're going to try something a little different.
3 We're going to go in 3-minute blocks of questioning.
4 If you would begin your questions, and then
5 when the three minutes is up, we can move on to the
6 next member.
7 We allow members to ask for another block of
8 questioning, and we'll continue do that, and see how
9 that works, at least to keep things moving.
10 Obviously, there will be a little flexibility
11 and discretion to the Chairs and the members of the
12 districts of impact relative to that process.
13 But we just want to keep everything moving.
14 The other -- I now invite Richard Kauffman,
15 who is the Chair of the Energy and Finance for
16 New York State for the Governor's Office, and,
17 Audrey Zibelman, the Chairwoman of the
18 New York State Public Service Commission, to come
19 down.
20 I would -- we're going to have both the
21 Chairwoman of the PSC and the Chairman of Energy and
22 Finance for the State of New York make their
23 presentations first, and then we will begin the
24 questioning after that.
25 So I want to thank Mr. Kauffman and
11
1 Ms. Zibelman for being here today. Appreciate your
2 cooperation, and accepting our invitation to appear.
3 RICHARD L. KAUFFMAN: Thank you very much.
4 Good morning, Chair Griffo, Chair Paulin, and
5 other distinguished members.
6 I'm Richard Kauffman, Chair of Energy and
7 Finance for New York.
8 Thank you for the opportunity to testify on
9 Governor Cuomo's announcement of the closure of
10 Indian Point.
11 I will discuss the safety concerns
12 surrounding the plant, settlement terms, and some of
13 the steps to ensure the plant-closure process is
14 safe, orderly, and addresses interests of
15 stakeholders.
16 Chair Zibelman will expand on several of
17 these issues.
18 Governor Cuomo's actions on Indian Point have
19 always focused on safety to protect New Yorkers
20 first and foremost.
21 Simply put, the human and environmental
22 safety risk posed by the plant's continued operation
23 are untenable.
24 That's why the Governor has been working to
25 close Indian Point for more than a decade.
12
1 The Governor's position on safety is well
2 documented, but bears repeating.
3 First, Indian Point Unit 3 is on a fault
4 line.
5 The nuclear regulatory commission previously
6 ranked Unit 3 to be at the greatest risk from
7 seismic activity of any reactor in the U.S.
8 Second, there has never been a workable
9 evacuation plan.
10 No other nuclear plant in the U.S., indeed,
11 on the whole continent, sits in an area as densely
12 populated as Indian Point.
13 It would be impossible to evacuate this many
14 people in the event of a disaster.
15 Indian Point was initially authorized in the
16 1950s at a time when federal regulations for
17 siting of nuclear power plants were, virtually,
18 non-existent.
19 A proposal to build Indian Point in the same
20 location today, given population factors and other
21 geographic and environmental realities, would have
22 little chance of being approved by federal
23 regulations.
24 Third, there are structural and material
25 safety concerns.
13
1 In addition to equipment and mechanical
2 problems, the plant has leaked tritium.
3 Further, there's a large quantity of
4 high-level radioactive waste at the site.
5 In fact, there's five times more spent
6 nuclear fuel in the pools than the volume they were
7 initially designed to hold.
8 Most notably, in March of 2016, Indian Point
9 Unit 2 discovered that 27 percent of baffle bolts
10 had degraded inside its core, and these needed to be
11 removed and replaced.
12 This failure rate greatly exceeded industry
13 standards.
14 And, finally, there are additional concerns
15 around environmental safety.
16 The Department of State found that license
17 renewal for 20 years would be inconsistent with the
18 state's coastal zone management plan.
19 This decision was the subject of extensive
20 litigation, and, recently, the New York State Court
21 of Appeals upheld the State's position.
22 Nor could Indian Point meet the requirements
23 of the federal Clean Water Act.
24 It's, therefore, not surprising that, in
25 2010, the Department of Environmental Conservation
14
1 denied water-quality certificates and permits for
2 the facility due to significant impacts in fish and
3 the environment.
4 After a decade of litigation and regulatory
5 disputes, New York State and Entergy were able to
6 reach a negotiated settlement to close Indian Point.
7 The parties entered into negotiations because
8 each side had an interest in a negotiated
9 settlement, to allow time for an orderly transition.
10 The Governor and the administration were, of
11 course, driven by safety concerns.
12 Entergy's motivation was deteriorating
13 economic conditions at the plant.
14 Together with work that the State has already
15 done, the settlement allows for us to fully replace
16 the power generated by the plant at a negligible
17 cost to consumers, while maintaining our commitments
18 to reduce harmful greenhouse gas emissions.
19 Highlights of the terms of the agreement and
20 the results of the closure are as follows:
21 One: Early Close Date.
22 Entergy will shut down Unit 2 on April of
23 2020, and shut Unit 3 in April of 2021.
24 By background, Unit 1 was permanently shut
25 down in October of 1974 because its emergency core
15
1 cooling system did not meet regulatory requirements.
2 In the event of an emergency situation
3 affecting electricity generation, the State may
4 agree to allow Indian Point to continue operating in
5 two-year increments, but no later than 20 --
6 April 2024 and April 2025 for Unit 2 and Unit 3,
7 respectively.
8 Two: Rigorous Safety Requirements and
9 Inspections.
10 New York State will make annual inspections
11 of key operational regulatory and environmental
12 matters at the plant.
13 Entergy will transfer used fuel to protective
14 storage and dry casks, the preferred method of
15 safely storing spent fuel, at a minimum of 4 casks
16 per year, and at least 24 by 2021.
17 Entergy will also inspect the structural
18 safety of the reactors during refueling outages.
19 Three: Workforce Protection.
20 There will be continued employment at the
21 plant throughout the closure process, through 2021,
22 and, thereafter, during decommissioning and to
23 maintain security.
24 Under the terms of its agreement with
25 New York State, Entergy has committed to offer plant
16
1 employees new jobs at other facilities.
2 We will work with workers to gain access to
3 other job opportunities and worker retraining in the
4 power and utility sector where there's growing
5 demand for skilled workers within the state,
6 including at other plants.
7 And through NYSERDA, the State will offer any
8 worker retraining in renewable technologies, like
9 solar and wind.
10 Four: Ongoing Environmental Protection and
11 Community Benefits.
12 Entergy has also agreed to establish a
13 $15 million fund to support environmental
14 restoration and community-benefit projects
15 associated with the plant's closure.
16 The fund will support efforts such as
17 protection and restoration of wetlands and
18 estuaries, creation and enhancement of wildlife
19 habitat, invasive-species migration, and conducting
20 studies to ensure long-term viability of the
21 communities affected by the plant's closure.
22 Communities will be actively involved in the
23 identification and selection of specific projects.
24 Five: Replacement Power.
25 Ample resources will be available to replace
17
1 Indian Point's power.
2 Some resources are already in service today,
3 and others are permitted and expected to come online
4 in the near future. These include both enhanced
5 transmission lines that can bring more power from
6 upstate to downstate, and new power-generation
7 sources.
8 These replacement resources will be coming
9 online as a result of deliberate planning on the
10 State's part and additional private-sector activity
11 in the merchant-power market.
12 I observed that Indian Point has had a number
13 of unscheduled outages without any interruption in
14 power supply to customers.
15 Part of the replacement of power will come
16 from energy efficiency. Through Reforming the
17 Energy Vision, we are driving down demand through
18 energy efficiency.
19 New York can also learn from California's
20 example of ramping up energy efficiency as a
21 solution to the closure of its Diablo Canyon nuclear
22 facility.
23 Six: Negligible Bill Impact.
24 Because the settlement gives sufficient time
25 for substantial replacement resources to be brought
18
1 online by 2021, laws of supply and demand indicate
2 that New Yorkers will see little change in their
3 bills.
4 Seven: No Net Increase of Emissions Due to
5 Closure.
6 Thanks to the Governor's leadership, every
7 day, there are new solar and wind energy projects
8 that are coming online.
9 Through our Clean Energy Standard, New York
10 will get 50 percent of its electricity from
11 renewables by 2030.
12 In addition to projects that will bring wind
13 from upstate, we have just begun to develop
14 substantial offshore wind resources near
15 Long Island.
16 Moreover, Indian Point's closure will not
17 have an adverse impact on carbon emissions at the
18 regional level. Through the Regional Greenhouse Gas
19 Initiative, the state will continue to drive
20 reduction in greenhouse gases across the power
21 sector.
22 In fact, in a State of the State message, the
23 Governor called for a 30 percent reduction in the
24 RGGI cap.
25 Eight: Local Tax Impact.
19
1 We understand that Indian Point's closure
2 will pose a challenge to local taxing jurisdictions.
3 The agreement allows for ample time to plan
4 for and address impacts on local tax revenues.
5 Entergy's previously agreed-upon payments, in
6 lieu of taxes, to local government entities and
7 school districts will continue through 2021 before
8 gradually stepping down at a negotiated level
9 following shutdown.
10 The State has already reached out to local
11 communities and begun financial-impact analyses that
12 will help address potential revenue shortfalls.
13 Earlier today we announced the formation of a
14 multiagency statewide task force to comprehensively
15 address tax impacts and other issues in the
16 communities.
17 For example, we'll be working with
18 communities to look at potential future uses of the
19 site.
20 The State has experienced working with
21 communities affected by other plant closures, and
22 has developed solutions, including the power plant
23 retirement fund.
24 We'll also ensure that Entergy complies with
25 NRC decommissioning rules, and that local taxing
20
1 jurisdictions are included in Entergy's
2 decommissioning planning.
3 That concludes my brief overview of the
4 status of our Indian Point agreement.
5 I welcome your questions following
6 Chair Zibelman's remarks.
7 AUDREY ZIBELMAN: Thank you.
8 Good morning, Chair Griffo, Chair Paulin, and
9 other distinguished members.
10 I'm Audrey Zibelman. I'm the CEO of the
11 Department of Public Service, and Chair of the
12 Public Service Commission.
13 Thank you for this opportunity to testify on
14 Governor Andrew Cuomo's announcement of the closure
15 of the Indian Point Energy Center by April 2021.
16 Among other things, the Department of Public
17 Service is charged with overseeing the reliability,
18 safety, and economic and environmental efficiency of
19 the state's electric system.
20 In my remarks today, I will focus on the
21 plans and actions that the State has put in place,
22 beginning in 2011, to ensure that the closure of
23 Indian Point can occur without detrimental impact to
24 the state's electric system and electric consumers.
25 The State has been planning and preparing the
21
1 electric system for Indian Point's eventual closure
2 since at least 2011.
3 In 2012, the commission required Con Edison,
4 the New York Power Authority, and the New York State
5 Energy Research and Development Authority to develop
6 plans that could address the forced closure of
7 Indian Point if, in 2020 -- 2015, if Entergy were
8 not success -- 2021, if Entergy were not successful
9 in obtaining its desired relicensing.
10 In 2013 the Public Service Commission
11 approved the Indian Point contingency plan.
12 Under that plan, the commission approved
13 utility investment in local transmission upgrades,
14 and increased investment in energy efficiency and
15 localized distributed resources, which we determined
16 which would benefit consumers in all events, and
17 would support system reliability in the event of a
18 plant closure.
19 In the same proceeding, the commission also
20 found that, due to a substantial level of positive
21 market interest, there would be adequate generation
22 available in a short time to make up for any gap in
23 supply adequacy or reliability.
24 The majority of the investments that were
25 ordered were completed in 2016, and are currently in
22
1 service, with the rest to be finished shortly.
2 In addition to the specific plans for
3 Indian Point closure, the commission took action in
4 2013 to develop up to 1,000 megawatts of increased
5 and alternate-current transmission capacity, the
6 so-called "AC Transmission Project," from
7 Upstate New York to the downstate region.
8 The addition of this transmission capability
9 will allow our existing upstate resources, including
10 new renewable resources, to support the demand for
11 electricity in the Lower Hudson Valley and the
12 New York City regions.
13 There are several entities competing to
14 develop the 1,000-megawatt transmission addition,
15 and the review of these options is proceeding both
16 at the New York Independent System Operator (the
17 NYISO) and the commission.
18 The increase in this transmission capability
19 is calculated to provide $1.20 in benefits for every
20 dollar that it costs.
21 We expect construction will start in the
22 spring of 2019, and the facilities will be
23 operational mid-2022 in time to meet the peak summer
24 demand.
25 I also want to note that the proposed
23
1 projects are designed to be constructed in existing
2 transmission right-of-way; thereby, minimizing land,
3 visual, and environmental impact.
4 Further, since 2013, and through the
5 REV-related proceedings, the commission has taken a
6 number of significant actions to maximize the
7 economically-advantageous level of local, clean
8 distributed energy resources and energy efficiency
9 in the downstate region and the rest of the state.
10 These actions, which are on the customer side
11 of the meter, provide local reliability, and further
12 reduce the need for electricity historically
13 supplied by Indian Point.
14 The benefits of this planning are already
15 taking root and resulting in concrete actions.
16 For example, the New York ISO's 2012 forecast
17 of New York's peak demands for year 2021 was
18 35,913 megawatts; whereas, the 2016 forecast of
19 New York's peak demands was 33,555 megawatts; for a
20 difference of 2,358 megawatts, or, a 7 percent
21 decrease.
22 This has helped to reduce the amount of
23 replacement capacity that would otherwise have been
24 needed to maintain a reliable system with an
25 Indian Point retirement.
24
1 The Department of Public Service also
2 reevaluated the reliability implications of the
3 '20 and '21 closures that are contemplated in the
4 agreement with Entergy.
5 The agency concluded that, based on the
6 actions that we've taken, and the power resources in
7 the vicinity of Indian Point that are in service
8 today and in construction, as well as numerous
9 existing plants in mothball status, and new power
10 plants and new transmission projects already
11 permitted, there will be no power-reliability need
12 associated with the plant's closure.
13 As a direct result of the comprehensive
14 planning for Indian Point's closure, the loss of the
15 plant will have a negligible or no adverse bill
16 impact on consumers.
17 The development of energy efficiency and
18 demand-based resources, in combination with the
19 transmission upgrades, means, both, that the need
20 for replacement supply has decreased, and the state
21 can take better advantage of existing upstate
22 resources.
23 Moreover, the price for electricity in the
24 wholesale market has substantially declined due to
25 falling fuel prices.
25
1 The average annual statewide wholesale price
2 for 2012, when the Indian Point contingency plan was
3 being considered and developed, was $45.23 a
4 megawatt hour; whereas, for 2016, the average annual
5 energy -- wholesale energy price was $34.28 a
6 megawatt hour, a 25 percent decline.
7 In short, since prevailing wholesale prices
8 are now lower than the cost of existing nuclear
9 generation, it is anticipated that any new
10 replacement power, in the long run, will be cheaper
11 than continuing to buy power from Indian Point.
12 Further, because the state is leading the
13 nation in the development of its clean energy
14 economy, Indian Point's closure can be accommodated
15 while continuing to reduce greenhouse gas emissions.
16 Through the Governor's Clean Energy Standard
17 enacted last year, utilities and other power
18 suppliers will have to procure at least 50 percent
19 of their power needs from renewable energy by 2030.
20 In addition to the emissions reduction
21 expected to be achieved through the Clean Energy
22 Standard, the Governor is advocating for a
23 30 percent reduction in the carbon dioxide cap in
24 the multi-state RGGI program by 2020, thereby
25 putting state and region in the path to meet our
26
1 significant emission-reduction goals.
2 It's noteworthy, that a study issued last
3 week by the National (sic) Resources Defense Council
4 confirmed that Indian Point's power can be
5 adequately replaced, with minimal consumer impact,
6 by resources that are already in service or
7 permitted, and more that will come online through
8 this Clean Energy Standard.
9 New York is already aggressively pursuing
10 energy efficiency by investing more than half of the
11 state's $5.3 billion clean energy fund on efficiency
12 programs, while taking innovative action that
13 requires utilities to make energy-efficiency
14 initiatives part of their business model.
15 In fact, an additional 100 megawatts of
16 energy-efficiency demand response has been achieved,
17 with another 50 megawatts committed, specifically
18 targeted in Con Ed service territory, as directed by
19 the commission's IPEC Contingency Planning Order.
20 This concludes my overall view -- review of
21 the Indian Point agreement, and I welcome your
22 questions.
23 SENATOR GRIFFO: Thank you very much.
24 I'm going to start with just a few questions.
25 Richard, we're learning today, that you
27
1 may -- the Governor has made the announcement of
2 creating a local task force.
3 A couple of quick questions on that.
4 Would that task force -- the creation of that
5 task force include legislative input in the
6 development of who will sit on that task force?
7 RICHARD L. KAUFFMAN: Uh, in fact --
8 SENATOR GRIFFO: Or would that be welcome?
9 RICHARD L. KAUFFMAN: -- that would be
10 welcome.
11 In fact, there are legislators that have
12 already agreed to participate as members.
13 SENATOR GRIFFO: Okay.
14 So you have to volunteer?
15 RICHARD L. KAUFFMAN: Yes.
16 SENATOR GRIFFO: Okay.
17 Secondly, are you considering, in the
18 development of that task force, any type of economic
19 transformation fund?
20 Similarly, that we -- when you had the
21 closure of the correctional facilities across the
22 state, there was a program done, to deal with
23 economic impact in those communities.
24 Has that been under discussion or
25 consideration at this point in time, that there
28
1 would be some format of State assistance in economic
2 transformation?
3 RICHARD L. KAUFFMAN: Yes.
4 And, again, to be clear, the benefit of the
5 agreement, is it gives a number of years to work on
6 a whole range of issues.
7 And so it's -- there are tax issues to look
8 at, there's economic development, there's
9 employment...a whole range of issues to look at.
10 And the task force we would look to to
11 address all these issues.
12 The task force consists of high-level
13 representatives from 11 state agencies.
14 It does include Senator Murphy,
15 Assemblywoman Sandy Galef, and Westchester County
16 government and town officials.
17 So --
18 SENATOR GRIFFO: So the point I made,
19 Richard, though, and I appreciate that, is you've
20 indicated they would be put on it.
21 I asked whether or not they would have any
22 involvement and input in determining who else should
23 be on it, or is that purely an executive decision?
24 RICHARD L. KAUFFMAN: No, no.
25 We -- we -- we are eager to engage with the
29
1 Legislature and this task force to include other
2 members as needed --
3 SENATOR GRIFFO: So for instance --
4 RICHARD L. KAUFFMAN: -- for the initial
5 membership.
6 SENATOR GRIFFO: So, for instance,
7 Senator Murphy felt somebody was missing, that
8 should be on there, he would be able to present
9 that, and, hopefully, that could be accommodated?
10 RICHARD L. KAUFFMAN: Absolutely.
11 SENATOR GRIFFO: Okay. Excellent.
12 Appreciate that.
13 RICHARD L. KAUFFMAN: In fact, I think in the
14 press release it says -- the last sentence of the
15 press release says, "Other officials as needed."
16 SENATOR GRIFFO: I haven't seen the press
17 release, but I thank you for that.
18 So we talk about 2,000 megawatts being lost
19 here in New York.
20 The Governor has presented in his budget
21 proposal a concept called "Buy New York" -- if
22 you're familiar with that -- where he's emphasizing
23 products being sustained and kept here in the state
24 of New York, and special attention be given and
25 prerogatives accordingly.
30
1 So what is the plan, then, to replace this
2 power with New York power?
3 There has been some discussion about
4 Champlain Hudson.
5 But, if the Governor, on one end, is talking
6 about "buy New York," you're losing 2,000 megawatts
7 of power right now, can you tell me what, you know,
8 specifically, without using some of that, is a
9 New York-specific solution?
10 RICHARD L. KAUFFMAN: Could I turn to
11 Chair Zibelman to answer that question?
12 SENATOR GRIFFO: Sure.
13 AUDREY ZIBELMAN: Thank you.
14 So there -- there's -- I like to look at this
15 replacement-power issue as a three-tiered-solution
16 process.
17 The first, we're always looking for energy
18 efficiency and demand reductions, because they can
19 be cost-effective.
20 And, obviously, under the REV program,
21 individuals who now put in things, like clean --
22 like CHP and distributed solar, as well as other
23 forms of resources, get paid. So they become,
24 really, resources and revenue sources, both, for
25 consumers, but also help reduce the cost of energy,
31
1 as well as energy-efficiency programs.
2 So those will all be New York projects.
3 The second, is the work we're doing around
4 transmission.
5 So we've already developed on the order of
6 700 megawatts of transmission additions.
7 This is to really allow for greater use of
8 existing New York resources to be used to serve the
9 downstate. It's different types of unbottling, so
10 we're making better use of existing assets.
11 That helps, frankly, the struggling Upstate
12 New York units, because it gives them a greater
13 market to sell into in New York.
14 So that's the other piece that we're doing.
15 That includes the 1,000 megawatts of
16 transmission capability from upstate to downstate,
17 but also the existing projects.
18 We also have a number of generators who have
19 proposed replacing Indian Point. These are
20 generators who are going to be participating in the
21 New York ISO market.
22 They're not regulated, in the sense that
23 they're not in rate base. They're merchants.
24 But, there are a number of plants that are
25 both new and have been licensed, as well as existing
32
1 plants that are in what we call "mothball status,"
2 because they became uneconomic, but they see this as
3 a -- potentially, opportunity to reengage, that will
4 also be used to serve.
5 So, all in all, those are all opportunities
6 to increase what we're doing in New York.
7 I would also add, that with the additional
8 transmission we're building, to the extent we're
9 putting in new resources upstate, like new wind,
10 they can also now be used to serve downstate as
11 low-emitted.
12 At the same time, and I know you mentioned
13 this, several years ago we had a proposal in front
14 of us to approve a transmission line from
15 Hydro-Quebec into New York City.
16 We approved that as a merchant line, meaning
17 that there's no rate-payer money going into the
18 line. It's absolutely at the risk of the developer.
19 If they choose to pursue that, that's an
20 opportunity for someone to enter into an agreement
21 voluntarily between Hydro-Quebec and themselves to
22 buy 1,000 megawatts of -- or -- of hydro.
23 But that -- that would be supplementable --
24 supplemental to the activities we're already doing.
25 And, you know, as like any other form of
33
1 interstate commerce, the State is not paying any
2 money for it, but -- nor could we prevent and put a
3 barrier up and say, well, you can't sell in New York
4 because it would violate the commerce clause.
5 SENATOR GRIFFO: So you don't really have a
6 concern, and you believe there's adequate protection
7 for the New York energy independence, and that
8 imports would not cause a problem to New York-made
9 power?
10 Is that what I'm hearing?
11 AUDREY ZIBELMAN: Well, we have -- we have
12 imports now. We're part of an integrated grid. We
13 buy and sell between ourselves and PJM, ourselves
14 and New England, and ourselves and Ontario.
15 So this -- and that's actually a benefit for
16 the state, because it gives us, actually, a much
17 stronger system if things happen.
18 SENATOR GRIFFO: Do you believe there will be
19 a role for NYPA in any of this? Do you anticipate
20 that, Richard or Audrey?
21 AUDREY ZIBELMAN: I think NYPA will have an
22 opportunity for transmission additions between
23 them -- as well as the project we already have
24 approved, which we call the "NYPA" -- the "Western
25 Power Unbundling Project."
34
1 And what we're doing there, is we're looking
2 at transmission to eliminate constraints that,
3 today, prevent us to get the full output of Niagara
4 all hours of the year.
5 So our goal, Governor (sic), is to optimize
6 everything we have in state, and make sure that the
7 transmission network is strong enough, so that we're
8 not finding ourselves not able to use and maximize
9 the capability of in-state access.
10 SENATOR GRIFFO: I am going to turn it over
11 to Chairwoman Paulin.
12 And I've got a number of other questions, but
13 we're going to keep this moving.
14 So, I turn this over to Chairwoman Paulin.
15 ASSEMBLYWOMAN PAULIN: Thank you so much.
16 So I have a series of questions in different
17 categories.
18 So because we're gonna be -- we want to make
19 sure, because members will be in and out, we're --
20 we've agreed that we will do one category at a time.
21 So I have -- but I'll just let you know --
22 (Off-the-record discussion between
23 Senator Griffo and Assemblywoman Paulin.)
24 ASSEMBLYWOMAN PAULIN: Yes.
25 And we've been joined by two Assemblymembers,
35
1 I'll just let you know, Jo Anne Simon and
2 Angelo Santabarbara.
3 -- so the categories: Replacement power.
4 Decommissioning. The agreement itself. And then
5 some local issues, you know, labor, of course, and
6 taxes.
7 So the first group is just regarding
8 replacement power.
9 And I know that the Senator also spoke about
10 that, so I'm going to try not to duplicate.
11 So, you know, we have received the list, you
12 know, when we were briefed, of all the different
13 power sources that we can expect to come online by
14 the time Indian Point closes. You know, CPV, which
15 is under construction; Cricket; the Hydro -- you
16 know, Champlain Hydro, cuts in Power Express; and
17 the transmission upgrades, mostly.
18 So, in each of the cases, even though they're
19 permitted, you know, except for CPV, they aren't
20 under construction. They're not -- they are -- we
21 anticipate that they will be, but they're not
22 currently.
23 There is substantial community opposition in
24 the case of the transmission upgrades and Cricket.
25 And, I have a few questions related to
36
1 Champlain Hudson.
2 But, maybe you can speak to the likelihood.
3 You know, you have a lot of experience in
4 watching these kinds of things get permitted.
5 You know, the likelihood of these really
6 coming online, and what some of the obstacles are
7 that we have to work through to ensure that they do
8 come online.
9 AUDREY ZIBELMAN: Sure.
10 Thank you.
11 The -- New York has had a really good history
12 of, actually, power plants getting built in response
13 to market response.
14 We've been able -- been very successful.
15 And I know Mr. Jones will be testifying,
16 from the New York ISO, and he might want to add to
17 this.
18 But, effectively, we've been able to retire
19 plants that were uneconomic, and we've added,
20 I think it's about 6,000 megawatts of new plants,
21 since the markets began.
22 And, effectively, the markets provide the
23 economic signal that allow investors to invest. And
24 the markets have been able to track new investments.
25 So I have full confidence that what -- and
37
1 what we saw post the -- when we were looking at
2 Indian Point, was that a number of generators said,
3 well, with the -- if the -- "if there is a scarcity
4 of supply, we're standing by to build," because
5 that's the business they're in.
6 So I have a very high degree of confidence.
7 As I mentioned, we also have a number of
8 mothballed units, which are -- actually, would be
9 very easy to come back, if the prices were right.
10 So, I am not concerned about the replacement
11 power.
12 We have a robust market.
13 There's a lot of capital, people are very
14 interested.
15 There's a lot of new technology in gas
16 generation that's making it highly efficient.
17 So all those things, I think, are there.
18 And if you add that, plus the work we're
19 doing on energy efficiency and demand response, and
20 the transmission, all of those, in combination,
21 really, is what makes me extremely comfortable that
22 we're not going to have a scarcity issue.
23 ASSEMBLYWOMAN PAULIN: So, maybe, more
24 specifically, you know, the -- you know, Cricket and
25 the Hydro are both permitted.
38
1 In the case of Cricket, though, you know, the
2 community is not happy.
3 Same thing with the transmission-line
4 upgrades, which -- you know, which I don't know what
5 exactly the status is.
6 Maybe you can speak to that.
7 You know, and I just wondered, the impact of
8 that community opposition.
9 And what that -- you know, if it's permitted,
10 do they have no recourse; and, therefore, you know,
11 we would expect that they're going to get built
12 irrespective of what the community is upset about?
13 AUDREY ZIBELMAN: Well, they have received
14 their permit from us.
15 I am not aware of any local permits.
16 But, you know, in general, what I've found --
17 our history is that, in all of these, whether it's
18 transmission or generation, to the extent they're
19 local concerns, some -- you know, the community and
20 the generators or the transmission folks need --
21 will work things through to try to mitigate them.
22 But, ultimately, part of our siting process
23 is, when things are needed for reliability, they --
24 you know, they need to -- they do need to get done.
25 And so it's a -- we try as much as we can to
39
1 address local community concerns and work with local
2 communities.
3 But, ultimately, you know, if we see a -- if
4 there's a need -- a reliability need, we'll -- we'll
5 need -- it will be -- we'll need to pursue it.
6 ASSEMBLYWOMAN PAULIN: And, specifically, to
7 the Champlain Hudson Power Express, the --
8 I wondered what role the EIS plays.
9 Because, originally, my understanding is,
10 that when that -- when it was permitted, the EIS
11 was -- spoke to replacing the burning fossil fuels
12 on Long Island to save New Yorkers large amounts of
13 money, by replacing expensive fossil-fuels
14 electricity with cheaper hydropower.
15 Does discontinuing to burn fossil fuels that
16 the hydropower could replace contradict the energy
17 standard?
18 And, does a change in the purpose impact the
19 permit itself?
20 And, also, on that same project, you know,
21 we've heard that there might be some
22 economic-viability issues. You know, that the
23 project developer needs to still secure the
24 necessary capital.
25 And I just -- you know, because it's such a
40
1 large amount of the power replacement, I just
2 wondered if you could speak a little bit about, you
3 know, some of those potential problems.
4 AUDREY ZIBELMAN: I am -- on the EIS-specific
5 issue, the legal question of whether or not that's
6 a -- there's a change, I will -- can I -- I would
7 like to get back to you on that, because I'm not
8 that conversant with that requirement to be able to
9 answer that right now.
10 Certainly, if -- what will -- the nature of
11 this project would be that, if it gets done, it's
12 because there is a willing buyer and a willing
13 seller, and they negotiate an agreement to buy and
14 sell among themselves, is my expectation.
15 That -- you know, we do know that there's
16 interest in New York City to look at this.
17 Certainly, the 1,000 megawatts of hydro would
18 allow us to meet our Clean Energy Standard goal with
19 additional clean energy.
20 So that's a benefit in terms of meeting those
21 needs.
22 But, again, the -- the 1,000 megawatts, which
23 is -- again, you know, is all about a voluntary
24 agreement between a buyer and seller, is
25 supplemental to the other activities we see going on
41
1 to the market.
2 So our primary concern, when it comes to
3 supply, is around adequacy.
4 All of this is usually done, based on
5 economic signals, where buyers and sellers will
6 negotiate.
7 And where that ultimately lands will be on
8 what buyers and sellers want to buy.
9 So -- but -- but what we will look for, is to
10 make sure that the system is reliable.
11 I would note, that in the Indian Point
12 agreement that's been negotiated by the Governor's
13 Office, there is a provision that if, in fact, the
14 commission is concerned about reliability, we can
15 extend operations.
16 So that, again, becomes an additional sort of
17 resource that we have if we are -- if none of these
18 things come to pass.
19 But I would come back to the fact that the
20 market activity is so strong, and there's such an
21 interest, that I really am not concerned that we're
22 going to be able to meet that demand.
23 ASSEMBLYWOMAN PAULIN: You know, during --
24 well -- like, a couple of years ago there was a
25 polar vortex in New York City, and we saw a large
42
1 spike in the natural gas prices due to increased
2 demand for heating gas and constrained pipelines.
3 How important, in light of that, is the
4 Champlain Hudson Power Express and the use of
5 hydropower in creating a diverse mix of power and
6 avoiding an overreliance on natural gas?
7 AUDREY ZIBELMAN: Well, in my view, the work
8 that we're doing with respect to the Clean Energy
9 Standard, which is around getting to 50 percent
10 renewables, is to really put the state in a position
11 so that, as we evolve out of nuclear, which is what
12 we expect to happen over time, we're replacing these
13 with non-gas resources and clean-energy resources.
14 That will -- you know, so I would -- and so
15 in terms of that, I think the State's overall plan,
16 which is a good one, is to say, we're not going to
17 put ourselves in a position -- for example, to our
18 neighbors in New England who are highly dependent on
19 natural gas right now -- and try to maintain the
20 diverse mix.
21 We are very fortunate in New York, in that we
22 have so much hydro in the state that helps us
23 maintain that diversity, and it puts us in a very
24 strong position in the northeast.
25 In terms of moving forward with, you know,
43
1 things like price spikes, we've done a lot of work
2 since the polar vortex at the commission, to make
3 sure that generators are better hedged and utilities
4 are better hedged.
5 So that -- one of the things that we found
6 out, was that there might have been an overreliance
7 on the stock market.
8 And that the ISO has put in rules, to ensure
9 better security.
10 Plus, we have additional pipeline capacity.
11 So all those things, in combination, have --
12 will, in fact, strengthen what we saw as a supply
13 issue.
14 But it was more of an operational issue, that
15 we've addressed through a number of different
16 changes and buying practices.
17 ASSEMBLYWOMAN PAULIN: I mean, so that -- you
18 mean, some that some of the gas plants would convert
19 to oil earlier?
20 AUDREY ZIBELMAN: Well, the gas plants in
21 New York City all are dual-fuel, and that's been --
22 and one of the reasons we do that, is to make sure
23 that if, in fact, there's scarcity, that they're
24 able to switch to oil.
25 So that addresses that issue.
44
1 The other thing, though, that we've done, is
2 the NYISO has put in different rules in terms of
3 requirements on reliability, that I think they can
4 speak to.
5 But we've also required our utilities to
6 adopt stronger hedging practices, so that they're
7 not so dependent on the stock market during the
8 winter months.
9 Now, as everyone knows, as soon as you do
10 something like that, you have two warm winters, and
11 so it looks like just the opposite.
12 But, that's the nature of the beast. It's
13 like being a farmer: it's dependent on the weather.
14 ASSEMBLYWOMAN PAULIN: The next question --
15 Firstly, let me just say that we've been
16 joined by Assemblymember Brian Kavanagh, wherever he
17 is.
18 Welcome, Brian.
19 -- the agreement states that "Entergy may
20 cease operations prior to the closure dates."
21 What happens if Entergy chooses to do that,
22 to -- you know, to -- because these replacement
23 options, or alternatives, are not coming online that
24 quickly, 'cause they still have to be built?
25 AUDREY ZIBELMAN: Again, if that occurs, we
45
1 would -- first of all, they would request it, and we
2 would have to agree to it.
3 And we would only agree to it if we
4 weren't -- felt that there was sufficient backup
5 supply.
6 ASSEMBLYWOMAN PAULIN: The agreement states
7 that "A sudden increase in the demand for electric
8 energy, or a sudden shortage of electric energy, or,
9 of facilities for the generation of transmission of
10 electric energy," -- I'm quoting -- "would extend
11 the operation to 2024 and 2025."
12 Is there a process for having both the State
13 and Entergy agree to that determination; or, will it
14 be determined solely through the assessment made by
15 NYISO?
16 AUDREY ZIBELMAN: We would have to look at
17 it, and we would comment with the New York ISO. We
18 would have an opportunity to do that.
19 But, in the event that the New York ISO sees
20 that there's a deficit, they have the authority,
21 under their tariff today, to, basically, enter into
22 what we call a "reliability agreement" with
23 Indian Point, which would continue operations until
24 the reliability issues are addressed.
25 So, that would be -- it's the type of
46
1 agreement that's been in place, for example, with
2 the Dunkirk unit.
3 And that's to ensure that we can maintain
4 system reliability while we pursue transmission or
5 other alternatives.
6 That would be the same type of thing I would
7 expect them enter into.
8 ASSEMBLYWOMAN PAULIN: So is that also true
9 in 2024 and '25?
10 AUDREY ZIBELMAN: If, in fact, the ISO feels
11 like they need the plant for reliability.
12 But -- and, again, I think the ISO will do an
13 assessment as soon as they get a notification, and
14 to make that determination.
15 I believe, but that -- you know, that with
16 the actions we've taken, which have produced, today,
17 nearly 1,000 megawatts of additional capability, and
18 the demand reductions we've already seen, and the
19 supply that wants to come into the market, this is a
20 very unlikely event.
21 But, clearly, no one's gonna want the system
22 to become vulnerable, if it's unavoidable.
23 But I just -- I -- you know, there's so much
24 interest in this market, I just don't think it's
25 going happen.
47
1 ASSEMBLYWOMAN PAULIN: So let me just make
2 sure I understand.
3 So, even though the plant would not be
4 licensed post -- past 2025, if it was determined by
5 NYISO, in their assessment, which takes place a
6 prior -- one year prior, if it was determined that
7 there was a reliability issue, because of the
8 current tariff with NYISO, the plant would stay
9 operational until the replacement power was
10 available?
11 AUDREY ZIBELMAN: Yes.
12 Senator Paulin, there's a lot of if, if, if.
13 And I don't want to sound like I'm trying to
14 avoid the question.
15 But, the way I would look at this for the
16 state in that period, if, in fact, by 2021, which is
17 what we're looking at, we don't have sufficient
18 adequacy of resources, the State has a number of
19 different things it can do in order to get those
20 resources online.
21 The mar -- and so the expectation,
22 number one, is the market will work.
23 Secondly, if, in fact, resources say that
24 they are struggling economically, and the State
25 wants to look at it, there may be other vehicles
48
1 that we can use to get alternative resources online.
2 I just don't think that we're going to have a
3 problem with getting replacement energy.
4 Certainly, if the prices are where we -- you
5 know, are show -- or, there's a need, I would expect
6 that the contract with the Champlain Hudson and
7 Hydro-Quebec to occur.
8 We also could do more demand reductions.
9 There's so much -- we -- we've been planning
10 on this, and we are, again, have a thou -- close to
11 1,000 megawatts done, I just don't see that there's
12 going to be an issue on what's -- how we're going to
13 replace (indiscernible) --
14 ASSEMBLYWOMAN PAULIN: Now -- understood.
15 But anything can happen, and we just want to
16 be sure that we're going to have the power in the
17 region.
18 AUDREY ZIBELMAN: Right, and I --
19 ASSEMBLYWOMAN PAULIN: So I just want to
20 understand.
21 AUDREY ZIBELMAN: -- and I -- yes.
22 And I didn't mean to speak over you,
23 Assemblywomen Paulin.
24 But I really do think that alternative
25 resources can happen.
49
1 I was at a meeting yesterday. People are
2 saying that -- you know, what the need is, you can
3 get a gas plant built between 18-24 months.
4 That's just how much availability, and,
5 really, interest there is.
6 ASSEMBLYWOMAN PAULIN: Thank you.
7 I'm going to pass, and move on to the next
8 person, and reserve my right to come back and talk
9 about decommission.
10 SENATOR GRIFFO: We're going to turn it over
11 to Senator Murphy.
12 Before I do that, though, Chairwoman, the
13 point you just raised to the Chairwoman's question
14 is interesting, because if the State is involved in
15 Entergy, you know, we're working in some type of
16 relationship there, will that not place a burden on
17 the ratepayer that was unanticipated and unexpected
18 at that point in time?
19 AUDREY ZIBELMAN: Yeah --
20 SENATOR GRIFFO: Potentially?
21 AUDREY ZIBELMAN: Yeah, and I just -- you
22 know, I feel -- I'm gain -- I feel like we're moving
23 into hypotheticals that may or may not, that,
24 I think, are unlikely to exist.
25 I believe --
50
1 SENATOR GRIFFO: But should not we be
2 considering all options?
3 I mean, it is a hypothetical, but it's an
4 option that possibly could present itself, and we
5 need to be prepared to deal with those situations.
6 Correct?
7 AUDREY ZIBELMAN: Correct.
8 So if, in fact, the market totally fails, and
9 we need to intervene, the State always has an
10 opportunity to think about how we can intervene
11 consistent with the requirements of the market.
12 But that is -- you know, that's something
13 that we would want to do because it's responsible.
14 But I just -- the mar -- we've not seen this
15 kind of failure since the markets have started, and
16 I can't imagine we'll see it now.
17 SENATOR GRIFFO: Senator Murphy.
18 SENATOR MURPHY: Yeah.
19 First of all, Assemblywoman Paulin, thank
20 you, and, Senator Griffo, thank you so much, for
21 holding this incredibly important hearing today that
22 directly affects my district.
23 And, Chairman Kauffman, I would like to go
24 right to it with you.
25 AUDREY ZIBELMAN: Thank you.
51
1 SENATOR MURPHY: Chairwoman, we'll -- I got
2 you next.
3 [Laughter.]
4 SENATOR MURPHY: I'd like to get right down
5 to it.
6 Can you tell me exactly who took part in the
7 negotiations in the closing of Indian Point?
8 RICHARD L. KAUFFMAN: Who, exactly?
9 SENATOR MURPHY: Yes.
10 Who was in the room?
11 RICHARD L. KAUFFMAN: It was representatives
12 from Entergy --
13 SENATOR MURPHY: Okay?
14 RICHARD L. KAUFFMAN: -- and members of the
15 Governor's Office.
16 SENATOR MURPHY: Okay.
17 Anybody else?
18 RICHARD L. KAUFFMAN: And then at the very
19 end of the process, included -- since the purpose of
20 the settlement was to close, to settle, all
21 litigation, then Riverkeeper, as a party to
22 litigation, was included.
23 SENATOR MURPHY: So you give new meaning to
24 "three men in a room." Right?
25 I'd like you to look at the mayor of Buchanan
52
1 right over there, and the supervisor in Cortlandt,
2 and the superintendent of schools right over in
3 Hendrick Hudson School District, that should have
4 been in the room.
5 To the teamsters in the UWUA, and the people
6 that are going to be directly affected, they should
7 have been in the room.
8 How come?
9 RICHARD L. KAUFFMAN: Well, the negotiations
10 needed to be kept confidential for several reasons.
11 So the first is that, I remind -- I remind
12 you, Senator, that these are parties in litigation.
13 There was no certainty of an agreement.
14 In fact, we didn't know until Sunday night,
15 the 8th, that there was going to be an agreement,
16 that was subsequently announced on the 9th.
17 And these -- as these were
18 settlement-of-litigation negotiations, these were
19 privileged conversations.
20 Also, Entergy is a public company, which has
21 an obligation to inform the public of any non-public
22 information.
23 So the process that was followed in these
24 nego -- in these confidential negotiations is the
25 typical practice that happen many, many hundreds of
53
1 times a year with public companies, in terms of when
2 they enter into negotiations and transactions.
3 SENATOR MURPHY: Okay.
4 So, where did $15 million come for
5 Riverkeeper?
6 RICHARD L. KAUFFMAN: $15 million did not
7 come for Riverkeeper. That's not correct.
8 SENATOR MURPHY: Okay.
9 Well, you just stated that there was going to
10 be $15 million in funding for Riverkeeper for the
11 estuaries, and the stuff like that.
12 RICHARD L. KAUFFMAN: No, I said it was
13 for -- I did not say it was for -- I'm sorry if
14 I conveyed that -- if I conveyed that.
15 I don't believe I used the word "Riverkeeper"
16 at all in conjunction with --
17 SENATOR MURPHY: So -- okay.
18 RICHARD L. KAUFFMAN: -- there's a
19 $15 million (indiscernible) --
20 SENATOR MURPHY: So if it wasn't for
21 Riverkeeper (indiscernible) --
22 RICHARD L. KAUFFMAN: There's a $15 million
23 fund. And, again, the communities will be involved
24 in projects that that fund will provide. But it's
25 for community support and for various environmental
54
1 projects, all to come, all to be done, in
2 discussions with members of the community.
3 SENATOR MURPHY: Super.
4 So is there going to be -- out of the
5 $15 million, is there a specific amount that will be
6 set aside directly for environmental and directly
7 for community?
8 Or, is it going to be a pot of $15 million,
9 to figure out who's gonna to get what?
10 RICHARD L. KAUFFMAN: It's the latter.
11 SENATOR MURPHY: It's going to be who figures
12 out what -- so whoever screams and yells, their
13 community over there, if they need an extra million
14 dollars, and it went someplace else, they're not
15 going to be able to get it?
16 Or is -- a different question: Is this going
17 to be a one-time appropriation?
18 RICHARD L. KAUFFMAN: It's not an
19 appropriation. It comes as part of the settlement.
20 SENATOR MURPHY: Is it a one-time?
21 RICHARD L. KAUFFMAN: Is it a one-time?
22 I'm sorry, I don't understand your question.
23 SENATOR MURPHY: So the $15 million is going
24 to be set aside?
25 RICHARD L. KAUFFMAN: Out of the agreement.
55
1 SENATOR MURPHY: Correct.
2 RICHARD L. KAUFFMAN: It's being provide by
3 (indiscernible) --
4 SENATOR MURPHY: What happens if we need more
5 money?
6 RICHARD L. KAUFFMAN: It's being provided
7 by -- it's being provided by Entergy, in conjunction
8 with the settlement.
9 SENATOR MURPHY: So if we need more money,
10 will we be able to get that?
11 RICHARD L. KAUFFMAN: So I think this takes
12 us into the task force, on which you happily
13 volunteered.
14 So --
15 SENATOR MURPHY: Which -- I don't mean to
16 interrupt you -- which, unfortunately, I just heard
17 of through an e-mail that just came across.
18 Ironically, the Governor just announced this
19 task force while we're all sitting here, having this
20 meeting.
21 RICHARD L. KAUFFMAN: Uh-huh.
22 SENATOR MURPHY: That's -- I just want that
23 on record.
24 RICHARD L. KAUFFMAN: Okay.
25 SENATOR MURPHY: Go ahead. I'm sorry to
56
1 interrupt you.
2 RICHARD L. KAUFFMAN: But I -- with respect,
3 Senator, I believe you did know about this --
4 SENATOR MURPHY: Yesterday.
5 RICHARD L. KAUFFMAN: -- yesterday, yeah.
6 SENATOR MURPHY: Yesterday I got a call from
7 the Governor's Office. Correct.
8 RICHARD L. KAUFFMAN: Thank you.
9 So the issue of additional funding for -- to
10 address these -- the whole range of issues that the
11 communities face, this will be -- this is why we
12 have the creation of the task force, is to figure
13 out what resources are going to be needed.
14 SENATOR MURPHY: Okay.
15 In your opening statement you stated that the
16 Governor has been trying to do this, and you guys
17 have been trying to shut down Indian Point for over
18 a decade. Correct?
19 RICHARD L. KAUFFMAN: That's correct.
20 SENATOR MURPHY: And you again stated in your
21 opening statement that this is going to pose a
22 challenge, quote/unquote, pose a challenge, that you
23 said, with regards to the tax implications for
24 what's going to happen over there.
25 So if you've been looking to do something for
57
1 over 10 years, wouldn't you have a plan?
2 RICHARD L. KAUFFMAN: Well, Senator, again,
3 I want to -- I want to -- I want to point out that
4 this is at the heart of the agreement, was time to
5 plan.
6 There's -- there's no immediate impact.
7 We have several years in which to plan.
8 And would I want to point out, that in other
9 examples of nuclear plant shutdowns around the
10 country, communities have had as little as
11 four months.
12 So -- so this is why we have quite a lot of
13 time to plan and engage with you and all other
14 stakeholders.
15 SENATOR MURPHY: I would love to, and,
16 obviously, I will be very involved in those ideas
17 coming out.
18 But, this is something that's been going on
19 for 10 years. I think we should have some answers
20 to the people, and the over 1,000 employees that are
21 there, and the tax implications.
22 Hendrick Hudson School District is
23 $25 million.
24 Buchanan, is 47 percent of their revenue.
25 RICHARD L. KAUFFMAN: Uh-huh.
58
1 SENATOR MURPHY: The county -- Cortlandt is a
2 million dollars.
3 I mean, we've got to aim, and then shoot; not
4 shoot, and then aim.
5 And that's what the proverbial -- this is
6 something that is just -- there's no answers.
7 There's no answers.
8 And thank you for being here today, because
9 this is what we're doing here, is to try and get
10 some answers.
11 So I have a list of questions, and you can
12 just fire away, because I know we're under time
13 constraint here. But, I would just, as quick as you
14 can answer them, I'll read them off to you.
15 RICHARD L. KAUFFMAN: Sure.
16 SENATOR MURPHY: If Indian Point closed
17 today, how much would the price increase be to the
18 average consumer and the average business bill?
19 RICHARD L. KAUFFMAN: I'm going to turn that
20 to Chair Zibelman.
21 AUDREY ZIBELMAN: If Indian Point closed
22 today, it would be speculative to say what would it
23 be the average.
24 Our plan -- our -- but the analysis that
25 we've done has shown that, because of the changes in
59
1 the cost of energy, the expectation is, by closing
2 in 2021, we will see a negligible, if not a
3 negative, impact on the price of energy in wholesale
4 markets.
5 So -- and as Richard just -- Mr. Kauffman
6 just said, that's one of the advantages of having a
7 plan.
8 If we didn't have a plan, they could have
9 closed and given us a short notice, and we would
10 have seen a spike in prices.
11 SENATOR MURPHY: Okay. Well, I did a little
12 research myself, and the Nuclear Energy Institute
13 calculated that residential consumers could
14 experience a 76- to 112-dollar increase per month,
15 and, businesses could be up to -- industrial
16 businesses could be up to $25,000.
17 I mean, we have some of the highest energy
18 rates in the United States of America, excluding
19 Hawaii.
20 These are things that are -- you know, people
21 are worrying about paying their electric bill, or
22 they're -- or are going to worry about buying their
23 heart medications.
24 So, these are things that have to be
25 considered.
60
1 AUDREY ZIBELMAN: I agree with you,
2 Senator Murphy. But, you know, I can't -- we can't
3 speculate or comment on someone's study that we
4 haven't seen.
5 But, you know, anyone can put in an
6 assumption. But without a real knowledge of what's
7 going on in the market, I would -- you know, it's
8 just an assumption.
9 SENATOR MURPHY: Well, we're assuming a lot
10 here today.
11 AUDREY ZIBELMAN: Well, we have assumed and
12 studied.
13 SENATOR MURPHY: Okay.
14 Setting aside the cost of replacement power,
15 how will the cost of decommissioning the plant be
16 passed along to the ratepayers?
17 RICHARD L. KAUFFMAN: So there is a
18 decommissioning fund that has been established
19 already, and funded.
20 That decommissioning fund is -- the purpose
21 of the decommissioning fund, and how that
22 decommissioning fund is spent, and when physical
23 decommissioning takes place, is governed by the NRC.
24 And so these are funds that -- that -- that,
25 according to NRC, will be sufficient to
61
1 (indiscernible) --
2 SENATOR MURPHY: Do you know how much is in
3 there, how much is in the fund?
4 RICHARD L. KAUFFMAN: It's a billion -- no.
5 It's a --
6 SENATOR MURPHY: Roughly, 60, 65 million?
7 AUDREY ZIBELMAN: There's more than that.
8 RICHARD L. KAUFFMAN: It's much more than
9 that.
10 SENATOR MURPHY: Okay.
11 RICHARD L. KAUFFMAN: Yeah, it's
12 $1.7 billion.
13 SENATOR MURPHY: 1.7 billion.
14 RICHARD L. KAUFFMAN: Yeah.
15 SENATOR MURPHY: Will you, or any other
16 entity, such as the PSC or NYISO, monitor or -- and
17 document what the costs of the replacement power
18 will be; that is, how much will the bills go up?
19 Will anybody be monitoring that?
20 AUDREY ZIBELMAN: We will -- we always
21 monitor the prices in the market, so we'll be
22 looking at the effects on the market.
23 But I also want to note that, for the most
24 part, when -- that people do not buy out of the
25 stock market. They buy in bilateral contracts.
62
1 So we would expect to see that occur too.
2 SENATOR MURPHY: As Indian Point is an
3 emission-free facility, it seems rather obvious that
4 carbon and other toxic emissions will actually
5 increase.
6 And we're doing this all to decrease
7 emissions. Right?
8 What is your estimate of what this increase
9 will be?
10 AUDREY ZIBELMAN: Well, the loss of the
11 megawatt hours will -- you know, will be replaced by
12 other megawatt hours.
13 But, the fact of the matter is, is that
14 because we're looking at resources, such as energy
15 efficiency, and using existing resources, increasing
16 renewables, the opportunity to look at the
17 1,000 megawatts of hydro, and the other actions that
18 we're taking with respect to the Clean Energy
19 Standard and the actions we're talking with RGGI,
20 that's why we put this as part of a plan, so that as
21 we have a transition plan, to start looking at the
22 development of renewables, so that, on a net-net
23 basis, we are not increasing emissions in the state.
24 RICHARD L. KAUFFMAN: Again, Senator, I go
25 back to the whole point that this -- because there
63
1 are sufficient time, the resources that will be
2 brought on will have negligible impact on, both,
3 consumer prices, as well as emissions.
4 And what we have seen in other places in the
5 United States, and around the world, is when there
6 have been abrupt shutdowns, there have been not only
7 price impacts, shocks, as you described, but, also,
8 spikes and increases in carbon emissions.
9 SENATOR MURPHY: And this dovetails right
10 into my next question, because according to the
11 U.S. Energy Information Administration, the nuclear
12 plants were shut down in Vermont, California, and
13 Germany, carbon and other toxic emissions
14 significantly increased.
15 RICHARD L. KAUFFMAN: Uh-huh.
16 SENATOR MURPHY: Why do we think that this is
17 not going to happen here?
18 AUDREY ZIBELMAN: Well, here's -- and here --
19 and this is really a great question.
20 So one of the things that we're very --
21 SENATOR MURPHY: Thank you.
22 AUDREY ZIBELMAN: -- they're all great
23 questions, but this is important, because, you know,
24 we are talking about the fact that we have a plan in
25 the state to get to "50 by '30" renewables.
64
1 We also had a recognition of the fact, with
2 the upstate nukes, that if they closed, they would
3 be replaced by fossil.
4 That's why the fossil-fuel interests are so
5 opposed to the ZEC program.
6 As we -- you know, we talked before, the
7 issue with Indian Point for us, and I think Richard
8 has -- you know, has talked about extensively in his
9 testimony, is around safety.
10 And so we recognize that, left alone, the
11 market would probably respond with increased fossil
12 fuels.
13 So in addition to looking at planning for the
14 closure, we're really pushing energy efficiency,
15 clean energy, other resources, and have a goal that,
16 by "50 by '30," we will get to 50 percent
17 renewables.
18 But these plans have to work in conjunction.
19 So we need the REC program. We need the ZEC
20 plan. We needed to plan for Indian Point. We need
21 to do things we're doing, like the Clean Energy
22 Standard and the clean energy fund.
23 So, in combination, what we're really looking
24 to do is say, look, we can't continue to tolerate a
25 plant that proposed these safety issues.
65
1 We need to replace it.
2 We want to replace it with low-cost, clean
3 resources, and we need time to do that.
4 That's what we've been working on, and this
5 project and the plan now allows us to do it.
6 It's not easy, but you're absolutely right,
7 every time someone else has tried to shut down
8 nuclear without a plan, it's been replaced by
9 fossil.
10 That's why we have the Clean Energy Standard.
11 SENATOR MURPHY: So it dovetails right in
12 again: What happens, in the future, demand is
13 greater than what you're estimates are actually
14 projecting?
15 How's that going to work?
16 Are we going have the renewable energy there
17 to sustain it?
18 AUDREY ZIBELMAN: I think that, in the
19 future, you know, there's a lot of things that are
20 going to be happening in the industry. Right?
21 One of the things that people are expecting
22 is electric transportation, which is also going to
23 reduce emissions and have a positive impact on
24 emissions.
25 But one of the things that we're doing in
66
1 New York, and why New York is leading, not just the
2 nation, but the world, is starting to look at: How
3 do we use energy efficiency, clean distributed
4 energy resources, storage, offshore wind...all these
5 new resources in conjunction, so that we can
6 maintain a reliable network, but do it in a way that
7 reduces emissions?
8 And by making the system, overall, more
9 efficient, which today is highly inefficient, we can
10 do this and be economically responsible to our
11 constituents.
12 That's why it's so important to get ahead of
13 these things.
14 That's why, in other regions, where they just
15 let it happen, they run into problems; and so why we
16 have been so committed in New York to have a plan
17 and execute on it.
18 SENATOR MURPHY: Isn't that going to come at
19 a cost, though?
20 AUDREY ZIBELMAN: It's all a cost.
21 Maintaining the entire -- existing system has
22 cost.
23 But what we're doing is, by looking at demand
24 reductions, because the biggest cost we have in the
25 system today is our system -- and this is the way
67
1 the systems were designed, is they're highly
2 inefficient.
3 We have what we call a "capacity factor," of
4 54 to 56 percent in the state.
5 That means, many hours of the year, we have
6 power plants transmission and distribution that's
7 sitting idle because we have to meet instantaneous
8 demand.
9 Our focus, through REV -- through the
10 Governor's REV program, has been looking at, how do
11 we maximize energy efficiency, use of new
12 technologies as distributed energy resources,
13 maintaining robust markets that look for the
14 greatest level of innovation, and planning for
15 changes in the market, rather than letting it just
16 happen to us?
17 SENATOR MURPHY: So you talk about the
18 mothballed plants, and there's 600 megawatts there
19 between the two plants.
20 They were mothballed for a reason.
21 What's the reliability on them?
22 AUDREY ZIBELMAN: Well --
23 SENATOR MURPHY: Why were they mothballed,
24 then?
25 AUDREY ZIBELMAN: We have a -- the relia --
68
1 the mothballing occurred because they were
2 economically unable to participate in the market.
3 Now, we do have a process, that we both look
4 at at the Public Service Commission and also the
5 New York ISO.
6 So anytime a plant looks like -- identifies
7 that it's longer able to economically participate in
8 the market, we in the New York ISO will evaluate
9 whether or not that has either a local or system
10 reliability impacts.
11 If they don't have a reliability impact,
12 where they're allowed to be mothballed or retired.
13 If they do have a reliability impact, we have
14 mechanisms to maintain them until we can address the
15 reliability issue.
16 So in these instances, they didn't have a
17 reliability concern and they could be mothballed.
18 SENATOR MURPHY: So if you brought them back
19 online, how -- what kind of life expectancy are we
20 looking at?
21 AUDREY ZIBELMAN: Well, if they came back
22 online, it would -- I mean, there -- I would have to
23 look at the ages of the plants.
24 SENATOR MURPHY: Okay. But --
25 AUDREY ZIBELMAN: But these plants last a
69
1 long time, and they can be upgraded as well.
2 SENATOR MURPHY: -- all right.
3 And, Chairman Kauffman, in October 2016,
4 public letter to Blair Horner, head of NYPIRG, you
5 defended the State's program to subsidize upstate
6 nuclear plants.
7 You said that "Closing those plants would
8 result in, quote/unquote, $1.4 billion in public
9 health and social costs."
10 How much are the public health costs going to
11 be when Indian Point closes?
12 And if it's similar to upstate costs,
13 wouldn't it be in the hundreds of millions of
14 dollars, or more?
15 RICHARD L. KAUFFMAN: Well, I know I sound
16 like a broken record here, but it all goes to the
17 issue of the benefit of the agreement, in terms of
18 allowing enough time for resources to be brought on
19 board on a cost-effective and emissions -- minimize
20 emissions output.
21 And I guess it's important maybe to talk
22 about the different conditions between -- between
23 Indian Point and the upstate plants.
24 So I think the first point I want to make is
25 that -- that Indian Point is a plant with operating
70
1 issues, that sit on a fault, closest to the densest
2 population center in the country, that's had more
3 than 40 operational, safety, and unit shutdowns
4 since 2012.
5 So the upstate plants have neither the same
6 operating record, nor face the same geographical or
7 geophysical issues.
8 So the Governor -- the Governor called for
9 support for the upstate plants to pay for their
10 carbon-free environmental attributes, as you pointed
11 out.
12 And those plants, kind of back to what we
13 talked about before, had there not been the support,
14 those plants would have started shutting down as of
15 the first part of 2017.
16 And so the benefit of this agreement, is that
17 it provides time for new resources to be brought on
18 with negligible cost and emissions.
19 SENATOR MURPHY: So with that being said,
20 NYSERDA, a spending on -- how much are they spending
21 on research to try and retrofit our existing dams to
22 generate some hydropower?
23 RICHARD L. KAUFFMAN: I don't know how much
24 money NYSERDA is spending to -- on dams.
25 But, certainly, as part of the Clean Energy
71
1 Standard, uh --
2 SENATOR MURPHY: If you don't have the
3 answer, that's fine.
4 RICHARD L. KAUFFMAN: -- but I think the
5 question which you asked before, about diversity of
6 resources?
7 And the one of the great things about
8 New York State is we have a whole variety of
9 renewable energy resources, including hydro.
10 And so, hydro, there are a number of hydro
11 developers in the state and owners of hydro assets.
12 And as a result of the Clean Energy Standard,
13 these are owners that are prepared to commit new
14 capital to upgrade and expand their facility.
15 So we will have more hydro resources that
16 will be brought on in the state.
17 SENATOR MURPHY: It could be a could fit for
18 both the state and us, retrofitting some of these
19 dams.
20 And as Senator Carlucci had a little report
21 that was done, that we could possibly be getting
22 some of our energy from our local --
23 RICHARD L. KAUFFMAN: Yes.
24 SENATOR MURPHY: -- our state. Not importing
25 from another state -- excuse me, another country,
72
1 and then having our people, our employees, move out
2 of New York State.
3 And that's -- I know my colleagues have a
4 bunch of other questions.
5 But I just would -- I'll come back around.
6 But I would invite you down Thursday. I am
7 having a town hall meeting down in Peekskill, with
8 the mayor and a lot of local officials, county
9 officials, and to -- you know, you got to come down,
10 because the people down there are just beside
11 themselves, and we need some answers.
12 So, I thank you for your indulgence today,
13 and being here and answering some of the questions,
14 and getting some more answers for us.
15 And I will turn it back over to
16 Senator Griffo.
17 Thank you.
18 SENATOR GRIFFO: Chairwoman Paulin.
19 ASSEMBLYWOMAN PAULIN: Yes, I'm going to turn
20 the microphone over to Assemblymember Sandy Galef.
21 ASSEMBLYWOMAN GALEF: Thank you so much for
22 being here.
23 And as a person who has represented Indian
24 Point for many, many, many years, and gone to more
25 NRC meetings, and Entergy meetings, and Con Ed
73
1 meetings, and NYPA meetings than I've ever wanted to
2 go to, I guess we always knew that there was going
3 to be a time.
4 And, we weren't happy about that, and,
5 certainly, we were very shocked by the announcement
6 that came to all of us, without any knowledge of
7 what was going on.
8 I understand that we do have a chance of
9 really planning, and it could be, with the plant, it
10 could just close overnight.
11 So, I do understand that, and I look forward
12 to being on the task force.
13 A lot of questions have been asked, and I'm
14 not going to get into the local tax issues, because
15 we're going have a lot of the local governments
16 here.
17 But I'm assuming that you knew what the tax
18 implications would be, Mr. Kauffman, before you
19 went forward with this; you tallied up the impact to
20 the community.
21 Okay. So let me ask you, in that vein, you
22 had mentioned a power plant retirement fund.
23 RICHARD L. KAUFFMAN: Uh-huh.
24 ASSEMBLYWOMAN GALEF: How much is in that
25 fund?
74
1 RICHARD L. KAUFFMAN: So that's a fund that's
2 already been set up. And I was really mentioning it
3 in the context of a structure that we have developed
4 in the past, and something that the task force would
5 explore, the funding in that.
6 And that was something that was done in
7 conjunction with the Legislature.
8 I don't know the exact number of what's in
9 that fund today.
10 It's not a sufficient fund to satisfy the tax
11 obligations of Indian Point.
12 ASSEMBLYWOMAN GALEF: Yeah, right.
13 Have you used the fund in other instances?
14 RICHARD L. KAUFFMAN: Yes.
15 ASSEMBLYWOMAN GALEF: Some of the issues in
16 Rockland that have come up, and --
17 I'm sorry, Kevin Parker?
18 SENATOR GRIFFO: I'm sorry.
19 Sandy, go ahead.
20 ASSEMBLYWOMAN GALEF: Have you used that
21 retirement fund for --
22 RICHARD L. KAUFFMAN: We --
23 ASSEMBLYWOMAN GALEF: -- could you give us
24 some examples --
25 RICHARD L. KAUFFMAN: -- yes --
75
1 ASSEMBLYWOMAN GALEF: -- of how you've used
2 it?
3 RICHARD L. KAUFFMAN: -- so we've used this
4 in a number of other communities in the state.
5 I mean, that was the purpose.
6 I mean, the -- the -- the -- we have a -- as
7 Audrey just talked about, there's tremendous change
8 going on in the power sector: Change in demand.
9 Change in environmental requirements. Changes in
10 technology.
11 And so all these changes together have led to
12 disruptions in the sector, which means that some
13 communities are benefiting, and some communities are
14 experiencing power plant closures.
15 So, that's why we have some experience with
16 other communities, and so that's why, again -- and
17 I know you mentioned this, but I just want to again
18 mention the point again, that that's the benefit of
19 this agreement: to give us time to work on these
20 issues before they are thrust upon us.
21 And that has been the case in other places
22 where, not just with nuclear plants, but also fossil
23 plants, where there's just an announcement, and
24 there's gonna be a closure, and then now there's
25 very little time to plan.
76
1 ASSEMBLYWOMAN GALEF: I think it would be
2 very helpful if we got a copy of how we've used this
3 over the last 10 years in the state of New York.
4 RICHARD L. KAUFFMAN: It sounds like the task
5 force has already begun.
6 ASSEMBLYWOMAN GALEF: Yes, it has.
7 RICHARD L. KAUFFMAN: Right now.
8 ASSEMBLYWOMAN GALEF: Right now.
9 Okay. On another -- just on another issue of
10 something that a lot of us in the community have
11 been working on.
12 As you know, at Indian Point, there is an
13 Algonquin pipeline that has been situated there for
14 many, many years. And there is a new portion of the
15 Algonquin pipeline that is traveling through
16 Buchanan, Montrose, Cortlandt, Yorktown, often to
17 Connecticut, whatever, to be used somewhere else.
18 Was there any intention -- because all this
19 is going on.
20 And so we kind of wonder how that pipeline --
21 the new pipeline got settled to be on a little bit
22 of the nuclear -- on Entergy's property.
23 Is it sited there so that there was an issue
24 of maybe using that gas for a gas facility at
25 Indian Point?
77
1 And the other thing is, there had been a
2 report that the Governor had authorized -- we're
3 very excited about it -- I believe it started in
4 September, to review the issue of nuclear and gas.
5 And, of course, we're not -- we wouldn't have
6 active nuclear particularly, but we would certainly
7 have spent-fuel rods, which is still a safety issue.
8 So -- and there was a report that was
9 supposed to be done by December, to see if you can
10 have the two together.
11 I'm trying to figure out where we go in the
12 future with the land at Indian Point.
13 What can you tell me about this Algonquin
14 pipeline?
15 Could there be a gas-fire plant there?
16 And, does the -- has the report come to
17 conclusion?
18 RICHARD L. KAUFFMAN: Okay. So I'm going to
19 have Chair Zibelman talk about the specific siting
20 of the pipeline.
21 But, at a recent meeting, we committed to --
22 with people in the community, we committed to
23 setting up a meeting between Entergy and local
24 officials to discuss the decommissioning plans, that
25 include bringing in third-party experts to evaluate
78
1 alternative uses for the site, for all kind -- you
2 know, for a range of redevelopment opportunities,
3 that possibly could include repowering.
4 There's also Con Ed land near the site that
5 does not need to wait for decommissioning.
6 So, again, these are all kinds of questions
7 to work on, starting now.
8 ASSEMBLYWOMAN GALEF: So we could have a
9 gas -- part of the property could be used for a
10 gas-fire plant, because you had an opinion done by
11 these consultants that said, you can have gas next
12 to nuclear?
13 We still don't have an answer to that
14 question.
15 Do you know about the report?
16 AUDREY ZIBELMAN: I'm not aware of the
17 report.
18 I am aware that there are certain nuclear
19 plants, like the Turkey Springs plant, I believe
20 it's called, in Florida, that were designed to have
21 gas and nuclear. It's just a big enough acreage
22 that they can exist simultaneously.
23 I think that the -- you know, the first
24 focus, with respect to the -- with Indian Point,
25 will be decommissioning and the decommissioning
79
1 process.
2 I think, you know, the -- I'm not aware of
3 any plant in the U.S. where you had a nuclear
4 decommissioning, and then, subsequently, a gas plant
5 was placed on the same location, except for where
6 you've had a design built around gas and nuclear
7 being adjacent.
8 So -- but I think that, both, having the task
9 force look at this, for Entergy to come in and bring
10 in experts to look at uses of the land.
11 The Algonquin pipeline was sited by FERC.
12 As you're aware, we objected to that, but we
13 were unsuccessful in our objection, because we were
14 worried about the proximity to Indian Point.
15 ASSEMBLYWOMAN GALEF: I actually hadn't known
16 that, that the Public Service Commission opposed it
17 with FERC?
18 AUDREY ZIBELMAN: The Public Service
19 Commission and DEC asked FER to not site it there,
20 but we were unsuccessful.
21 But, in terms of the plants for the resource,
22 I think that the next focus ought to be looking at
23 decommissioning, getting the task force going, and
24 then starting a discussion on the best use of the
25 property.
80
1 ASSEMBLYWOMAN GALEF: Have you ever heard --
2 I understand you're going to --
3 AUDREY ZIBELMAN: It's Turkey Point, by the
4 way.
5 Go ahead.
6 ASSEMBLYWOMAN GALEF: -- you're going to be
7 going to another country?
8 AUDREY ZIBELMAN: Yes.
9 ASSEMBLYWOMAN GALEF: We're losing you?
10 AUDREY ZIBELMAN: Yes.
11 ASSEMBLYWOMAN GALEF: And I know Miss Paulin
12 thinks you have done a very good job.
13 AUDREY ZIBELMAN: Thank you.
14 ASSEMBLYWOMAN GALEF: So, could we ever put
15 solar on an old nuclear plant? Wrap it in solar?
16 Have you ever heard of that?
17 AUDREY ZIBELMAN: I think, again, what we've
18 seen, is solar going on brownfields, and other --
19 you know, other resources and other power plants.
20 What I think will be a good discussion, is
21 for Entergy to bring in people; talk about the
22 decommissioning process, how long it's gonna take,
23 and then, subsequently, how we can use it, because
24 it is a lengthy process.
25 ASSEMBLYWOMAN GALEF: Uh-huh.
81
1 Will that be Entergy's role?
2 AUDREY ZIBELMAN: Entergy, as the owner, is
3 responsible for the decommissioning.
4 But we have in the contract, obviously,
5 safety provisions to monitor.
6 ASSEMBLYWOMAN GALEF: Okay.
7 Thank you.
8 SENATOR GRIFFO: Thank you,
9 Assemblywoman Galef.
10 Can I just follow up on what the Assemblyman
11 said?
12 When you talk about decommissioning, and you
13 talked about specific purposes, can it be
14 redeveloped in any kind of a purpose, for a
15 tax-generating piece of property? Or are there
16 going to be restrictions based upon what currently
17 sits on the site?
18 Or is there opportunities in a variety of
19 methods or manners in order to put that back as a
20 tax-generating piece of property?
21 AUDREY ZIBELMAN: I think the -- how we --
22 you know, for one thing, the PILOT taxes, obviously,
23 will be in place until 2021.
24 And so this is something that I think the
25 task force can look at.
82
1 I would -- you know, without -- I would
2 suggest you have both the NRC here and Entergy.
3 They have -- they're going to be much better
4 equipped than I am to talk about both what happens
5 during the process and what could be done
6 afterwards.
7 SENATOR GRIFFO: I appreciate that.
8 I want to acknowledge the presence of the
9 Ranking Member of the Senate Committee on Energy and
10 Telecommunications, Senator Kevin Parker.
11 Thanks for being here, Senator Parker;
12 appreciate it.
13 ASSEMBLYWOMAN PAULIN: And I also want to
14 acknowledge that we've been joined by three
15 additional Assemblymembers: Walter Mosley,
16 Kevin Byrne, and Tom Abinanti.
17 SENATOR GRIFFO: And I am now going to turn
18 it over to Senator Tom Croci.
19 SENATOR CROCI: Thank you, Mr. Chair.
20 And I'd like to thank both Chair Zibelman and
21 Chairman Kauffman for appearing here today.
22 It's an important topic, because I believe it
23 sits at the nexus of the Governor's economic
24 strategy -- economic development strategy and his
25 energy policies, which are concerning.
83
1 So my first question is going to be for
2 Chairman Kauffman.
3 If you don't mind, sir, it's my understanding
4 that there are 1,000 metric tons of uranium and
5 plutonium, weapons-grade, that are on that site.
6 It's my understanding that that material
7 cannot be moved to the former Yucca Mountain, which
8 is not receiving it.
9 It's my understanding that the federal
10 government has increased restrictions on
11 transporting that material.
12 So, is that material to remain on-site, and,
13 who bears the responsibility and cost for securing
14 it, after closure?
15 RICHARD L. KAUFFMAN: So as I said in my --
16 as I said in my testimony, one of the bene -- one of
17 the benefits of the agreement is the immediate
18 movement, or transfer, of some of this material into
19 dry-cask storage, which is the state-of-the-art
20 storage -- on-site storage for nuclear waste.
21 I said also in my testimony that this is a
22 safety issue. That there's many times more nuclear
23 waste, and this is -- some of the waste is
24 high-level radioactive waste, than was ever designed
25 for these pools.
84
1 You're correct, that until the federal
2 government comes up with a long-term plan for
3 storage of nuclear waste, this is waste that will
4 remain on-site, not just at Indian Point, but every
5 other nuclear plant in the country.
6 SENATOR CROCI: So this -- this is something
7 that I think is a perception issue, that has not
8 been effectively dealt with, I believe, by the
9 administration; and that is, most people think that
10 once you shutter a nuclear power plant, that you can
11 then turn it into an organic farm.
12 That, somehow, that waste is going to
13 disappear, there's going to be no more -- there's
14 not going to be any nuclear reaction going on, and
15 that, somehow, now we're all safe.
16 In fact, when you take 1,000 eyes -- sets of
17 eyes off of that campus at Indian Point,
18 "employees," some very highly-trained security
19 personnel that Entergy pays for, you now have
20 1,000 metric tons of uranium and plutonium,
21 weapons-grade, that the Governor of New York is now
22 taking responsibility for.
23 RICHARD L. KAUFFMAN: That's -- that's not --
24 that's not correct.
25 I mean, the -- the issue of the process of
85
1 decommissioning, the oversight of decommissioning,
2 is overseen by the Nuclear Regulatory Commission.
3 And Entergy, as the company, will continue to
4 have that obligation, overseen by the federal
5 government.
6 SENATOR CROCI: For how long?
7 RICHARD L. KAUFFMAN: Until the
8 decommissioning process is complete.
9 SENATOR CROCI: And how long would that take?
10 RICHARD L. KAUFFMAN: It could take a very
11 long period of time.
12 SENATOR CROCI: And after that long period of
13 time is over, then who bears responsibility for the
14 site?
15 RICHARD L. KAUFFMAN: The -- the -- the
16 decommissioning -- decommissioning is the
17 responsibility of the operator, until --
18 SENATOR CROCI: I understand the
19 decommissioning part.
20 RICHARD L. KAUFFMAN: -- and
21 decommissioning --
22 SENATOR CROCI: I'm talking about the
23 storage --
24 RICHARD L. KAUFFMAN: -- decommissioning
25 would include being able to have the site no longer
86
1 be radioactive.
2 SENATOR CROCI: -- including the stored
3 materials, uranium, plutonium, 1,000 metric tons?
4 RICHARD L. KAUFFMAN: And so, again, there
5 needs to be a long-term plan for storage of nuclear
6 material. And that's a -- that's a -- that's an
7 issue for the federal government.
8 SENATOR CROCI: Right, but until the federal
9 government takes action, the State of New York, at
10 some point in this process, could be responsible for
11 securing that site.
12 RICHARD L. KAUFFMAN: Go ahead, Audrey.
13 AUDREY ZIBELMAN: So -- so there -- there's
14 two decommissioning processes, and there's the --
15 what we call this, the "DECOM process" and "SAFSTOR
16 process."
17 SAFSTOR process could take up to 60 years for
18 decommissioning.
19 I would fully expect that the NRC, if it's
20 itself doing its job, is going to make sure that the
21 plant remains safe. And even while there's just
22 dry-cask storage there, that the dry-cask storage is
23 protected with sufficient security.
24 We would certainly expect that, and demand
25 that, as part of the state.
87
1 You're not going to have casks sitting there
2 with -- unguarded.
3 We're gonna have to -- you know, and so
4 I would fully expect that Entergy is still going to
5 own the property, is going to be responsible --
6 SENATOR CROCI: You said "assume"?
7 AUDREY ZIBELMAN: -- well, I'm going to say,
8 we will re -- I can't imagine that the State will
9 not require, at the end of decommissioning, as part
10 of the process, that the storage would just stay
11 there.
12 I would suggest -- I would, again -- do we
13 have the NRC here?
14 I would ask them.
15 But I can't imagine that the federal
16 government would say we're going to have nuclear
17 plants sitting in dry casks without specific
18 security.
19 SENATOR CROCI: And I understand your
20 responses here today.
21 But if I were sitting and creating a
22 settlement for the decommissioning and shutdown of a
23 nuclear power plant, where I knew there was
24 weapons-grade material within miles of
25 New York City, I would want those details to be
88
1 hammered out before I entered into the process of
2 closure and decommissioning.
3 I think it's -- I think it's a little
4 reckless that it hasn't been fully thought out to
5 the very end, from birth to death.
6 And just a quick question: Were you briefed
7 on the settlement terms before the agreement was
8 finalized?
9 AUDREY ZIBELMAN: Yes -- was I?
10 SENATOR CROCI: Yes.
11 AUDREY ZIBELMAN: Yes, I was aware.
12 SENATOR CROCI: Sir?
13 AUDREY ZIBELMAN: He was too.
14 RICHARD L. KAUFFMAN: Yes.
15 SENATOR CROCI: Oh, you were?
16 Okay.
17 So before it was inked, you were briefed on
18 the potential settlement terms?
19 RICHARD L. KAUFFMAN: Yes.
20 SENATOR CROCI: Yes, to both. Okay.
21 AUDREY ZIBELMAN: Senator Croci, may I just
22 add, the settlement term does require Entergy to
23 work with us -- with the State on safety.
24 And the decommissioning process is a long
25 process that I -- that the State will be involved
89
1 with, and we will be able to work with the NRC and
2 Entergy to make certain that there's security.
3 That -- that's, simply, the State's not going
4 to abandon that.
5 SENATOR CROCI: I understand, and you said
6 long process. Maybe we're not around when the
7 process is over.
8 But there is potential liability for the
9 State, or potential security that the State might
10 have to provide, when everyone has walked away from
11 the site, and the NRC and everyone else has said
12 that site is now clear.
13 I'm concerned that there is now -- that
14 New York State is now on the hook.
15 And I'm finding it hard to believe that the
16 Governor would be willing to take on that
17 responsibility without having thought this all the
18 way through, from birth to death.
19 AUDREY ZIBELMAN: And not to be argumentive,
20 but the state is in the same position as every other
21 state, and every other state has the same interests.
22 And I think that there's no question that
23 the -- you know, to make sure that, at the end of
24 the decommissioning of a nuclear power plant, states
25 are going to want to make sure that public safety is
90
1 maintained.
2 And I think the NRC, who has responsibility
3 for this, will require that of owners.
4 It should not fall back on the public.
5 These are --
6 SENATOR CROCI: On the State?
7 AUDREY ZIBELMAN: -- they will continue to be
8 the owners of the casks.
9 SENATOR CROCI: Okay.
10 I have -- I don't know what my time is right
11 now, Mr. Chairman. Am I out of time?
12 SENATOR GRIFFO: If you can move on --
13 SENATOR CROCI: Yes, sir. I have one more
14 question.
15 The 2,000-plus megawatts of power that
16 Indian Point produces for our grid, I'm aware that
17 there has been a -- there's been a thought to what
18 we're going to replace it with; offshore wind and
19 solar and other -- which are all laudable goals.
20 But, I do know from being over at the ISO and
21 watching their operations, that there are times when
22 wind speed gets to a point where wind turbines have
23 to be shut down.
24 And I'm also aware, having been on the ground
25 for "Superstorm Sandy," that you could have a
91
1 confluence of factors, high wind and low-light days,
2 in which both your wind and solar are now,
3 potentially, degraded to the point where you go to
4 your peakers.
5 My concern is that, you're relying on, again,
6 hypotheticals, that we're going to have transmission
7 lines in place, that we're going to have additional
8 generation in place, when this goes offline.
9 And I don't see that timeline as having been
10 completed. I don't see a smooth and seamless
11 transition in generation or transmission.
12 And as a Long Islander, we suffered the
13 closure of Shoreham. The ratepayers are still
14 paying the debt for that.
15 And I know in your testimony, both of you
16 have said "negligible."
17 I suspect that "negligible" cost to the
18 ratepayer is going to be far in excess of anything
19 that we can expect or that anyone has testified here
20 today.
21 But that's just more of a statement.
22 My final question is: Can we get a detailed
23 list of any task forces or working groups or
24 committees in this state: Who's on them, and
25 exactly how they're put on these groups or
92
1 workforces, or anybody that's providing input?
2 Could we get a list for the Committee
3 members?
4 SENATOR GRIFFO: Senator Croci, I'm going to
5 be asking you for something formally at the end of
6 this.
7 SENATOR CROCI: Very good.
8 I want to thank you both for your appearance
9 here today.
10 Thank you.
11 SENATOR GRIFFO: Chairwoman Paulin.
12 ASSEMBLYWOMAN PAULIN: Yes.
13 We're now going to hear from
14 Assemblymember Phil Palmesano.
15 ASSEMBLYMAN PALMESANO: Thank you.
16 Thank you, Mr. Chairman, Ms. Chairwoman.
17 Thank you for being here.
18 I have several questions, especially on the
19 area of reliability.
20 I know -- I know there's a lot of questions
21 relative to the tax impact, the jobs, the
22 reliability system, and the cost of the system to
23 ratepayers, the impact on the emissions and Clean
24 Energy Standard that the Governor has so strongly
25 promoted.
93
1 Mr. Chairman, you mentioned in your
2 statement that one of the things you were encouraged
3 about were the drop in the wholesale electricity
4 prices, from 2012, to 2006; from $45, to $34.
5 Is that -- what -- the direct cause of that,
6 is that not a result of the production -- or, the
7 use of natural gas price -- the wholesale price of
8 natural gas across the country?
9 AUDREY ZIBELMAN: There's several things that
10 are affecting it.
11 Certainly, the fact that there's -- the
12 availability of -- the use of fracked gases
13 increased supply in the region, and that has the
14 most -- the largest effect on wholesale prices.
15 The other thing that's happening is power
16 plants, new gas plants, are coming on, are actually
17 more efficient than existing plants.
18 And then the third level of activity is the
19 work that we've been doing to -- around energy
20 efficiency and demand reductions, which, this is a
21 rule of supply and demand, as demand goes down,
22 prices of energy follow.
23 ASSEMBLYMAN PALMESANO: Sure.
24 Regarding fracked gas, and I know
25 Mr. Chairman mentioned -- Chairman Griffo
94
1 mentioned about the Governor's State of the State,
2 when we were talking about the "buy American," and
3 the concerns about, you know, bringing the power
4 from Canada.
5 But also in the Governor's State of the
6 State, which I wasn't able -- none of us were able
7 to attend because we weren't invited, but the
8 Governor had in his quote, it said, "New York State
9 must double down on the fight against fossil fuel
10 and fracked gas from neighboring states."
11 So I guess my question is:
12 We know the production is down of natural
13 gas, from 2005 to 2015, by about 68 percent.
14 But we also know that the use of natural gas
15 for generation is up.
16 So, based on those Governor's comments and
17 statements, what is his position as far as the use
18 of natural gas or fracked gas from other -- because
19 we know there's no production. He has a ban in
20 New York State as far as fracked gas production in
21 our state.
22 But what is his position, and what is --
23 how -- the position of the administration, relative
24 to the use of fracked gas for generation?
25 Which is vital, because if you even look at
95
1 the NYISO's position, right now, power plants fueled
2 by natural gas provide 57 percent of New York's
3 total generating capacity.
4 And based on NYISO's planning, because NYISO
5 has to plan, the projects they're looking at,
6 natural gas and dual-fuel projects account for more
7 than 65 percent of the proposed generating capacity
8 being studied for NYISO for the future.
9 So I guess I would like -- I think -- I don't
10 know about anyone else, but I would like some
11 clarification on what the administration's position
12 is, based on the comments he made in the State of
13 the State, that "we must double down on the fight
14 against fossil fuel and fracked gas from neighboring
15 states."
16 Is he okay with it?
17 I mean, obviously, he's not okay with it for
18 production.
19 Is he okay with it for -- bringing it in for
20 generating capacity?
21 And then the other part of it is,
22 transmission.
23 Because we have delays, we don't have any
24 movement with the Constitutional (sic) Pipeline.
25 And then Chairwoman Paulin mentioned the
96
1 polar vortex that we faced a few years ago, when we
2 had the spike, was not due to a supply problem. It
3 was due to a capacity problem.
4 And that's something that we need to address
5 as well, as far as developing our energy
6 infrastructure.
7 RICHARD L. KAUFFMAN: So if I can get started
8 on the answer to that question?
9 We're not going -- I know there was --
10 Senator Murphy talked about a letter that I sent.
11 I don't remember if it was the same letter
12 that I sent, but, I've sent a couple of letters.
13 We're not going to get to 100 percent
14 renewables overnight.
15 It's not -- it's not practicable, and it's
16 not cost-effective.
17 Although, the Governor, in the State of the
18 State, has called for a study, that we can start
19 working towards that objective.
20 So we have a 50 percent mandate by 2030,
21 along the way to 80 percent by 2050.
22 And so we are -- we are -- want to put in
23 place policies to get us to 100 percent, but, we're
24 not going to get there tomorrow, so we are going to
25 be reliant upon natural gas as a bridge.
97
1 And, of course, natural gas is -- from an
2 emissions standpoint, has much less carbon emissions
3 than coal.
4 That's one of the reasons why the
5 United States was able to help achieve, in the
6 aggregate, a very substantial reduction in carbon
7 emissions over the last several years.
8 Having said all that, we don't want to just
9 build more and more gas infrastructure, and produce
10 the same kind of infrastructure as we have in the
11 past.
12 So, what Chair Zibelman talked about was this
13 54 percent average capacity utilization of the
14 system.
15 That's a lot of capital that's tied up, it's
16 very financially inefficient.
17 And so we want -- so when the Governor talks
18 about wanting to be mindful of reliance upon natural
19 gas, he's talking about not only, over time,
20 increasing the percentage of renewables. He's also
21 talking about using gas, and building the gas
22 infrastructure, not in the way we have in the past,
23 but in a more efficient way, so that we are not just
24 building large power plants, but we have the right
25 mix between -- between large power plants and
98
1 distributed solutions.
2 One of the things about, for example, in the
3 use of natural gas, is that, when more natural gas
4 is used for distributed generation, you use more of
5 the heat. And so it's more energy-efficient to use
6 natural gas in that way.
7 So, I hope that's responsive to your
8 question.
9 ASSEMBLYMAN PALMESANO: So I guess -- maybe
10 it can be just a yes-or-no question.
11 Is the Governor opposed to using fracked gas
12 to -- for -- for electric generation in the state,
13 or for transmission to bring gas into the state, to
14 meet our needs, especially since Indian Point is
15 going down, which provides 25 percent of the power
16 to New York City, and is the biggest power producer
17 in the state of New York?
18 Is the Governor and the administration
19 opposed to the use of?
20 We know he's opposed to producing it in
21 New York State.
22 Is he opposed to using it in New York State?
23 RICHARD L. KAUFFMAN: We're going to need to
24 rely upon natural gas, but we want to use less and
25 less natural gas as time goes along.
99
1 ASSEMBLYMAN PALMESANO: Relative to that
2 question, and we talked about, I know, obviously,
3 you're concerned about using more -- obviously, we
4 want to see more alternatives.
5 But, certainly, along that line, even
6 according to the NYISO report, we all know solar and
7 wind is intermittent.
8 So even with that, even if we increase the
9 generating capacity and the power coming from wind
10 and solar, because it's intermittent, it's not as
11 reliable as our conventional means, like natural gas
12 or oil, which we're getting away from, I know, but,
13 we still need that backup.
14 RICHARD L. KAUFFMAN: Well -- so, again --
15 ASSEMBLYMAN PALMESANO: Am I correct?
16 RICHARD L. KAUFFMAN: -- I think I've said,
17 we're going to need a -- we're going to need a mix
18 of generation sources; a mix of large-scale
19 generation and distributed generation.
20 The -- and I know this is not a hearing about
21 REV. It's a hearing about Indian Point.
22 But Audrey has talked about REV.
23 And that -- the purpose of REV is to build
24 the -- is to create price signals and financial
25 incentives for utilities and for third parties to
100
1 build the energy system of the future.
2 And this energy system of the future will be
3 more energy-efficient, it will be more
4 capital-efficient, it will be more resilient, and it
5 will -- if you want to think about it in a different
6 way, it will be similar to the IT system of today,
7 as opposed to the way the power system is today,
8 which is the main frame.
9 So it means that electrons will flow in more
10 than one direction, and it means that the
11 intermittency of renewables can be paired with
12 storage and with demand.
13 And that's not the way the system is built
14 today, but that's -- we are creating the policy
15 framework to start building that system.
16 ASSEMBLYMAN PALMESANO: I just want to make
17 sure: The administration is committed to a
18 competitive market-driven wholesale market system
19 still, going forward. Correct?
20 RICHARD L. KAUFFMAN: Yes.
21 And, so -- and by the way, I think this is --
22 you know, one of the -- the question that's come up
23 about the resource, and the resource adequacy,
24 the -- and the bal -- what is the mix of these
25 different resources, really goes, Assemblyman, to
101
1 exactly your point, which is, it will be the market
2 that will determine -- there's -- which -- which of
3 these resources are actually brought online, and
4 what the mix of resources are.
5 And so -- so the -- the -- we -- that's why
6 we're -- we have confidence that there are adequate
7 resources that are available, but what exactly those
8 mix of resources will be dependent upon competitive
9 market forces.
10 ASSEMBLYMAN PALMESANO: Well, given your
11 indication of wanting compet -- continuing with the
12 competitive market system that we have in place, and
13 when you talk about, I know nuclear has been
14 mentioned as a bridge to the alternative energy, and
15 you mentioned the same thing about nuclear -- or,
16 about natural gas, from that perspective, but you
17 keep saying "a bridge."
18 But what's the end date?
19 Because the concern I have, is if we're going
20 to have a private-sector market making these
21 billions of dollars in investments in these plants,
22 what kind of certainty -- I mean, they want
23 certainty in the investment they're making.
24 If there's this kind of, I don't want to use
25 the word "lackluster," but this vague, well, just
102
1 till we go to -- till we get to the future, I mean,
2 that doesn't bring certainty to their investment,
3 not knowing what the end could be.
4 We want to encourage that private-sector
5 investment.
6 Isn't comments like that kind of go
7 contradictory, and then kind of send the wrong
8 message to the market that we want to be in our
9 state: the private-driven market?
10 RICHARD L. KAUFFMAN: Well, I'm a "markets"
11 person by background.
12 Before I joined government, I had a long
13 career in business and finance.
14 So, I'm very sympathetic to what market
15 participants want, which is clear certainty.
16 And so we are -- we are committed to markets.
17 When I talked about REV, and building this
18 system of the future, it requires active
19 participation by market participants, and it is a
20 market-based system.
21 So -- so I -- I -- I -- we are mindful of the
22 need to give long-term certainty.
23 And I think, in general -- I mean, not
24 everybody's gonna agree all the time.
25 But I think, in general, we have -- we have
103
1 given quite a lot of signals to the market in terms
2 of what our policy direction is.
3 And, capital, as you can see from the
4 Indian Point contingency plan, there are a number of
5 projects that have -- have relied upon the signals
6 we've given to markets.
7 ASSEMBLYMAN PALMESANO: Chairwoman, in your
8 comments, you mentioned about how energy efficiency
9 has helped reduce the demand.
10 But also, in the planning process, I'm sure
11 you're both aware of, you know, even the NYISO has
12 done a proposal, a spreadsheet, of the number of --
13 of -- when we talk about our generating capacity,
14 what we have in supply, what we have in reserve,
15 what we need, and when we're at full capacity and
16 full demand.
17 But there's also a number of state and
18 federal environmental regulations that are -- in
19 fact, that are coming down the pipeline, that do
20 affect private owners; the private market that we're
21 trying to support.
22 And by my calculation -- or, by NYISO's
23 calculation, it accounts, from anywhere from 28,000
24 to 32,000-plus megawatts of generation; or, 75 to
25 80 percent of the capacity of the electric --
104
1 electrical -- electricity generating capacity.
2 And these are regulations that have a direct
3 impact, just like, obviously, what Indian Point was
4 facing.
5 Those are things that need to be addressed in
6 this process too.
7 And if those -- if we're saving a little bit
8 on energy efficiency, but, you know, it's going to
9 cost a private developer who's -- has -- you know,
10 is looking for some certainty, you know, billions of
11 dollars to be compliant with some of the rules, that
12 could bring some of these plants offline too.
13 Is that something that you're keenly aware of
14 and watching very closely?
15 AUDREY ZIBELMAN: I'm not aware of the ISO
16 report that you're referring to, so I can't speak
17 directly to the report.
18 We do work and watch, with the ISO, in terms
19 of looking at the plants, if there are
20 vulnerabilities for retirements because of the issue
21 of system reliability.
22 The issue around energy efficiency is both in
23 terms of the markets that we're creating around REV,
24 but, also, and as just a point of fact, the
25 buildings that are going up today, the houses that
105
1 are going up today, are simply just more efficient
2 than resources that exist previously.
3 And so that's why, in the electric industry
4 at large, not just New York, across, really, the
5 uni -- the world, you're seeing in developed
6 countries, decreases in demand, associated with the
7 fact that you just have, your washing machines are
8 more efficient, you're refrigerators are more
9 efficient.
10 All that is affecting the electric industry.
11 That's -- if you combine that with consumer
12 choice and consumer-preference changes, where more
13 and more consumers are looking for things like
14 partici -- having rooftop solar, that's affecting
15 the demand, which, of course, is then affecting the
16 supply.
17 But that is no different, frankly, than
18 people who produce landlines, finding that now
19 people aren't buying landlines anymore. They want
20 cell phones.
21 And that's -- you know, there's -- there's --
22 the role then for businesses, who are in sort of the
23 old businesses, is to say: Well, consumer
24 preferences are changing, technology is changing.
25 Maybe we need to change our business model.
106
1 And that's something, again, that we've
2 anticipated in New York, which is why in -- what
3 we're looking is, is for our distribution utilities
4 to change their business model so that we can meet
5 customer preferences and take the advance of these
6 technologies changes.
7 ASSEMBLYMAN PALMESANO: And just, basically,
8 one other point I just want to make.
9 I mean, obviously, we're talking about
10 Indian Point, and we're -- as part, we're talking
11 about the reliability.
12 But, just to -- you know, Indian Point, the
13 amount of power that it does produce, produces four
14 times as much electricity as all the wind turbines
15 in New York State, and 236 times as much as all the
16 state's solar projects.
17 So that's a lot of energy to make up.
18 That's a lot of windmills and solar panels to
19 go up, to help address just the generating capacity
20 made up by Indian Point.
21 I know you're -- we're talking about other
22 options, but I do think we having to be cognizant,
23 moving forward, of making sure there's certainty in
24 the market for the investment, especially the
25 natural gas aspect of things, that are going to play
107
1 a major role in the future as you look towards the
2 bridge and the gap.
3 But I also think we need to be very clear
4 about the signals we send to the private market,
5 because that's impacted by subsidies and policies
6 that we make as well too, that can impact the
7 market.
8 So I think we really need to make sure.
9 You know, I get the fact that, clean energy,
10 I support clean energy, but it's one -- one part of
11 the stool.
12 You have clean, affordable, and reliable.
13 And we need to make sure we have reliable
14 power generating capacity that can answer the needs
15 and demands of our state, and to make sure we can be
16 competitive in a private market, from jobs, to, you
17 know, heating homes for our seniors.
18 RICHARD L. KAUFFMAN: So we agree with your
19 observations.
20 And, again, I want to stress this point,
21 that -- and I know the -- I know they'll be the
22 Entergy representative that is going to be appearing
23 here.
24 But Entergy has made the decision -- the
25 strategic decision, that they wanted to exit the
108
1 merchant -- merchant nuclear business.
2 So, the benefit of this agreement, is that we
3 have time to work on all these issues.
4 Again, I would observe that other places have
5 had only a few months in which to get ready.
6 ASSEMBLYMAN PALMESANO: I do understand.
7 Just -- actually, just one last question, and
8 I'll be done.
9 Given the fact that the NRC, you know,
10 basically, you know, we're looking to relicense, and
11 we're moving forward, indicating that they -- from
12 their perspective, they thought it was okay to move
13 forward; and given the fact, and the concerns that
14 we're talking about now, were being talked about
15 when the Governor had mentioned that he's opposing
16 Indian Point; given the economic impact; given the
17 significant tax impact it's going to have on the
18 communities; given the impact on reliability; and
19 the impact on jobs; and the cost to consumers; and,
20 certainly, the impact to the Clean Energy Standard,
21 was there ever any contact, to try to address some
22 of the concerns and problems that were out there, to
23 fix it, to keep Indian Point open, rather than just,
24 you know, putting up roadblocks to, basically, you
25 know, we're going to make it more difficult for them
109
1 to survive, one, with the market, and, two, with the
2 lawsuits, and the things -- and the challenges that
3 were being put in front of them?
4 Was there ever any -- I guess I'm trying
5 to -- was there any conversations with the
6 administration, "what can we do to help you?" rather
7 than say, make it more and more difficult for them
8 to continue?
9 Because, I know there's safety concerns, we
10 all wanted to address the safety concerns.
11 But was there ever any contact to say:
12 What can we do to help you with this process?
13 What can we do to make you meet these needs
14 that we're asking for, from the State perspective,
15 so you can move forward, so you can continue to
16 provide the power and the generating capacity to,
17 you know, New York City, and to be a part of the
18 grid over this course of time?
19 I was just wondering, was there ever any
20 contact, to try to solve the problem, rather than
21 just to, you know, have it end?
22 RICHARD L. KAUFFMAN: Well, again, I believe
23 that the Governor's been very clear that he thinks
24 the primary role of government is to protect the
25 people, that safety comes first.
110
1 And so his belief, for a very long period of
2 time, that having this facility so close to where
3 19 million people live represents an untenable
4 safety risk.
5 And so that's -- you know, it's ironic,
6 because I think what you're going to hear from --
7 from Entergy is that one of the challenges that
8 they've had with the economics of the plant has been
9 market factors, which is low natural gas prices.
10 And that's been in effect -- that's had the effect
11 of why there are many nuclear facilities that are at
12 risk, several that have been shut down around the
13 country, because of low natural gas prices.
14 That's a market effect.
15 ASSEMBLYMAN PALMESANO: Thank you,
16 Mr. Chairman.
17 SENATOR GRIFFO: Senator Ortt.
18 SENATOR ORTT: Thank you, Mr. Chairman.
19 I want to thank Senators (sic) Griffo and
20 Assemblyman (sic) Paulin for putting this together.
21 And I want to thank both of you for being
22 here today.
23 I apologize if there's any redundancy in my
24 questions. I had to step out momentarily.
25 But if there is, certainly, it won't to be
111
1 first time in Albany that we've had redundancies.
2 [Laughter.]
3 SENATOR ORTT: So, I have a little bit of a
4 different take on this, and I'll start, you know,
5 I'm going to go into several questions.
6 But, you know, maybe it's about safety, and
7 I'm sure safety factors in.
8 But I also believe this is also about a
9 larger, what I would say, a political agenda, or
10 philosophic agenda, to move away from nuclear, and
11 they are the same folks who politically opposed
12 Indian Point, ensured its closure, also, wanted
13 FitzPatrick closed, because they oppose nuclear
14 power; just like the same folks who don't want
15 natural gas exploration.
16 And this is really more about moving more and
17 more towards renewable and clean-energy sources.
18 And so my problem with that is, I think when
19 that's put before the economic issues, the jobs
20 issues, the sort of the meat and bones that we're
21 here had to discuss today, I think that's when we
22 run into problems, because we're trying to race to a
23 goal before we have all the answers in place to get
24 there.
25 Okay?
112
1 So, I want to premise my questions with that.
2 And, certainly, as we go through this, both
3 of you are certainly more than asked to comment on
4 that if you want to.
5 My first question is regarding the New York
6 Power Authority.
7 I represent the Niagara Power Project.
8 And, certainly, much of the revenue that is
9 generated through the Power Authority is generated
10 in Niagara.
11 I think Chair Zibelman, you mentioned that
12 NYPA would have a role to play as we move forward.
13 My concern is that, there's been a host of
14 previous examples where the New York Power Authority
15 has been asked to -- to step in, to subsidize
16 various things.
17 They've taken over the New York State Canal
18 Corporation now, which is, budgetarily, a loser,
19 it's in the red, and so that's absorbed by the
20 Power Authority.
21 I know there are plans to generate funds and
22 try to turn that around, but, at this point, it's
23 certainly an economic loser.
24 And I just wonder how many times, if NYPA's
25 gonna be asked to -- I guess my question first is:
113
1 Is NYPA going to be asked, or do you see any
2 scenario, where they're going to have to subsidize
3 losses or cover, budgetarily, for any revenue
4 shortfalls as a result of, both, the closure, and as
5 we move towards the replacement?
6 AUDREY ZIBELMAN: I -- no -- in the
7 agreement, no.
8 So -- but getting back to your question and
9 your point, and I think, to pick up on where -- what
10 Richard was talking about, the thing that has -- has
11 challenged the market in many different ways, is the
12 fact that the abundancy of natural gas supply has
13 resulted in very large -- low energy prices.
14 Ironically, even though we -- you know,
15 people have asked about fracking gas in New York, if
16 that had happened, gas prices would have gone even
17 lower because we would have had even more supply,
18 because that supply of gas right now is very high in
19 this part of the region, and at the lowest price.
20 That has affected the economics of the entire
21 market.
22 So one of our issues, one of our concerns,
23 was to say, well, we have existing resources in
24 Upstate New York, like Niagara, that have
25 traditionally served a lower-priced market. Upstate
114
1 has always been lower price than downstate, which we
2 talk about all the time.
3 So our concern at the commission is to say:
4 Well, wait a minute. If we have existing resources
5 that are being underutilized and are being
6 challenged, what they really need is a delivery
7 system to get them to the downstate region that has
8 across-the-state benefit. It helps bring existing
9 resources downstate that are lower cost and exist
10 there today, avoids the need to building downstate,
11 and makes better use of existing resources.
12 So, to the contrary, the work that we've been
13 doing at the commission around transmission, and
14 work we are doing with New York ISO on looking at
15 unbottling, have all been about, actually, ensuring
16 that we use the best amount of resources that we
17 have in-state to serve the state's needs, rather
18 than have them sit there and be stuck behind a
19 transmission constraint and not get to the market
20 where they're demanded.
21 SENATOR ORTT: So just to be clear: So you
22 don't feel that NYPA has in any way subsidized or
23 covered for other revenue shortfalls within the
24 market?
25 AUDREY ZIBELMAN: No, to -- no, they haven't.
115
1 Not at all.
2 SENATOR ORTT: Well, I think it's very
3 important, you talked about moving that power
4 downstate.
5 Certainly, as you can imagine, in my
6 district, a lot of constituents, because the power
7 is generated there, certainly, would love to see
8 their energy bills lowered; right?
9 Of course, that's -- and -- and -- and I go
10 back and forth, trying to explain to them that
11 that's not exactly how it works.
12 There's the delivery aspect of it, the
13 utilities, and so forth.
14 But what I really want to be clear about
15 today is that, if in any way NYPA is subsidizing or
16 making sure that there is a negligible impact on
17 somebody's bills in Westchester County, with all due
18 respect to my colleague to my left, that's going to
19 be a problem for me, because if they're going to
20 subsidize anybody's power -- energy bills, it should
21 be someone in Niagara County, in my view.
22 So -- so I want to make sure that that's --
23 I just want you to understand that, that I'm going
24 to be paying very close attention to that as we go
25 forward.
116
1 And my other concern, where NYPA comes into
2 play, of course, is, ultimately, this whole thing
3 is -- is -- is for the -- for the workers there,
4 because, ultimately, if they have less revenues, or
5 if they're stretched, then what you're looking at
6 is, when they have contract negotiations, they're
7 going to be saying to the folks who, you know,
8 produce the power and do all this, you know, we need
9 to take it out of your -- out of your you-know-what,
10 because we don't have the revenues coming in like we
11 did.
12 So I think it's very important as well to
13 keep in mind, as we go forward, we don't want that
14 rolling downhill.
15 And, certainly, that goes to the jobs
16 argument, which leads me to my other question on --
17 I think it was Chair Kauffman who talked about
18 transmission sources, transmission lines.
19 I know we talked a lot about the
20 Hudson Champlain (sic) line.
21 That originates out of Campa (ph.); correct?
22 Is that -- is my understanding of that accurate?
23 And you talk about the loss of jobs and the
24 shifting, we're going to train workers.
25 And -- and that's great.
117
1 I've heard that before; I've heard it when it
2 comes to shutting down coal plants.
3 Of course, I have a coal plant in my area.
4 But I haven't actually seen any workforce
5 training or transition programs. Okay? I haven't
6 seen them myself.
7 And so my question becomes, first of all: If
8 we're going to be importing power from Canada
9 through a transmission line, are those folks, are
10 they going to be working in Canada?
11 I mean, is that the hope? Or, where are they
12 going to go?
13 I guess, if we're -- if we're exporting jobs
14 and importing power, where are those jobs going to
15 materialize?
16 RICHARD L. KAUFFMAN: Well, first of all,
17 this Champlain Hudson line, it's going to be up to
18 the market to decide whether that line gets built.
19 So I want to make that very clear.
20 This is not -- as Audrey said before, this is
21 not a line that is being financed on the back of
22 ratepayers.
23 So the other point about, I think the --
24 I think -- so the -- it is true that we have already
25 put in place transmission assets within the state to
118
1 bring power from within the state to help offset the
2 loss of power from Indian Point.
3 That's in-state resources through in-state
4 transmission.
5 And the "worker" point I think is -- let's
6 say, a couple points.
7 The -- I guess what I said in my testimony
8 was, any worker that works at the plant can have a
9 job with Entergy somewhere else.
10 Unfortunately, that would mean, if they want
11 to take advantage of that, they'd have to move out
12 of state.
13 But there are absolutely demand for those
14 workers in other facilities in the state; skilled
15 workers.
16 The demographics of people that work in the
17 power sector, in the utility sector, and I would say
18 mature -- say mature -- I'm "mature" too, so I can
19 use that word -- it's a mature -- it's a mature -- a
20 mature demographics.
21 So there's -- and we're very, very confident
22 that workers will be able to stay within state if
23 they want to stay within state to work.
24 And so the training is really back to the
25 point I said before, about the changes in the energy
119
1 sector. There -- there are -- the technology is --
2 is -- is evolving quite quickly, and so there's --
3 to the degree to which workers need to have
4 additional training, we will make that -- those --
5 that training -- that training available.
6 It will depend on what the workers will need
7 at that point in time, because, again, we're talking
8 about several years away.
9 And, you know, I think we have actually had
10 successful training programs.
11 We have the veterans training that have
12 placed veterans in -- in the solar sector. And, of
13 course, the solar sector is one of the
14 fastest-growing sectors in New York State in terms
15 of job growth.
16 And I guess the last point I'd make is
17 about -- about the Governor's commitment to
18 communities.
19 I think that the record of the Governor going
20 to communities and saying, We know communities are
21 in pain, and has -- we're not going to forget about
22 you, I think, is a pretty darn good record, from
23 Long Island, to Buffalo.
24 And, so, that's why we're very mindful of the
25 impact in this local community.
120
1 And that's why, again, as a key part of the
2 agreement, we wanted to have -- we wanted to have
3 time to work on the impacts in the local community.
4 SENATOR ORTT: Well, I certainly, when --
5 I appreciate what you said the veterans programs.
6 I think those have been successful.
7 My concern is, when you talk about, if they
8 want a job, we're confident there will be jobs
9 available.
10 I come from a region where I'm less
11 confident, because, historically, that has not been
12 the case. Okay?
13 I realize downstate and the upstate economy,
14 as I'm sure you realize, are significantly
15 different.
16 RICHARD L. KAUFFMAN: It's also the nature of
17 the particular workers.
18 SENATOR ORTT: I understand.
19 But you have -- you list in your testimony
20 here, "Through NYSERDA, the State will offer any
21 worker retraining in renewable technologies, like
22 solar and wind."
23 I have a little experience, not a ton, just
24 enough to be dangerous, with a wind project in my
25 district, which you may be familiar with.
121
1 It's a proposed, about 70 windmills,
2 670 feet, in the eastern part of Niagara and Orleans
3 counties.
4 And the company proposing it projects, of
5 those 70 windmills, there might be between 2 and 5
6 jobs. Okay?
7 We're losing 1,000 from Indian Point; is that
8 accurate?
9 SENATOR MURPHY: Over.
10 SENATOR ORTT: So that's a you-know-what load
11 of windmills to replace at that rate.
12 And I actually believe we're probably looking
13 at a you-know-what load of windmills that would
14 need -- that would be needed to replace some of this
15 power.
16 And that concerns me, because the amount of
17 windmills you're going to need, or the amount of
18 solar panels, let's say, but I'll -- I'll -- I think
19 the windmill project is particularly important,
20 because these usually end up being put in rural
21 parts of the state, poorer communities, you know,
22 where you have farmland.
23 And the specific project I'm speaking about,
24 there has been significant community pushback,
25 because you're putting them on Lake Ontario, which
122
1 is going to change the character, certainly, of
2 those two communities.
3 And so I wonder about (a) that the actual
4 trade-off of jobs.
5 You know, we're losing 1,000, and are we
6 going to be able to actually replace those on the
7 renewable side, you know, on a comparative basis?
8 Or, is it going to be a huge delta, which is my
9 concern?
10 But, also, you know, on the renewable side,
11 when you talk about windmills, if we're going to
12 have -- I'm getting pushback from seventy.
13 If we're going to have to put up hundreds, if
14 not thousands, of windmills across the state, in
15 poor rural areas, I think it's going to be a real
16 problem.
17 I think you're going to have a real pushback
18 from a lot of communities on that.
19 So I would like to hear, maybe, what your
20 thoughts are on that.
21 RICHARD L. KAUFFMAN: All right. So --
22 again, a couple of things.
23 Just as I said before, the power sector faces
24 very dramatic changes, and this is not New York.
25 This is -- it's happening.
123
1 So, we talked about low natural gas prices.
2 So when you talk about employment, you talk
3 about the economic challenges at Indian Point from
4 that low natural gas prices, and we talked about the
5 possibility of repowering.
6 And when you talk about repowering a new
7 natural gas plant, that has maybe more than two
8 jobs, but it has -- but, watt per watt, there are
9 far fewer workers at a natural gas -- a modern
10 natural gas plant than there would be for a nuclear
11 plant.
12 So -- so the technology changes are very
13 significant.
14 First natural gas. Then all the other
15 distributed technologies.
16 We talked about -- you know, you talk about
17 onshore wind? The cost of offshore wind turbines
18 has fallen dramatically.
19 That's -- and it just -- I talked in my
20 testimony about that being a resource that we're now
21 just beginning to exploit off of Long Island.
22 So, customer preferences are changing.
23 So it's not just individuals who want to have
24 solar, but companies want to have more control over
25 their own power, which some of that is companies'
124
1 own decisions to enter into renewable-energy
2 contracts.
3 Half the wind projects that were built last
4 year were as a result of -- the power-purchase
5 agreements were a result of companies entering into
6 those kind of contracts.
7 But, then, there are also companies that want
8 to have on-site generation, either using solar or
9 fuel cells or CHP.
10 Communities, we see this -- you know, many of
11 the communities across the state, after various
12 storms, participated in New York (indiscernible).
13 150 communities have been participating in trying to
14 develop large-scale microgrids.
15 So there are just a whole range of changes
16 going on in the sector.
17 So the -- so the -- there are -- there are
18 job gains and job losses when you have this kind of
19 dynamic industry change.
20 So you have -- you have reduction; you have
21 technology threatening employment in large scale
22 plants. But you have growth in employment in --
23 in -- in people involved in distributed solutions.
24 And as you know, the Governor -- we also have
25 manufacturing jobs now that are being created in the
125
1 state in the new energy economy as well.
2 So -- so I guess those are just some thoughts
3 to get going.
4 SENATOR ORTT: Yeah, well, and I certainly --
5 I guess I hear what you're saying.
6 There's no question over the state when you
7 talk about the larger changes.
8 I think everyone understands that there are
9 economic forces at work, there are changes. But
10 there can be no denying that, in New York State, we
11 have certainly picked a side, and we have picked
12 some winners and losers when it comes to the energy
13 sector. And I don't think there can be any doubt
14 about that.
15 I mean, the Governor's made pretty bold
16 statements about, you know, certain sectors, certain
17 technologies, being favored over other ones.
18 And even on the solar side or the wind side,
19 there's heavy subsidies, as you would probably
20 admit, that make those even remotely economically
21 beneficial for the companies. Okay?
22 Were it not for heavy federal, and in some
23 cases, state subsidies, many of these projects would
24 never be proposed because there would be no profit,
25 or no payoff, for the company, for the
126
1 private-sector corporation.
2 RICHARD L. KAUFFMAN: Well, this is -- again,
3 this is maybe a much longer conversation because,
4 the markets, when we talk about markets for energy,
5 there are very significant embedded subsidies for
6 traditional fossil-fuel industries.
7 So when you talk about support for subsidies
8 for renewable -- renewable energy, it's not really
9 comparing apples to apples.
10 So the -- you know, if you want to talk
11 about, you know, the price of gasoline, we don't pay
12 for the cost of -- when we go to the pump, we don't
13 pay for the cost to share the military budget.
14 So, I mean, there are all kinds of
15 distortions in markets, you know, including the fact
16 that -- that there -- that we do face -- we do face
17 the reality of climate change.
18 And one of the problems with current
19 structure in markets is that there are no -- there's
20 no cost to carbon -- there's no national cost to
21 carbon.
22 So I think when you actually -- and there are
23 a whole variety of studies.
24 I think when you actually look at the impacts
25 of markets, and try to normalize for all kinds of
127
1 things, I'm not sure that you come to the same
2 conclusion that renewable-energy projects are not
3 economic in terms of the overall value that it -- is
4 being provide to the state.
5 I think -- the -- the -- I think the --
6 the -- and, again, this isn't a REV hearing, but the
7 reason why the Governor has embarked on energy
8 policies that he has, is what we're trying to do is
9 to -- is to try to get ahead of some of the trends
10 that are coming at the industry, and to take
11 advantage of those opportunities, as opposed to just
12 let the future be handed to us.
13 Because, if the future just gets handed to
14 us, the risk is, that we wind up being burdened by
15 tremendous standard -- stranded costs, or wind up
16 having to build a different system later, and we
17 will forego the economic-development opportunities
18 that come from this transition to a different energy
19 system, which is already occurring.
20 SENATOR ORTT: My last question just has to
21 do with, we talked about mothballed plants.
22 We talk about -- is there any thought about
23 reenergizing, bringing Huntley back online?
24 RICHARD L. KAUFFMAN: That would be something
25 that --
128
1 SENATOR ORTT: As a -- I mean, in relation
2 to --
3 AUDREY ZIBELMAN: -- certainly.
4 I mean, I think that's something that would
5 be for NRG to look at again.
6 We don't choose winners and losers in the
7 markets, but, certainly, if NRG saw an opportunity
8 to make money, I have no doubt that they would
9 pursue it.
10 SENATOR GRIFFO: Thank you, Senator Ortt.
11 Just a quick follow-up.
12 Richard, you said Champlain Hudson would be a
13 market-driven decision.
14 The Chairwoman, though, at the budget
15 hearing, you indicated that the international hydro
16 would count towards the state's renewable energy; is
17 that correct?
18 AUDREY ZIBELMAN: The -- they -- it -- they
19 would, yes.
20 SENATOR GRIFFO: Okay. And then as a result
21 that of, would that make them eligible for Clean
22 Energy Standard funds at any time?
23 AUDREY ZIBELMAN: It would depend on the
24 nature of the resource.
25 And I'm not hesitating on that.
129
1 The --
2 SENATOR GRIFFO: Do you believe they should
3 be eligible, then?
4 AUDREY ZIBELMAN: I'm sorry, I didn't hear
5 you.
6 SENATOR GRIFFO: Do you believe they should
7 be eligible?
8 AUDREY ZIBELMAN: The eligibility's criteria
9 that we set up is that, if, in fact, they're
10 using -- if it's a resource that was commissioned
11 post 2015, and does not require a new impoundment,
12 they would be eligible for Tier 1.
13 If not, they would not be eligible under the
14 CES.
15 SENATOR GRIFFO: Chairwoman.
16 ASSEMBLYWOMAN PAULIN: Yes.
17 Assemblymember Barclay.
18 ASSEMBLYMAN BARCLAY: Thank you, Chairwoman.
19 And I know we're under some time constraints,
20 so I will be pretty quick.
21 I have kind of a general question, and then
22 I think a fairly specific question.
23 Before I ask the questions, though, I just
24 want to thank both of you and the Governor for the
25 CES (the Clean Energy Standard).
130
1 I think it really is very forward-thinking in
2 New York State, and I think it's going to help
3 stabilize our energy market and our energy and
4 electricity in New York State.
5 So thank you both for your leadership on
6 that.
7 The more general question, I think it follows
8 up with a lot of questions that have already been
9 asked regarding replacement power and the loss of
10 2,000 megawatts from Indian Point.
11 And if I understand your testimony right, you
12 said, one, we're going to increase transmission.
13 Obviously, bring energy from upstate, downstate.
14 I think that's a good -- that's terrific.
15 Next, we've talked about energy efficiency
16 which just seems naturally to be happening in our --
17 in the market in New York State.
18 And then, lastly, obviously, we talked about
19 renewables.
20 We do subsidize renewables in New York State
21 pretty substantially. We have done it now for a
22 substantial amount of time, over a decade. I think
23 over billions of dollars -- maybe, $1.2 billion in
24 subsidies.
25 And, currently, they make up about, you can
131
1 correct me if I'm wrong, I think about 3 to
2 5 percent of generation in New York State.
3 What makes -- I don't know, you haven't
4 really broken down how the replacement power is
5 going to be made up of, what?
6 But, presumably, replacement power, do you
7 have any idea how much you're looking for replace --
8 or, excuse me, renewable power to make up for
9 replacement power for Indian Point? Is there any
10 percentage on that?
11 AUDREY ZIBELMAN: We -- the answer is no.
12 So to -- the quick answer is no, and then
13 I'll explain it.
14 The -- the way we -- the goal -- the State
15 goal is to get to 50 percent renewables by 2030
16 without a designation to Indian Point specifically.
17 In terms of Indian Point, again, as
18 I mentioned, we've already, essentially, replaced
19 the requirement with close to 900 megawatts of
20 energy efficiency and additional transmission
21 capability.
22 So we're really only talking about the
23 remaining 1100 megawatts.
24 That's what we would expect to come out of
25 the market, and the market would be a combination of
132
1 the resources that respond to the price.
2 But at the same time, we're going to be
3 looking to bring on additional renewables, which
4 would mitigate or moderate whatever needs to be
5 bought for replacement power that the market itself
6 would produce.
7 ASSEMBLYMAN BARCLAY: What is the total of
8 the renewables that you're planning, that's in the
9 study now, for power (indiscernible) --
10 AUDREY ZIBELMAN: In citing, I can't -- I can
11 get that you number. I don't have it offhand.
12 ASSEMBLYMAN BARCLAY: The second question
13 I have is, obviously, a little bit more specific,
14 and it's regarding the CSE -- CES, excuse me.
15 The -- when that policy was implemented by
16 the PFC, it had -- Entergy hadn't decided to close,
17 you hadn't reached an agreement to close, the
18 Indian Point plant; correct?
19 AUDREY ZIBELMAN: Correct.
20 ASSEMBLYMAN BARCLAY: They still are eligible
21 for the ZEC credits under the CES?
22 AUDREY ZIBELMAN: They --
23 ASSEMBLYMAN BARCLAY: And then -- I guess,
24 let me just follow up, and then you can answer the
25 whole thing.
133
1 AUDREY ZIBELMAN: -- yeah.
2 ASSEMBLYMAN BARCLAY: Obviously, there's been
3 a lot of talk about the potential costs and
4 implementation of the Clean Energy Standard.
5 You've come up with how much you think it's
6 gonna cost.
7 There's been interest groups that have come
8 up with a cost.
9 When these costs are being calculated, do
10 they take into account Indian Point, as far as, one,
11 whether they're going to be able to receive the
12 credits, or did they not include Indian Point?
13 AUDREY ZIBELMAN: The calculations -- and,
14 Assemblyman Barclay, the calculations that we did,
15 that we've been -- that we talked about when we
16 approved it, were really focused on the upstate
17 plants.
18 But the way the ZEC program works within the
19 CES, is that Indian Point would have been eligible
20 had it demonstrated the same economic issues that
21 the upstate plants had. So they were, technically,
22 eligible.
23 At that point, Indian Point said they would
24 not apply for eligibility.
25 Now that they've entered into this agreement,
134
1 the plant -- the program is a 12-year program.
2 So since they won't be extant for 12 years,
3 they wouldn't be eligible any longer.
4 So the calculations that we've looked at,
5 were calculations that were focused on the upstate
6 plants.
7 ASSEMBLYMAN BARCLAY: Thank you.
8 Thank you both for being here.
9 AUDREY ZIBELMAN: Thank you.
10 SENATOR GRIFFO: Thank you, Assemblyman.
11 Senator Croci.
12 SENATOR CROCI: Thank you, Mr. Chairman.
13 Just one additional follow-up question.
14 Again, thank you for your appearance here
15 today, and I know it's a long process, but we
16 certainly appreciate your very valuable time.
17 What -- Chairman, you were saying in your
18 testimony, Governor Cuomo's -- quote,
19 Governor Cuomo's actions on Indian Point have always
20 focused on safety, to protect New Yorkers first and
21 foremost.
22 And getting back to what we were discussing
23 earlier, sir, I would suggest that with -- we are
24 now going to sacrifice, for safety's sake, is what
25 I'm being told, 2,000 jobs -- excuse me,
135
1 2,000 megawatts, 1,000 jobs, $340 million in tax
2 revenue, and close to $1.6 billion in economic
3 impact in the state of New York.
4 Now, if I were confident in the Governor's
5 economic policies, I would say we could replace
6 that, those 1,000 jobs, and -- but I'm not.
7 So, for safety's sake, I would think, in
8 order for us to absorb that loss, we would have an
9 answer to the question: For safety's sake, what is
10 going to happen to 1,000 metric tons of
11 weapons-grade uranium and plutonium throughout the
12 course of its existence?
13 Now, if that's a federal issue, if that's a
14 state issue, before that agreement is inked, that
15 question should -- that fundamental question should
16 be answered.
17 That's something that I'll let you address
18 after this second safety question, or statement.
19 "Superstorm Sandy," both, the wind action,
20 the wave action, and the low-light situations, make
21 a situation like that, again, whether it's a weather
22 catastrophe, or it's a terrorist-related attack or
23 catastrophe, you're going to have to go to another
24 transmission -- you're going to have to go to
25 another generation source.
136
1 And the transmission, that you're suggesting
2 is going to provide additional power, has not yet
3 been built. There are no existing additional cables
4 being built.
5 So from a safety perspective, again, you're
6 talking about taking 2,000 megawatts off the grid,
7 for safety's sake, because of the threat that this
8 plant poses, even though we're still going to have
9 1,000 metric tons of waste, and the additional
10 generation or transmission capacity on Long Island
11 isn't going to change.
12 Has the coast guard or DHS done a study of
13 who's protecting the wind turbines offshore?
14 There are a lot of questions that I would
15 have thought would have been answered before the ink
16 was dry on this document.
17 I'll allow you -- either of you two to
18 respond.
19 AUDREY ZIBELMAN: Okay. Well, I will respond
20 again on the -- on the safety of the dry-cask
21 storage.
22 The -- the -- I can't tell you, cited
23 offhand, but I -- I am -- we will make certain,
24 there's no question, that the dry-cask storage
25 had -- is secure, from a safety standpoint. That
137
1 that should remain a responsibility of the owner.
2 That's something that I can't imagine is not
3 a standard in place today, but we'll get back to
4 you.
5 The second is, is in terms of the --
6 "Superstorm Sandy" and the issue of resiliency,
7 first of all, you know, the issue, when we had
8 "Superstorm Sandy," was not simply the -- was not
9 about the ability to import energy into New York
10 City. It was about the local distribution system
11 and maintaining the security of that.
12 Since "Superstorm Sandy," we've taken a
13 number of steps across -- in both Con Ed and Long --
14 and with LIPA, and continue to do so, to harden up
15 that system.
16 And as a result, we have seen throughout the
17 state, because of the work that we've done to make
18 the systems more resilient, the systems stay
19 together and be able to come back much faster as a
20 result of reconfiguration and the work that we've
21 done to address climate -- you know, the issues of
22 significant climatic effects.
23 So I believe that the State has actually been
24 very proactive in addressing these issues.
25 Largely, when we think about these types of
138
1 outages, these are outages that are actually more
2 local outages than on the transmission system
3 itself.
4 If, in fact, though, we look at more
5 generation, the fact is, is that they will -- that
6 generation, in their same region, will use the same
7 transmission system coming down.
8 Of course, by looking at both the work that
9 we've already done, in terms of the transmission
10 projects that have been completed, and the AC
11 transmission, that provides additional transmission
12 resources, so it gives us additional ability to
13 import resources.
14 So all of this is -- is really done to
15 strengthen the system.
16 And then, lastly, again, the work that we're
17 doing around distributed energy resources, such as,
18 looking at storage, and combined heat and power, and
19 things that can be used locally, are also going to
20 help support the resiliency of the system, because
21 that means that you have local power that can --
22 you -- can be turned to, even with the transmission
23 system we're going to go down.
24 And that is really, when people talk about
25 the new energy economy, recognizing that the system
139
1 can be built in a two-way. And that actually
2 creates greater redundancy, because you have both
3 local and both power resources.
4 RICHARD L. KAUFFMAN: Senator, if I could
5 just add to this, the -- the energy team that you
6 see in front of you, the origin of why we're here,
7 was "Sandy."
8 I got a call from the Governor right after
9 "Sandy," because he said that he felt that the power
10 sector was a vinyl record in the age of the I -- in
11 the age of the iPad.
12 And, he's right.
13 The industry needs fundamental change.
14 And the tip of the iceberg, as it were, is
15 the question of resilience.
16 The system is very resilient, until it's not;
17 and then it's not resilient -- not resilient -- can
18 be not resilient for a long time.
19 So all the policies that the Governor has put
20 forth in the last four years have been to try to
21 improve resiliency and affordability of the system.
22 So, I just talked about REV, which is --
23 which has this -- tries to have this mixture of
24 distributed resources and central station.
25 Resources, I'd also observe, on Long Island,
140
1 that the LIPA Reform Act has led to the
2 restructuring of the utility on Long Island.
3 And I believe that most people on Long Island
4 feel that the quality of service has improved.
5 And the other thing on the LIPA reformat, as
6 you recall, gave increased oversight
7 responsibilities to the Public Service Commission to
8 increase penalties.
9 So, really, across many, many fronts, we are
10 highly focused on resilience.
11 SENATOR CROCI: Well, I can see that in
12 certain sectors.
13 But, if you're taking your power generation
14 and you're moving it into the Atlantic Ocean and the
15 Block Island Sound, I don't consider that a step
16 forward in resiliency.
17 I consider that a step backwards in
18 resiliency for some reason other than safety and
19 power generation.
20 But you and I might differ on that.
21 SENATOR GRIFFO: Thank you, Chairman Croci,
22 from our Homeland Security Committee.
23 Chairwoman Paulin --
24 ASSEMBLYWOMAN PAULIN: Thank you.
25 I just have a --
141
1 SENATOR GRIFFO: -- from the energy side.
2 ASSEMBLYWOMAN PAULIN: -- few follow-up
3 questions.
4 The -- the agreement provides that the
5 Attorney General and Riverkeeper shall file a joint
6 motion with the NRC to withdraw their contentions,
7 and shall, and I quote, use their best efforts to
8 cause other potential parties, intervenors, and
9 interested government entities in the NRC
10 proceedings to join or not oppose withdrawal, end of
11 quote.
12 Who are these potential parties?
13 Has this happened?
14 Could it jeopardize the agreement if such
15 parties did not join the motion or if they oppose
16 the withdrawal?
17 RICHARD L. KAUFFMAN: By the way, I want to
18 amend earlier testimony, Senator Murphy, because you
19 asked me who else was involved in the negotiations?
20 SENATOR MURPHY: Yes.
21 RICHARD L. KAUFFMAN: And so the
22 Attorney General was also involved in the
23 negotiations.
24 SENATOR MURPHY: So there was four?
25 RICHARD L. KAUFFMAN: Yeah.
142
1 So forgive me. All right?
2 This was all part of the -- part of the
3 settlement agreement, and so I do not believe that
4 there are any parties that are -- that are going to
5 stand in the way of -- of -- of the settlement
6 agreement.
7 ASSEMBLYWOMAN PAULIN: But are there other
8 parties that existed, that needed to be brought into
9 the conversation at any point?
10 Because I'm just curious about the mention of
11 "other parties" specifically in the agreement.
12 RICHARD L. KAUFFMAN: There were -- not --
13 not that I'm -- not that I am aware of.
14 ASSEMBLYWOMAN PAULIN: Not that you're aware
15 of.
16 Okay.
17 The agreement doesn't say much about
18 decommissioning. It's one paragraph.
19 What exactly is your understanding of the
20 commitment vis-a-vis the agreement between the State
21 and Riverkeeper and Entergy?
22 RICHARD L. KAUFFMAN: With respect to
23 decommissioning?
24 ASSEMBLYWOMAN PAULIN: Yes.
25 RICHARD L. KAUFFMAN: There's -- there's --
143
1 if I understand your question, there's -- there's --
2 there's no agreement between Riverkeeper and Entergy
3 with respect to decommissioning.
4 ASSEMBLYWOMAN PAULIN: So in the -- in the
5 agreement it says, in that short paragraph, it
6 commits -- it says, "Within 120 days after" -- and
7 they're referring to Entergy -- "has made a
8 reasonable determination that the funds in the
9 nuclear decommissioning trust are adequate to
10 complete radiological decommissioning and any
11 remaining spent nuclear-fuel management activities."
12 So it's basically saying, Entergy shall make
13 appropriate filings after they determine that
14 there's reasonable funds to complete radiological
15 decommissioning.
16 So that -- that's the essence.
17 I'm just, you know, refreshing your memory.
18 RICHARD L. KAUFFMAN: Right.
19 ASSEMBLYWOMAN PAULIN: The -- you know, in
20 March of -- March 16, 2016, NYSERDA, which you're a
21 chair of, filed -- filed a statement, or filed in a
22 proceeding, that -- in rule-making, that the NRC is
23 currently undergoing -- although I'm not sure what
24 the status of that -- but, in March there was a
25 statement issued from NYSERDA and from the Attorney
144
1 General's Office, and -- on, again, NRC's regulatory
2 improvements for decommissioning power reactors.
3 And the State argued that the NRC should
4 eliminate the 60-year-delay decommissioning option,
5 and that all decommissioning should be completed in
6 10 years.
7 NYSERDA further argued that DECOM is the best
8 option to protect state and local resources.
9 Did this come up in the agreement
10 conversations, in the negotiation?
11 RICHARD L. KAUFFMAN: It -- you know, it --
12 it -- it -- it came up, but the -- the -- again,
13 this is an issue. That's why NYSERDA has -- has
14 provided these comments to NRC.
15 The issue of the decommissioning process, the
16 termination of the trust fund, all the -- all these
17 various things, are really a subject for the NRC.
18 And you have a representative here from the
19 NRC who can explore this in greater detail.
20 So this was an area where we -- we've -- it
21 was not a long part of the negotiation, but we --
22 we -- we discussed the possibility of -- of an
23 earlier physical decommissioning.
24 And -- and, instead, I think what we were
25 able to negotiate was -- to Senator Croci's concern,
145
1 we were able to negotiate a -- an immediate
2 beginning of transfer of waste into dry-cask
3 storage.
4 Because under -- under -- without the
5 agreement, the waste would continue to accumulate in
6 those pools, and nothing would have been moved into
7 dry-cask storage until after the plant would have
8 shut down.
9 ASSEMBLYWOMAN PAULIN: So, presumably,
10 leaving resources, because they could be a waiver
11 applied to the NRC, to use some money for
12 dry-caskets.
13 So you're saying that, you know, this way,
14 the money is going to be, essentially, used for
15 radiological cleanup, other than spent fuel, which
16 was another argument that was made in your testimony
17 to the NRC, that that would be appropriate.
18 I'm putting words in your mouth, but
19 that's -- you know.
20 So just to remind you about the testimony,
21 I realize it was a year ago, that, you know,
22 New York further argued that decommissioning trust
23 funds should not be used for spent-fuel management
24 or any other non-commissioning expense, going to
25 the -- to your point about dry-caskets.
146
1 New York further argued that decommissioning
2 expenses should be limited to activities that reduce
3 radiological contamination at the site.
4 New York further argued that sites, such as
5 Indian Point, specifically mentioned, with
6 subsurface-contamination costs, may cost more than
7 the formula that the NRC uses.
8 New York further argued that there should be
9 a complete -- complete energy preparedness plan in
10 place during re -- decommissioning.
11 New York further argued that there should be
12 a requirement for an independent audit of all
13 relevant trust funds aligned with -- I'm quoting,
14 aligned with realistic decommissioning planning,
15 including site-restoration costs for subsurface
16 contamination.
17 I'm wondering if any of those topics came up
18 in the negotiation.
19 RICHARD L. KAUFFMAN: No, they did not.
20 And, again, I would -- I would -- I'd -- I'd
21 ask you to raise some of these issues with Entergy.
22 I don't want to speak on their behalf.
23 But I think the -- I think the -- one of --
24 one of the points of contention that we've had in --
25 in -- over the years with Entergy is the issue of --
147
1 of what are -- what are state authorities versus
2 federal authorities?
3 And I think Entergy has -- has -- has taken
4 the position that they don't want -- they have not
5 wanted to -- they have had a very strong legal
6 perspective that the federal government has certain
7 responsibilities, and they have not wanted to -- to
8 concede certain state authorities, out of concern
9 about setting precedent.
10 ASSEMBLYWOMAN PAULIN: So in the -- you know,
11 in the filing -- in a filing that Entergy made with
12 the NRC, it said that, to decommission Indian
13 Point 3, it would be $1.1 billion, which is about a
14 $400,000 -- they're short about $400,000 currently.
15 Did the -- was it discussed whether or not
16 that would be adequate for DECOM versus SAFSTOR?
17 Or, was it assumed that, you know, because of
18 the amount of money in the trust funds, that SAFSTOR
19 was the only option, which means that they would
20 have up to 60 years to make that land usable for --
21 for local -- local concerns?
22 RICHARD L. KAUFFMAN: So, again, in terms of
23 decommissioning the trust fund, the adequacy of
24 trust fund, that is -- that is in the realm of the
25 NRC.
148
1 ASSEMBLYWOMAN PAULIN: So could it have come
2 up?
3 I mean, clearly, this is a, you know, legal
4 document. It's an agreement between the two
5 parties. And, it was discussed, somewhat, at least
6 the option of DECOM versus SAFSTOR.
7 You know, was there a reluctance on the part
8 of Entergy to engage in those conversations?
9 I mean, you implied that by saying that the
10 compromise was, or that the agreement speaks to, the
11 dry-casket -- or, moving the spent-fuel rods into
12 the dry-caskets.
13 I'm -- I'm -- knowing the community's need to
14 use that land, I just wondered, to what degree, you
15 know, that was, you know, part of the conversation,
16 and whether it can still be part of the
17 conversation, or, you know, we've lost that
18 opportunity?
19 Whether -- I guess the -- you know, Vermont,
20 as you know, was very active in trying to promote a
21 quicker decommissioning.
22 Entergy owns that plant. And, you know,
23 initially, it was scheduled for the same 60 years.
24 And, most recently, they sold it, and the
25 decommissioning is going to be take can place,
149
1 I believe, in ten.
2 You know, so I just wondered, is the State
3 going to be involved?
4 You know, if you feel you gave up negotiating
5 it into the agreement, you know, is there going to
6 be involvement on the part of the State to help the
7 locals drive Entergy to a DECOM solution?
8 RICHARD L. KAUFFMAN: We are certainly going
9 to -- we are certainly going to continue to work
10 with the communities and with Entergy to try to
11 ensure that the decommissioning of the plant happens
12 as soon as it -- as soon as it -- as soon as it can
13 practicably.
14 ASSEMBLYWOMAN PAULIN: So in hearings held
15 in Vermont regarding the decommissioning of
16 Vermont Yankee, it was clear that Entergy and the
17 NRC had a difference of opinion about who would be
18 responsible for additional costs beyond the 60-year
19 SAFSTOR period.
20 Entergy argued that they have no
21 responsibility past that time.
22 The NRC argued that Entergy should continue
23 to be responsible.
24 We're gonna -- I'm going to ask the NRC, you
25 know, what enforcement power they have.
150
1 But, was this a concern -- I mean, going to
2 Senator Croci's point about liability, I mean,
3 there's clear -- in the New York testimony liability
4 was discussed. I think it was in the Attorney
5 General's comments, not NYSERDA's, but liability was
6 a concern over -- because of the length of time.
7 You know, there could be bankruptcy.
8 The business could go -- can sell it to
9 somewhere else, which may not be as reputable, or
10 what have you.
11 So, you know, if -- you know, is there -- you
12 know, could we have addressed the liability issues
13 in the agreement?
14 And I'm curious as to why we didn't.
15 RICHARD L. KAUFFMAN: Well, the -- of course,
16 this is all very hypothetical, and might be quite a
17 long period of time in the future.
18 The -- the -- there -- there are these
19 existing approaches to decommissioning and
20 decommissioning fund.
21 I've already talked about this several times.
22 The -- if you're concerned about the future
23 financial viability of Entergy, any representation
24 that would have been in a contract wouldn't have had
25 any -- any particular value.
151
1 It was not something that -- that -- it was
2 not something -- we felt that the -- that the
3 existing arrangements and -- with the NRC and the
4 operators and the role of the federal government
5 provided sufficient protection for the state.
6 ASSEMBLYWOMAN PAULIN: So we have a few more
7 years left, you know, of -- with Entergy operating
8 Indian Point.
9 Was there any -- you know, or, is there any
10 conversation going on about increasing that trust
11 fund?
12 You know, where does the money come from?
13 Could we do that in order to guarantee that
14 we could go with a different option?
15 You know, could there be any negotiation in
16 there, you know, so that the $724 million currently
17 in IP-3, you know, could be increased to the point
18 where we could at least decommission a part of the
19 property earlier?
20 You know, was there a -- because if we
21 need -- if we are assuming SAFSTOR, which is what
22 they were assuming when they made the filing to the
23 NRC, and we don't even have enough money for that,
24 then, we clearly don't have enough money for DECOM,
25 because the difference between DECOM and SAFSTOR, as
152
1 we know, is a financial decision.
2 It's not a -- you know, although, we can be
3 clearer when we talk to the NRC, but it doesn't seem
4 to be more than -- at least New York argued in their
5 testimony, doesn't seem to be more than a financial
6 option or a difference.
7 So, is there a possibility of increasing the
8 trust fund to the point where we can decommission
9 Indian Point earlier?
10 RICHARD L. KAUFFMAN: Well, I believe that
11 the people from Entergy will tell you, as the plant
12 operates, there are additional contributions that
13 are given to the decommissioning fund.
14 But, again, I want to -- I want to stress yet
15 again, that Entergy had -- has made certain
16 decisions with respect to being in the merchant
17 business, has had concerns about the ongoing
18 economics at the plant.
19 So this was -- this was -- this was a -- this
20 was a negotiation -- there was a nego -- after
21 10 years, there was a moment where both sides had an
22 interest in negotiating -- having a negotiating
23 settlement.
24 So Entergy was -- was not prepared to
25 increase the -- the amount of money that was
153
1 gonna -- it was going to commit to the
2 decommissioning trust fund.
3 I believe that they will say that -- and the
4 NRC will say, that there's -- there -- that there
5 are -- the funds, over time, will be adequate to
6 decommission the plant.
7 ASSEMBLYWOMAN PAULIN: Okay.
8 Thank you so much.
9 SENATOR GRIFFO: Thank you, Chairwoman.
10 You have been very gracious with your time.
11 I know, Assemblyman. I'm -- we're
12 continuing.
13 So, do you need a break? that's what you want
14 to ask? Because you've been very gracious, both of
15 you.
16 Do you need a five-minute break?
17 RICHARD L. KAUFFMAN: I guess it depends on
18 how much longer we're --
19 SENATOR GRIFFO: We have -- you have myself,
20 I'm about to ask you a few -- some questions.
21 Senator Murphy. And then I think you have at least
22 three Assemblymembers.
23 AUDREY ZIBELMAN: Yeah, if that's okay?
24 SENATOR GRIFFO: All right. So we're going
25 to take a five-minute break. Okay?
154
1 RICHARD L. KAUFFMAN: That's great.
2 Thank you.
3 (A recess commenced.)
4 (The public hearing resumed.)
5 SENATOR GRIFFO: Can we have silence please
6 in the room, and if everyone would please take their
7 seats.
8 I think the Chairwoman and the Chairman,
9 Mr. Kauffman and Ms. Zibelman, have a few things
10 that you want to clarify, and I'll let you do that,
11 and then I will have some questions for you, if
12 that's okay with you?
13 RICHARD L. KAUFFMAN: That's fine.
14 SENATOR GRIFFO: Can I again have some order,
15 please?
16 Mr. Kauffman.
17 RICHARD L. KAUFFMAN: Thank you,
18 Chair Griffo.
19 I wanted just to make a couple points, to
20 clarify some of the points that came up earlier.
21 The first, is that there is no weapons-grade
22 material at Indian Point.
23 I want to just make -- there is material
24 associated with the production of -- of -- the
25 byproduct that comes from the production of -- OF
155
1 nuclear power. But that does not -- that waste
2 material is not weapons-grade material.
3 The second thing is there -- I think there
4 was ambiguity, and I want to clear up the ambiguity,
5 with respect to the role of the NRC in terms of
6 responsibility for decommissioning and security at
7 the site.
8 This is -- there's no -- there's no ambiguity
9 about this at all.
10 We should not leave any sense that this is a
11 site that's going to be -- where responsibilities
12 are going to fall in between the cracks.
13 The NRC is responsible for decommissioning
14 and ensuring safety at the site.
15 Full stop.
16 SENATOR GRIFFO: Thank you.
17 Audrey.
18 AUDREY ZIBELMAN: I just wanted to add,
19 since -- Richard, the -- in terms of the agreement
20 itself, and the questions that came out around
21 decommissioning, did you want to add about that?
22 RICHARD L. KAUFFMAN: Oh, yes.
23 Thank you.
24 So the -- again, this is kind of, maybe a
25 little lawyerly, and I'm not a lawyer, the -- again,
156
1 the -- this agreement was an agreement to settle
2 outstanding litigation.
3 And some of the questions that came up
4 were -- with respect to decommissioning, were
5 outside what had been brought up in any matters of
6 litigation.
7 SENATOR GRIFFO: Thank you.
8 Anything else?
9 AUDREY ZIBELMAN: That's it.
10 SENATOR GRIFFO: I appreciate that, and, so
11 noted.
12 I got a couple of questions on the
13 AC transmission line and some in-state generation.
14 But let me start with Champlain Hudson first.
15 Okay?
16 There was a -- well, first of all, you said
17 that it was a mark -- let's start with you, Richard,
18 and then go to Audrey, because I know it will be
19 more Audrey -- but you said, again, the market
20 decision would rule it.
21 So if it doesn't happen, how would we replace
22 that emission-free power, otherwise, if the market
23 didn't present itself, as you indicated?
24 RICHARD L. KAUFFMAN: Well -- so, again,
25 there are a whole range of projects that are -- that
157
1 could come online, some sooner, and some later.
2 So we've talked about the changes in
3 technology and -- and -- that can be quite rapid.
4 But when we -- so, certainly, as we go out
5 into the 2020s, we will have increasing amounts of
6 wind from offshore, but we have to look at it on a
7 systemwide basis.
8 And as I said before, in terms of the impact
9 of the RGGI cap, so I'm not going to say that
10 there's -- that there's going to be a watt-for-watt
11 replacement.
12 If Champlain Hudson doesn't happen, I can't
13 do an exact accounting of where the replacement
14 power is going to be, because, ultimately, that's
15 going to turn out to be a result of market actors.
16 SENATOR GRIFFO: You stated in the past that
17 the best way to look at energy policy are all
18 starting with the consumer, and work backward.
19 So let's identify the -- let's talk about,
20 what do you see as the best sources of in-state
21 generation?
22 You talked about, generally, but what would
23 you identify specifically?
24 Is it solar? Is it wind?
25 Is it -- what are going to be our best
158
1 sources of in-state generation that we can expect to
2 replace this type of power?
3 RICHARD L. KAUFFMAN: Well -- so, the way
4 things stand today, based on what we know today, is
5 going to be energy efficiency, it's going to be
6 onshore wind, and it's going to be -- in terms of
7 large scale, it's going to be -- as we get out in
8 into the 2020s, it's going to be offshore wind.
9 Solar is certainly going to play a role, but
10 it's not going to be the large -- probably not going
11 to be the largest source of renewable energy in
12 New York State.
13 We're not -- we're not currently Nevada.
14 That's a joke.
15 SENATOR GRIFFO: I get you, I get you.
16 AUDREY ZIBELMAN: Nor do we want to be --
17 I think, nor do we want to be.
18 SENATOR GRIFFO: All right.
19 We're all celebrating fat Tuesday. It's the
20 Mardi Gras, so...
21 The AC transmission line, you talked about
22 maybe 1,000 megs coming from the line.
23 The Energy Highway, I mean, how would you
24 indicate the status?
25 There was a lot of discussion of that,
159
1 there's was a task force put together to work on the
2 Energy Highway; and, yet, you know, if we look at AC
3 transmission, you know, seven years later, there's
4 no projects, really, that have been built under it.
5 So I guess the questions here are not only
6 the status of the Energy Highway, but with that
7 absence of any activity over a seven-year period,
8 have we chosen a path?
9 Do we know who's going to construct the line?
10 AUDREY ZIBELMAN: Sure.
11 Well, we have -- there's been quite a bit of
12 activity, actually.
13 And we're at a point now where, in January,
14 the commission approved, it was a process -- this is
15 one of those processes that sits between the -- it
16 sits among, I would say, the New York ISO and us,
17 because there's a state-federal issue.
18 The -- we asked the ISO to review the
19 projects, and to make sure that they would do what
20 we wanted them to do.
21 They came back to us and said that they
22 would.
23 We confirmed then that they should proceed.
24 They're going to now proceed with their
25 selection process, and then it will come back to us
160
1 for an Article 7 siting process.
2 The expectation all along is -- was that we
3 would be in the -- end up with the selections, in
4 2018-19 time frame, with construction completed in
5 the early 2022. We're still actually on track to do
6 that.
7 I know these sound like long processes, but,
8 frankly, for building this type of transmission,
9 it's really not. It's pretty much at pace.
10 The good news is, is that we used a
11 competitive process here, which has really driven
12 better results.
13 SENATOR GRIFFO: So we have a path chosen?
14 AUDREY ZIBELMAN: There's mult -- there are
15 paths at the various -- vendor -- that various
16 competitors have looked at.
17 The ISO has confirmed that the various
18 competitors have identified a path -- paths, that
19 will -- and -- you know, and design that will get to
20 our 1,000 megawatts.
21 And now we're looking at, well, which is the
22 best one along the lot?
23 SENATOR GRIFFO: Do we have a cost associated
24 with that?
25 AUDREY ZIBELMAN: There are -- there are
161
1 various costs that have been proposed, and were
2 evaluated by both my agency and the ISO for
3 reasonableness.
4 SENATOR GRIFFO: And the projected completion
5 date?
6 AUDREY ZIBELMAN: It -- I expect that it will
7 begin construction in early 2019, with the
8 expectation that it will be ready for commissioning
9 and be able -- in 2022.
10 I want to make sure, because, you know,
11 there's always the other side, is that this will go
12 through the siting process.
13 It's not, like, we still have to go through
14 the siting process.
15 But, if everything stays the way it is today,
16 that's when we expect it to get done.
17 SENATOR GRIFFO: Under the siting process,
18 how would you handle any local opposition that would
19 generate as a result of where you identify a pathway
20 to such a project?
21 AUDREY ZIBELMAN: Well, we would look at it
22 just like we do on things.
23 You know, there's -- I believe that, at this
24 juncture, the process that we have used, in terms of
25 looking at existing right-of-way and minimizing
162
1 impacts, has -- has been a good one.
2 To the extent that there's -- continues to be
3 local concerns, and there are improvements that
4 could be made, that would be made through the siting
5 process.
6 But I think that the competitive process, and
7 the Governor's requirement that we create a
8 fast-track process for transmission that uses
9 existing right-of-way, has made it very clear that
10 even -- what we want to do is use better technology
11 and use existing right-of-way to get more out of it.
12 SENATOR GRIFFO: In a -- Marie French was
13 here from "Politico", and we were just talking.
14 There was a January 17th article, going
15 back to Champlain Hudson, where a NYPA spokesman had
16 indicated that an Internet -- interconnect agreement
17 was going to be necessary with NYPA, and they were
18 working on the terms.
19 Now, previously, we've been asked if there
20 was going to being a role for NYPA.
21 So do you see now that there's some type of
22 acknowledgment that NYPA will have to be involved in
23 this process -- project, potentially, if this is
24 identified and selected as a potential alternative?
25 AUDREY ZIBELMAN: Let me, subject to
163
1 clarification -- to check on this, they -- I don't
2 believe the Champlain Hudson line itself is going to
3 require an interconnection with NYPA because it's a
4 DC line.
5 I think what it was referring to is the fact
6 that we're looking at additional interconnection
7 into -- on -- into Quebec, which would be over AC.
8 SENATOR GRIFFO: And the company Entergy
9 actually --
10 AUDREY ZIBELMAN: Do you have --
11 RICHARD L. KAUFFMAN: Yeah -- I mean, again,
12 I -- I -- the issue of NYPA -- if the question -- is
13 the question about NYPA's participation in
14 Champlain Hudson? Is that the question?
15 SENATOR GRIFFO: Yeah, and the question is
16 the solvency of NYPA, because they've undertaken a
17 number of projects right now, and they're dealing
18 with a number of significant financial challenges,
19 potentially.
20 And now, when we were talking about, were
21 there roles for NYPA in all of this process,
22 particularly, with the closure of Indian Point?
23 And, if there's going to be some type of
24 responsibility or requirement, if you're looking at
25 importing power internationally, is there a role
164
1 that they're going to have to play? What would that
2 be?
3 And I'm just quoting you -- quoting what we
4 had read recently from one of the -- this article in
5 "Politico" that occurred, where NYPA is saying that
6 they would have -- they would be involved in some
7 way.
8 RICHARD L. KAUFFMAN: Well, NYPA would be
9 involved to the degree to which NYPA has a customer
10 that is interested in procuring the power.
11 SENATOR GRIFFO: And we had talked before,
12 Chairman, about, you know, whether or not this
13 project would be eligible for Clean Energy Standard,
14 and the acknowledgment at the budget hearing about
15 how this would count towards the State's renewable
16 energy goals.
17 The company Entergy is saying that the
18 Champlain Hudson would not be economically feasible
19 and put a burden on the New York ratepayers.
20 I'm going to ask the company when they come
21 here. That was a previous statement.
22 Would you -- you disagree with that,
23 obviously, then?
24 AUDREY ZIBELMAN: I do disagree.
25 So -- so, there's two things.
165
1 One's the question, under what circumstances
2 do -- does any resource -- existing resource,
3 qualify for a renewable-energy credit under the
4 Clean Energy Standard?
5 And what we said in the standard, because we
6 didn't want existing resources to compete with new,
7 that the resource would have to be commissioned
8 post 2015 and be incremental.
9 Because the idea is, we're already counting
10 towards our Clean Energy Standard, existing
11 resources, such as the existing hydro; otherwise,
12 you'd have to procure even more.
13 So that was that question.
14 The separate question I think is, how would
15 we treat a bilateral agreement between a customer
16 and Hydro-Quebec, even if it didn't qualify under
17 the CES?
18 And what we would look to do, and this is
19 something we also identified in the Clean Energy
20 Standard, is that, to the extent that people are
21 voluntarily getting into agreements with renewables
22 that allow us to meet our goal, we would lose -- use
23 that as an opportunity to reduce the commitment that
24 others have to make.
25 And so we would look at how it gets included
166
1 in the base of resources that we count towards the
2 goal.
3 SENATOR GRIFFO: Well, thank you.
4 And in 2013-14, I think you had instituted an
5 expedited Article 7 process.
6 Have there been any Article 7 expedited
7 projects to date as a result of the initiative?
8 AUDREY ZIBELMAN: I believe there have been,
9 and I'll get back to you on that.
10 But, certainly, the AC system itself, you
11 know, would qualify.
12 But that was already pending, so it was a bit
13 of a --
14 SENATOR GRIFFO: All right. Thank you.
15 As we conclude, I'm just going to ask -- make
16 an ask, which Senator Croci began, on some listings
17 that we would like you to provide some information
18 for us, from both of you.
19 But I'll wait until we end, and I'll turn it
20 over to Chairwoman Paulin.
21 ASSEMBLYWOMAN PAULIN: Ah, yes.
22 On my side, I think Assemblymember Byrne has
23 a couple of questions.
24 ASSEMBLYMAN BYRNE: Yes.
25 Thank you.
167
1 First, thanks for coming in today and
2 speaking with my colleagues.
3 I know they all asked good, pointed
4 questions, and I appreciate it.
5 Some of the questions I even had have been
6 answered already.
7 Just by background, I actually grew up about
8 30 minutes away from Indian Point, in Putnam County,
9 in Putnam Valley.
10 I have friends and family that have benefited
11 from Indian Point. People I grew up with, their
12 parents worked at Indian Point. Folks that I know
13 now work there.
14 This has been an issue I know we've been
15 talking about much of my life, about the potential
16 closure of Indian Point.
17 And when this came out, the Governor made a
18 comment that he was so proud, and that he worked for
19 this for about 15 years.
20 So here's my question, is:
21 Throughout the long process of this, how much
22 has the State actually spent in litigation against
23 Entergy?
24 And, how much has it actually, ultimately,
25 cost the taxpayers so far?
168
1 RICHARD L. KAUFFMAN: I don't know.
2 ASSEMBLYMAN BYRNE: You don't know?
3 Okay.
4 So I would venture to guess, it's been quite
5 a lengthy battle, it would be in the tens of
6 millions of dollars, and, if not more.
7 But my concern is about the jobs lost.
8 Obviously, that's something we've been
9 hearing a lot from my colleagues previously.
10 And, we have over 1,000 people that will be
11 going out of the work.
12 We have about 100 people in my district that
13 will be going out of work.
14 And I understand your comment before, when
15 you alluded to say we have time to kind of answer
16 this question, and I appreciate that.
17 But, you know, the folks who found out about
18 this --
19 I know I have representatives, I think, from
20 the Teamsters and UWA here, and I appreciate them
21 coming down.
22 -- you know, them finding out about this in
23 the "New York Times" I don't think was the best way
24 for them to be notified.
25 I didn't appreciate that either.
169
1 But, that said, we are where we are, and we
2 have this timeline.
3 And I really just want to know a little more
4 about your plan. You spoke about it already.
5 You spoke about how the people at
6 Indian Point are skilled workers, which
7 I appreciate, and I agree with.
8 But I don't want to have to see them uprooted
9 from their families and move, or have their families
10 move, out of New York State to keep that gainful
11 employment.
12 And I do think it's important that, you know,
13 this energy is created in-state, in New York State.
14 So that's really more of a comment.
15 My question was more geared towards, how much
16 in litigation fees does the State pass?
17 And you didn't have an answer for that, and
18 that's okay.
19 If you can get one, I would appreciate it.
20 But, if there's anything else you can do to
21 elaborate on how we're going to do this, create this
22 energy in New York?
23 RICHARD L. KAUFFMAN: Okay.
24 I guess the only comment I would make about
25 cost is, you know, what price, safety?
170
1 I mean -- and I think that the safety issues,
2 we don't want to -- we certain -- again, this was
3 the Governor's primary motivation in the last 10 or
4 15 years.
5 By the way, in terms of the comment, we
6 didn't appreciate reading about it in the
7 "New York Times" either, because we weren't sure
8 that there was a deal, as I say, until Sunday night.
9 So that article, I believe, was on a Friday.
10 So it was certainly not -- not what we wanted
11 either.
12 You know, in terms of -- in terms of
13 employment, I guess I'd make a couple comments.
14 One is that, just to reiterate the point that
15 I made before, that the workers that are at
16 Indian Point are highly skilled, and so there is
17 going to be demand for those workers in the state.
18 And, I think the -- and the broader point
19 about energy being made in New York is, you know,
20 one of the -- one of the benefits, and one of the
21 reasons why the Governor has put forth the energy
22 policy that he's put forth, is that -- is that the
23 new energy system is going to involve creation, in
24 the aggregate, of -- it's going to create a lot more
25 economic growth; and what I mean by that, is that --
171
1 or create -- has an opportunity to create economic
2 growth.
3 Because the thing is, is when -- when
4 you're -- and -- and a -- we don't -- we don't
5 produce fossil fuels in the state, so we're not --
6 we're not only not Nevada, we're not -- you know,
7 we're not Texas either.
8 Right?
9 And so it means that, the energy system that
10 we're building is one where, as we have more
11 distributed resources, as we have more energy
12 efficiency, the ability to integrate distributed
13 resources with large-scale -- with -- integrate
14 energy efficiency and demand shifting with
15 large-scale renewables.
16 All this -- all this means, that we are
17 substituting labor for what would have been fossil
18 fuels, because there's going to be more labor
19 content in many of the -- many of the things that
20 are going to be required to build this new system.
21 So it is a pro economic-growth policy that
22 we're pursuing.
23 ASSEMBLYMAN BYRNE: So, just one more
24 follow-up question.
25 You mentioned it before, people asked
172
1 questions -- some of the members, my colleagues,
2 asked about natural gas as an option, and I just
3 want to confirm something.
4 You said that doesn't employ nearly as many
5 people.
6 It's compared to the 1,000-plus people at
7 Indian Point presently, how much could we expect
8 from natural gas?
9 200?
10 RICHARD L. KAUFFMAN: No, much -- much --
11 much less than that.
12 ASSEMBLYMAN BYRNE: Much less than that.
13 Like, 25?
14 AUDREY ZIBELMAN: If I may add, though, just
15 two points:
16 One is, as Richard mentioned before, you
17 know, Entergy has announced that it was going to get
18 out of the merchant business, so that the plant
19 wasn't going to stay operational.
20 And, again, by entering into this agreement,
21 which has within its component, a discussion around
22 jobs, it actually is the State's best opportunity to
23 plan for making certain that people have jobs.
24 If we just let it happen, they could have
25 given us a six months' notice, and we were done.
173
1 So I do think that we have the best
2 opportunity.
3 The other piece about jobs that we haven't
4 talked about before, is the other work that the
5 State's doing in terms of the energy sector.
6 We've talked about renewables.
7 The other piece is, the -- the work we're
8 doing on transmission and distribution, which, also,
9 our utilities are looking to hire, and I think are
10 also going to be a good source.
11 The other aspect that the State has been
12 doing, both in terms of infrastructure build-out, is
13 replacing 10,000 miles of leak-prone pipe with new
14 pipe. And so the gas utilities are also looking for
15 people.
16 So there's -- there's plenty of jobs in the
17 energy sector, even the traditional sector, in
18 addition to the jobs in the renewables.
19 That's why I think we have a great
20 opportunity, with planning, to give people jobs that
21 they can redeploy even in the region, maybe in other
22 aspects of the sector.
23 But, certainly, I would expect that they're
24 going -- in fact, that they come from the sector
25 will be very valuable.
174
1 ASSEMBLYMAN BYRNE: Well, thank you for your
2 time again, and I look forward to seeing this plan
3 evolve.
4 AUDREY ZIBELMAN: Thank you.
5 SENATOR GRIFFO: Senator Murphy.
6 SENATOR MURPHY: Thank you, Chairman.
7 Thank you for your indulgence and staying
8 here for quite a few hours.
9 Chairwoman, you stated that electricity is
10 more reliable and more cost-effective when it is
11 consumed closer to where it is generated.
12 New York City and Westchester need a great
13 deal of electricity.
14 How much of the planned replacement power
15 that we're talking about will be based in
16 Westchester County or New York City?
17 AUDREY ZIBELMAN: The expectation -- the
18 expectation that we're looking at with respect to
19 how the energy sector can evolve is, is that you're
20 going to have a high level of intensity of what we
21 call "distributed energy resources."
22 It could be other types.
23 It could be -- you know, we talked about
24 solar, but it's also storage.
25 We're also talking about fuel cells,
175
1 geothermal, all sorts of resources, that could be
2 located closer to the load and the technologies are
3 going down.
4 And I just want to be clear, that the total
5 price of electricity is what we're talking about.
6 And the fact that by using distributed
7 resources closer to the point of consumption, you
8 can both make sure that demand is more efficient.
9 So one of the things that, as we have, for
10 example, renewables, like wind, wind is available
11 better at night.
12 If we use localized storage, we can move
13 demand to the night and make better use of the
14 resources.
15 So it's about, actually, the total efficiency
16 of the system, and reducing the total bill, being
17 indifferent to technology.
18 So the difference, and just to -- in the
19 twentieth century, we built a grid that was
20 dominated by central power, and very little on the
21 demand side.
22 In the twenty-first century, New York and
23 elsewhere is saying, actually, we need to buy --
24 have a much more sophisticated system that uses both
25 distributed resources and central station so
176
1 everything gets optimized and is more resilient.
2 SENATOR MURPHY: Okay. Thank you.
3 So, we talked about possibly getting the
4 1,000 megawatts from Champlain Hudson. Right?
5 So, has anybody talked to the coast guard?
6 Because, in case you don't know, from Yonkers
7 to Kingston, they plan on 60 new anchorage sites in
8 the Hudson River.
9 AUDREY ZIBELMAN: I believe -- well, subject
10 to the check, but I think the coast guard has been
11 involved in the siting processes at the federal
12 level.
13 But let me -- let's get back to you on that.
14 SENATOR MURPHY: I think that's extremely
15 important.
16 And so, Chairman, you talked about the
17 relicensing, how it took so long, 10 years, and you
18 finally came to the agreement with Entergy.
19 Well, $200 million later, you make common
20 sense of saying, listen, this is not a good business
21 decision for us to continue.
22 So the agreement there tells you that the
23 relicensing took 10 years, and normally it takes,
24 how long, in the relicensing of a nuclear power
25 plant?
177
1 AUDREY ZIBELMAN: It depends on the
2 circumstances.
3 SENATOR MURPHY: My understanding was, about
4 two years.
5 AUDREY ZIBELMAN: It depends on the
6 circumstances. Factual.
7 SENATOR MURPHY: So it finally came to an
8 agreement, in 200 (sic) years.
9 I know Entergy will be here today, and they
10 will be testifying. So, I most certainly have a
11 bunch of questions, and the whole process, and what
12 obstacles they've confronted with the State, and how
13 much money, and things like that.
14 But Assemblyman Byrnes talked about the
15 workforce, which I am extremely concerned about.
16 1100 jobs, close to, up there.
17 We talk about retraining them.
18 Can we get in this agreement about retraining
19 these guys in the process of decommissioning?
20 AUDREY ZIBELMAN: I think that's something
21 else you should talk to Entergy about, is what --
22 how they -- what resources they use for
23 decommissioning.
24 SENATOR MURPHY: Okay.
25 Because a lot of them live locally, and I'd
178
1 prefer them to stay in their own households instead
2 of having to move within New York State, or without
3 having to move to Louisiana or someplace else.
4 I'd like to keep them in New York State and
5 actually keep them in their homes.
6 AUDREY ZIBELMAN: And may I, I would say,
7 certainly, from our side, that's the preference as
8 well, which is why we want to look at both jobs at
9 the plant as well as jobs elsewhere in the industry.
10 SENATOR MURPHY: And then one final -- well,
11 two final questions.
12 The Yankee Nuclear Plant in Vermont, when
13 they were decommissioning the nuclear power plant,
14 they brought in a decommissioning firm for the
15 purpose of the shutdown.
16 Is there any prohibition within your
17 agreement of not bringing in an outside company to
18 do this?
19 RICHARD L. KAUFFMAN: There's no prohibition,
20 no.
21 SENATOR MURPHY: Okay.
22 Okay. One last thing.
23 I'd just like to just read some "quick, I'm
24 done." It's no -- it's just a statement from me.
25 Thank you for your indulgence, and thank you
179
1 for being here today and answering some of our
2 questions, but I do have one quick statement.
3 The Business Council of Westchester estimated
4 that, Indian Point were to close, it would result in
5 a drain of close to $11.5 billion from the local
6 economy.
7 This factored in loss of taxes, jobs,
8 real-estate holdings of employees, the expected loss
9 of support to businesses, gas stations, markets,
10 et cetera.
11 Taxes.
12 Indian Point Energy Center is one of the
13 largest taxpayers in Westchester County.
14 In 2014 Indian Point paid close to
15 $72 million in taxes to the state and local
16 governments, and -- and, $268 million to the federal
17 government.
18 Of the 70 -- close to $72 million, 30 was
19 paid to the state and local -- localities for
20 property taxes.
21 The Village of Buchanan, where the mayor is
22 here today, would lose close to 47 percent of its
23 revenue.
24 The Town of Cortland would lose close to
25 another $1 million, if not more.
180
1 Hendrick Hudson School District would lose
2 close to $25 million, which is close to one-third of
3 their tax revenue.
4 The jobs, Indian Point, close to 1100 jobs;
5 1100 jobs that we're worried about.
6 This is what I said earlier, in all due
7 respect, that if we're working on something for
8 10 years, we should have a plan, we should have
9 people involved, we should have communication, we
10 should have transparency.
11 These people should have been sitting at the
12 table.
13 We're talking about lives.
14 We're talking about ripping apart families,
15 and sending them south, and sending them out of
16 New York State.
17 I don't think that is what we all sitting
18 here want to happen.
19 Thank you.
20 SENATOR GRIFFO: I would request -- that
21 I think that's it right now.
22 So I would just make a request, as
23 I indicated earlier, a couple of things.
24 And I know the Chairwoman is leaving.
25 We congratulate you on your new opportunity.
181
1 AUDREY ZIBELMAN: Thank you.
2 SENATOR MURPHY: Congratulations.
3 SENATOR GRIFFO: You'll be in summer next
4 year at this time.
5 So what I would ask is, is there a
6 possibility of providing us with some type of a
7 roadmap here, where you outline the next regulatory
8 or State actions which may -- which are necessary,
9 or may be necessary, between now and closing the
10 plant, options, if it's determined, and made, that
11 we need to remain open past 2021?
12 Is there nothing something you can put
13 together with us, a little roadmap to say: Here's
14 what we envision needs to happen, or may need to
15 happen? And if an alternative situation develops,
16 this is the possible approach we may be able to
17 take?
18 AUDREY ZIBELMAN: We can do that.
19 SENATOR GRIFFO: If you can provide me that.
20 The other thing I would ask, Richard, if
21 there's a possibility to provide us with a list of,
22 as we mentioned, a number of the task force is here
23 today that exists right now. And it gets a little
24 confusing at some point.
25 So if you could provide us with an updated
182
1 list of the state task force working -- the state
2 task force, working groups, commissions, or boards
3 that are dealing directly or indirectly with the REV
4 energy siting, energy general issues.
5 If we could get a status of these, if some
6 are defunct now, or if they're still active.
7 Who sits on many of these?
8 If we can get a current updated list of the
9 members that sit on these, such as this new task
10 force that's being created: Where they're housed?
11 Who's on them? Who created them? Are they all
12 executive-created, or some other means?
13 And then, do they have -- what type of
14 authority is encumbered in their creation that they
15 may have, or do not possess?
16 We can get you something written, if you need
17 that, but we can communicate with you.
18 But, something back to us in a couple of
19 weeks, I'd appreciate, that would help us to sort
20 through all of this.
21 RICHARD L. KAUFFMAN: We will do that.
22 SENATOR GRIFFO: At this point, I just want,
23 before the Assemblywoman closes, thank you both for
24 being accessible, for your willingness to come here
25 today to make this presentation; for your interest
183
1 in this matter; and interacting with the members of
2 the Legislature, because it's very important, as we
3 go through such an important issue and a challenging
4 issue.
5 So your presence, we appreciate.
6 And I want to thank you for your service to
7 the state, both of you, because these are
8 challenging times.
9 And your willingness and your interest and
10 your service to be commended too.
11 AUDREY ZIBELMAN: Thank you.
12 ASSEMBLYWOMAN PAULIN: I just want to add --
13 or, to concur with the Senator, that it's been a
14 great working relationship.
15 We really wish you well.
16 AUDREY ZIBELMAN: Thank you.
17 ASSEMBLYWOMAN PAULIN: And we appreciate
18 ongoing support on this issue, and all other
19 energy-related matters, and have really learned a
20 lot today from your testimony.
21 And we know that we will be continuing to
22 work together, as the task force is implemented more
23 fully, and, also, as the decommissioning process
24 continues.
25 So, thank you.
184
1 AUDREY ZIBELMAN: Thank you.
2 RICHARD L. KAUFFMAN: Thank you.
3 SENATOR GRIFFO: The next testifier will be
4 Entergy.
5 I think we will have T. Michael Twomey, who
6 is the vice president of external affairs for
7 Entergy at Indian Point.
8 Mr. Twomey, thanks for being here.
9 Did I pronounce that correctly?
10 T. MICHAEL TWOMEY: Yes, Twomey.
11 SENATOR GRIFFO: So I would ask again,
12 Mr. Twomey, I know you have testimony.
13 T. MICHAEL TWOMEY: I do.
14 SENATOR GRIFFO: If you can summarize in some
15 way, and then allow us to have the opportunity to
16 interact with you, that would be greatly
17 appreciated.
18 We thank you for your patience --
19 T. MICHAEL TWOMEY: No problem.
20 SENATOR GRIFFO: -- and your presence.
21 T. MICHAEL TWOMEY: I'll make one correction.
22 Good afternoon.
23 Senator Griffo, Assemblywoman Paulin,
24 Senator Murphy, Assemblywoman Galef, Senate
25 Committee members and Assembly Committee members,
185
1 I appreciate the opportunity to appear at this
2 public hearing.
3 My name is Mike Twomey, and I'm the vice
4 president, external affairs, for Entergy
5 Corporation, their wholesale commodities division in
6 White Plains, New York.
7 Energy Corporation, the owner of
8 Indian Point, has approximately 30,000 megawatts of
9 electrical generating capacity, delivers electricity
10 as a retail utility provider to 2.8 million
11 customers in the southeastern portion of the U.S.,
12 and is one of the largest nuclear operators in the
13 United States.
14 It owns and operates 10 nuclear plants in
15 New York, Massachusetts, Michigan, Arkansas,
16 Louisiana, and Mississippi, and provides
17 management-support services for an eleventh unit
18 owned by the Nebraska Public Power District.
19 Entergy also owns the Vermont Yankee Nuclear
20 Power Plant in Vernon, Vermont. That facility shut
21 down in December of 2014, and will eventually be
22 decommissioned.
23 As part of electric deregulation in New York,
24 Entergy purchased Indian Point Unit 3 from the
25 New York Power Authority in 2000 through a
186
1 competitive-bid process held by the State of
2 New York.
3 Entergy purchased Indian Point Unit 2 from
4 Con Edison in 2001.
5 We've operated the two units as the
6 Indian Point Energy Center in the New York
7 Independent System Operator, or, "NYISO," wholesale
8 competitive electric market since that time.
9 Indian Point is a world-class,
10 safely-operated nuclear power generation facility
11 regulated and inspected rigorously by independent
12 experts at the Nuclear Regulatory Commission.
13 I do want to repeat that.
14 Indian Point is, unquestionably, safe.
15 It has operated safely, it will continue to
16 be safely operated until the facility shuts down,
17 and it will be maintained in a safe condition
18 thereafter.
19 The NRC rated Indian Point in that agency's
20 "top regulatory" column for safety, following more
21 than 6,000 hours of inspection in 2016.
22 Indian Point is one of the largest, and under
23 Entergy's ownership, has become one of the most
24 reliable power-generating stations in New York
25 State, producing, annually, approximately 25 percent
187
1 of the electricity for New York City and the
2 Lower Hudson Valley.
3 In the last 15 years, Entergy has invested
4 more than $1.3 billion in the Indian Point facility,
5 including hundreds of millions of dollars to
6 strengthen and enhance safety and security.
7 As we sit here today, Indian Point Unit 2 has
8 been online for 237 consecutive days, and Unit 3 has
9 been online for 440 consecutive days.
10 In response to the invitation to appear
11 before these Standing Committees, I will address the
12 following topics:
13 Entergy's decision to retire Indian Point
14 Units 2 and 3 in April of 2020 and 2021,
15 respectively; as well as the settlement agreement
16 with New York State that reflects that business
17 decision;
18 The local economic consequences of the
19 facility's retirement;
20 And a general description of the
21 decommissioning process.
22 Entergy, and the employees of Indian Point,
23 have operated Units 2 and 3 safely, securely, and
24 reliably for more than 15 years, providing
25 environmental, economic, and grid reliability
188
1 benefits to the state of New York and its residents.
2 In late 2016 we made the difficult decision
3 to close Indian Point Unit 2 in 2020 and Unit 3 in
4 2021, primarily because of sustained low wholesale
5 energy prices in the absence of a mechanism to
6 adequately value the facility's zero-emission
7 energy.
8 The shutdowns will complete Entergy's exit
9 from the merchant-power business.
10 The key considerations in our decision to
11 close Indian Point were:
12 Number one: Sustained low current and
13 projected wholesale energy prices that have reduced
14 revenues and that do not adequately value
15 zero-emission energy.
16 Record low gas prices, due primarily to
17 supply from the Marcellus Shale formation, have
18 driven down power prices over the last 10 years to a
19 record low of $28 per megawatt hour.
20 To put the issue of low power prices in
21 perspective, a $10-per-megawatt-hour drop in power
22 prices reduces annual revenues by approximately
23 $160 million for power plants such as Indian Point.
24 Number two: We've had increased operating
25 costs.
189
1 And, number three: The continuing cost of
2 licensed renewal beyond the more than 200 million in
3 10 years we have already invested in that process.
4 We determined that shutting down Indian Point
5 on a multi-year timeline was appropriate in
6 consideration of the interests of all of our
7 affected stakeholders: our employees, our customers,
8 our owners, and the communities in which
9 Indian Point operates.
10 The timeline provides certainty about the
11 facility's future, while also providing the NYISO,
12 the local electric utilities, and the State of
13 New York adequate time to make plans to replace the
14 power.
15 Entergy and its employees are committed to
16 ensuring Indian Point continues to safely and
17 reliably power New York for another four years.
18 Both units continue to be regulated under the
19 NRC's normal oversight to which Entergy remains
20 committed, and we will remain strongly engaged in
21 our community through our charitable programs while
22 the plant is operating.
23 With respect to our employees specifically,
24 it is important to note that we expect to remain
25 fully staffed through April of 2021.
190
1 Moreover, we have made a commitment to those
2 employees willing to relocate to find them positions
3 at other nuclear plants in the Entergy fleet or
4 other non-nuclear positions for which they may be
5 qualified within the Entergy utility system.
6 Talk about the settlement.
7 Our decision to shut down Indian Point is
8 part of, and reflected in, the settlement agreement
9 under which New York State has agreed to drop legal
10 challenges and support renewal of the operating
11 licenses for Indian Point.
12 As noted under the agreement, Units 2 and 3
13 will shut down by April 2020 and April 2021,
14 respectively.
15 There are other terms, which include:
16 New York State's issuance of a Coastal Zone
17 Management Act consistency certification, a
18 water-quality certificate, and water-discharge
19 permits;
20 The withdrawal by New York State and the
21 primary intervenor Riverkeeper of all legal
22 challenges to Indian Point's license renewal;
23 Entergy's submittal of a request to the NRC
24 to shorten the term of a renewed license for
25 Indian Point, from 2033 and 2035 for Units 2 and 3,
191
1 respectively, to 2024 and 2025, to provide a
2 backstop for limited continued operation of the
3 plants, if needed, to address system conditions and
4 other factors as described in the settlement;
5 Entergy's contribution of $15 million to
6 support community stakeholders and environmental
7 stewardship, the specific distribution of which will
8 be jointly determined by Entergy and New York State;
9 And, Entergy's cooperation with New York
10 State's inspections of Indian Point which will
11 supplement the NRC inspections.
12 Now, Indian Point's direct impact on the
13 local economy currently includes approximately
14 1,000 full-time jobs that generate more than
15 $140 million in annual employee payroll, more than
16 $350 million in annual local purchases, and
17 approximately $1 million in annual charitable
18 contributions to non-profit organizations located
19 within the Lower Hudson Valley and the New York City
20 metropolitan region.
21 After shutdown, those economic benefits will
22 be substantially reduced, and eventually eliminated.
23 Moreover, Indian Point recently entered into
24 two renewed payment-in-lieu-of-taxes (PILOT)
25 agreements with the Town of Cortland, including the
192
1 Verplanck Fire District, the Village of Buchanan,
2 the Hendrick Hudson School District, and
3 Westchester County.
4 Each taxing jurisdiction entered into its own
5 separate tax agreement for 10 years, from 2015 to
6 2024.
7 The total payment for all of the taxing
8 jurisdictions together in 2015 was approximately
9 $30 million, but that figure will increase in
10 subsequent years in accordance with an inflation
11 adjustment.
12 Each party to the agreements has the right to
13 terminate the PILOT agreement in the event
14 Indian Point provides notice to the NRC of its
15 intent to shut down either plant.
16 If the agreement is not terminated, the PILOT
17 payments will be reduced by 30 percent in the first
18 tax year following the actual shutdown, 60 percent
19 in the second year, and 90 percent in the third
20 year, following shutdown.
21 Decommissioning.
22 Decommissioning is a multi-step process that
23 begins when a nuclear plant is retired from service.
24 The NRC (the Nuclear Regulatory Commission)
25 oversees each phase of this process to ensure that
193
1 decommissioning is done safely and securely and
2 meets all regulatory and environmental requirements.
3 Entergy is committed to a transparent and
4 open decommissioning process, with many
5 opportunities for public participation.
6 After shutdown, all nuclear fuel in the
7 reactor will be transferred to the spent-fuel pool
8 for initial cooling, and then moved to dry-cask
9 storage on-site.
10 Dry-casks are sealed metal and concrete
11 containers that fully enclose the spent fuel.
12 Our current expectation is that all of
13 Indian Point's spent fuel will be transferred into
14 casks within approximately 10 years after shutdown.
15 Under federal law, and by contract, the
16 United States Department of Energy is obligated to
17 remove the spent fuel from the Indian Point site and
18 dispose of it in an NRC-licensed facility.
19 Within two years of shutdown, a nuclear plant
20 owner must prepare and submit to the NRC a
21 post-shutdown decommissioning activities report,
22 also known as a "PSDAR," which is the filing that
23 includes a detailed cost estimate for the
24 decommissioning project, along with the plant
25 owner's plan for decommissioning.
194
1 In its PSDAR, a nuclear plant owner must
2 elect to either proceed immediately with
3 decommissioning, often referred to as "prompt
4 decommissioning," or, the "DECOM method," using the
5 NRC's terminology; or, two, place the facility in a
6 safe and secure condition for an extended period of
7 time prior to major decommissioning activities,
8 which allows time for radioactivity to decay, a
9 method referred to by the NRC as "SAFSTOR."
10 Which method is selected usually depends on
11 the availability of adequate nuclear decommissioning
12 trust funds to complete decommissioning.
13 The SAFSTOR method is frequently used by
14 plant owners, to provide the opportunity for nuclear
15 decommissioning trust funds to grow as a result of
16 the passage of time and investment performance.
17 Absent approval from the NRC for additional
18 time, plant owners must complete decommissioning
19 within 60 years of a plant's retirement.
20 Today the nuclear decommissioning trust funds
21 for the Indian Point Units 1, 2, and 3, combined,
22 collectively, contain approximately $1.7 billion.
23 After we have completed a detailed cost
24 estimate for decommissioning the facility, we will
25 prepare and submit a PSDAR to the NRC in which we
195
1 will declare our intent to utilize either the DECOM
2 or the SAFSTOR method of decommissioning.
3 After the decommissioning process is
4 complete, and the DOE has removed the spent nuclear
5 fuel, the dry-fuel storage pads and security
6 structures will eventually be removed and the Indian
7 Point site will be available for redevelopment.
8 This concludes my prepared remarks, and I am
9 available to answer questions.
10 SENATOR GRIFFO: Thank you, Mr. Twomey,
11 I appreciate that.
12 The -- you've been here this morning, and
13 listening.
14 Would you -- some of the points that were
15 made previously by the Executive, was that your
16 decisions were strictly based on, they whether
17 strategic market-factor decisions that caused you to
18 reach your decision.
19 Do you agree with that?
20 T. MICHAEL TWOMEY: I missed one part of your
21 question.
22 Did you say "strictly based"?
23 SENATOR GRIFFO: Correct.
24 T. MICHAEL TWOMEY: Well, if using that term
25 means it was the only reason, I'd have to say, no,
196
1 it wasn't the only reason, but it was, certainly,
2 the overwhelming reason were market conditions.
3 The market into which we sell power has
4 deteriorated, from an economic perspective.
5 You heard the chairman of the PFC say that
6 average wholesale energy prices were closer to,
7 I think she said, $45, just a few years ago, per
8 megawatt in 2012. And they've dropped to $34 per
9 megawatt hour in 2016.
10 As the price for wholesale energy prices goes
11 down, the amount of money that we get for the power
12 we produce goes down.
13 And in my testimony I referenced that, every
14 $10 reduction in the market power prices that we
15 receive is a loss of about $160 million a year in
16 revenue.
17 So we're in a situation where we had
18 significantly declining costs -- excuse me,
19 revenues, increasing operating costs, and, our
20 perspective, our judgment, on what power prices
21 would be three or four years from now --
22 Because that's how we make these decisions.
23 We don't just look at what power prices are today.
24 We look at what we think they will be.
25 -- we concluded that -- that this plant was
197
1 not economically viable, and so that was the
2 overwhelming reason.
3 We certainly did have other factors.
4 The license-renewal process has cost us
5 $200 million over the last 10 years.
6 We've been in the license-renewal process
7 since 2007.
8 The typical U.S. -- you asked this question
9 earlier, Senator Murphy.
10 The typical license-renewal process at the
11 NRC takes somewhere between two and three years,
12 depending on the issues.
13 We are, by far, the longest license-renewal
14 process, I believe, in the history of the NRC,
15 and -- and we aren't done.
16 We still have -- even with the settlement, we
17 won't be done until sometime in 2018.
18 SENATOR GRIFFO: So would you -- because many
19 of my colleagues were concerned about the
20 interaction, and some of the lack of information
21 that went into this process, as you all came to a
22 settlement agreement.
23 Do you agree with the representation and
24 depiction of the events as they unfolded, that were
25 presented to us previously to your taking the seat?
198
1 T. MICHAEL TWOMEY: Well, generally.
2 Obviously, each party comes to a negotiation
3 with its own perspective.
4 I respect Mr. Kauffman, but I certainly don't
5 agree that the plant was not operating safely.
6 I don't think that should be a consideration.
7 However, that was the perspective of the
8 other party on the other side of this negotiation.
9 Our determination was that, we had been
10 fighting with New York for 10 years, with many years
11 to go, in order to achieve a license renewal to let
12 us operate until 2033 and 2035.
13 When we came to the conclusion that we were
14 not interested in running the plant that long,
15 because the plant was not economically viable, it
16 became obvious to us that there would be some
17 opportunity for settlement here, because we didn't
18 think the State would want to see us close the plant
19 immediately, because they would want some time to be
20 ready.
21 And, somewhere within that time frame of,
22 don't do it immediately, and, we don't want to run
23 until 2035, there would seem to be an opportunity
24 for both parties to have the same point of view on
25 what was a reasonable time.
199
1 So, we made the business decision to shut the
2 plant. That was a motivating factor in our
3 willingness to engage in these serious settlement
4 negotiations.
5 I can't speak for what the State's
6 perspective was.
7 Obviously, us running another four years was
8 acceptable to them, and I think we know, from the
9 testimony you heard today, some period of time was
10 needed to get that -- to be ready.
11 So, ultimately, that -- that's how that
12 happened.
13 And I think the one thing that Mr. Kauffman
14 said that I strongly agree with, is that this was a
15 resolution of litigation here.
16 And if you look at what we did in other
17 states, we announced the settle -- we announced the
18 shutdown of Vermont Yankee on a morning in August of
19 2013. And the Governor of Vermont found out about
20 it the same time everybody else did.
21 And we made an announcement about Pilgrim
22 closing. And, in the same situation, everybody
23 found out around the same time, either the night
24 before or the morning of the announcement.
25 We're a publicly-traded company. We have to
200
1 shepherd material of non-public information.
2 Obviously, the shutdown of Indian Point is
3 material non-public information.
4 So while I was there, any involvement with
5 the State at all on this, is because we were
6 resolving that pending litigation. And so we were
7 permitted to have a confidential, privileged
8 conversation with them about the resolution of this
9 settlement.
10 I suppose we could have simply announced the
11 shutdown, and then begun negotiations with the State
12 and with parties.
13 But, in our view, it was important to try to
14 get the cloud of uncertainty related to relicensing
15 out of way.
16 So, we engaged in that negotiation to resolve
17 that litigation, and announced the settlement, along
18 with our decision to close the plant, at the same
19 time.
20 SENATOR GRIFFO: Do you believe -- we talked
21 about renewables and clean energy -- that there's
22 still a role for nuclear energy in that portfolio?
23 T. MICHAEL TWOMEY: Well, I certainly believe
24 nuclear is an important part of the diverse energy
25 portfolio that we need to have in this country.
201
1 It is, by far, the largest non-greenhouse gas
2 emission generation-type that you have.
3 Nuclear power provides about 60 percent of
4 the greenhouse gas-free generation capacity in this
5 country.
6 The difficulty that nuclear plants are
7 facing, some of ours, and some belonging to others
8 companies, is that the market prices don't value
9 that zero-emission quality.
10 And so we get the same value for our power
11 that a gas plant gets, we get the same value for our
12 plants as a coal plant gets, even though we provide
13 60 percent of the emission-free quality.
14 Now, on the other hand, renewables, wind and
15 solar, they get significantly high subsidies,
16 extended long-term contracts, fixed prices.
17 You know, there was -- there was a project in
18 Massachusetts a few years ago called the "Cape Wind
19 Project," where the developers of that project had
20 struck a deal, with big support from the
21 then-governor of Massachusetts, not the current
22 governor, in which they were getting $187 a megawatt
23 hour for their prices -- for their power, from the
24 get-go, with a 3-1/2 percent escalation across the
25 years.
202
1 Now, $187 a megawatt hour, compared to the
2 $30 a megawatt hour that the markets are producing
3 today, means that that wind developer was getting
4 six times the price for his power.
5 And more importantly, ratepayers were paying
6 six times the going rate for the power.
7 Now, there are public-policy reasons why you
8 would want to do that, but the only one I can think
9 of is that you want emission-free generation.
10 So, in some parts of the country, in some
11 markets, some policymakers are willing to pay five,
12 six, seven times the going rate for electricity in
13 order to not have greenhouse gas emissions.
14 But when it comes to nuclear power, which
15 also doesn't produce any greenhouse gasses, that
16 level of subsidy has largely been absent.
17 Now, New York is really the leader in the
18 country with the adoption of the ZEC program for
19 upstate plants, and they're to be, in my view,
20 commended for that.
21 But that -- this tension between nuclear
22 power's value and nuclear power's revenue, I think,
23 as long as there continues to be a disconnect,
24 the -- we will continue to have power plants that
25 are closing.
203
1 SENATOR GRIFFO: Relative to decommissioning,
2 are you considering, or is there any intent, to sell
3 the plant or contract the work to another company to
4 perform the decommissioning work currently under
5 consideration?
6 T. MICHAEL TWOMEY: Well, I wouldn't say it's
7 currently under consideration, but we certainly will
8 evaluate the most efficient way to decommission the
9 plant.
10 We have signed an agreement in Vermont with a
11 company that specializes in decommissioning.
12 Using a company that specializes in
13 decommissioning has a whole host of benefits.
14 It reduces the cost of the project.
15 It increases the time -- I'm sorry, shortens
16 the time within which you can do the decommissioning
17 work, which is good for the community.
18 And I think that we will certainly evaluate
19 that option with all of our facilities, including
20 Indian Point.
21 And just for the record, the company that
22 we're dealing with in Vermont is actually based in
23 New York.
24 And I am sure that, as we evaluate that
25 process, which we haven't done yet, at least not to
204
1 the fullest extent, we will -- that will be an
2 option to the table for us.
3 SENATOR GRIFFO: And my last question for
4 you, is if you could -- you talked about, you know,
5 we're obviously concerned about the people who work
6 there, who have done an extraordinary job for both
7 your company and the community and the plant.
8 Can you be more specific about what you have
9 in mind when you talk about relocation or
10 retraining?
11 T. MICHAEL TWOMEY: Sure.
12 I agree with you, first of all, we have the
13 best employees in the industry, as far as I'm
14 concerned.
15 Nuclear plant owners operate those plants,
16 including Indian Point, safely and reliably and
17 better than any facility in the country, period.
18 And we've got the best employees.
19 What -- I can't tell you exactly how it will
20 play out, because a lot of people get to make
21 individual choices about what they want to do next.
22 But we have made a commitment that we will
23 relocate any employee who wants to relocate and work
24 at one of our nuclear facilities, because we've
25 got -- well, after Indian Point closes, we'll still
205
1 have five plants, and so there'll be opportunities
2 there.
3 We also will help them find work in our
4 utility business, even in the non-nuclear side.
5 I can tell you our experience in Vermont,
6 because we've gone through the process of
7 significant drawdown in employees there.
8 There's going to be some number of employees
9 who decide that they're at the point in their career
10 where they can retire.
11 There will be some employees who will move to
12 other facilities that we own.
13 There will be some employees who move to
14 other facilities owned by other operators.
15 For example, you've three nuclear plants in
16 New York. I wouldn't be shocked if some of those
17 employees end up in New York.
18 SENATOR GRIFFO: Will you work with them to
19 try to get them that opportunity.
20 T. MICHAEL TWOMEY: Sure. Certainly.
21 And -- and, you know, we have made this
22 employee commitment.
23 And, when we got to the end of the day in
24 Vermont, after all the employees were either placed
25 or relocated or decided to retire, I believe we had
206
1 about 5 out of 600 who we couldn't find a place for.
2 And I think our level of success in getting
3 that done gives us great interest in making sure we
4 do that again in New York.
5 SENATOR GRIFFO: When you talk about
6 retraining, though, are you talking about trying
7 to -- some may want to stay in the area --
8 T. MICHAEL TWOMEY: Right.
9 SENATOR GRIFFO: -- where they are living
10 right now.
11 Is that what you mean by "retraining";
12 helping them to look for other career opportunities
13 in that community?
14 T. MICHAEL TWOMEY: Well, I don't know what
15 level of retraining there is planned, but we will
16 work with employees on that issue as well. That's
17 among the things that we want to do.
18 SENATOR GRIFFO: Okay. Thank you.
19 Chairwoman.
20 ASSEMBLYWOMAN PAULIN: Yeah.
21 Thank you so much, thank you for coming
22 today.
23 The -- the agreement was very vague, or,
24 didn't have a lot of information, about the
25 decommissioning process, as I mentioned before when
207
1 we had the Executive testify.
2 What is Entergy's understanding of the
3 obligation?
4 T. MICHAEL TWOMEY: Well, you're right, we
5 didn't spend a lot of time in this agreement about
6 talking about decommissioning.
7 This was, principally, a resolution of
8 litigation related to license renewal.
9 And with respect to decommissioning, we've
10 made a commitment that, within 120 days of the
11 determination that we make that there are adequate
12 funds to complete decommissioning and any remaining
13 spent-fuel management activities, we will make the
14 appropriate filings.
15 And let me try to put that in perspective.
16 As I mentioned in my testimony, the first
17 thing you need to do when you -- after you've shut
18 down the plant and you've dealt with the operational
19 issues, is we need to have a cost estimate, a
20 detailed cost estimate, of what it will cost to do
21 the decommission.
22 And I'll deal with it -- let's deal with all
23 three units together.
24 So we have a detailed cost estimate to
25 complete decommissioning of the whole site. That's
208
1 going to yield --
2 ASSEMBLYWOMAN PAULIN: And (indiscernible),
3 that will occur when?
4 T. MICHAEL TWOMEY: Well, we have an
5 obligation to submit that to the NRC within
6 two years after shutdown. So we have an obligation
7 to submit that to the NRC by April of 2023. It's
8 likely that we'll do that earlier than that.
9 But once we do the decommissioning cost
10 estimate we'll have a number.
11 And then the other number is what's in the
12 decommissioning trust fund.
13 And, today, that number is $1.7 billion.
14 So, if the number -- the detailed cost
15 estimate is greater than $1.7 billion, we will put
16 the plant in SAFSTOR and allow time for that
17 decommissioning trust fund to grow.
18 And the commitment we've made in the
19 settlement agreement is, let's say, 10 years from
20 now, or 5 -- let's say, 10 years from now, we have
21 enough money in the fund to complete
22 decommissioning, we've made that determination,
23 under the NRC rules, we could still wait another 50,
24 because we have an obligation to complete by
25 60 years.
209
1 So what the commitment we've made here, and
2 which I think is a significant one, is that we won't
3 wait any longer to do decommissioning, once we have
4 enough money in the decommissioning trust fund.
5 ASSEMBLYWOMAN PAULIN: So -- you know, in
6 hearings held in Vermont, you know, regarding the
7 decommissioning of Vermont Yankee, it was clear that
8 Entergy and the NRC had a difference of opinion
9 about who would be responsible for additional costs
10 beyond the 60-year SAFSTOR period if that occurred.
11 That might be moot because of your recent
12 agreement to sell.
13 But Entergy argued that there's no
14 responsibility past that time, and the NRC argued
15 that Entergy would continue to be responsible.
16 Obviously, the State would have some
17 liability if Entergy didn't.
18 And I wondered if you could just speak to
19 Entergy's position about what would happen if you do
20 remain owner, if you continue to own the plant, past
21 the agreed to time.
22 T. MICHAEL TWOMEY: Thank you. I'm glad you
23 asked that question.
24 I'm not sure what the source of your
25 information is, but I can assure you that is not the
210
1 position that we took.
2 In fact, the person who was testifying in
3 that legislative hearing was me.
4 And what I said in response to a question --
5 let me give you the question.
6 The question was: What happens if we get to
7 the end of 60 years and the decommissioning process
8 is not completed, and there's no more money in the
9 fund?
10 What I said was: I expect there would be
11 quite a bit of litigation.
12 ASSEMBLYWOMAN PAULIN: Oh.
13 T. MICHAEL TWOMEY: That's what I said.
14 I can't give you a hypothetical answer to
15 what would happen under those conditions.
16 There could be various reasons why the
17 decommissioning process had not been completed.
18 There could be various reasons why the fund
19 was where it was.
20 And I just didn't think it was helpful to
21 speculate about what those conditions might be, and,
22 particularly, in light of the fact that I do expect
23 that would provoke litigation, and I don't want to
24 be the guy on the record 50 years earlier who said
25 something dumb.
211
1 So, I didn't -- I didn't respond to that
2 question any more than just say "there will be
3 litigation."
4 We have not -- we have not taken the position
5 that it's not our responsibility.
6 Under the NRC regulations, it's clearly our
7 responsibility to decommission that site to the
8 NRC's satisfaction. And we have no expectation that
9 we would not be able to fulfill that obligation.
10 ASSEMBLYWOMAN PAULIN: Got it.
11 Knowing that the communities are dependent on
12 the land to generate taxes, was DECOM on option, or
13 is it an option, in your mind, based on the funds
14 that we currently have?
15 You have an experience with other plants
16 already, either, in Vermont, or you have two on the
17 line that you're going to be -- you're probably at
18 that point where you've already filed the -- the
19 resources required.
20 T. MICHAEL TWOMEY: Well, we don't know
21 whether there's sufficient funds in the
22 decommissioning trust fund to complete the
23 decommissioning of Indian Point yet, because we have
24 not done the detailed cost estimate that will
25 accompany the PSDAR.
212
1 ASSEMBLYWOMAN PAULIN: Although I do recall
2 having seen a filing that Entergy made with the NRC
3 about Indian Point 3, seeing that you anticipated
4 $1.1 billion would be required.
5 What was that filing?
6 T. MICHAEL TWOMEY: We have to make periodic
7 filings with the NRC about our adequacy of
8 decommissioning trust funds compared to the cost of
9 decommissioning.
10 And I will tell you that that estimate,
11 whatever that number was at that time, was our best
12 estimate of what it would be under the requirements
13 of the NRC regulations.
14 I don't think that when we get down and do a
15 decommissioning cost estimate, a detailed cost
16 estimate, when you're about to decommission the
17 plant, that you're going to get the same number.
18 And we've certainly had the benefit of
19 additional time and experience by the time we do
20 this.
21 So I personally wouldn't rely on the older
22 decommissioning cost estimate.
23 We will do a new decommissioning cost
24 estimate that takes into account current conditions
25 and what our expectations are over of the short
213
1 term, and that will be the number that we use to
2 compare to what's in the decommissioning trust fund.
3 ASSEMBLYWOMAN PAULIN: So based on your
4 experience with those three other nuclear sites, I'm
5 assuming all three are in SAFSTOR?
6 I know that Vermont is --
7 T. MICHAEL TWOMEY: Well --
8 ASSEMBLYWOMAN PAULIN: -- but the other two,
9 I -- I -- you know, haven't begun that process?
10 But --
11 T. MICHAEL TWOMEY: That's right. The
12 SAFSTOR process is what's currently in effect in
13 Vermont.
14 We have not begun decommissioning either of
15 the other two facilities you're referencing because
16 they're still operating.
17 The Palisades Nuclear Power Station in
18 Covert, Michigan, is operating today. Our current
19 expectation is that it will operate through October
20 of 2018.
21 There are some regulatory approvals required
22 relating to a power purchase agreement that doesn't
23 need to be discussed in great detail here, unless
24 you'd like me to. But let's just say, October 2018
25 is our expectation of when the plant will
214
1 continue -- will stop operating.
2 And then Pilgrim Nuclear Power Station in
3 Plymouth, Massachusetts, we are going to refuel that
4 plant in the next month or two, and it will operate
5 for two more years, until May 31st of 2019. So that
6 plant is still operating.
7 And, at some point, we will submit a PSDAR,
8 we will do a detailed cost estimate, for those two
9 units, and we will then present those to the NRC as
10 we're required to do.
11 So the -- really, the only experience we
12 have, specifically, is from our Yankee plant. And
13 you mentioned earlier that we've got the sale to a
14 third party that specializes in decommissioning.
15 And because of the cost savings that are
16 presented by that expertise and the labor force and
17 the vendor pricing that that company is able to do,
18 they were able to come in and make a commitment that
19 they could complete decommissioning by 2030, which
20 is far sooner than it would be done if we owned and
21 operated it because, quite frankly, we're not in the
22 business of decommissioning.
23 We're in the business of operating the
24 plants, and the workforce is much different.
25 You asked a question earlier about using the
215
1 workforce for decommissioning. And that may be an
2 option in some limited circumstances.
3 But, you know, the person who's the senior
4 reactor operator at Indian Point, who runs nuclear
5 power plants, is not gonna be the person who is, you
6 know, using a sledgehammer to take down the walls.
7 It's a little bit like, if you decommission a
8 hospital, the doctors and the nurses wouldn't be the
9 ones doing the decommissioning work.
10 And that's the way it is with the nuclear
11 plants.
12 There are some jobs that they can do.
13 And we certainly have a full security force
14 that will remain as long as we have
15 decommissioning -- or, excuse me, spent nuclear fuel
16 on the site.
17 But, by and large, it's a different type of
18 workforce that does decommissioning work compared to
19 those who actually run a power plant.
20 ASSEMBLYWOMAN PAULIN: The trust fund itself,
21 and the -- and as you spend money, what is the
22 auditing provision?
23 I mean, is Entergy solely in charge of
24 overseeing the cost, or do you submit papers to the
25 NRC or to the State, under any part of the agreement
216
1 that you filed?
2 T. MICHAEL TWOMEY: Well, not -- there's
3 nothing in the agreement --
4 ASSEMBLYWOMAN PAULIN: Nothing in the
5 agreement.
6 T. MICHAEL TWOMEY: -- on that issue.
7 But, we do have to comply very strictly with
8 the NRC requirements.
9 There are also IRS requirements, because
10 these funds are called "qualified funds," and that's
11 a significant financial consequence, and so you have
12 very specific uses of the funds.
13 The NRC has the right to review that.
14 We do have to provide them with some amount
15 of notice when we're going to take a withdrawal from
16 the fund, but that's all very strictly regulated by
17 the NRC.
18 ASSEMBLYWOMAN PAULIN: So is there an
19 independent auditor that will look to make sure that
20 that's happening?
21 T. MICHAEL TWOMEY: There is no independent
22 auditor that we have set up.
23 I suppose the NRC certainly has the right to
24 do that if they believed it was appropriate, but,
25 there's no mechanism for that to happen
217
1 automatically.
2 ASSEMBLYWOMAN PAULIN: And under the
3 agreement, Entergy will transfer a minimum of
4 4 casks, with a total of 32 bundles each, of IP-2 --
5 of Indian Point 2 and Indian Point 3 spent fuel to
6 dry storage per year, and will transfer a total of
7 24 such casks by the end of 2021.
8 Can you put this amount in perspective for
9 us?
10 You know, is that more than is currently
11 being done?
12 And what will result -- you know, what will
13 be left to still put in dry casks by the time you
14 cease operations?
15 T. MICHAEL TWOMEY: The four per year and --
16 is generally consistent with what we're doing today.
17 We -- we've been moving spent fuel to
18 dry-cask storage for the last several years, and we
19 expect to continue to do that.
20 We have not made a final determination on
21 exactly how many casks we can load over the time
22 after the shutdown. But I can tell you that, our
23 current expectation, is that it should be done in
24 about 10 years --
25 ASSEMBLYWOMAN PAULIN: So --
218
1 T. MICHAEL TWOMEY: -- after shutdown.
2 10 years after shutdown.
3 ASSEMBLYWOMAN PAULIN: -- the State testified
4 that they believed they were able to achieve the
5 transfer to dry casks.
6 When I asked the question, you know, were you
7 able to negotiate DECOM, they, in turn, replied
8 that, you know, instead, they were able to achieve
9 the transfer of the spent fuel into the casks.
10 But you're suggesting otherwise, that you
11 were doing the transfer consistent with -- or, the
12 anticipation is, that you're going to do it in -- in
13 relation to what you've been doing consistently.
14 That there was no -- it's mentioned in the
15 agreement, but there's no advance of transfer.
16 T. MICHAEL TWOMEY: Well, all I can say is,
17 each party to a negotiation brings to the table its
18 own perspective.
19 ASSEMBLYWOMAN PAULIN: Uh-huh.
20 So moving and storing spent-fuel rods is a
21 high-risk operation.
22 For example, at the Vermont Yankee plant,
23 there was an incident where a fuel rod was nearly
24 dropped from a crane.
25 The spent fuel will be moved to a location
219
1 less than 4500 feet from an elementary school.
2 You know, that was the -- that's what
3 happened in Vermont Yankee.
4 You know, will there be any consideration
5 given to local conditions, to avoid moving the fuel
6 during periods of the day when there's higher
7 traffic near the site, or if there's -- school is in
8 operation?
9 Or, you know, is there any oversight from the
10 NRC to ensure that, you know, what might be a
11 higher-risk time is monitored in any way?
12 T. MICHAEL TWOMEY: I would have to say
13 I don't agree with the characterization of it being
14 a higher risk.
15 The movement of spent fuel is done very
16 safely. All of this is done under the regulation of
17 the NRC.
18 I was asked about that issue in Vermont.
19 And, you know, my only answer to that --
20 well, one of my answers to that is, that many of the
21 employees of Vermont Yankee have children at that
22 elementary school. And I can promise you that their
23 focus is on safety every day.
24 ASSEMBLYWOMAN PAULIN: And you spoke a little
25 bit about this, you know, in your testimony, you
220
1 know, about the movement from -- well, you know, let
2 me jump, actually.
3 You know, on November 8th, Entergy announced
4 the sale of Vermont Yankee Nuclear Plant to
5 NorthStar, as you mentioned, a company in New York
6 and they decommission plants and they specialize in
7 it.
8 According to reports, the sale will allow the
9 dismantling of the plant -- actually, what we
10 were -- you know, with 2021, with most site
11 restoration complete by 2030, as you mentioned.
12 The original timeline would not have
13 completed the process until 2075, quite a
14 difference.
15 Uh --
16 T. MICHAEL TWOMEY: Well -- I'm sorry.
17 ASSEMBLYWOMAN PAULIN: -- yeah, no, no. Go
18 ahead.
19 T. MICHAEL TWOMEY: Okay.
20 ASSEMBLYWOMAN PAULIN: Yeah.
21 T. MICHAEL TWOMEY: I want to be clear, that
22 there was erroneous reporting around the 2021 date.
23 The 2021 date is the date by which NorthStar
24 had committed to begin the decommissioning process.
25 ASSEMBLYWOMAN PAULIN: Ah. Got it.
221
1 T. MICHAEL TWOMEY: And the completion would
2 be by 2030.
3 So it's -- for their -- under their process,
4 it's approximately -- you know, no more than a
5 nine-year, from the day they begin to the day they
6 complete.
7 The reason it was so much longer under our
8 ownership is that we are not in that business of
9 decommissioning.
10 NorthStar brings its own labor force that
11 specializes in this work. They have fixed-price
12 agreements with various vendors that are superior to
13 the agreements that we could get in place. And,
14 their cost structure is different.
15 And when you factor all of that into the mix,
16 they are able to do the work as safely, as
17 carefully, but at a lower cost and in a much shorter
18 time frame.
19 And that is a win for everybody because, we
20 continue to focus on our business which is running
21 power plants, not decommissioning them; they do the
22 work at the decommissioning in a way that is
23 beneficial to the community.
24 Most of the community around the plant has
25 been very supportive. In fact, I haven't heard
222
1 anybody near the plant who doesn't like the idea of
2 this decommissioning being completed by 2030.
3 So that -- it's a model that has been used in
4 other places.
5 And we're now at the beginning of a
6 decommissioning round for nuclear power plants.
7 You know, there was decommissioning done
8 10 or 15 years ago, and then there was sort of a
9 quiet period, and now we're getting into
10 decommissioning again.
11 And I think you're going to see this model of
12 a third party expert doing the decommissioning being
13 used more and more because it makes a lot of sense.
14 Some of the decommissioning projects that
15 were done in the '90s were done by the owner of
16 the plant while they were rate-regulated by the
17 state Public Service Commission, and any cost
18 overruns just went straight to the ratepayer.
19 And these were not necessarily done in the
20 most efficient manner.
21 They were done safely, but I can't say they
22 were done efficiently.
23 And so this process that we're talking about
24 utilizing in Vermont, and that we may utilize in
25 other places, in our view, presents an opportunity
223
1 for this to be done safely and efficiently in the
2 best interests of everybody who's concerned about
3 it.
4 ASSEMBLYWOMAN PAULIN: And is there any
5 approval needed to sell to that third party; PSC,
6 NRC --
7 T. MICHAEL TWOMEY: Specifically --
8 ASSEMBLYWOMAN PAULIN: -- the State
9 Legislature?
10 T. MICHAEL TWOMEY: -- well, certainly, the
11 NRC has to approve that.
12 ASSEMBLYWOMAN PAULIN: Uh-huh?
13 T. MICHAEL TWOMEY: The NRC -- in fact,
14 there's an application pending with the NRC for
15 what's called the "license transfer," and that's a
16 transfer of the license over to NorthStar.
17 We also need State approvals in some places.
18 And we do in Vermont, because we've got an
19 application pending in front of the Vermont Public
20 Service Board.
21 And I have to tell you, I'm -- I don't know
22 exactly what approvals we would need in the state of
23 New York. I'd have to consult my counsel and get
24 back to you.
25 ASSEMBLYWOMAN PAULIN: But there might be
224
1 some for the State?
2 T. MICHAEL TWOMEY: There could be, yes.
3 ASSEMBLYWOMAN PAULIN: Yeah.
4 So what is the -- you know, one of the
5 concerns that came up from one of my colleagues was
6 liability.
7 And I wondered, you know, what if you, when
8 you were in the process of decommissioning, went
9 bankrupt, and what if the company that you sell it
10 to goes bankrupt, who has the liability?
11 Where you're suggesting, as you said in
12 Vermont, there would be litigation?
13 T. MICHAEL TWOMEY: I think there'd be quite
14 a bit of litigation --
15 ASSEMBLYWOMAN PAULIN: Okay.
16 T. MICHAEL TWOMEY: -- on that question.
17 I mean, it is a -- I will tell you this: We
18 don't see any reasonable outcome where the State
19 would have to be taking care of the decommissioning.
20 But, if everybody in the chain went bankrupt,
21 all I can tell you is, I think there would be quite
22 a bit of litigation.
23 ASSEMBLYWOMAN PAULIN: Got it.
24 So on -- some issues related to the trust
25 fund.
225
1 So just -- you know, I have some records that
2 we got from the NRC website, but just to be sure,
3 you said, total, there was $1.7 billion in all of
4 them?
5 T. MICHAEL TWOMEY: Yeah. The -- we have
6 a -- we have three separate trust funds:
7 One for Unit 1, which, as Mr. Kauffman noted,
8 that was the original Indian Point unit that closed
9 back in the 1970s. It has a trust fund for itself.
10 There's a trust fund for Unit 2 which we
11 received from Con Ed.
12 And there's a trust fund for Unit 3 that we
13 received from the New York Power Authority.
14 And I don't have the precise numbers for each
15 of the three, but I can tell you the number for all
16 three is approximately 1.7 billion.
17 ASSEMBLYWOMAN PAULIN: I'm just going to
18 throw out some numbers, and you can tell me if they
19 sound right to you.
20 T. MICHAEL TWOMEY: Okay.
21 ASSEMBLYWOMAN PAULIN: For Indian Point 1,
22 the trust fund total is 413.92 million. This is,
23 again, from the NRC;
24 The Indian Point 2 is 529.05 million;
25 And, Indian Point 3, at the time of the
226
1 transfer from NYPA to Entergy, is 724.
2 So that's pretty much consistent with what
3 you're suggesting.
4 I mean, there might about little more --
5 T. MICHAEL TWOMEY: It is consistent --
6 ASSEMBLYWOMAN PAULIN: -- in each of 1 and 2.
7 T. MICHAEL TWOMEY: -- those numbers
8 fluctuate.
9 We provide a quarterly filing, and it depends
10 on the snapshot in time. But those numbers add up
11 to a little less than $1.7 billion.
12 So I --
13 ASSEMBLYWOMAN PAULIN: It could fluctuate,
14 right, either way --
15 T. MICHAEL TWOMEY: -- I would say subject to
16 check, that's not an unreasonable number.
17 ASSEMBLYWOMAN PAULIN: And the trust funds
18 are created because of the amount of money that's
19 required from the NRC -- or, by the NRC, and Entergy
20 is required every year to put money in those trust
21 funds?
22 T. MICHAEL TWOMEY: No.
23 ASSEMBLYWOMAN PAULIN: No?
24 T. MICHAEL TWOMEY: The trust funds are
25 required by the NRC. And plant owners, when they
227
1 started operating, were required to set aside funds
2 for decommissioning.
3 You have to maintain a certain minimum
4 balance with -- in each of the funds to satisfy the
5 NRC's adequacy-of-funding requirement.
6 If there is enough money in the fund to
7 satisfy the NRC's requirements, you do not have to
8 add any additional money.
9 ASSEMBLYWOMAN PAULIN: And when was the last
10 time Entergy had to add additional money?
11 T. MICHAEL TWOMEY: I don't believe we've
12 ever added additional money.
13 Those dollars came over to us when we
14 purchased the plants -- well, Unit 1 and Unit 2 came
15 over when we purchased the plant from Con Ed.
16 The Unit 3 fund was actually held by the
17 New York Power Authority until about a month ago.
18 And it was held by NYPA, along with the unit -- I'm
19 sorry, the trust fund for James A. FitzPatrick. And
20 those funds were held by NYPA for about 15 years,
21 and then they were transferred to us at the
22 beginning of the year.
23 The FitzPatrick fund will actually go over to
24 Exelon when we close the sale of that plant to
25 Exelon, the FitzPatrick plant.
228
1 ASSEMBLYWOMAN PAULIN: And I know in advance,
2 the answer to this question, so I'm going to try to
3 ask it differently.
4 The question was: Do you plan to apply for a
5 waiver to use the trust fund to pay for the storage
6 of spent-fuel rods?
7 And I know that you're going to say you don't
8 have a plan yet --
9 T. MICHAEL TWOMEY: Right.
10 ASSEMBLYWOMAN PAULIN: -- and that you don't
11 have the detail to know that yet.
12 So I guess the question I would ask instead
13 is: Did you apply for a waiver in Vermont to --
14 because you said there'd be 10 more years of
15 transferring --
16 T. MICHAEL TWOMEY: Right.
17 ASSEMBLYWOMAN PAULIN: -- to dry, right, and
18 there's a certain allowed amount that you can
19 transfer.
20 Maybe you could just speak to --
21 T. MICHAEL TWOMEY: Yeah, that's called the
22 "commingled-funds exemption."
23 ASSEMBLYWOMAN PAULIN: Uh-huh?
24 T. MICHAEL TWOMEY: And what that allows you
25 to do, is if you have adequate funds in the plant --
229
1 in the trust fund, at a certain threshold --
2 And I have to confess, I don't know the
3 threshold as I'm sitting here.
4 -- you can apply for a commingled-funds
5 exemption, which allows you to use a portion of the
6 funds for spent-fuel management.
7 Now, the spent-fuel management process is a
8 little complex, legally, because much of the
9 spent-fuel management costs that you incur as a
10 plant operator, you are entitled to reimbursement
11 from the United States Department of Energy.
12 So if -- for example, if we spend $20 million
13 in 2016 out of our money to do spent-fuel
14 management, and it qualifies under the various
15 rules, we can seek that from the Department of
16 Energy.
17 Now I will tell you, they haven't been
18 willing to pay without making us sue them, but, we
19 do get the money back. And we have gotten the
20 money back at a pretty good clip, not only for
21 Indian Point, but for other units.
22 Now, with trust-fund money, if you were to
23 use the money from the trust fund for a reimbursable
24 cost, because we didn't want to be out-of-pocket,
25 for example, we would take the money out of the fund
230
1 if we got any commingled-funds exemption, we'd use
2 it for the spent-fuel management, we'd seek to
3 recover it from the Department of Energy, and then
4 we'd put it back either in that fund or another
5 fund, depending on what was the right way to
6 approach it.
7 It wouldn't go in our pocket. It would go
8 back into the fund.
9 So, that is a part -- I want to just be
10 complete in my answer to you.
11 Because of the spent-fuel management and the
12 Department of Energy issues, it can be a little
13 complicated.
14 ASSEMBLYWOMAN PAULIN: So -- okay.
15 Because the -- my understanding is federal
16 law prohibits, you know, the use of the trust fund
17 for both non-radiological activity and for
18 spent-fuel management.
19 Is that --
20 T. MICHAEL TWOMEY: It doesn't prohibit it.
21 You're allowed to seek a commingled-funds
22 exemption, and --
23 ASSEMBLYWOMAN PAULIN: If -- with a waiver?
24 T. MICHAEL TWOMEY: -- and so the NRC can
25 grant that.
231
1 And, you know, there are various
2 interpretations of what exactly the funds can be
3 used for.
4 And I have say, we've been in a few
5 disagreements with the State of Vermont over exactly
6 what the scope of that is.
7 We have prevailed on, virtually, every
8 interpretation issue that has come up.
9 We are entitled to use that fund for
10 decommissioning-related expenses, and that, for
11 example, includes, you know, things that are not
12 just radiological cleanup.
13 ASSEMBLYWOMAN PAULIN: You know, we found
14 online, you know, in your March 30th report to the
15 NRC, you provided a site-specific estimate for
16 $556.76 million to decommission Indian Point 1.
17 And, you know, we found that site-specific
18 information.
19 T. MICHAEL TWOMEY: For what year was that?
20 ASSEMBLYWOMAN PAULIN: This was filed in
21 March 2016.
22 T. MICHAEL TWOMEY: Okay.
23 ASSEMBLYWOMAN PAULIN: And we found, for
24 IP-3, a cost estimate of $1.1 billion.
25 I just wondered if there was anything that
232
1 was filed relating -- because we couldn't find
2 everything online, obviously -- where you could
3 provide an analysis that you might have provided to
4 NRC on IP-2?
5 T. MICHAEL TWOMEY: I don't know -- I'm sure
6 we had to make a filing for IP-2 sometime in the
7 last two years. So I don't know if there's a
8 staggering of 2016 versus 2015, but we can certainly
9 look into that information and provide it to you.
10 Again, the real focus we have is on the
11 detailed decommissioning cost estimate that will be
12 prepared as part of the PSDAR around the time of
13 shutdown, and that is a document that will be much
14 more helpful in judging what the cost will be,
15 because it will be a document that we can bring to
16 bare whatever recent experience we've had in
17 decommissioning.
18 ASSEMBLYWOMAN PAULIN: Is that because the
19 cost estimates are based on the formula that the NRC
20 requires, versus a real cost estimate of what the
21 cost would be?
22 T. MICHAEL TWOMEY: I am not the expert on
23 the cost methodology for the decommissioning
24 project, but that's an answer that we can track
25 down.
233
1 ASSEMBLYWOMAN PAULIN: Yeah, I'd love to
2 understand better what is provided to the NRC
3 currently, so I understand a little better about
4 what we will see when you file, you know, subsequent
5 to --
6 T. MICHAEL TWOMEY: Right.
7 Well, I can tell you that whatever we file
8 with the NRC was complete and accurate, and
9 consistent with whatever their requirements are.
10 But it may not be exactly the same approach that is
11 taken when you do a detailed cost estimate.
12 But, again, I'm not the expert on that.
13 ASSEMBLYWOMAN PAULIN: I'm going to
14 completely shift gear here and talk about the land.
15 You know, the site is about 240 acres.
16 And, I don't know if you have this experience
17 yet in Vermont, or not, but, you might.
18 And, you know, the concern for the local
19 community is to be able to use some of that land so
20 they can generate taxes for other purposes.
21 It's a very large amount of land.
22 Can you -- is this a question better asked of
23 the NRC, or, can you speak to, you know, how much
24 land is actually used for the reactors, and for the
25 fuel, how much is anticipated?
234
1 And is there any surplus that would be
2 appropriate for sale at this point?
3 T. MICHAEL TWOMEY: Well, I think you hit the
4 last point, and I appreciate that.
5 You know, what's important for folks to
6 remember is that, this is Entergy's property.
7 When we finish generating power on it, it's
8 not public property; it's the company's property.
9 And what we will do with the property after
10 we decommission has certainly not been determined
11 yet.
12 It is possible that some parcels of the
13 property on the boundaries, perhaps, might be
14 suitable for limited development while the project
15 is being decommissioned.
16 But, we haven't even begun that process.
17 I can tell you that, you know, from my Yankee
18 close in December 2014, we have not released any of
19 the property on that site. That's a bit of a
20 smaller site. It's about -- it's about 175 acres.
21 But there -- there will be an opportunity to
22 look into that, and part of that will be reflected
23 in our PSDAR, because we need to have enough
24 property to do the work. You know, there'll be a
25 lot of trucks and people going in and out of that
235
1 site during the decommissioning project.
2 There will be disposal of material, some of
3 it radiologically contaminated, some of it not
4 radiologically contaminated.
5 And I just don't know what that site will
6 need to look like while the project's going on.
7 There may be huge chunks of the property that
8 we need to set aside for temporary disposal of
9 material. There may be parts of the site that need
10 to be, you know, trailers for offices for the
11 company that are doing -- that is doing the work.
12 So I don't think there's a short-term reuse
13 of any of that property.
14 And, certainly, we're going to operate the
15 plant for another four years. We're going to move
16 the fuel within, probably, the next 10 years after
17 that.
18 And, I just don't think there's a short-term
19 reuse.
20 ASSEMBLYWOMAN PAULIN: So one other question
21 on the land.
22 Do you have any estimate of how long the fuel
23 rods would remain in storage on the site?
24 Is there any opportunity to transfer them to
25 another place?
236
1 T. MICHAEL TWOMEY: I -- no, I don't think
2 there's any opportunity to transfer to another
3 location.
4 If you can imagine, I can't think of anybody
5 who would want, or permit, the transfer of spent
6 nuclear fuel to their neighborhood.
7 So I -- the U.S. Department of Energy has a
8 legal obligation to remove the spent nuclear fuel
9 from the site. We expect the federal government to
10 fulfill its obligation.
11 Only when they do, will the spent nuclear
12 fuel leave the site.
13 Now, I will tell you that the dry-cask
14 canisters are perfectly safe. There is no concern
15 on our part about the safety of those canisters
16 on-site.
17 We will maintain a robust security detail at
18 the site long after there's no longer a plant there.
19 There will be a specific security force, and
20 other security mechanisms in place, to protect the
21 spent nuclear fuel, just like there is at every
22 site.
23 You know, there's an interesting conversation
24 going on in the industry right now.
25 There are some companies who believe that the
237
1 U.S. is missing a huge opportunity to reuse that
2 spent nuclear fuel to make more electricity.
3 There are companies that are well funded and
4 serious about doing that.
5 I was on a panel with a gentleman who works
6 for one of those companies, who said that, from
7 their perspective, it's not, you know, nuclear
8 waste; it's nuclear fuel.
9 And I don't know what the next 5 to 10 years
10 will bring, and it could be that all of that nuclear
11 fuel on-site is purchased and used by somebody to
12 make electricity in, perhaps, a small modular
13 reactor.
14 So all I can tell you is, we're going to
15 secure the fuel on-site in canisters, and they will
16 be safe, and until such time as they're taken off
17 the site.
18 ASSEMBLYWOMAN PAULIN: I have just one final
19 question, and that relates to labor.
20 You mentioned about the retraining and
21 relocation of employees.
22 I have a list of your merchant nuclear
23 plants, all of which you'll be closing shortly.
24 You said there were five others.
25 Are there three others, because you still
238
1 have two operating merchant plants?
2 T. MICHAEL TWOMEY: No, there --
3 ASSEMBLYWOMAN PAULIN: Or, five other
4 utility-owned?
5 And I wonder --
6 T. MICHAEL TWOMEY: -- there will be five --
7 after we shut down Indian Point, we will have five
8 utility-owned nuclear units.
9 We have two units in Arkansas, we have one
10 unit in Mississippi, and we have two units in
11 Louisiana.
12 ASSEMBLYWOMAN PAULIN: And two in Louisiana.
13 Okay.
14 Well, thank you very much.
15 T. MICHAEL TWOMEY: You're welcome.
16 SENATOR GRIFFO: Senator Croci.
17 SENATOR CROCI: Thank you, Mr. Chairman.
18 And thank you, sir, for your appearance here
19 today.
20 What is the cost to Entergy right now for
21 security at Indian Point?
22 T. MICHAEL TWOMEY: I do not know.
23 But it would be reflective of the salaries --
24 well, you know, I don't know the answer to that
25 question. You'd have -- I can get back to you on
239
1 that, but it's a significant cost.
2 SENATOR CROCI: So would I be interested in
3 the cost, all told; not only the salaries of the
4 security personnel, but to weaponize those security
5 personnel, the non- -- the physical security as
6 well, the upgrades that you do...the whole package?
7 T. MICHAEL TWOMEY: It's very likely that
8 I cannot provide that.
9 The security of nuclear facilities is
10 governed by strict federal rules.
11 SENATOR CROCI: Which is, why?
12 T. MICHAEL TWOMEY: That you need specific
13 clearance --
14 SENATOR CROCI: Uh-huh?
15 T. MICHAEL TWOMEY: -- that even I do not
16 have.
17 SENATOR CROCI: Right?
18 T. MICHAEL TWOMEY: So I would just -- right
19 off the bat, I'll tell you, it is almost certain
20 that I will not be able to provide you the level of
21 detail that you've asked about.
22 SENATOR CROCI: Right?
23 T. MICHAEL TWOMEY: I will see what --
24 what -- what numbers we can provide, but, it will be
25 subject to that restriction.
240
1 SENATOR CROCI: And the reason is, is because
2 it's an awful lot of money that is expended every
3 year to secure those facilities, and we don't want
4 to communicate that to people who might seek to do
5 us harm.
6 Completely legitimate.
7 So can you provide what you can provide.
8 But I would suggest that that number is
9 pretty high.
10 Who pays for it right now?
11 T. MICHAEL TWOMEY: We pay for it.
12 SENATOR CROCI: Entergy, completely?
13 T. MICHAEL TWOMEY: Yes.
14 SENATOR CROCI: During the transition period,
15 which another company will be dealing with the
16 decommissioning, you said NorthStar, who will be
17 paying for it?
18 T. MICHAEL TWOMEY: Well, once the plant
19 becomes a decommissioning project, the cost of
20 running the project, including the cost of security,
21 will come out of the decommissioning trust fund.
22 SENATOR CROCI: And who will --
23 T. MICHAEL TWOMEY: That's one of the costs
24 of decommissioning.
25 SENATOR CROCI: And who will then be in
241
1 control, command and control, of the security at
2 that time?
3 T. MICHAEL TWOMEY: Well, the company that we
4 sell the project to will be responsible, but, the
5 NRC will still have oversight, and requirements that
6 every operator and every owner of a nuclear facility
7 must comply with.
8 So one of the conditions of --
9 Assemblywoman Paulin asked me, whether you needed
10 approval for the sale.
11 One of the things the NRC will evaluate is
12 whether the new company has the technical
13 capabilities to take on the responsibility of this
14 site.
15 And that has been done in other places.
16 A Zion is a nuclear facility out near
17 Chicago, where the owner transferred the project to
18 another company. They have all of the
19 responsibilities, including the obligation for
20 providing security.
21 I think, in that case, the project will
22 eventually come back to the owner.
23 But, that was all --
24 SENATOR CROCI: The owner being Entergy?
25 T. MICHAEL TWOMEY: No, no. The owner of
242
1 that facility in Chicago --
2 SENATOR CROCI: Okay.
3 T. MICHAEL TWOMEY: -- which is not us.
4 But all of that is strictly regulated by the
5 NRC, and there would be no, you know, diminution in
6 the quality of the security under anybody's
7 ownership. And if the NRC believed there would be,
8 they wouldn't approved the transfer.
9 SENATOR CROCI: And when the decommissioning
10 process is over, who is responsible for the
11 security, financially, and then command and control?
12 T. MICHAEL TWOMEY: It continuous to be
13 whoever owns the facility at that time.
14 And one of the things we have to do with the
15 decommissioning trust fund is ensure that there's
16 adequate money, even at the very end, to continue to
17 pay for all of the security costs related to that
18 for as long as it needs to be done.
19 SENATOR CROCI: Who would be the potential
20 owners?
21 T. MICHAEL TWOMEY: Well, if we sold -- all
22 I can tell you is that, in Vermont, we are proposing
23 to sell -- we've signed an agreement, we need
24 regulatory approval -- to a group known as
25 NorthStar.
243
1 They have a number of partners in that
2 endeavor: Areva. Burns & McDonnell. Waste Control
3 Specialists, which is a place in Texas where a lot
4 of low-level radioactive waste can go.
5 But that group, NorthStar, would become the
6 owner, and they would step into our shoes, and from
7 the NRC's perspective, would be required to fulfill
8 every obligation that we would otherwise --
9 SENATOR CROCI: And if NorthStar were to go
10 belly up, who would be a potential -- who could be a
11 potential owner?
12 T. MICHAEL TWOMEY: Well -- and that's --
13 I think that's the same question, no matter who the
14 owner is. Right?
15 That that's a question, whether Con Ed owned
16 it, like they used to, or, NYPA owned it, or Entergy
17 owns it, or NorthStar owns it, I would say that the
18 NRC has very robust financial qualification
19 requirements in place to ensure that the obligations
20 don't fall on another party.
21 SENATOR CROCI: On, what?
22 T. MICHAEL TWOMEY: On another party. That
23 they don't fall on the state, they don't fall on the
24 local community.
25 That's why the NRC has --
244
1 SENATOR CROCI: But, that is one
2 potentiality?
3 T. MICHAEL TWOMEY: I think it's highly
4 unlikely. But --
5 SENATOR CROCI: Well, I'm in the business of
6 "highly unlikely."
7 And I think our job, as a legislature, is to
8 make sure that we're not allowing the Governor or
9 the State to enter into an agreement which would
10 subject the State to undue financial liability.
11 That's one of our concerns.
12 One -- one --
13 T. MICHAEL TWOMEY: I would --
14 SENATOR CROCI: -- yes, sir.
15 T. MICHAEL TWOMEY: I would say, we were
16 going to close the plant anyway, so all of those
17 issues would be presented whether we had a
18 settlement agreement or not.
19 SENATOR CROCI: But what I hear in your
20 testimony, and the testimony that we've heard
21 previously, are phrases like: Not -- "Has not been
22 determined yet." "There are other questions that
23 are outgoing. That plan has not been instituted
24 yet."
25 I would think whether we're closing it or
245
1 not, that some of these questions would have been
2 answered.
3 T. MICHAEL TWOMEY: Well, the change in
4 market forces has really come upon us reasonably
5 quickly.
6 You know, we were in the fight for the
7 relicense for the long haul. We've been doing it
8 for 10 years.
9 And I would say, a year or two ago, we
10 expected to continue to work that process, and we
11 expected to continue to operate that plant until
12 2035.
13 I, for one, didn't expect to be announcing a
14 shutdown of Indian Point, two years ago.
15 I didn't expect to be announcing that we
16 would be shutting down in 2021.
17 But the precipitous drop in wholesale power
18 prices -- which is something that the New York ISO
19 has congratulated itself for -- you know, that's a
20 boon to consumers, that prices have dropped so much.
21 But that has caused consequences, and one of
22 the consequences is a loss of fuel diversity,
23 because you're gonna lose a nuclear plant. It's
24 largely going to be made up with natural gas.
25 And, you know, that's the market we're in.
246
1 So, we certainly were not planning for a 2021
2 shutdown, two years ago.
3 Now what we will do, is we will operate the
4 plant for four more years, and we will comply
5 strictly with all the NRC requirements, including
6 submission of the post-shutdown activities report.
7 And under those rules, we have until two
8 years after shutdown, which is until 2023, to submit
9 that plan.
10 And I certainly believe that six years is
11 adequate time for us to answer those questions, to
12 address those issues, and submit our plan.
13 SENATOR CROCI: The other aspect that you
14 mentioned was storage.
15 You said it was unlikely that this material
16 would be moved.
17 T. MICHAEL TWOMEY: No, I said it's
18 undetermined as to when it's going to move.
19 The federal government has an obligation --
20 oh, I'm sorry.
21 The question was, whether we would be able to
22 mover it to Massachusetts or Pennsylvania.
23 I think that is, virtually, impossible --
24 SENATOR CROCI: Right.
25 T. MICHAEL TWOMEY: -- that nobody would take
247
1 that.
2 SENATOR CROCI: But we're aware of the
3 realities that we don't want to transport it.
4 There is no centralized storage location,
5 like Yucca Mountain, available to us anymore.
6 So it is more than likely -- would you say it
7 is more than likely that that material will just
8 remain on-site in perpetuity?
9 T. MICHAEL TWOMEY: I don't think so, and the
10 reason I say that is, I know that there are some
11 other proposals.
12 Waste Control Specialists, for example, is
13 located in West Texas, and they have had, for years,
14 a low-level radioactive-waste disposal site.
15 They have filed an application with the NRC
16 to be an interim storage site; that is, to be the
17 pre-Yucca Mountain.
18 And if that application is accepted, and
19 approved, then you could have spent nuclear fuel
20 being moved to West Texas, you know, not too long
21 from now.
22 SENATOR CROCI: A thousand metric tons?
23 T. MICHAEL TWOMEY: Yes. Their facility will
24 be big enough to accommodate all the sites in the
25 U.S. That's my understanding.
248
1 SENATOR CROCI: So that there will be this
2 material moving out of that plant by some land, sea,
3 or air, to get down to Texas; so, it would be moving
4 out of the tri-state area, somehow?
5 T. MICHAEL TWOMEY: It is possible.
6 It depends on whether the NRC accepts the WCS
7 application.
8 It depends on what the contractural terms
9 that can be negotiated, and the timing, and so
10 forth.
11 I guess I was just responding to your
12 question that, by saying that Yucca Mountain is not
13 the only solution.
14 SENATOR CROCI: Uh-huh. Okay.
15 T. MICHAEL TWOMEY: There are other market --
16 there are other market solutions that are being
17 presented for the secure receipt of spent nuclear
18 fuel.
19 SENATOR CROCI: And who is then responsible
20 for the transportation and secure delivery of this
21 material?
22 T. MICHAEL TWOMEY: Well, obviously, under
23 contract, the Department of Energy's really required
24 to be doing that.
25 If it's done as a bilateral contract between
249
1 parties, I have to confess, I don't know
2 specifically.
3 I would imagine the NRC and the DOE, and
4 probably other federal agencies, at least, would be
5 involved in that process.
6 SENATOR CROCI: Okay.
7 Thank you very much today for your testimony.
8 T. MICHAEL TWOMEY: Thank you.
9 ASSEMBLYWOMAN PAULIN: Assemblyman
10 Tom Abinanti.
11 ASSEMBLYMAN ABINANTI: First of all, thank
12 you for joining us today.
13 I had wanted to make some comments when the
14 Governor's people were here, so I'm just going to
15 make those while you're sitting here, if you don't
16 mind. I got called away to another meeting.
17 And I just want to say, I want to applaud the
18 Governor's leadership on this issue.
19 And I think the people that spoke for him
20 today gave us a succinct summary of some of the
21 concerns -- the safety concerns, the environmental
22 concerns -- that so many of us in the Westchester
23 community have expressed for a long period of time.
24 I know Entergy has taken a different view of
25 those issues.
250
1 But those of us in the community were very
2 concerned, and we're pleased that the Governor is
3 putting into effect a plan that many of us have long
4 called for.
5 As a member of the Westchester County
6 Legislature, we raised these concerns.
7 I know our county executive, 10 years ago,
8 said that there's just no way of evacuating should
9 there be some kind of an incident.
10 So I am very pleased that the Governor has
11 taken the leadership on this.
12 I do think that there are some issues that
13 need to be dealt with, concerning the workers.
14 And I'm pleased to see that Entergy is
15 dealing with some of those issues; and, hopefully,
16 all of the workers will land softly.
17 I'm concerned also for our municipalities,
18 because this is going to raise concerns about taxes,
19 and substitute for taxes, et cetera.
20 I've taken a look at the PILOT agreement, and
21 I am a little concerned that, the way the PILOT
22 agreement was drafted, it leaves a lot of questions.
23 And I'm hopeful that Entergy will be
24 cooperative with the community, because I think both
25 the community and Entergy will need each other for a
251
1 long, long time, and that something can be worked
2 out.
3 I'm not quite sure what happens when the
4 PILOT agreement ends. We're probably in unchartered
5 territory. I'm not quite sure how we value your
6 property.
7 There have been circumstances where pilots
8 have ended, and the value of the property actually
9 went up, and municipalities were able to collect
10 more than they were getting through the PILOT.
11 I don't know if there's any precedent,
12 though, for a nuclear power plant.
13 T. MICHAEL TWOMEY: Well, we actually have
14 had that issue come up.
15 We had an agreement with the town in Vermont
16 where Vermont Yankee was located, and we went back
17 onto the rolls.
18 I will tell you it was at a substantially
19 reduced amount because, the plant's no longer
20 generating power, the plant's no longer generating
21 revenue.
22 But, I agree with you, that those issues need
23 to be worked out for Indian Point specifically.
24 ASSEMBLYMAN ABINANTI: Okay.
25 The other concern that I have is the issue of
252
1 decommissioning.
2 I know that there have been community groups
3 that have called for something other than the
4 decommissioning and the safe storage, and they've
5 tried to come up with some compromise which would be
6 a planned decommissioning with some kind of a site
7 restoration.
8 Are you willing to take a look at that?
9 T. MICHAEL TWOMEY: Well, we will certainly
10 evaluate all of the options, and we will be mindful
11 of the community's interests.
12 You know, quite frankly, the transaction we
13 proposed in Vermont is just such a solution, in
14 terms of providing a quicker decommissioning.
15 But, you know, I will say, at a minimum, we
16 will comply fully with our obligations under the NRC
17 requirements, and we will submit our PSDAR in a
18 timely fashion, and we are quite a bit away from
19 having that done.
20 We really are focused as a company, and with
21 the employees, on operating that plant for the next
22 four years.
23 That's -- four years is a long time, and we
24 want everybody --
25 ASSEMBLYMAN ABINANTI: You under --
253
1 T. MICHAEL TWOMEY: -- to stay focused on
2 that.
3 ASSEMBLYMAN ABINANTI: -- right.
4 You understand the fear of the community,
5 because Entergy did try, somewhere along the way, to
6 transfer this plant to a single-purpose corporation
7 which could very easily have been put into
8 bankruptcy at that point.
9 And, you know, it's kind of like a taxi
10 company that's got one taxi, the taxi gets into an
11 accident, there's no insurance, and there's a
12 problem.
13 So you understand the -- the hesitancy of
14 some people in the community to rely on promises,
15 because of that. And --
16 T. MICHAEL TWOMEY: Well, obviously, I -- we
17 don't need to get into it here --
18 ASSEMBLYMAN ABINANTI: Right.
19 T. MICHAEL TWOMEY: -- but I don't know that
20 I would agree of your characterization of the prior
21 proposal.
22 I will tell you that, what we have in Vermont
23 is, it's really a question of what your priority is.
24 We can certainly remain the owner, and this
25 is the conversation I've in Vermont many times.
254
1 It will mean that the plant doesn't get
2 decommissioned in Vermont, for example, for 30 or
3 40 years longer.
4 But that's an option.
5 If the objective, if the priority, is for
6 quicker decommissioning, then we really should be
7 looking at other options where you have financially
8 qualified, technically capable experts in
9 decommissioning, who are willing to come in and take
10 on the project.
11 So, you know, that -- it's all a question of
12 what your priority is and how you want to balance
13 that.
14 ASSEMBLYMAN ABINANTI: Well, in layman's
15 terms, what's the difference between safe storage
16 and decommissioning?
17 What's the end product of decommissioning?
18 T. MICHAEL TWOMEY: All -- all --
19 decommissioning itself is just one definition, which
20 is the ultimate dismantling, decontamination of the
21 site, and eventual removal of the spent nuclear
22 fuel.
23 There are a couple of methods of getting that
24 done, and at least, under the NRC requirements as
25 they exist today, there are two.
255
1 One is referred to as "DECOM," all caps,
2 D-E-C-O-M, which means, simply, that you begin that
3 process, more or less, immediately.
4 Now, there will be some several years after
5 the plant shuts down where you have spent nuclear
6 fuel that has recently moved from the reactor to the
7 spent-fuel pool --
8 ASSEMBLYMAN ABINANTI: Uh-huh?
9 T. MICHAEL TWOMEY: -- that you want to have
10 some time for that to be cooling.
11 But after that period, whatever that period
12 is, you begin, immediately, to start dismantling and
13 decontaminating the site.
14 ASSEMBLYMAN ABINANTI: Do you, literally,
15 take the building apart?
16 T. MICHAEL TWOMEY: Yes, you literally -- it
17 becomes -- just to put it in perspective:
18 When we take the spent nuclear fuel out of
19 the reactor and put it in the spent-fuel pool, and
20 then move it to dry-cask storage, we have eliminated
21 99 percent of the radioactive material from the
22 buildings.
23 ASSEMBLYMAN ABINANTI: And how long will it
24 take -- let's say, in Vermont, for example --
25 T. MICHAEL TWOMEY: And then at that point --
256
1 ASSEMBLYMAN ABINANTI: -- to take the
2 building apart?
3 T. MICHAEL TWOMEY: -- and then -- then
4 you've got to -- well, you've got to do it in a
5 logical way, and in a safe way, and under the NRC
6 requirements, but, at that point, it becomes,
7 largely, a deconstruction effort.
8 What the SAFSTOR method simply means is that
9 you defer the decommissioning activities for some
10 period of time.
11 And what has been true, in many cases, is
12 that what you're simply doing is waiting for the
13 amount in the nuclear decommissioning trust fund to
14 grow, until you have enough money in the fund to do
15 the work.
16 And I won't pretend to offer testimony on
17 behalf of the NRC, but my understanding of that
18 process is that, essentially, we have to wait until
19 we have enough money to both begin and complete the
20 decommissioning.
21 We can't -- we can't start the project and
22 have it half finished.
23 So -- so the only difference, really, between
24 SAFSTOR and DECOM, is how long are you going to wait
25 before you begin?
257
1 And under the NRC guidelines, we have the
2 right to defer the decommissioning, as long as we
3 complete it within 60 years of the shutdown.
4 So the option is really our option.
5 ASSEMBLYMAN ABINANTI: Now -- now, where is
6 the money, literally, physically?
7 T. MICHAEL TWOMEY: It's in -- well, the
8 trust funds are invested.
9 ASSEMBLYMAN ABINANTI: Yeah, but whose -- in
10 whose name are they?
11 T. MICHAEL TWOMEY: Well, we have had a
12 trustee.
13 They belong to the companies that own the
14 nuclear plant.
15 So, Indian Point Unit 2, Indian Point
16 Unit 3 --
17 ASSEMBLYMAN ABINANTI: Okay. What prevents
18 you from transferring the ownership to a different
19 corporation?
20 T. MICHAEL TWOMEY: NRC guidelines, IRS
21 guidelines, the federal guidelines.
22 ASSEMBLYMAN ABINANTI: They're guidelines.
23 They're not laws.
24 T. MICHAEL TWOMEY: No, no. They're laws.
25 The NRC regulations, federal law, we are
258
1 prohibited by federal law --
2 ASSEMBLYMAN ABINANTI: Are they attachable by
3 a creditor?
4 T. MICHAEL TWOMEY: I don't believe so, no.
5 They're --
6 ASSEMBLYMAN ABINANTI: See, what I'm very
7 concerned about here, and this is one piece of this
8 deal that I criticize, is that the money left the
9 government, the state, and went into your hands.
10 And I'm very concerned, that once it's into a
11 private corporation, there are bankruptcy laws,
12 there's other attachments...there's all kinds of
13 things out there that we can't control.
14 And I'm worried about that $1.7 billion being
15 there for the purposes for which it was designed.
16 T. MICHAEL TWOMEY: I would say this:
17 There -- that trust fund is secure -- those trust
18 funds are secure.
19 They are not -- as I understand it, they are
20 not subject to attachment, they're not subject to
21 bankruptcy.
22 They are limited-purpose trust funds, under
23 federal law, that can only be used for
24 decommissioning-related activities.
25 And -- and the ownership of the funds
259
1 residing with us is -- makes the arrangement in
2 New York now consistent with every other plant owner
3 in the United States.
4 The situation where NYPA was holding the
5 trust funds, after they no longer owned the plant,
6 was, to my understanding, unique in the
7 United States.
8 ASSEMBLYMAN ABINANTI: Okay. I --
9 T. MICHAEL TWOMEY: And that -- so all we've
10 done is, we've made -- we've set up the situation so
11 that it's exactly the same as every other plant in
12 the country.
13 ASSEMBLYMAN ABINANTI: Now, my con -- I'm
14 hearing a contradiction.
15 You're telling me that you've added no moneys
16 to the $1.1 billion that you inherited.
17 T. MICHAEL TWOMEY: I don't know if that's
18 the number.
19 ASSEMBLYMAN ABINANTI: Well, whatever the
20 number is.
21 The $1.7 billion came from somewhere else.
22 And Entergy, over the last 20 years --
23 T. MICHAEL TWOMEY: 15.
24 ASSEMBLYMAN ABINANTI: -- 15 years, has added
25 nothing, presumably, because you believe it's
260
1 sufficient to decommission.
2 And yet your testimony here today is, you
3 don't know that it will be sufficient. It may turn
4 out not to be sufficient.
5 So why haven't you added some moneys for the
6 last 15 years to ensure that it's sufficient?
7 T. MICHAEL TWOMEY: Well, let me break that
8 down. There were a couple of things.
9 ASSEMBLYMAN ABINANTI: Because there have
10 been some of us in the community who have said over
11 and over again, these moneys may not be sufficient.
12 What guarantee do we have?
13 T. MICHAEL TWOMEY: Well, let me -- let me do
14 a couple of things.
15 The current balance -- and it's not --
16 I don't mean current today. It's whenever the last
17 time we made the filing. -- of 1.7 billion is not
18 the amount that we got from the owners 15 years ago.
19 We got some amount far less than that from
20 the owners.
21 ASSEMBLYMAN ABINANTI: But the investments
22 have grown?
23 T. MICHAEL TWOMEY: And the investments have
24 grown, and the fund has grown, to $1.7 billion.
25 What I have said, is that we have met the NRC
261
1 minimum requirements to show adequate assurance at
2 each filing.
3 And in cases where we didn't meet that, which
4 may have happened, like, around 2008 or 2009, we may
5 have had to provide some kind after a -- a temporary
6 guarantee to bridge the gap.
7 So I don't want to be imprecise.
8 But, by and large, we have made the filings
9 that show that we have the minimum NRC requirement.
10 We have -- we have not said that the amount
11 in the fund is enough to decommission the plant
12 beginning on X date, because the date of
13 decommission was always uncertain.
14 That (indiscernible) --
15 ASSEMBLYMAN ABINANTI: Right. But you had a
16 license that ended on a certain date. Right?
17 T. MICHAEL TWOMEY: -- I'm -- we --
18 ASSEMBLYMAN ABINANTI: Shouldn't it be enough
19 for the end date on the license?
20 T. MICHAEL TWOMEY: -- well, what's the end
21 date on the license?
22 Right?
23 That was uncertain.
24 The end date on the license, from our
25 perspective, would eventually be 2035.
262
1 There are plants in the United States that
2 have gone in for second license renewal.
3 ASSEMBLYMAN ABINANTI: Okay. So then,
4 basically, you're agreeing with the critics, who
5 have all along have said, that the decommissioning
6 fund was insufficient to finance a decommissioning
7 at the end of your existing license?
8 T. MICHAEL TWOMEY: No, I don't agree with
9 that.
10 All I said is, that we had met the NRC
11 requirements at each stage.
12 And whether there's enough in the fund to
13 complete decommissioning will depend on the
14 decommissioning cost estimate that we haven't
15 prepared yet.
16 In Vermont Yankee's case, for example, the
17 amount in the fund is sufficient for NorthStar to
18 complete decommissioning.
19 I don't know what that situation will be in
20 New York, and we won't know until we complete the
21 decommissioning cost estimate.
22 So I don't agree that the funds are
23 inadequate.
24 ASSEMBLYMAN ABINANTI: Okay.
25 I'll just end with, there was some discussion
263
1 about, and I think you were talking about the
2 difference in the -- or was it your -- the
3 predecessor was talking about the difference in the
4 subsidies that different industries get, et cetera.
5 I just wanted to note, and I don't know what
6 happens in -- and this leads to a question -- that
7 your industry has not had to provide the same
8 liability insurance because of the Price-Anderson
9 Act, where, basically, the federal government steps
10 in to provide anything over $500 million, or
11 whatever that number is these days.
12 What happens with a plant that's shut down,
13 does that act continue on? Is the federal
14 government on the hook in case there's an accident,
15 as opposed to Entergy?
16 T. MICHAEL TWOMEY: Well, I don't know for
17 sure. I'm not an expert on the Price-Anderson Act.
18 I do believe that the Price-Anderson Act
19 continues in effect for nuclear plants, but, I'm not
20 certain.
21 And I am familiar with that argument from
22 advocates of renewable power.
23 ASSEMBLYMAN ABINANTI: And I'll just -- the
24 other thing is, your argument is, the market has
25 been such that Entergy would to this anyway.
264
1 Isn't Europe, basically, shutting down its
2 nuclear power plants?
3 T. MICHAEL TWOMEY: I'm sorry?
4 ASSEMBLYMAN ABINANTI: Isn't Europe,
5 basically, exiting the industry?
6 T. MICHAEL TWOMEY: Some European countries
7 are -- have limited the use of nuclear power.
8 Germany, for example, which, by the way, has
9 had a dramatic increase in carbon emissions as a
10 result of that decision. They're burning a lot of
11 coal now, when they used to be burning nuclear.
12 Other countries are continuing to utilize
13 nuclear power.
14 Some countries are expanding their use of
15 nuclear power.
16 So, it's really a patchwork of energy policy.
17 And it, obviously, remains to be seen what
18 the -- you know, what's the best mix.
19 You know, the Germans, obviously, are willing
20 to tolerate, you know, a lot of coal burning and a
21 lot of increased carbon emissions in exchange for
22 whatever benefit they think they got out of shutting
23 down nuclear plants.
24 I'm not sure every country would agree with
25 that perspective.
265
1 ASSEMBLYMAN ABINANTI: Okay. Thank you.
2 SENATOR GRIFFO: Senator Murphy.
3 SENATOR MURPHY: Mike, it's great to see you.
4 Joanne, it's good to see you again.
5 Thanks for coming up.
6 And, I state for the record, you've been an
7 exceptional neighbor, in a lot of different ways, to
8 our community.
9 T. MICHAEL TWOMEY: Thank you.
10 SENATOR MURPHY: And I know there's -- a lot
11 of the answers have already been -- a lot of the
12 questions have already been answered here, so I'm
13 just going to breeze through my quick questions.
14 And, we have a lot of other speakers here,
15 who have been here for five hours.
16 Just answer them as quick and as complete as
17 you can.
18 T. MICHAEL TWOMEY: Okay.
19 SENATOR MURPHY: Can you describe the
20 relicensing process Entergy has been going through
21 for Indian Point over the past 10 years, and what
22 role the state has played in it?
23 T. MICHAEL TWOMEY: You want a short answer
24 to that question?
25 SENATOR MURPHY: I want the cliff notes.
266
1 [Laughter.]
2 T. MICHAEL TWOMEY: Okay. Well, in very
3 high-level terms, in order to get relicensed, a
4 nuclear facility needs to satisfy the NRC, first and
5 foremost.
6 SENATOR MURPHY: Did you do that?
7 T. MICHAEL TWOMEY: We did not complete that
8 process.
9 We certainly had staff recommendations that
10 supported license renewal. But the NRC has an
11 entity, that the whole commission, did not have an
12 opportunity to rule on that, and won't until we
13 finish this process in 2018, likely.
14 So, we satisfied the staff, it would be my
15 position.
16 We also needed to obtain concurrence from the
17 State of New York, the Department of State, that the
18 continued operation of the plant was consistent with
19 the Coastal Zone Management Act.
20 We got an objection to that from the State of
21 New York, and there were -- there was quite a bit of
22 litigation around that.
23 Some of it was resolved in our favor, some of
24 it was not resolved in our favor, and some of it was
25 unresolved.
267
1 That's all gone away.
2 SENATOR MURPHY: Is that the typical thing
3 that you go through --
4 T. MICHAEL TWOMEY: No.
5 No, in fact -- in fact --
6 SENATOR MURPHY: -- so -- because my next
7 question, and I'm sorry if I'm interrupting you, but
8 I'm just going -- my next question was going to be:
9 In your opinion, did the State help overcome, or
10 build more obstacles, during this, and the most
11 relicensing?
12 T. MICHAEL TWOMEY: Well, certainly, there
13 were various elements of the State, the Attorney
14 General and the Governor's Office, who had a point
15 of view about license renewal that was not -- were
16 not supportive of our effort, and made the effort
17 take longer and be more expensive.
18 SENATOR MURPHY: So it's not typical?
19 T. MICHAEL TWOMEY: And it's not typical.
20 In fact, it's not typical, when compared to
21 the license-renewal process for Gannett, Nine Mile,
22 and FitzPatrick in Upstate New York, all of which
23 went through a license-renewal process relatively
24 quickly.
25 SENATOR MURPHY: Did two to three years;
268
1 right?
2 T. MICHAEL TWOMEY: Correct.
3 SENATOR MURPHY: Okay.
4 Question: How did FERC's capacity zone
5 mandate affect the decision process in this?
6 T. MICHAEL TWOMEY: Well, the introduction of
7 a new capacity zone provided some additional revenue
8 to Indian Point compared to the previous
9 arrangement, but it was not sufficient to allow us
10 to continue to operate the plant.
11 So, it was helpful, but not sufficient.
12 SENATOR MURPHY: Okay.
13 Will Entergy continue to receive
14 consumer-funded subsidies from the Lower Hudson
15 Capacity Zone during the next five years while it's
16 being decommissioned?
17 T. MICHAEL TWOMEY: I guess I wouldn't
18 describe the capacity zone as consumer-funded
19 subsidies.
20 The New York ISO, under the FERC regime, has
21 an obligation to determine the appropriate capacity
22 price in the states. And the NYISO determined that
23 the appropriate price was what we're currently
24 getting.
25 I wouldn't call that a subsidy. It's just
269
1 the price in that zone.
2 SENATOR MURPHY: So that will continue for
3 over the next five years --
4 T. MICHAEL TWOMEY: That will continue,
5 unless the New York ISO changes the pricing, or FERC
6 requires it to be changed.
7 SENATOR MURPHY: Can you describe Entergy's
8 plan for those currently working at the plant?
9 So, we've talked before about this, and this
10 is something that I would love to see in there,
11 about -- you're talking about, the workforce,
12 retraining the workforce.
13 And -- so typ -- example: I have four years
14 left before I can retire.
15 Can you keep me at your plant for four years
16 and put me on the decommission team, so I can get my
17 four years without disrupting and moving my entire
18 family someplace else?
19 This is going to be a crucial component to a
20 lot of the employees over there, that -- to be quite
21 honest with you, they're very anxious.
22 And as a -- if I was an employee over there,
23 I would be very anxious, not knowing where I'm going
24 to end up.
25 Am I going to end up in Louisiana?
270
1 Am I going to end up in another one of your
2 nuclear plants?
3 Am I going to be able to stay there? And if
4 I'm stay there, what am I going to be able to do?
5 When do these -- what are these options, and
6 when are they going to become available to these
7 people over there?
8 And the workforce retraining, will that be
9 done right on premise?
10 T. MICHAEL TWOMEY: Well, there's been a lot
11 of questions about workforce retraining.
12 I don't know any of those details.
13 SENATOR MURPHY: Okay. Fair enough.
14 T. MICHAEL TWOMEY: I didn't -- but I will
15 say that we've made a commitment to our employees to
16 try to find them another position in our fleet, or
17 even in our utility business.
18 We have to develop a staffing plan for the
19 various periods of time after the plant shuts down,
20 and that staffing plan has not yet been developed.
21 SENATOR MURPHY: If -- when you develop your
22 plan, if you can keep that in there, because it's --
23 that would be very crucial to a lot of the employees
24 over there, that, through attrition, through buyouts
25 that you might have, through the four- or five-year
271
1 process, that be -- so I don't have to move my
2 entire family.
3 It's going to be -- when you make your plan,
4 please keep that in mind.
5 Will Entergy continue to honor the PILOT
6 program currently in place with local
7 municipalities, the County, and the Hendrick Hudson
8 School District?
9 T. MICHAEL TWOMEY: Well, we certainly will
10 honor the terms of the PILOT agreement.
11 That's easy to say.
12 The PILOT agreement has various provisions in
13 it that permit it to be terminated by either party.
14 SENATOR MURPHY: That's for --
15 T. MICHAEL TWOMEY: And I can't tell you
16 today whether -- I don't know what we will do with
17 respect to the PILOT agreement.
18 We will certainly honor the terms.
19 Whether we exercise some of our options under
20 the PILOT agreement is something I can't -- I don't
21 have an answer for you today.
22 SENATOR MURPHY: Okay.
23 Your step-down; does that step-down after
24 2020, or after 2021?
25 T. MICHAEL TWOMEY: It's after --
272
1 SENATOR MURPHY: Because it goes 30, 60, 90.
2 Correct?
3 T. MICHAEL TWOMEY: -- it goes -- it's --
4 it's 30, 60, 90, and it's after shutdown. And
5 I don't know whether it's after shutdown of the
6 first unit or the second, or whether there's some
7 kind of a split between the two.
8 I would have to consult my tax lawyer on that
9 question.
10 SENATOR MURPHY: It's kind of an important
11 question, so I'm sure I'll be in contact with you.
12 T. MICHAEL TWOMEY: Well, we definitely will
13 be in contact, not only with your office, but with
14 the other parties to the agreement.
15 We have --
16 SENATOR MURPHY: We've got our supervisor,
17 our mayor, our -- and superintendent of schools
18 right there, so...
19 Is the 15-million community fund already
20 spoken for?
21 T. MICHAEL TWOMEY: No, no.
22 The $15 million -- and I brought my copy of
23 the agreement, and I dog-eared that page -- what it
24 said is, that we would establish a fund in the
25 amount of $15 million, the goal of which is to fund
273
1 projects designed to benefit the Hudson River and to
2 support the community, and to provide environmental
3 protection, other public benefits to the community.
4 So it's a fund that we will create, that we
5 will have to work with the State of New York.
6 The fund will provide for the completion of
7 projects to be selected by New York State and
8 Entergy after consultation --
9 SENATOR MURPHY: After --
10 T. MICHAEL TWOMEY: This is the point I think
11 you may be trying to get to.
12 -- after consultation with regional
13 environmental organizations and community groups and
14 interests.
15 So, you know, it's been variously described
16 as an environmental fund.
17 It's not just an environmental fund.
18 It's a fund for community stakeholders, and
19 it could be economic development. It -- you know,
20 some portion will be for environmental.
21 There's no designation as to what percentage
22 is attributable to each one.
23 We actually have to sit down with the
24 stakeholders, and we have to sit down with New York
25 State thereafter, and agree to a distribution of the
274
1 funds.
2 SENATOR MURPHY: -- that's my question: Who
3 will you be sitting down with in New York State?
4 T. MICHAEL TWOMEY: I don't know the answer
5 to that question, because --
6 SENATOR MURPHY: Very important to me.
7 T. MICHAEL TWOMEY: -- because the agreement
8 simply says "New York."
9 SENATOR MURPHY: Very, very important to me,
10 because I am very disappointed, and in all due
11 respect, and we've had a great relationship over
12 there, the three men in the room, between
13 Riverkeeper, between you guys, and between the
14 Governor's Office, and not letting anybody -- and
15 I understand -- the optics of that is just horrific.
16 It's just -- on an outsider looking in, it just
17 looks really bad.
18 And I understand what the reasons of why you
19 had to do that.
20 But coming out, and bringing the devastating
21 news in the newspaper, when the supervisor and the
22 superintendent, that's $25 million on the table.
23 These guys have a thousand jobs that there,
24 and they got to read it in the newspaper?
25 You've been a great, great neighbor.
275
1 And it just -- you know, and, listen, it's
2 like a slap in the face.
3 And, you know, I understand the reasons why
4 you had to do that. I really do.
5 But I believe it could have been rolled out a
6 little bit different.
7 You've got -- you've got -- like you said in
8 your opening statement, you have the best employees
9 on your premise.
10 They deserve better.
11 T. MICHAEL TWOMEY: Well, I agree.
12 I mean, certainly, one of the worst things
13 about this was that, somebody, and I can promise you
14 it was not anybody who works for Entergy, talked to
15 the "New York Times," and there was a story about
16 this on a Friday, when we did not have an agreement
17 yet.
18 Now, short of that, we are -- and I've said
19 this before, we are a publicly-traded company, with
20 non-material -- with material non-public
21 information. We would not have been in a position.
22 And if you look at how we had to roll out the
23 announcements in the other jurisdictions, we
24 announced it, and everybody heard about it at the
25 same time.
276
1 The twist here was the settlement of the
2 litigation with the State.
3 Now, I don't know who on the part of the
4 State is going to negotiate with us over the
5 15 million.
6 SENATOR MURPHY: Can I be part of that?
7 T. MICHAEL TWOMEY: I don't think it's up to
8 me to decide.
9 I don't know who the State -- I mean, there
10 are a number of folks from the State who signed this
11 agreement.
12 SENATOR MURPHY: When you go into your
13 agreement, can you suggest that we have someone
14 who's got some skin in the game down there, in
15 representing the 320,000 people, 25,000 people, in
16 my district --
17 T. MICHAEL TWOMEY: I certainly --
18 I certainly --
19 SENATOR MURPHY: -- with some the major,
20 major players involved, between the jobs, between
21 the taxes, between the school district, between the
22 mayor over there, between the supervisor, between
23 the other mayor, would you please suggest that?
24 T. MICHAEL TWOMEY: I'd be happy to do that.
25 I'm very supportive of that.
277
1 SENATOR MURPHY: I am almost done, and you
2 brought it up in -- with a lot of the challenges
3 that you have had over the years of legality.
4 Who were -- who was -- who was a big --
5 big -- what do I want to say? -- a big opponent to
6 try and overcome?
7 T. MICHAEL TWOMEY: Well --
8 SENATOR MURPHY: Was it the State?
9 T. MICHAEL TWOMEY: -- I -- yes.
10 SENATOR MURPHY: Was it other groups?
11 T. MICHAEL TWOMEY: Primarily the State.
12 I mean, if the State had been supportive of
13 the continued operation of the facility, I think you
14 would have had a different outcome.
15 I mean, we've had environmental organizations
16 who challenge the continued operation of our plants,
17 and we have achieved license renewal other places.
18 The big difference I would say here, was that
19 we certainly had a group that -- of state officials
20 who had a different perspective on license renewal
21 than we did.
22 And, again, I don't want to hang all of the
23 consequences of this on the litigation, because the
24 overwhelming reason for the shutdown was the
25 economic deterioration of wholesale market prices.
278
1 We have been fighting and litigating
2 Indian Point for 10 years, and that's just the
3 license renewal.
4 We had other challenges.
5 You know, we bought Unit 2 from Con Ed, and
6 closed on that facility sale about a week after
7 9/11. And there people, immediately upon our
8 ownership, were calling for the shutdown of the
9 plant, for their own, you know, good and valid
10 reasons and concerns.
11 But we have been in a fight for the continued
12 operation of that plant almost since the day we
13 bought it. And we would continue to be in that
14 fight if the price of power were adequate.
15 But it wasn't.
16 And so that's the reason we shut the plant
17 down.
18 SENATOR MURPHY: All right. And an extra
19 $200 million wouldn't hurt to have in your pocket;
20 right?
21 T. MICHAEL TWOMEY: Well, that's right.
22 SENATOR MURPHY: Okay. You don't have to
23 explain.
24 T. MICHAEL TWOMEY: That money could have
25 been spent on other things.
279
1 SENATOR MURPHY: You don't have to explain.
2 Listen, I know we have other people here.
3 Thank you.
4 I look forward to continue working with you
5 and Joanne and Entergy, because there's -- we're
6 having a hearing on Thursday.
7 If you're around, I'd love to have you.
8 There's -- just people are just too anxious
9 over there. They're not sure what's going to happen
10 to their community, the job impact that that's gonna
11 have over there.
12 We're going to have a tremendous amount of
13 people over there, just to kind of alleviate some of
14 the fear that might -- that they're feeling.
15 So, I thank you for being here today.
16 T. MICHAEL TWOMEY: I appreciate your
17 questions.
18 SENATOR GRIFFO: Mr. Twomey, just a follow-up
19 to that.
20 Would you -- you're a business, I understand
21 that, but do you consider yourself a corporate
22 citizen?
23 T. MICHAEL TWOMEY: I think we've been an
24 outstanding corporate citizen for 15 years.
25 SENATOR GRIFFO: So as a result of that,
280
1 would you be willing to work with the community,
2 relative to the pilots and some of these other
3 things that could be beneficial to the community, as
4 opposed to following all the language in the
5 contracts that already exist?
6 T. MICHAEL TWOMEY: Well, I will say this:
7 We will certainly work with the community to
8 the extent that we can.
9 We can't ignore agreements that we've signed.
10 I know you weren't asking me to --
11 SENATOR GRIFFO: Well, you can alter those
12 agreements.
13 I mean, this is -- listen, $15 million is
14 woefully inadequate to that community.
15 This is akin to economic Armageddon to that
16 community.
17 And as a corporate citizen, if you're truly a
18 good corporate citizen, I would urge you, and highly
19 recommend, that you work not only within the
20 framework of the agreements, but be willing to be
21 flexible.
22 T. MICHAEL TWOMEY: Well, you know, I think
23 $15 million is certainly not a big number compared
24 to some of the economic consequences.
25 It is $15 million more than any legal
281
1 obligation that we would have.
2 I know many facilities have shut down,
3 manufacturing plants go out of business, they --
4 businesses close, and they don't provide money.
5 They don't provide $15 million.
6 SENATOR GRIFFO: That's untrue, that's
7 untrue.
8 T. MICHAEL TWOMEY: But --
9 SENATOR GRIFFO: There are number of
10 organizations.
11 When the federal government closed military
12 installations, the Office of Economic Adjustment
13 stepped in.
14 When the State closed correctional
15 facilities, they came in with an economic
16 transformation fund.
17 And I think there's an obligation for the
18 State to look at that too.
19 But --
20 T. MICHAEL TWOMEY: I think the State could
21 step in.
22 And, you know, given the State -- given that
23 the State has achieved its objective, I would
24 certainly expect that they would be on the list of
25 people to call.
282
1 SENATOR GRIFFO: Thank you.
2 Chairwoman.
3 ASSEMBLYWOMAN PAULIN: I've got, Sandy Galef.
4 ASSEMBLYWOMAN GALEF: (Microphone turned
5 off.)
6 Thank you very much for being here.
7 And I must admit, I -- when you purchased the
8 plant, and having September 11th the next day, was
9 an amazing thing for you to have to deal with.
10 But I think you've done a great job in our
11 community, as a company, and I really appreciated
12 that very much.
13 T. MICHAEL TWOMEY: Thank you.
14 ASSEMBLYWOMAN GALEF: I do have some
15 questions, and I just was -- really, relating to
16 your statement.
17 And, on page 2, and maybe I'm just asking
18 this in a different way than Senator Murphy, but you
19 have three points -- the Indian Point shutdown
20 announcement, you have three points.
21 One is the energy prices;
22 The second is operating costs;
23 And the third is getting your license
24 renewal.
25 So in the increased operating costs, is that
283
1 your 10 years of litigation, or is that in your
2 third point?
3 T. MICHAEL TWOMEY: The 10 years of
4 litigation would be in the third point.
5 ASSEMBLYWOMAN GALEF: Third point.
6 T. MICHAEL TWOMEY: The second point,
7 increased operating costs, and I'm not a technical
8 expert at the plant, so I didn't want to get into
9 too much detail.
10 But, generally speaking, the cost of
11 operating any nuclear plant in the United States has
12 increased in the last 15 years, due to things like
13 modifications after 9/11, modifications after
14 Fukushima, the general increase in labor costs and
15 material costs and equipment cost.
16 And everything about running a nuclear plant
17 has become somewhat more expensive, just like
18 running a household, or running any kind of
19 business.
20 And what I was trying to describe here was
21 that we -- while we've had a steady increase in
22 operating costs, we've had a huge drop in revenue.
23 And when you have that situation, you know,
24 my daughter was asking me to explain it to her.
25 And I said, well, there was an old show
284
1 called "I Love Lucy." And Lucy and Ethyl were
2 making salad dressing, and it cost them $5 a bottle
3 to make it, and they could only sell it for
4 $3 bottle. You can't stay in business very long if
5 your costs are greater than your revenue.
6 She had no idea what I was talking about,
7 but -- except for the "5" and the "3."
8 But, essentially, we were operating this
9 plant. It's costing us more money to run it, and
10 we're getting sharply reduced revenues as a result
11 of natural gas prices.
12 And, you know, the reduction in natural gas
13 prices has been a huge benefit to many people.
14 It's been a huge benefit to consumers who use
15 natural gas, whether directly, or indirectly through
16 power plants.
17 So, you know, society, as a whole, probably
18 it's a net benefit today.
19 The consequence of that is that other plants,
20 like the nuclear plants, that not running on natural
21 gas, we're being pushed out of business, and you're
22 going to lose fuel diversity as a result.
23 And we're going to be I think 65 percent
24 dependent on oil and natural gas.
25 That number could increase over time.
285
1 It's certainly higher than that in
2 New England.
3 And that will be fine, as long as natural gas
4 prices remain low.
5 If they turn, then that could be a hardship
6 for folks.
7 But, you know, the unfortunate thing about
8 these nuclear plants is that, once you shut them
9 down, that's it.
10 We can't mothball them the way they mothball
11 a coal plant, or a high-capacity or high-heat-rate
12 gas unit.
13 When we shut down Indian Point, that's it.
14 And if, 10 years from now, or 15 years from
15 now, people wish they had more baseload
16 emission-free generation, they'll have to find
17 another source for that. And I don't know what
18 those sources would be.
19 But, I think that's the dilemma.
20 ASSEMBLYWOMAN GALEF: Well -- so, in the
21 increased operating costs, is part of that because
22 it's an aging plant, and you have to do different
23 things, and reconstruct, and so on?
24 Is there -- are you -- you have other plants
25 too.
286
1 Is there just a time span with -- in which
2 something like this may happen, that it's just too
3 expensive to run a facility?
4 T. MICHAEL TWOMEY: I don't think so.
5 I mean, these plants are -- have been in operation
6 for quite some time. But almost all of the major
7 components have been replaced or refurbished over
8 the years.
9 So, you're not dealing with a plant that all
10 of the components are 40 years old.
11 You're dealing with a plant, some of the
12 components have been replaced as recently as, you
13 know, maybe five years ago.
14 And -- and so just the general cost of
15 operating a plant, as with any other business.
16 Plus, we did do some specific things for
17 nuclear plants, like Fukushima modifications, and
18 increased security after 9/11, all of which were
19 appropriate to do, but, they increased the cost.
20 And you can tolerate a certain level of
21 increased cost as long as your revenue is
22 sufficient.
23 And, you know, I would say, six or eight
24 years ago the revenue was sufficient; and the
25 revenue was sufficient to tolerate those costs, the
287
1 revenue was sufficient to tolerate litigation.
2 You know, it was sufficient.
3 And now revenues are, you know, much lower,
4 and as a result of that, the plant is not
5 economically viable.
6 ASSEMBLYWOMAN GALEF: Right.
7 So, in one, two, and three, even if you got
8 rid of three, your licensing -- relicensing costs,
9 you still would have to close the plant?
10 T. MICHAEL TWOMEY: I think that's right.
11 I mean, it was an issue, it was a factor.
12 But the overwhelming factor was the price --
13 ASSEMBLYWOMAN GALEF: Right.
14 T. MICHAEL TWOMEY: -- of -- price of power.
15 ASSEMBLYWOMAN GALEF: I'd just like to ask
16 about the fully staffing to April 2021.
17 Because, I would think if I were an employee,
18 and I have the opportunity to go to one of your
19 southern plants, and I really wanted to continue in
20 the nuclear business, I might want to leave -- if
21 I saw a position was open down there, I think
22 I might want to grab it before it goes.
23 And so then you're left in the plants in our
24 area without certain people.
25 Is that something that I have to worry about?
288
1 T. MICHAEL TWOMEY: Well, it's something that
2 we worry about, and that's why, when we announced
3 the shutdown of other facilities, we put in a pretty
4 aggressive retention plan to keep the employees,
5 because we really need to focus on running that
6 plant for four years.
7 We can't have a skeleton crew running the
8 plant. We have to have nearly full staff.
9 Now, maybe it's not exactly the same number.
10 Maybe we lose 20 employees because of attrition.
11 But, by and large, we take that issue very
12 seriously.
13 We roll out aggressive retention plans. We
14 pay people a lot of extra money to stay at
15 Indian Point for the period of time that we need
16 them to stay.
17 You know, that does benefit the community
18 because they generally spend that money on goods and
19 services in the community.
20 So, we do take that very seriously, and it's
21 a big focus of ours as we make the transition.
22 ASSEMBLYWOMAN GALEF: What about other
23 companies recruiting?
24 T. MICHAEL TWOMEY: You know, I am not
25 involved directly in that process.
289
1 My general understanding is that other
2 companies have been pretty respectful of the process
3 because, it may be one of our units today; it may be
4 one of their units tomorrow.
5 And it doesn't benefit anybody to push the
6 employee base to the point where you don't have
7 adequate staffing, because, if you had an incident
8 at an Exelon plant, or a Dominion plant, or an
9 Entergy plant, that's going to affect the whole
10 industry. It's not just going to be a local
11 problem.
12 So my experience, and my understanding, is
13 that the other companies tend to be very respectful,
14 and supportive, of our focus on continued operations
15 through the end of the plant's life.
16 ASSEMBLYWOMAN GALEF: And I'd just like to
17 add, on the whole community stakeholders, I agree
18 with both of our Senators, that -- first of all,
19 when I saw the "$15 million" in the paper, and I had
20 no idea what it was going for, but I thought it
21 could have gone to people in Putnam County or
22 Oswego, or whatever.
23 The definition of "community," and I think
24 the definition of "community" should be, the
25 community where the plant has been, in the confines
290
1 of that. And maybe that's not even a 10-mile
2 radius. It might be, you know, just very, very
3 close to the plant.
4 And I'm assuming there will be a lot of
5 environmental groups from all over that will kind of
6 try to gobble it up, but, I don't think that's what
7 it should be.
8 And I think it should grow over time.
9 So, just a statement from me.
10 But I'd also like to get to, you know, I'm
11 sitting here, thinking, we have three plants.
12 This isn't like another place where you have
13 one plant.
14 We have three plants.
15 Can't we look at them as three different
16 plants?
17 So, Indian Point 1's been sitting there.
18 It's got "X" amount of dollars -- I can't
19 remember -- 400 --
20 T. MICHAEL TWOMEY: I think the number I was
21 given was four hundred and sixteen.
22 ASSEMBLYWOMAN GALEF: -- million -- whatever.
23 T. MICHAEL TWOMEY: 413 million.
24 SENATOR MURPHY: -- in the trust fund.
25 Couldn't we start and -- and -- start working
291
1 on that, and that might free up some property around
2 it, somehow, to be reused sooner?
3 And then look at -- look at each one of them
4 separately, instead of having to wait to put the
5 whole pot together, because they are three different
6 plants, and they, for a period of some time, they've
7 been owned by different people.
8 It's just now that they're owned by you.
9 And -- you know, so could we look at those
10 separately and divide them up?
11 T. MICHAEL TWOMEY: Well, I don't think that
12 would be the most efficient thing for getting the
13 project done.
14 You know, Unit 1 sits in between 2 and 3.
15 There really isn't going to be any available
16 property in between Units 2 and 3.
17 And the spent-fuel management process, we --
18 we -- they are interconnected between the two
19 facilities. There's a spent-fuel handling system
20 that connects one unit to the other.
21 And as a practical standpoint, I don't want
22 to rule it out.
23 I just want to be as responsive to your
24 question as I can be.
25 I think it's highly unlikely that there's a
292
1 more efficient way to decommissioning these
2 facilities than to approach them as a single
3 facility.
4 And, you know, we do have the decommissioning
5 trust fund.
6 We have to be as efficient as we can be,
7 because the more efficient we are, the sooner we can
8 do decommissioning.
9 ASSEMBLYWOMAN GALEF: Except, you have to go
10 into safe storage if you don't have enough money.
11 But if you have enough money for one of the
12 plants or two of the plants, it seems like we could
13 start to be -- I would ask that you put that into
14 your scenario --
15 T. MICHAEL TWOMEY: I will certainly pass
16 that concern along to --
17 ASSEMBLYWOMAN GALEF: -- because I think we
18 all would like to see some activity on the site,
19 whether it's, you know, using the training center
20 for a manufacturing job.
21 Whether, you know, the Algonquin gas, are you
22 thinking about, as a company, using that as some
23 kind of energy producing that's come through your
24 site?
25 T. MICHAEL TWOMEY: No.
293
1 In fact, you asked that question earlier, and
2 I was hoping I'd get a chance to get around to that.
3 ASSEMBLYWOMAN GALEF: Oh, okay.
4 T. MICHAEL TWOMEY: There certainly was no
5 coordination between the owner of that facility.
6 We're just a landowner.
7 The FERC and federal law give the owners of
8 pipelines, you know, the right to be on public
9 property, and private property, quite frankly.
10 We worked closely with that company to ensure
11 that there would be no safety concerns at
12 Indian Point.
13 We required that they reroute the pipeline.
14 We required that they use more robust
15 material with the pipeline and over the pipeline.
16 And we did extensive analysis to ensure that
17 the operation of that -- you're talking about the
18 AIM project, the Algonquin -- the incremental
19 project, didn't present any safety concerns.
20 And we are satisfied that it didn't present
21 any safety concerns.
22 The NRC was -- made its own independent
23 evaluation of that.
24 But, as far as us developing the site as a
25 gas-fired unit, I don't think that Entergy will be
294
1 investing in that site to build a new power plant.
2 We're -- our CEO and chairman have -- has
3 said that we're going to focus on our utility
4 business in the south, and we are not going to be in
5 the merchant-power business in the northeast after
6 these facilities are closed.
7 SENATOR MURPHY: But you had, a number of
8 years ago, recommended some gas peaker plants there
9 on the site.
10 Would you not sell off some of the property
11 to somebody, to be able -- I don't know whether the
12 community wants it or not, but, would you be willing
13 to sell off some of the site there that you might
14 have had for the peaker plant for people to develop
15 other energy sources?
16 T. MICHAEL TWOMEY: Yeah, I can say this: We
17 will evaluate any reasonable commercial proposal, in
18 due time.
19 We're going to remain focused on operating
20 the plant for the next four years, and then
21 decommissioning is going to be a -- you know, a
22 major focus after that.
23 Along the way, if there are commercial
24 proposals for reuse or use of part of the site, we
25 will evaluate those. We will take into account the
295
1 community interest in that, as we would anywhere.
2 And so we -- the short answer to your
3 question, which is, it's too late to give, is, yes,
4 we will take that into account.
5 SENATOR MURPHY: Okay. Thank you very much.
6 SENATOR GRIFFO: Assemblyman Palmesano.
7 ASSEMBLYMAN PALMESANO: Yes.
8 Thank you, Mr. Twomey.
9 And, Joanne, good to see you as well.
10 I have a few questions, and a lot of our
11 panel up here already got into some of it.
12 And I know you were pretty clear that the
13 main driver in this decision was the market costs.
14 But, is it fair to say that, certainly, the
15 10-year battle you had to go through the licensing
16 process, at 200 million, and no certain outcome,
17 certainly helped weigh in that decision because of
18 the uncertainty?
19 And we all know businesses need certainty,
20 and there's a lot of uncertainty in that process.
21 Is that -- is it fair to say that --
22 T. MICHAEL TWOMEY: It was factor.
23 It was certainly a factor.
24 ASSEMBLYMAN PALMESANO: And I know you
25 mentioned in your comments earlier, and I don't know
296
1 if I got it exactly right, but you said if the State
2 had been more supportive, we might be looking at a
3 different outcome today than what we're facing right
4 now?
5 T. MICHAEL TWOMEY: Well, if we had gotten
6 support, you know, 10 years ago, and the plant was
7 fully relicensed, I don't know what situation we
8 would be in.
9 I mean, if the market conditions deteriorated
10 to the same degree, then we would be certainly be in
11 the same situation.
12 You know, I don't know whether the
13 uncertainty that has hung over Indian Point for the
14 last 10 years hasn't affected the market in some
15 way.
16 You know -- so, it's hard to judge, and I try
17 not to speculate.
18 But what I was trying to convey, was that if
19 we never had to fight about Indian Point's license
20 renewal, and we had been relicensed within a couple
21 of years, and the whole market hasn't had this
22 uncertainty hanging over it the last 10 years, I'm
23 not sure where we'd be.
24 ASSEMBLYMAN PALMESANO: Sure.
25 And I think I know the answer to this
297
1 question, but, was there ever any reach out from the
2 Governor's Office or the administration or the State
3 to say, given that you're going through the process,
4 and I know you had to go through the NRC process,
5 you know, what can we do to help? What can we do to
6 help move this along faster?
7 T. MICHAEL TWOMEY: Under this
8 administration?
9 ASSEMBLYMAN PALMESANO: Yes.
10 T. MICHAEL TWOMEY: You know, I want to be
11 respectful of the --
12 ASSEMBLYMAN PALMESANO: Yeah, it's --
13 T. MICHAEL TWOMEY: -- I want to be
14 respectful of the interaction that any major company
15 has with an administration.
16 I just don't think it would be appropriate
17 for me to characterize one way or the other.
18 We -- we --
19 ASSEMBLYMAN PALMESANO: That's all right.
20 I'll do it for you.
21 I think it was a "no."
22 I guess my other question to you is,
23 I guess -- I mean, we know, in the economy we're
24 facing, if there was a company, a business, in our
25 state that provided a tax -- a local tax impact of
298
1 $24 million to schools and local municipalities,
2 that provided a thousand jobs-plus --
3 T. MICHAEL TWOMEY: Thirty.
4 $30 million.
5 ASSEMBLYMAN PALMESANO: -- thirty?
6 See, corrected again.
7 Thank you.
8 -- a thousand direct jobs, twenty -- a
9 hundred indirect jobs, probably, you know, thousands
10 of jobs, would impact the reliability of the energy
11 supply system, would impact the cost that consumers
12 and manufacturers and small businesses pay for their
13 energy, and, certainly, could impact emissions into
14 the environment, wouldn't you think that what we've
15 seen from the administration, and trying to help
16 preserve those jobs and preserve that?
17 And, again, I'm not asking you to speculate.
18 But, we've seen the Governor be really direct
19 in trying to help in that approach.
20 But -- and you've seen that all along, too,
21 haven't you?
22 T. MICHAEL TWOMEY: We -- I'll say this:
23 We got a tremendous amount of focus and
24 support from the administration with respect to the
25 FitzPatrick facility in Upstate New York.
299
1 And I think it is -- it is fair to say we did
2 not see that same support for Indian Point.
3 ASSEMBLYMAN PALMESANO: And I guess my other
4 question, and I'm pretty much -- well, I want to get
5 to one point on the safety side of things, because
6 the administration -- or, the representatives from
7 the administration that were here earlier kept
8 mentioning "safety."
9 You know, safety is paramount to the
10 Governor.
11 Isn't it fair to say that Entergy, who
12 operated the plant, that safety was, first and
13 foremost, your paramount goal in operation and
14 operating your plant?
15 T. MICHAEL TWOMEY: We are focused on safety
16 every day.
17 The thousand employees at that plant are
18 focused on safety every day. They're -- you know,
19 those folks live near the plant, many of them.
20 Their families are near the plant. Their children
21 go to school, you know, near the plant.
22 They are focused on safety every day.
23 The NRC, which has full-time resident
24 inspectors at the site, is focused on safety every
25 day.
300
1 The safety record of that plant is
2 outstanding.
3 The plant is absolutely safe today. It will
4 be absolutely safe tomorrow.
5 And, so, I certainly -- you know, we reached
6 an agreement.
7 Not everybody to a negotiation brings the
8 same perspective.
9 And I certainly do not agree with any
10 characterization of the facility as being unsafe.
11 And whether that is referring to the
12 operation of the facility, or, the workable nature
13 of the evacuation plan, which it clearly is, we just
14 have to disagree on that point, and be respectful in
15 our disagreement.
16 But, the plant is safe.
17 ASSEMBLYMAN PALMESANO: Sure.
18 And you mentioned it, and I think you kind of
19 got to my question, the NRC, which is the expert in
20 dealing with a relicensing, and licensing, of these
21 plants, to make sure it's safe, their -- safety is
22 their first and foremost and paramount in their
23 perspective.
24 The local individuals from the school
25 district, the town, and the village, who are here
301
1 from Buchanan, I'm sure they would say when they're
2 up here, that safety was paramount, first and
3 foremost, in their decision.
4 The community who lives around that area,
5 like you said, the employees who have families
6 there, safety was always paramount.
7 And we -- and so I don't think the
8 administration has a -- has the box on safety when
9 it comes to this issue.
10 So I think everyone was concerned and focused
11 on safety, so I think that's a fair assessment to
12 say. Isn't that correct?
13 T. MICHAEL TWOMEY: Certainly, it was our
14 safety -- I mean, certainly it was our focus, and it
15 remains our focus.
16 ASSEMBLYMAN PALMESANO: And I just want to
17 get back to one more point.
18 I know -- and I'm not trying to bring up this
19 statement, but you said, if we had more cooperation
20 from the State, maybe at the beginning, you know, in
21 the beginning of the phase, and how that might
22 affect the market. And you mentioned the
23 cooperation that the administration showed relative
24 to FitzPatrick and the Clean Energy Standard,
25 because you brought up a good point about how -- you
302
1 know, when the market shifts the way it has, you are
2 providing, you know, for clean emissions, that you
3 don't get any benefit from.
4 Hypothetically speaking, because I know we're
5 not there, if that had been part of the deal, if,
6 along the way, the State was cooperative with this
7 process, rather than being an obstructionist, from
8 my perspective, and from others' perspective, if,
9 along this process, given what the market has done,
10 and given what was done for the upstate nuclear
11 power plants, if an offer was made on the table to
12 provide the zero-emission credits that are being
13 offered to the upstate nuclear plants, might we be
14 looking at a different situation right now, in
15 keeping the plant open, keeping the jobs there,
16 keeping the tax revenue there, but also making sure
17 that the safety and security of the plant is
18 paramount?
19 T. MICHAEL TWOMEY: That's actually the
20 toughest question of the day.
21 Thank you for asking it.
22 You know, the problem with the ZEC program,
23 from my perspective, is that it is a creature of
24 state law and state regulation, and it can be
25 withdrawn, or modified, down the road.
303
1 And my personal view on this, is that that
2 introduces a level of uncertainty that makes it very
3 difficult to make a 12-year, 15-year commitment.
4 And I think we -- we certainly looked at the
5 ZEC program.
6 And the chairman of the PSC was very
7 forthcoming, in that Indian Point was, technically,
8 eligible to receive a payment.
9 But, as we look at the market, and we look at
10 the cost of operating the plant, we just didn't
11 think that the plant was sustainable, economically.
12 And, the ZEC program is certainly a positive.
13 I wouldn't describe it as a negative. But it is
14 subject to, you know, modification, down the road.
15 And -- and on that basis, at least my view,
16 is that it probably wouldn't have changed the
17 outcome.
18 ASSEMBLYMAN PALMESANO: Okay. Thank you.
19 SENATOR GRIFFO: Thank you, Assemblyman.
20 Mr. Twomey, we want to thank you for your
21 willingness to appear here today to provide
22 testimony to the Committee.
23 Appreciate your candor, and being here.
24 T. MICHAEL TWOMEY: Thank you very much.
25 And I appreciate the invitation, and I am at
304
1 your disposal for any time.
2 ASSEMBLYWOMAN PAULIN: Thank you.
3 I concur, completely.
4 T. MICHAEL TWOMEY: Thank you.
5 SENATOR GRIFFO: So in the interest of time
6 again, because we have a number of people here, and
7 we still want to get through everything, we're going
8 to now call, Bruce Watson, who is the chief of the
9 reactor decommissioning branch for the U.S. Nuclear
10 Regulatory Commission.
11 The members have agreed that we're gonna keep
12 our questioning to about five minutes each.
13 And, again, we would ask any of the
14 presenters, if they can summarize, that would be
15 outstanding, to allow that opportunity to interact.
16 So, we want to welcome Mr. Bruce Watson,
17 again, chief of the reactor decommissioning branch
18 for the U.S. Nuclear Regulatory Commission.
19 I believe he's joined here today by
20 Jonathan Greaves, who is regional state liaison
21 officer for Region 1.
22 Did I pronounce that right?
23 And then, Brett Klukan --
24 Did I get that one right?
25 BRETT KLUKAN: You did,sir.
305
1 SENATOR GRIFFO: Okay.
2 -- who is also regional counsel for Region 1.
3 They're both based out of King of Prussia in
4 Pennsylvania.
5 Mr. Watson, thank you very much for being
6 here.
7 BRUCE WATSON: Okay.
8 For the record, I am Bruce Watson. I am
9 chief of the reactor decommissioning branch in the
10 office of nuclear material safety and safeguards at
11 the United States Nuclear Regulatory Commission.
12 Good afternoon, Chairman Griffo,
13 Chairwoman Paulin, and distinguished members of the
14 Committees.
15 My colleagues and I appreciate the
16 opportunity to testify today, and provide you
17 information on how the U.S. NRC accomplishes its
18 safety and security mission by ensuring the safe
19 decommissioning of nuclear power plants, including
20 the management of spent nuclear fuel generated by
21 these plants.
22 As you know, the NRC is an independent
23 federal agency established to license and regulate
24 the civilian use of radioactive materials in the
25 United States to ensure the adequate protection of
306
1 the public health and safety, promote the common
2 defense and security, and protect the environment.
3 I will discuss the regulatory process for the
4 nuclear power plant decommissioning, including our
5 role in the engagement of stakeholders, such as
6 individual citizen, state, local governments, and
7 officials in industry, and non-government
8 organizations.
9 When a power plant decides to close a nuclear
10 power plant permanently, the facility must be
11 decommissioned by safely removing it from surface --
12 service and reducing residual radioactivity to a
13 level that permits the release of the property and
14 termination of the operating license.
15 The NRC has strict rules governing the
16 nuclear power plant decommissioning involving the
17 cleanup of radioactive leak-contaminated plant
18 systems and structures, and removal of the spent
19 nuclear fuel.
20 These requirements protect workers and the
21 public during the entire decommissioning process and
22 the public after their license is terminated.
23 To date, 10 nuclear power plants have
24 completed decommissioning, and the NRC has
25 terminated the reactor operating licenses.
307
1 There are currently 20 power plants in
2 various stages of decommissioning that the NRC
3 regulates.
4 The decommissioning process for nuclear power
5 plants begins with the formal written certifications
6 to the NRC by the licensee that nuclear operations
7 have complete -- will have permanently ceased, and
8 that the fuel has permanently been removed from the
9 reactor.
10 These notifications are made publicly -- are
11 publicly available so any individual can access
12 them.
13 Prior to, or two years be -- prior to or
14 within two years after permanent shutdown, the NRC
15 requires the licensees to submit a report called the
16 "post-shutdown decommissioning activities report,"
17 or, "PSDAR."
18 No major decommissioning activities described
19 in the PSDAR can begin until 90 days after the
20 agency reviews this report and confirms that the
21 licensee has provided the following three elements:
22 The first is a description and schedule for
23 the planned decommissioning;
24 Second, an estimate of the expected
25 decommissioning costs;
308
1 And, third, an evaluation of the potential
2 environmental impacts of decommissioning, and
3 affirmation that the decommissioning can be
4 performed within the existing approved elemental --
5 environmental reviews.
6 The NRC reviews this report, and may request
7 that the licensee provide supplemental information
8 to ensure it meets our requirements.
9 During this review, the public -- the NRC
10 holds a public meeting in the vicinity of the power
11 plant to receive comments -- public comments on the
12 report.
13 There are principally -- or, primarily, two
14 approaches that the licensee can accomplish
15 decommissioning in accordance with NRC regulations.
16 The first: Immediate dismantlement, or,
17 "DECOM." Deferred dismantlement, or, "SAFSTOR."
18 Licensees make these decisions on these
19 approaches to pursue by taking a variety of factors
20 into consideration, including, ensuring the plant
21 safety, potential dose to workers, availability of
22 decommissioning funds, access to low-level
23 waste-disposal facilities, and potential uses --
24 future uses of the site, and, of course, stakeholder
25 input.
309
1 Power plants are required to complete
2 decommissioning within 60 years of the plant ceasing
3 operations.
4 A time beyond that would be considered only
5 when necessary to protect the public health and
6 safety in accordance with the NRC regulations.
7 We'll move on to NRC oversight.
8 Throughout the process, the NRC continues to
9 oversee the safety and security and compliance
10 activities conducted by the licensee.
11 The goals of the oversight of the program at
12 the nuclear power plants undergoing the
13 decommissioning are to determine, through direct
14 observation and verification, if decommissioning
15 activities are being conducted safely, if the spent
16 nuclear fuel is being stored safely, and if
17 activities at the site are being conducted in
18 accordance with the applicable regulations and
19 commitments.
20 Second: To determine that -- if the
21 administrative controls that the licensee has in
22 place are adequate and comply with regulatory
23 requirements.
24 These controls include a self-assessment and
25 audits, corrective actions, design control, safety
310
1 reviews, maintenance, surveillance, radiation
2 protection, and affluent controls.
3 And then in -- and, also, the third goal, is
4 to identify any significant declining performance
5 trends, and verify that the licensee has taken
6 actions to reverse that trend.
7 The principal method for oversight is on-site
8 inspections.
9 These inspections are supplemented by
10 observations of site characterization, and, before
11 license termination, a radiological survey to
12 confirm the radiation levels have been suitably
13 reduced.
14 During the initial phases of the
15 decommissioning, at least one NRC resident inspector
16 remains on-site during the transition from
17 operations to decommissioning -- through the
18 decommissioning process, until the complexity and
19 risk associated with the activities are reduced.
20 Eventually, the resident inspectors are no
21 longer necessary on an on-site daily basis, and the
22 NRC oversight shifts to specialist inspectors from
23 the regional offices or headquarters.
24 The NRC will continue to adjust the level of
25 oversight to ensure the site remains safe and
311
1 secure, and in response to the licensee's
2 performance, as warranted.
3 If the licensee decides to enter an extended
4 SAFSTOR period, NRC will continue to inspect the
5 plant.
6 We have been inspecting Indian Point Unit 1
7 at least annually since it ceased operations in
8 1974.
9 The public has several opportunities to
10 participate in the decommissioning process.
11 As stated previously, a public meeting is
12 held in the vicinity of the facility after submittal
13 of the PSDAR to the NRC.
14 Another public meeting is held within -- when
15 the NRC receives the license-termination plan.
16 An opportunity for a public hearing is
17 provided prior to issuance of license amendment,
18 approving the plan, or any other license-amendment
19 requests.
20 In addition, when the NRC holds a public --
21 holds a -- when the NRC holds a meeting with the
22 licensee, members of the public may observe the
23 meeting, unless those discussions involve
24 proprietary, sensitive, safeguards, or classified
25 information.
312
1 The NRC may also hold public meetings
2 sponsored by the license -- may also attend public
3 meetings sponsored by the licensee, and we encourage
4 licensees to sponsor community groups to engage and
5 educate the public on the decommissioning plans and
6 schedule.
7 Before a nuclear power plant begins
8 operations, the licensee must establish and obtain a
9 financial mechanism, such as a trust fund or
10 guarantee from its parent company, to ensure there
11 will be sufficient money to pay for the ultimate
12 radiological decommissioning of the facility.
13 Under the Atomic Energy Act of 1954, as
14 amended, the licensee -- the NRC is authorized to
15 regulate the radiological decommissioning; however,
16 the NRC is not authorized to regulate
17 site-restoration activities.
18 Once the NRC terminates the license, the
19 owner and the state are responsible for site
20 restoration, and determining the end state of the
21 site and its reuse.
22 Each power plant must -- power plant licensee
23 must report to the NRC every two years, the status
24 of its radiological fund for each reactor or share
25 of the reactor it owns.
313
1 The report must provide an estimate of the
2 cost of decommissioning, which must be more, not
3 less, than the amount estimated using the formula
4 found in the NRC regulations.
5 The NRC assesses each of these reports to
6 determine whether licensees are providing reasonable
7 decommissioning funding assurance for de --
8 radiological decommissioning of the reactor at -- at
9 the -- permanent -- at the permanent termination of
10 operation.
11 Once a plan is in decommissioning status, the
12 licensee must report the status to the radiological
13 de -- on the -- status of the radiological
14 decommissioning fund annually to the NRC.
15 In closing, we welcome the Committees'
16 interest in the NRC's performance over -- of our
17 important regulatory mission as it pertains to
18 decommissioning of nuclear power plants.
19 Chairman Griffo and Chairwoman Paulin, and
20 distinguished members of the Committee, this
21 concludes our formal testimony.
22 We thank you for the opportunity to appear
23 before you, and we would be pleased to answer any
24 questions.
25
314
1 SENATOR GRIFFO: Thank you, Mr. Watson.
2 Would you just reiterate for me, who would
3 perform decommissioning work at the nuclear plant?
4 For instance, can current employees train for
5 that, or do that work? Or does outside labor need
6 to be brought in to do such a job?
7 BRUCE WATSON: They can be trained to do some
8 of this work.
9 Generally, the skill sets do not always match
10 up well with the decommissioning work.
11 There's a significant amount of specialty
12 work that is done, especially in disassembly of the
13 internals of the react -- the nuclear reactors. So,
14 a speciality company is generally hired for that.
15 It's kind of a mixed bag of what has
16 transferred over the years.
17 Some plants have chosen to do that model, and
18 it's taken many, many years to decommission the
19 plant.
20 And some have taken the route, which has
21 become very popular with the newer business model,
22 where the license is transferred to a
23 decommissioning company, which then facilities a
24 more timely decommissioning of the site.
25 And that's, the example we can give you is
315
1 Zion.
2 And they recently -- La Crosse also did the
3 same thing, to facilitate the finality of their
4 decommissioning.
5 SENATOR GRIFFO: Is there a reason why the
6 NRC decided to allow two approaches to decommission,
7 instead of having one consistent model?
8 BRUCE WATSON: Well, the regulations were
9 intended to be performance-based.
10 They allow for the decommissioning funds to
11 grow. So, if a plant prematurely shut down, there
12 was an opportunity to grow the funds.
13 The -- we try to follow some of the
14 international guidance on decommissioning and other
15 safety issues.
16 And -- and, so, they really have two plans,
17 which is the immediate dismantling and deferred
18 dismantling.
19 Now, in many cases, they don't put an end
20 point on it.
21 The NRC did put a specific end point on the
22 60-year requirement because, at 50 years, you
23 basically have, I'll say, exhausted the safety
24 benefits of the radioactive decay.
25 At that point, there's no real benefit to
316
1 waiting. You still have 10 years to decommission
2 the plant, which is typically what it's taken with
3 the first 10.
4 SENATOR GRIFFO: And you talked about safety
5 and security.
6 Could you just -- what would you say to the
7 community, because you have number of community
8 leaders here today, that would allay some of their
9 concerns about safety and security after
10 decommissioning is finished?
11 BRUCE WATSON: The main issue that I hear
12 from the public, is they think that, in many times,
13 that we go away after the plant has shut down.
14 And, of course, we stay till the license is
15 terminated, and this would include continuing to be
16 there as long as there was spent nuclear fuel there.
17 So we would continue to inspect that.
18 It would be under a license, to make -- to
19 ensure it's maintained safe. So we would continue
20 to inspect the dry-fuel storage facilities.
21 So -- and the second -- second -- I'll just
22 volunteer this:
23 The second complaint we hear, is that we need
24 to solve the spent-fuel disposal issue; high-level
25 waste issue.
317
1 And what I generally tell people at public
2 meetings is, I agree with you, and we would like our
3 national policymakers to solve the problem.
4 SENATOR GRIFFO: Okay. I appreciate that.
5 Thank you.
6 Chairwoman?
7 ASSEMBLYWOMAN PAULIN: Yes, thanks so much.
8 Thank you so much for coming today.
9 We really appreciate it.
10 The -- you know -- you know, given that we a
11 little over three years before the first unit in
12 Indian Point is expected to shut down, does this
13 change how the NRC will be working with Entergy in
14 any way?
15 Has the agreement prompted any measures or
16 actions by the NRC?
17 BRUCE WATSON: I would say that the
18 announcement that they're gonna -- they're planning
19 to shut the plant down in three, or whatever, years
20 is -- will -- is inconsequential to the NRC. We'll
21 continue to conduct business as usual.
22 The resident inspectors will continue to be
23 there. They will continue to inspect the plant on
24 the schedule that we had in place.
25 So, I would say nothing is going to change.
318
1 ASSEMBLYWOMAN PAULIN: So as far as
2 physically -- the NRC physically being a presence on
3 the site, does that take place at all during this
4 process?
5 BRUCE WATSON: Can you repeat that?
6 ASSEMBLYWOMAN PAULIN: You know, in other
7 words, do you send people down to the site to look
8 or review on-site, or is it all done on paper?
9 BRUCE WATSON: I think the key to -- as
10 I said in the testimony, is that the key to a good
11 inspection program is observation, which means we
12 had have people observing the work being done, and
13 the operations, to make sure they're being followed,
14 being conducted safely and consistent with their
15 procedures that they have in place to do that work
16 safely.
17 ASSEMBLYWOMAN PAULIN: So how often does that
18 happen?
19 BRUCE WATSON: Well, when the plant's
20 operating, we have two or three resident inspectors
21 there that go out and observe activities every day.
22 During decommissioning, we will keep -- when
23 the plant does first shut down, we will keep one of
24 the resident inspectors there probably for, anywhere
25 from six months to a year, depending on what
319
1 progress they make in putting the plant into
2 decommissioning.
3 After that, it will be based on what the
4 activities are at the site.
5 And so it may be very frequent, or it may be
6 infrequent, depending on what the activities are at
7 the site.
8 Obviously, a plant that's in SAFSTOR, where
9 there's very little activities, other than
10 demonstrating compliance with the existing
11 license -- ensuring that the security is maintained,
12 the environmental monitoring continues -- all those
13 basic things, we will inspect the plant maybe once
14 or twice a year.
15 ASSEMBLYWOMAN PAULIN: So knowing that, you
16 know, it takes five years, or, approximately, for
17 you to be able to move the fuel rods to --
18 BRUCE WATSON: Right.
19 ASSEMBLYWOMAN PAULIN: -- you know, to dry
20 casks, knowing that Entergy's intention would -- is
21 to move the spent fuel, you know, over the course
22 of -- well, I guess we don't know what their plan is
23 in commissioning. Right?
24 So -- so -- but if they were planning to move
25 the spent-fuel rods in a quicker manner, subsequent
320
1 to their ceasing operation, would that prompt the
2 NRC to stay on-site because of the nature of moving
3 spent-fuel rods?
4 BRUCE WATSON: The nature of the fuel is that
5 it takes about five to seven years for it actually
6 to reach a temperature where it can be safely put in
7 those containers.
8 During -- if they wanted to remove those
9 early, they would, obviously, have to get our
10 permission. There's strict requirements on that.
11 ASSEMBLYWOMAN PAULIN: Well, no, there are
12 existing fuel rods that we could potentially move.
13 Right?
14 BRUCE WATSON: Right. But -- yes.
15 And I think they've demonstrated they know
16 how to do that.
17 But, during a large fuel campaign, we would
18 be there to inspect more frequently.
19 I generally think that we would be there
20 during the first one or two, to make sure they
21 understand the process and are doing it right, but
22 I don't know that we would be there full-time for
23 that.
24 But --
25 ASSEMBLYWOMAN PAULIN: Understood.
321
1 BRUCE WATSON: -- it would be increased
2 involvement by our spent-fuel inspection people.
3 ASSEMBLYWOMAN PAULIN: Does the NRC have any
4 oversight of the non-radiological decommissioning
5 activities of the site?
6 And if not, who, in your estimation, does,
7 and is responsible?
8 BRUCE WATSON: We're only authorized to
9 regulate the radiological parts.
10 The hazardous materials that would -- might
11 be on-site would be either the responsibility of the
12 EPA or the state.
13 Typically, it's the department of
14 environmental health, or environmental quality, and
15 the states look after that.
16 ASSEMBLYWOMAN PAULIN: Is there an evacuation
17 plan required throughout the process?
18 BRUCE WATSON: No.
19 ASSEMBLYWOMAN PAULIN: None?
20 BRUCE WATSON: No, once the fuel reaches a
21 certain state of being cooled, it's not possible to
22 have an off-site release.
23 So the emergency-response plans, and the --
24 I forgot what you just mentioned.
25 ASSEMBLYWOMAN PAULIN: So -- so there would
322
1 be an evacuation plan for the first five to
2 seven years while the fuel is cooling down?
3 BRUCE WATSON: No, no, no, no.
4 No, once the fuel reaches a point where it
5 can no longer cause what we would call a "fuel
6 accident," or, "ZIRC fire," which is typically about
7 a year after it's removed from the reactor, then the
8 emergency plan would be reduced down to a site
9 emergency plan, because you can't have any
10 off-site -- you can't physically have an off-site
11 dose consequence requiring an off-site response.
12 ASSEMBLYWOMAN PAULIN: I read in the paper
13 that, you know, moving and storing the spent-fuel
14 rods is a high-risk operation, because at
15 Vermont Yankee, for example, there was an incident
16 where there was a fuel rod was nearly dropped from a
17 crane. And the spent fuel will be moved to a
18 location, it was right near an elementary school.
19 So you're suggesting that you might have some
20 oversight, but there would be no evacuation plan
21 during that time, because the fuel rod, if it was
22 being moved, would be more than a year, because it
23 would be cool?
24 BRUCE WATSON: Correct.
25 But I don't know the -- I've heard that story
323
1 before.
2 But I also want to reemphasize that moving
3 nuclear fuel is a routine operation at these plants.
4 They defuel and refuel frequently. They do remove
5 the fuel from the spent-fuel pool and transfer it to
6 dry storage.
7 So it's not been -- and the result of a
8 possible dropping of a fuel element is not an
9 unanalyzed event. The plant is designed to
10 accommodate such things.
11 So -- I mean, even in Vermont, there's been a
12 tremendous amount of fuel moved to the dry storage,
13 and there's no consequence to the off-site dose
14 rates as a result of doing that transfer.
15 ASSEMBLYWOMAN PAULIN: The NRC issued an
16 order, approving the transfer of the trust fund
17 from -- for Indian Point 3, from NYPA to Entergy.
18 Will the transfer of the trust fund result in
19 New York State losing any kind of oversight or
20 control related to how the trust funds are spent?
21 BRUCE WATSON: The trust funds are held in an
22 independent trust. I think most of them, I've heard
23 from our financial people, are held with Melon Bank.
24 For some reason, many of the utilities have them
25 there.
324
1 And so the trustee is responsible for
2 ensuring that those funds are spent for -- on
3 decommissioning activities.
4 There are times when they have to request our
5 permission to remove those funds to do the
6 decommissioning.
7 But, we do it through inspection and annual
8 reports, that give us updates on the funds, and how
9 much was spent, and how much is remaining, and,
10 basically, ensuring that there's a reasonable amount
11 left to complete the decommissioning.
12 ASSEMBLYWOMAN PAULIN: I -- and -- I don't --
13 I guess I'm asking the question, where your proposed
14 regulatory improvements for -- you know, there was a
15 response, that NYSERDA and four states had to
16 propose rule regulations in March of last year --
17 BRUCE WATSON: Right.
18 ASSEMBLYWOMAN PAULIN: -- and I just wondered
19 what that timeline was.
20 And then, further, the State argued several
21 things, and I just wondered if you had a response.
22 So, one, the timeline -- I'll just say what
23 they argued, and then you can just give me one
24 answer on the regulations.
25 The -- they argued that we should be
325
1 eliminating the 60-year delayed decommissioning
2 option and only allowing DECOM.
3 They argued that the decommissioning trust
4 fund should not be used for spent fuel or any other
5 non-decommissioning expense.
6 They argued that decommissioning expenses
7 should be limited to activities that reduce
8 radiological contamination at the site only.
9 They argued that sites, such as Indian Point,
10 with subsurface contamination costs should be
11 evaluated, and the formula used by the NRC to be
12 different.
13 They argued that there should be a complete
14 emergency-preparedness plan in place during
15 decommissioning.
16 And they further argued that there should be
17 a requirement for an independent audit of the
18 relevant trust funds.
19 And so I just didn't know if -- you know --
20 you know, where the regulation changes were in
21 process.
22 And, you know, if there was any response that
23 was made to New York during the time period from
24 March to now.
25 We didn't see any.
326
1 And if you had any response to their
2 concerns.
3 BRUCE WATSON: The staff was -- the NRC staff
4 was tasked with developing regulations that will
5 make it easier to go from operations to
6 decommissioning; and by that I mean, make it more
7 efficient, not only for us, but also for the
8 licensees, because there's no safety issues with it.
9 And so we -- we are at the goal of having
10 those regulation out by 2019.
11 So, Indian Point will benefit, if they shut
12 down past that, of having those regulations in
13 place, to make it smoother, I guess I'll call it,
14 more efficient, to go into the decommissioning.
15 Right now, the status of that rule-making,
16 the regulatory analysis for -- which is one of the
17 steps in that process, is due to go out anytime now.
18 I say, "anytime now," I was referring around
19 the beginning of March.
20 And then that would allow for more public
21 comment on our analysis of those issues.
22 But I would try to address a few of the ones
23 that you mentioned.
24 We are evaluating the 60-year criteria.
25 As far as the commingling of funds -- and
327
1 counsel may have to correct me on this -- but,
2 originally, there was a one decommissioning fund.
3 And in past year -- in recent years, we put an
4 additional regulation to say separate those.
5 And so, instead of having two different
6 funds, most of the utilities, they have an existing
7 trust fund with, say, their independent trust-fund
8 organization have created two different funds within
9 that one trust fund.
10 And so the real difference is kind of ardu --
11 excuse me, seamless, in the fact that they have two
12 different fund at the -- under one umbrella, so they
13 don't have to enjoy -- incrue (sic) the cost of
14 having another independent trust fund developed.
15 So, it's still under the same umbrella.
16 So that's where they request an exemption to
17 that.
18 In 2012, we did put in a regulation. We
19 refer to it commonly as the "decommissioning
20 planning rule" -- excuse me, in 2012 we put the rule
21 into place, which is very explicit in the
22 requirement to monitor the subsurface of the plant
23 sites, not only nuclear power plants, but all
24 decommissioning sites, and to monitor the
25 groundwater close in to where the sources of
328
1 contamination are.
2 And so, as a part of that, if you find
3 something, you're now required to either -- well,
4 first of all, you want to fix the leak.
5 And, second of all, if it affects the trust
6 fund, and that you need to put more money into that
7 trust fund because of the contamination, you're
8 required to do that.
9 Of course, they also have the option of
10 remediating that area, if it's possible to do that.
11 That's one of their choices.
12 ASSEMBLYWOMAN PAULIN: So any monies that
13 were needed to address Indian Point subsurface would
14 be already in the trust fund?
15 BRUCE WATSON: Or would be needed to be added
16 to the trust fund if they felt they weren't
17 sufficient.
18 ASSEMBLYWOMAN PAULIN: Right.
19 BRUCE WATSON: Okay?
20 Third -- I guess the other issue you had was
21 continuing emergency response.
22 Since there's no benefit to continuing an
23 off-site emergency-response organization, as it
24 currently rules, continuing that without any
25 benefit, the cost of that is probably not warranted.
329
1 And then, lastly, an independent audit of the
2 trust funds.
3 One of the things I really want to point out
4 is that, the NRC does not regulate commerce; the
5 states do. The states regulate the commerce through
6 their public service commissions.
7 And I think if the state had a need to go
8 audit a trust fund for a facility in their site --
9 state, they would have the opportunity to go do that
10 audit if they chose to.
11 So, we typically do not do major audits of
12 these things.
13 They're certified by an independent bank, and
14 a -- you know, a financial institution.
15 ASSEMBLYWOMAN PAULIN: Thank you so much.
16 Thank you.
17 SENATOR GRIFFO: Senator Murphy.
18 SENATOR MURPHY: (Microphone turned off.)
19 Yeah, sure.
20 Let me just go down my list of questions, if
21 you don't mind, Mr. Watson.
22 First of all, thank you so much for traveling
23 here and being in front of us today.
24 I know many of us already know the answers to
25 these questions already, but, for benefit of the
330
1 public:
2 How long does it take to actually
3 decommission the nuclear facility that we're talking
4 about today called "Indian Point," in your estimate?
5 BRUCE WATSON: Well, I can only go by
6 history.
7 We have the 10 plants that were
8 decommissioned.
9 They had -- some of them had incentives to go
10 do it fairly quickly because, if -- a number of them
11 were going to be no longer able to dispose of their
12 low-level waste in the Barnwell, South Carolina,
13 facility, so they had the incentive to do it fairly
14 quickly. So those plants completed their
15 decommissioning in 7 to 10 years.
16 Right now, the two-unit Zion plant up in --
17 near Chicago, north of Chicago, I think has a 6 to
18 7 year schedule. And I expect they'll be on
19 schedule and complete that on time.
20 It's also a two-unit facility, a very large
21 pressurized water reactor, similar to Indian Point,
22 but I'm sure there's some differences.
23 SENATOR MURPHY: Roughly, 6 to 7 years if
24 you're going to guestimate?
25 BRUCE WATSON: Could be.
331
1 I'm just saying --
2 SENATOR MURPHY: No, I'm not going to hold
3 you to it.
4 BRUCE WATSON: -- no, I'm -- no, I'm just
5 saying, it's how aggressive they want to go after
6 it.
7 After they work -- these decommissioning
8 sites generally work a 40-hour work week.
9 And the construction and the mode of work, is
10 that they generally work a four/ten schedule -- four
11 days a week, ten hours a day -- and they take the
12 long weekends in between. So they work a short
13 week, and a long weekend. Or --
14 SENATOR MURPHY: How long do the spent-fuel
15 rods have to be stored there before they have the
16 possibility of being transported?
17 BRUCE WATSON: Like I said, it's typically
18 five to seven years for the decay heat to happen
19 after a plant permanently shuts down.
20 Zion was shut down for 15 years before they
21 went into -- I guess I'll call it, into the DECOM
22 mode, and so they had the added advantage that the
23 fuel could be moved immediately.
24 SENATOR MURPHY: And is there anywhere in the
25 United States where these -- this spent-fuel rods
332
1 can be transported to?
2 And how would they -- if they could, how
3 would they be transported?
4 BRUCE WATSON: I don't know that I can really
5 answer that. I'm not into spent-fuel
6 transportation.
7 But, spent fuel is transported in the
8 country, has.
9 But I guess some of that, I would assume it's
10 going to be done, principally, by rail.
11 But I really can't really give you anything
12 firm on that.
13 My focus has been on safe decommissioning.
14 SENATOR MURPHY: That's fine.
15 And how many scheduled site visits does a
16 decommissioned plant legally require?
17 So you say you're on-site until -- on a daily
18 basis.
19 And then once you go off-site, how often are
20 you back?
21 BRUCE WATSON: It depends on the activities
22 of the plant.
23 I can tell you we're at Zion very frequently
24 because they have a significant amount of
25 decommissioning work going on in its two facilities.
333
1 At Vermont Yankee, we went from a full
2 presence with the resident inspector, down to,
3 I guess, once a month, to once every two months, to
4 I think we're at quarterly right now, because of
5 they're, basically, in a --
6 SENATOR MURPHY: Winding it down?
7 BRUCE WATSON: -- they're in a no-activity
8 zone, so to speak, because they need the fuel to
9 decay before they can move it.
10 SENATOR MURPHY: Throughout the U.S., how
11 many nuclear facilities have been in the process of
12 being decommissioned, off the top?
13 BRUCE WATSON: Well, complex sites are --
14 I mean, we have sites -- we have licensees that are
15 decommissioned all the time. They may be very
16 small.
17 We have, you know, 20,000 licensees in the
18 country. Most of those are very small medical
19 facilities, or other type, research facilities.
20 Right now there are -- if I am correct,
21 there's 20 reactors in decommissioning.
22 We have 13 complex material sites in
23 decommissioning, ones that are non-reactors.
24 We have, presently, four research reactors in
25 decommissioning. That would include the State
334
1 University of New York at Buffalo, which, basically,
2 has completed all the work there. They just have to
3 submit to us their final survey so we can terminate
4 the license.
5 The West Valley Demonstration Project up in
6 Upstate New York is ongoing.
7 And so we continue to have a role in
8 monitoring of that site, along with DOE, and I guess
9 it's NYSERDA managing the actual decommissioning
10 work.
11 SENATOR MURPHY: Do most of them keep nuclear
12 waste currently on-site?
13 BRUCE WATSON: Yes, at the nuclear plants.
14 The high-level waste, anyway.
15 And Indian Point, as we know, is located just
16 north of New York City.
17 SENATOR MURPHY: Upon its decommission, can
18 you explain to me the security protocols that the
19 NRC puts into place to ensure its safety?
20 BRUCE WATSON: I was just up at the Zion
21 plant, which moved all their fuel to dry storage.
22 They have a designed security facility to
23 monitor the fuel and protect the facility. They're
24 there 24/7.
25 It has a -- I can't go into much detail
335
1 because it is security-related, but, it is monitored
2 24/7 by a, I'll say not insignificant guard force,
3 but -- so it's under their constant surveillance and
4 communication with law enforcement.
5 SENATOR MURPHY: Let me ask you a different
6 question here.
7 Public-notification requirements during the
8 decommissioning process, obviously, they're
9 different than when they're open. And, back home,
10 people are used to hearing the sirens.
11 What would -- how would we be notified if
12 there was some sort of compromise to the casks?
13 BRUCE WATSON: Well, one of the principles of
14 the security plans, I guess I'll say, are the fact
15 that they do off-site response from the local
16 authorities, and state police would be involved in
17 that response.
18 So it would be through the normal
19 emergency-management notification.
20 SENATOR MURPHY: Is it normal to take the
21 sirens down?
22 Like, I know in -- up in Yankee, up in
23 Vermont, they've been dismantled, my understanding.
24 BRUCE WATSON: Right.
25 And some places we'll keep them and maintain
336
1 them just for civil-defense purposes, a tornado,
2 whatever.
3 It's really up to the owner and licensee and
4 the local communities, because they have -- there is
5 a cost of maintaining them.
6 SENATOR MURPHY: Okay. Last question, trying
7 to make it quick.
8 You mentioned in your opening statement that
9 once the NRC terminates the license, the owner and
10 the state are responsible for site restoration and
11 determining the end site of this.
12 So you had mentioned previously, so that if
13 it takes 60 years, are you guys going to be on-site,
14 whether it's once a year or once a quarterly, for
15 the next 60 years, if it takes --
16 BRUCE WATSON: If that's what it takes, yes,
17 sir.
18 SENATOR MURPHY: It's good to know.
19 BRUCE WATSON: Okay.
20 I will just elaborate, that the NRC does not
21 require green-fielding of the site.
22 We do require that all the radioactive
23 material be removed from the site, and so it meets
24 our strict requirements for being released from the
25 license.
337
1 And so some sites will decontaminate all the
2 buildings and leave the buildings up. And then it's
3 up to the owner and the state for the final end
4 state.
5 SENATOR MURPHY: Good. Thank you.
6 And last question, I promise you.
7 In these other facilities, have you had any
8 type of economic development within the facility or
9 on the facility, whether it's during or after the
10 decommissioning of the plant itself?
11 BRUCE WATSON: I guess the easy answer is,
12 that we don't get involved in such things.
13 However, I can tell you that, at the Kewaunee
14 plant, the utility, Dominion Energy, had made a
15 statement about continuing to help them with
16 economic development.
17 Now, I don't know what that meant, and what
18 their actions were, or what they did -- whether they
19 had really done anything or not.
20 So --
21 SENATOR MURPHY: So it is possible?
22 BRUCE WATSON: -- yeah, but it's not our
23 call. It's --
24 SENATOR MURPHY: Sure.
25 Just wanted to know if there was any federal
338
1 regulations --
2 BRUCE WATSON: No, no.
3 SENATOR MURPHY: -- that would say:
4 Absolutely not. We're out of bounds, we're off
5 limits.
6 BRUCE WATSON: Right, that's not our --
7 that's not within our regulatory framework.
8 SENATOR MURPHY: Thank you.
9 BRUCE WATSON: Uh-huh.
10 SENATOR MURPHY: I'm done.
11 SENATOR GRIFFO: Mr. Watson, thank you.
12 Appreciate you, gentlemen, thank you for
13 being here.
14 We certainly appreciate your service to the
15 agency and our country --
16 SENATOR MURPHY: Thank you.
17 SENATOR GRIFFO: -- and for your willingness
18 to appear and testify today.
19 We will be in touch with you because I'm sure
20 there will be more questions as time goes on.
21 But, thank you for your expertise and sharing
22 with us today.
23 BRUCE WATSON: Thank you.
24 ASSEMBLYWOMAN PAULIN: Yes, thank you so
25 much.
339
1 BRADLEY JONES: Our next presenter will be
2 Mr. Brad Jones, who's president of the New York
3 State Independent Service Operator -- System
4 Operator.
5 Mr. Jones, either you are clairvoyant, or you
6 have somebody that edits very good, because he
7 begins, "Good afternoon."
8 So...
9 [Laughter.]
10 BRADLEY JONES: I had a premonition this
11 would be the case.
12 SENATOR CROCI: Just glad you didn't say
13 "Good evening."
14 BRADLEY JONES: Good afternoon, Chair Griffo,
15 Chair Paulin, and members of the Senate and
16 Assembly.
17 We welcome this opportunity to describe for
18 you the process and the time frame by which the
19 New York Independent System Operator will address
20 and assist the reliability impacts, if any, of the
21 closure of Indian Point facilities.
22 My name is Brad Jones. I've been with NYISO
23 as chief executive and president for a year and a
24 half.
25 And, prior to that, I had over 30 years of
340
1 experience in the electric industry, in system
2 operations, market design, and in planning.
3 I have submitted written comments for you,
4 and, again, due to the lateness of the day, I will
5 briefly summarize those for you, and be available
6 for any questions you may have.
7 The NYISO is an independent not-for-profit
8 organization.
9 We began operation in 1999, and the NYISO's
10 required to operate in accordance with tariffs that
11 are filed and approved by the Federal Energy
12 Regulatory Commission.
13 The NYISO has no final natural interest in
14 its market producements, nor does it in the outcomes
15 of the energy markets that it oversees.
16 The NYISO's first and primary function is to
17 reliably operate the New York bulk electric system.
18 We keep the lights on for over 19 million
19 New Yorkers. We do that 24 hours a day, and we do
20 it seven days a week.
21 Second, the NYISO administers competitive
22 wholesale markets, enabling entities to buy and sell
23 wholesale power and services.
24 Third, the NYISO is continuously planning the
25 New York system.
341
1 We do a comprehensive planning analysis, and
2 it's important to understand that the state's
3 resource mix are transmission, as well as our
4 forecasted (indiscernible) are constantly changing.
5 Part of that have planning process assesses
6 the impacts of generator retirements.
7 Pursuant to the NYISO tariffs, the generator
8 must provide the NYISO with a notice of its intent
9 to retire.
10 Once we receive that notice of intent, and we
11 certify it as being complete, the NYISO assesses,
12 within 90 days, the reliability needs that will
13 arise as a result of that retirement.
14 The NYISO has yet to receive a formal notice
15 of deactivation of Indian Point; however, we
16 anticipate that one will be filed in the coming
17 months, and we will follow this process to make our
18 determinations.
19 When the NYISO receives Indian Point's
20 retirement notices, we will conduct our studies
21 using the most up-to-date information of the
22 resource mix, system conditions, and forecasted
23 system needs of the state of New York.
24 Upon completion of the study, we will provide
25 federal and state policymakers, market participants,
342
1 investors, and the general public with clear
2 information regarding any potential impact of the
3 Indian Point retirement on reliability.
4 Our process is designed to identify needs
5 with enough time to come up with a solution without
6 reliable service being impaired.
7 Again, I thank you for the opportunity to be
8 here, and I welcome any questions you may have.
9 SENATOR GRIFFO: Thank you, Mr. Jones;
10 appreciate that.
11 The -- there's been a recommendation that the
12 State set the objective and the goal of 50 percent
13 renewables by 2020 (sic).
14 In your expertise, and there are many groups
15 that have challenged that, that have expertise in
16 the energy field, do you believe that that objective
17 is realistic and achievable?
18 BRADLEY JONES: It is an ambitious target.
19 And, again, the number is 50 percent by 2030.
20 It's ambitious target.
21 I believe that it is achievable, but we must
22 do a number of things right in order to achieve that
23 target.
24 One of those goals that I have talked about
25 many times is the necessity to build transmission in
343
1 New York.
2 We have to begin building very quickly today,
3 and the time to build transmission is often 10 to
4 12 years.
5 As you can imagine, 10 to 12 years, when we
6 have, roughly, 13 years left on that goal, is not
7 something that we can continue to do.
8 So we have to begin to look at ways to build
9 that transmission to enable us to move renewables
10 around the grid to serve all New Yorkers.
11 SENATOR GRIFFO: You talked about the state
12 resource plan.
13 Can you give us a status of that resource
14 plan, what you see being in it?
15 And will it be looking at future cost
16 implications of any of the future development plans?
17 BRADLEY JONES: There's not an economic cost
18 within the SRP, to my knowledge.
19 We have been managing that program, but we're
20 not deeply involved in it. It's a program that is
21 being managed by the public utility -- or, rather,
22 the Public Service Commission.
23 In terms of the results of that plan, I know
24 that the plan is wrapping up, and we intend to roll
25 much of its findings into our process, going
344
1 forward, on looking at additional public-policy
2 transmission needs.
3 SENATOR GRIFFO: You talk about forecasting.
4 Have you begun to work for the next state
5 energy plan?
6 BRADLEY JONES: I apologize, have I...?
7 SENATOR GRIFFO: Can you give update on the
8 timing of the next state energy plan, and the
9 fore -- you talked about energy forecast?
10 BRADLEY JONES: No, sir, I do not have that.
11 SENATOR GRIFFO: Okay.
12 Thank you.
13 Chairwoman.
14 ASSEMBLYWOMAN PAULIN: Yes, sure.
15 So receipt of a generator deactivation notice
16 by the NYISO triggers the start of a generator
17 deactivation assessment, to determine the impact on
18 reliability of the generator's deactivation.
19 NYISO would work on the assessment with
20 Con Ed, the transmission owner.
21 How long does it take NYISO to do the
22 assessment?
23 BRADLEY JONES: About 90 days.
24 ASSEMBLYWOMAN PAULIN: 90 days?
25 BRADLEY JONES: Yes.
345
1 ASSEMBLYWOMAN PAULIN: So what kind of things
2 does NYISO look at while conducting the assessment?
3 BRADLEY JONES: Very good question.
4 Clearly, the system is changing as much as it
5 ever has in the past.
6 For example, we have new transmission that is
7 both, under construction, some that had recently
8 completed, as well as transmission that is in the
9 process, both the -- what we call the "western
10 interconnection" and the "AC interconnection."
11 In addition to transmission changes, when
12 we're looking out these four years into the future,
13 we also have significant changes in our load:
14 Load changes that are occurring because of
15 greater energy efficiency;
16 Load changes due to load shifting by
17 different participants in the market;
18 And, also, load changes due to solar panels
19 that are being put on rooftops of homes.
20 Those changes are fairly dramatic, and that's
21 one change that we have to look at.
22 Then, finally, we do have both resource entry
23 and resource exit from the generation side.
24 There are a number of generating resources
25 that are looking at New York. Some are very -- at
346
1 vast stages of development. Some are at the
2 beginning.
3 And then we do have, such as Indian Point,
4 retirements that we have to consider.
5 ASSEMBLYWOMAN PAULIN: Do you ever look at
6 the mix of power resources as a part of the
7 evaluation?
8 BRADLEY JONES: So we do value the mix of
9 power resources, but not as part of this reliability
10 analysis.
11 ASSEMBLYWOMAN PAULIN: Got it.
12 So what are the possible outcomes of the
13 assessment?
14 BRADLEY JONES: The possible outcomes could
15 be:
16 Number one, that there is no reliability
17 concern;
18 And, number two, that there is a reliability
19 concern. And, at that point, what we will do, is we
20 will approach the market to find solutions.
21 So we first give the market the opportunity
22 to come to respond.
23 Again, with having four years to retirement,
24 we believe we have plenty of time to achieve that.
25 If the market cannot find a solution, our
347
1 next course of action is to look toward regulatory
2 solutions.
3 ASSEMBLYWOMAN PAULIN: And -- so what happens
4 if, at the near end of the extension period set
5 forth in the agreement, 2024 and '25, Entergy files
6 the deactivation notice, but there's not enough
7 power in place to have reliability; what are the
8 options?
9 BRADLEY JONES: Again, we believe that we
10 have plenty of time to address this issue, certainly
11 before 2024 and 2025, and so we'll make sure that we
12 have those plans in place.
13 ASSEMBLYWOMAN PAULIN: But you do have, at
14 least this -- when we queried the PSC and chair of
15 NYSERDA, you know, they indicated -- or, at least
16 Chairman Zibelman did, that, you know, there would
17 be, because of the tariff, an ability for a
18 requirement for Entergy to stay open even without a
19 license.
20 BRADLEY JONES: Yeah, I believe that she
21 misspoke on that.
22 There's not a requirement.
23 There's ability for us, as the NYISO, to
24 request a, what we call, "reliability must-run
25 contract," which would extend them beyond the period
348
1 of that 2024, 2025.
2 ASSEMBLYWOMAN PAULIN: But they could refuse?
3 BRADLEY JONES: But they could refuse, that
4 is correct.
5 ASSEMBLYWOMAN PAULIN: And, finally, with the
6 shutdown of Indian Point, there will be an increased
7 reliance on natural gas to supply power to the
8 New York City and Westchester area.
9 During the -- during 2014 polar vortex we saw
10 a large spike in natural gas prices due to the
11 increased demand.
12 Can you speak to the need for diversity of
13 energy sources in the area?
14 Besides situations like the polar vortex, are
15 there other reasons why a diverse mix is important?
16 BRADLEY JONES: Yes, absolutely.
17 One of the things that we remain concerned
18 about for New York is that we have a diversity of
19 resources so we're not reliant upon one fuel.
20 Now, one of the options as a replacement of
21 Indian Point would be to have additional gas units
22 that come online to replace that.
23 But there are variety of different scenarios
24 that I also think are feasible.
25 If the replacement generation does come from
349
1 natural gas, we have been concerned at the NYISO, as
2 we rely more upon natural gas, of the reliability of
3 the supply of the gas itself.
4 And so we've begun to look at issues related
5 to whether we can re -- could and should require
6 generators throughout New York to have a dual-fuel
7 supply. So we're working on those issues today.
8 ASSEMBLYWOMAN PAULIN: Thank you. That's all
9 I have.
10 BRADLEY JONES: Thank you.
11 SENATOR GRIFFO: Mr. Jones, just a quick --
12 before I introduce Senator Murphy to you:
13 The AC line is within your realm.
14 Any estimated time of completion there?
15 BRADLEY JONES: I ask my team that same
16 question almost every morning.
17 The plan right now, we're, of course, working
18 on the western interconnection, which also has a
19 deadline, running before the AC.
20 The western interconnection, we will complete
21 our analysis by the end of the second quarter, so we
22 will be able to select whoever those -- that
23 provider is on the most efficient- and most
24 effective-type solution for western interconnection.
25 The AC is running just a few months behind
350
1 that, so we expect, by the end of the year, we will
2 have the answer on that, be able to select that
3 provider, and then it moves into the Article 7
4 process which the PSC controls.
5 SENATOR GRIFFO: And one last question:
6 You've been here throughout all the testimony
7 today, and you had indicated that you think that a
8 couple of things may have been inaccurate.
9 So, did you hear anything here today that was
10 presented, that would cause you concern or you
11 believe was very inaccurate, that could be
12 problematic and relative to what we're trying to
13 ascertain?
14 BRADLEY JONES: No, sir.
15 With the exception of that one clarification
16 I just made, I believe that I'm comfortable with the
17 statements.
18 SENATOR GRIFFO: Okay.
19 Senator Murphy.
20 SENATOR MURPHY: Mr. Jones, thank you so much
21 for being here today; appreciate it.
22 Westchester, Dutchess, and Orange counties,
23 along with the Public Service Commission, failed in
24 the legal effort to stop or alter the Lower Hudson
25 Capacity Zone, which was originally suggested by
351
1 ISO.
2 The House of Representatives even passed the
3 bill, Congressman Gibson and Congressman Maloney, to
4 repeal the zone.
5 Do you know if there's still any efforts in
6 Washington to stop the zone?
7 BRADLEY JONES: I don't know about any
8 efforts in Washington to stop the zone. I'm not
9 aware of any.
10 SENATOR MURPHY: Okay.
11 The ISO seeks to meet the city's energy
12 demand through generation, while the Governor's
13 Energy Superhighway wants to accomplish it through
14 transmission.
15 The Governor's plan to open up the
16 bottleneck, quote/unquote, is to build huge power
17 lines right in the backyard in Westchester and
18 Hudson Valley, the country's first designated
19 National Heritage area.
20 Which would you say is the better way of
21 replacing the energy in Indian Point: increased
22 generation capacity or increased transmission
23 capacity?
24 BRADLEY JONES: From the perspective of
25 replacing Indian Point, we don't take a position,
352
1 certainly, on what is the best way to do it.
2 However, as I said before, if we are to
3 achieve the "50 by 30," we believe that transmission
4 capacity will be a significant portion of that
5 solution.
6 SENATOR MURPHY: So you think transmission.
7 Is it true there remains a bottleneck energy
8 above the Hudson Valley --
9 BRADLEY JONES: That's correct.
10 SENATOR MURPHY: -- getting into New York
11 City?
12 BRADLEY JONES: That's correct.
13 SENATOR MURPHY: 1650 megawatts of
14 unanticipated electricity has become available in
15 the Lower Hudson Capacity Zone since 2014.
16 Where did that energy come from, and is any
17 of it the, quote/unquote, renewable energy that
18 we're all looking for?
19 BRADLEY JONES: So, I'm not familiar with the
20 1650 you described, but I will say there's been
21 number of generators that have come back online that
22 were previously mothballed.
23 In addition, there has been a significant
24 amount of load reduction in the Lower Hudson Valley
25 and New York City area due to, I think, primarily
353
1 energy efficiency and rooftop solar.
2 SENATOR MURPHY: The Natural Resource Defense
3 Council released a report this week that says that
4 energy efficiency can make up for the loss of power
5 from the plant.
6 What exactly do they mean by "energy
7 efficiency," in your view?
8 BRADLEY JONES: I believe what they're
9 talking about is specific actions by the state
10 government to promote additional energy efficiency,
11 such as, more insulation to homes, it could be
12 window change-outs, it could be lighting retrofits;
13 those types of things.
14 SENATOR MURPHY: Few more questions, and
15 we're good.
16 In a letter from the PSC they wrote that:
17 ISO's claim that an increased amount of solar
18 panels would overload their transmission system was,
19 quote/unquote, misleading, incomplete, and grossly
20 inaccurate.
21 Do you agree with those characterizations?
22 BRADLEY JONES: Actually, I don't --
23 SENATOR MURPHY: I want --
24 BRADLEY JONES: -- excuse me.
25 I don't recall that claim.
354
1 SENATOR MURPHY: Don't recall it.
2 Okay.
3 How can the grid be more reliable with less
4 baseload power, especially in one of the largest
5 metropolitan areas in the world; meaning,
6 Westchester County and New York City?
7 BRADLEY JONES: We can reliably replace that
8 power.
9 How can be more reliable?
10 Certainly, as our grid changes, it's likely
11 that less baseload power is our future.
12 We'll have more variable power to manage
13 our -- the variability of the renewable resources.
14 SENATOR MURPHY: And how would you do that,
15 reducing the baseload?
16 BRADLEY JONES: Well, you could either reduce
17 the portion of baseload through load growth in the
18 state, or, if load growth in state stays constant,
19 then some, potentially, baseload generation might
20 leave the state --
21 SENATOR MURPHY: Okay.
22 BRADLEY JONES: -- and be replaced by more
23 intermediate and responsive units.
24 SENATOR MURPHY: Last question, let's make
25 this quick:
355
1 Our rates in Westchester are already
2 130 percent above the national average.
3 The Empire Center for the Public Policy says
4 that clean-energy standards will cost $2 per month
5 more than the PSC predicted. Most consumers will
6 have to pay that on their rates.
7 Earlier this month, I had asked the PSC
8 chairwoman who was here today, and I ask you: Can
9 you guarantee me those rates in the Hudson Valley
10 will remain the same once Indian Point closes?
11 BRADLEY JONES: Senator, we have no
12 involvement with retail rates.
13 Of course, the majority of the cost of rates
14 to retail customer is within the transmission,
15 distribution, and other taxes and services.
16 The portion that we're involved in is just
17 the wholesale part of the rate.
18 And, in fact, the wholesale rates have been
19 extraordinarily low, as you've heard here, the last
20 few days.
21 And, in fact, we compare with just almost any
22 state in the union.
23 SENATOR MURPHY: So if we had more of the
24 energy centrally located in Westchester and
25 New York City, would that continue making our rates
356
1 lower?
2 BRADLEY JONES: Potentially.
3 SENATOR MURPHY: Okay. Thank you.
4 ASSEMBLYWOMAN PAULIN: Yes, Assemblymember
5 Palmesano.
6 ASSEMBLYMAN PALMESANO: Thank you, Mr. Jones.
7 I have a few questions to ask.
8 Chairman Griffo mentioned about the policy of
9 "50 by 30."
10 And the concern I have, and the question
11 I want to ask you, is:
12 I know you mentioned -- this is mentioned in
13 your "Power Trends" report --
14 Which is one of my favorite reading
15 materials, just so you know. Kudos to your
16 department for putting that together. I think more
17 people should read that report, and get a little
18 better idea of what's going on with our energy in
19 New York State.
20 -- but, there's a big push to do "50 by 30."
21 I think everyone up here supports renewable
22 energy, but the concern we have is also, because
23 that's clean, but, being reliable.
24 And you mentioned the need to build out
25 transmission even further with that push.
357
1 But isn't there a concern, because solar and
2 wind are intermittent, so there's a chance, when the
3 sun's not out and the wind's not blowing, that you
4 still need backup, conventional energy to back that
5 up, to make sure the reliability of the grid is in
6 effect?
7 Is that not true?
8 BRADLEY JONES: That is correct.
9 In fact, first of all, let me say that I very
10 much appreciate your pumping up "Power Trends."
11 We're very proud of that document.
12 And, in it, of course, for policymakers, we
13 try to give a signal of where we think the markets
14 are going and how it might be met by technology.
15 So thank you again for that.
16 As to your point about, "what is necessary?"
17 yes, we will need backup generation, generation that
18 will allow us to respond to variability of both wind
19 and solar.
20 But I would say that we have gotten
21 extraordinarily good in New York in projecting where
22 the movements of wind, and how it's going to affect
23 the production on the system, as well as something
24 that I wanted you to know about here recently.
25 The solar rooftop has always concerned me in
358
1 the past, and the reason why it has, is that the
2 NYISO doesn't have a good sense of where it is and
3 how much it's producing, so we can't predict it.
4 But we've had a breakthrough at the NYISO,
5 and I believe the first anywhere in the nation.
6 We are now gathering data off of 10 percent
7 of the solar panels throughout the entire state of
8 New York.
9 We've taking that data and moving it through
10 our own algorithms, to project, on region-by-region
11 basis, how much rooftop solar we expect to receive
12 throughout the day.
13 And the results so far have been very good.
14 So I think our future is that, as we get
15 better at understanding the movements, the
16 variability, of both solar and wind, we will be very
17 good at making sure that we have the necessary
18 generation to back it up.
19 ASSEMBLYMAN PALMESANO: Relative to fuel
20 diversity, I know it's been a big topic, and, you
21 know, when the Governor announced the Clean Energy
22 Standard, with the zero-emissions credit for the
23 upstate nuclear facilities, he's saying it's a
24 bridge to alternatives.
25 And then, even this morning, Mr. Kauffman
359
1 mentioned that -- when he referred to natural gas,
2 he referred to that, I think, and, again, so I don't
3 want to characterize it, but what I thought I heard
4 pretty clearly, is that's a bridge to alternatives.
5 And if the bridge is to get rid of nuclear
6 and to get rid of the natural gas, what does that do
7 to our fuel-diversity mix?
8 And how -- I mean, just like your investment
9 portfolio, you want to have a fuel diversity.
10 And that kind of gives me some caution about
11 what that can -- sends; but, also, what it sends to
12 our private-market system operators who we want to
13 invest private dollars to develop these plants. And
14 they want certainty in the market.
15 And I'm concerned comments like that can
16 create more uncertainty in the markets about the
17 future of where the support is.
18 Because even the Governor's comments, which
19 I wanted Mr. Kauffman to address, he kind of said we
20 need the natural gas, because it kind of countered
21 his comments in the State of the State address.
22 So I just wanted your comments on that.
23 BRADLEY JONES: Well, good. Thank you.
24 Well, first of all, that's not an area
25 that -- certainly, the public-policy side of
360
1 achieving 100 percent renewables, it's not something
2 that I'm very familiar with.
3 I do think it's many years off into the
4 future.
5 I believe that Richard Kauffman also admitted
6 that he believe it was also many years off in the
7 future.
8 In terms of that bridge to the future, we
9 have investments that are coming to the state today,
10 built on natural gas, and those investments have
11 30-year life frames.
12 So, although it may be bridge to the future,
13 it's a pretty good bridge, so I'm not that concerned
14 about the investment signals that may or may not be
15 sent.
16 ASSEMBLYMAN PALMESANO: Okay.
17 The other part about the -- when we talk
18 about the transmission, and getting our fuel to
19 where it needs to get to, and Assembly --
20 Chairwoman Paulin mentioned about the polar vortex
21 that we faced, the polar vortex from a couple years
22 ago, we had the natural gas spike.
23 But it wasn't -- from my understanding from
24 attending forums and talking to experts, it wasn't
25 for a lack of supply of natural gas. It was because
361
1 the capacity was so constrained that we didn't have
2 the capacity to get through the gas to where it
3 needed to go, which impacted the market.
4 Same thing with propane.
5 Do you see any solutions on the forefront?
6 Because, obviously, you have, like, the
7 Constitutional Pipeline, and other projects like
8 that, that continue to be held up.
9 Isn't that something that certainly will
10 affect the marketplace, and affect the delivery, and
11 doesn't that need to be part of the solution as
12 well?
13 BRADLEY JONES: Very good question.
14 So I would like to let you know that we did
15 an extensive analysis throughout the eastern
16 interconnect on natural gas, and the potential for
17 limitations in natural gas pipeline delivery.
18 In New York we have an extremely favorable
19 position.
20 We think that the gas is actually very strong
21 in the western part of the state.
22 In the eastern part of the state we have gas,
23 and behind it we have a fuel backup.
24 So our fuel diversity is pretty fair in the
25 state today.
362
1 We do have some concerns, going forward,
2 though, as you said.
3 We will need additional natural gas
4 deliveries to the state, additional pipelines.
5 We'll also be looking, as I said, at fuel
6 backup for those new units that are coming online.
7 So, we are watching the situation very
8 closely.
9 ASSEMBLYMAN PALMESANO: And I know in your
10 report, you talked about, right now, I know 50 --
11 I think -- believe around 57 percent of New York's
12 generating capacity is by -- done by natural gas.
13 And then -- but you're planning for the
14 proposed generating capacity, and natural gas
15 accounts for about 65 percent of that.
16 Is that something you're trying to get better
17 mix of as we move forward?
18 BRADLEY JONES: I'm sorry, a better mix of
19 natural gas?
20 ASSEMBLYMAN PALMESANO: I know -- where -- in
21 your report, it says, going forward, you know, the
22 planning process, right now we're at 57 percent.
23 But even for proposed generating capacity, moving
24 forward, to the connection of the grid, most of
25 those projects you're starting, 65 percent of them
363
1 are natural gas.
2 And I know you mentioned you had some
3 concerns relative to natural gas, as far as trying
4 to get some more diversity.
5 Is that something you're trying to address,
6 too, as we move forward?
7 BRADLEY JONES: And part of the way that
8 we -- yes, absolutely.
9 And part of the way that we are addressing
10 that, is looking at alternate fuel supplies, to make
11 sure that we have a reliability of that natural gas
12 supply as they come to market.
13 ASSEMBLYMAN PALMESANO: And I just have one
14 question.
15 Again, from your book, that's something that
16 was concerning --
17 BRADLEY JONES: And I'm so thrilled by this,
18 so...
19 ASSEMBLYMAN PALMESANO: This is not a public
20 service announcement.
21 [Laughter.]
22 ASSEMBLYMAN PALMESANO: But I even remember
23 from couple of years ago, when I read through your
24 report, when it talked about certain environmental
25 and regulations from the state and federal
364
1 government coming down the pipeline, because, you
2 know, when we're talking about full generating
3 capacity, what we have in reserves, and what we need
4 at peak demand.
5 But when you look at your report from 2016,
6 it shows these different federal and state
7 regulations that are just taking effect. Some have
8 a couple -- have some time to be compliant.
9 But these are -- represent, anywhere from
10 20,000 to 32,000 of our generating megawatt
11 capacity. And these are private operators.
12 And I even remember one of them from a couple
13 of years ago said, one regulation alone would cost
14 20 power plants $8 1/2 billion to comply.
15 Are we -- are we on top of this?
16 Because that's a concern I have.
17 If a power plant can just shut down --
18 And I know Energy said, we're in settlement;
19 otherwise, we would have shut down.
20 -- if anyone can just shut down because of
21 these regulations, is that something that we're
22 watching very closely, or do we see some positive
23 signs coming from that in the future?
24 Because, at the end of the day, if we can't
25 turn the lights on, we got a big problem -- problem
365
1 in the state.
2 BRADLEY JONES: I agree. It's a very good
3 point.
4 We are watching that very closely.
5 We continually analyze the regulations, and
6 how it may affect the generation within our state.
7 Just recently we issued a report. We call it
8 the "CPP Report."
9 Dependent upon, of course, the CPP getting
10 out of the court stay and moving forward, we believe
11 that New York State is very well positioned for
12 meeting the CPP requirements.
13 (Indiscernible) some of the (indiscernible)
14 in the Hayes requirements, there will be some cost
15 to New York State generators.
16 But, for the most part, I think we're in
17 better shape than most states.
18 ASSEMBLYMAN PALMESANO: Okay. Thank you.
19 SENATOR GRIFFO: Assemblyman, Mr. Jones is
20 available to sign your book later.
21 [Laughter.]
22 SENATOR GRIFFO: Senator Croci.
23 SENATOR CROCI: Thank you.
24 Mr. Chairman, it's good to see you.
25 BRADLEY JONES: A pleasure to see you.
366
1 SENATOR CROCI: And thank you to your staff
2 over at ISO.
3 I've enjoyed my time over there. I learned a
4 lot by being in your operation center, and speaking
5 with the experts.
6 And I do think that the "I" in ISO is
7 extremely important in the state of New York, that
8 independence, that the voice of integrity, you bring
9 to the process is very important.
10 We look to you for answers.
11 So with regard to, just very a quick
12 threshold question, we're talking a lot about
13 substituting generation with wind, something that's
14 going on right now off the coast of Long Island, and
15 we're talking a lot about resiliency after
16 "Superstorm Sandy."
17 I contend that moving your power generation
18 into the Atlantic Ocean and the Block Island Sound
19 isn't the smartest way to achieve resiliency,
20 particularly with that sea state and the winds.
21 At what wind speed does -- and I've seen this
22 happen over at ISO, watching it -- at what wind
23 speed do you need to shut down the turbines?
24 BRADLEY JONES: And I do not have that
25 information.
367
1 From my experience, on land, wind speeds
2 would be around 35 to 40 miles per hour.
3 But I do not know what offshore might be.
4 SENATOR CROCI: Okay. Well, for the record,
5 the winds during "Superstorm Sandy" ranged from
6 anywhere between 70 and close to 90 miles an hour.
7 And I believe that that would probably exceed
8 any GE turbine or others that I know of.
9 But, if we can get that specification, that
10 would be very helpful.
11 In recalling when the FitzPatrick nuclear
12 facility was announced, that closure, ISO
13 immediately did a study to determine if there would
14 be a reliability issue.
15 Has there been a study done by ISO recently
16 on the Indian Point power plant?
17 BRADLEY JONES: No, sir.
18 In fact, on FitzPatrick, once we received the
19 notice of deactivation, we immediately began the
20 process of evaluating reliability impacts. That
21 process ran for about 90 days. We did release a
22 report at that point.
23 As I mentioned to the rest of the Committee a
24 moment ago, we have not yet received a notice of
25 deactivation on Indian Point, although we expect to
368
1 receive it in the next several months.
2 SENATOR CROCI: Well, would there any reason
3 why you wouldn't start that report right now?
4 BRADLEY JONES: There would be a reason.
5 There are a number of factors that are
6 changing in our system, and those factors are very
7 diverse.
8 And, for example, one of the most significant
9 is the amount of load that we expect to have in our
10 system.
11 So if we got ahead of the notice of
12 deactivation, we'll end up with a report that could
13 possibly have a different ending result than the
14 report that would be appropriately tied with the
15 notice of deactivation.
16 SENATOR CROCI: Now, it's my understanding
17 that you didn't have a notice of activation (sic)
18 for FitzPatrick. That was just on the intention.
19 BRADLEY JONES: We did.
20 SENATOR CROCI: You had a notice?
21 BRADLEY JONES: We had notice of deactivation
22 in, I believe, late November of 2015.
23 SENATOR CROCI: Okay. So, we should expect
24 that you'll be receiving a notice of deactivation,
25 and then ISO will very quickly produce a report?
369
1 BRADLEY JONES: Yes, sir.
2 SENATOR CROCI: Okay. Great.
3 In 2016 there was a reliability needs
4 assessment done; considered some reliability
5 scenarios, including the closure of Indian Point.
6 The study found significant violations of
7 resource-adequacy criteria.
8 So if I understand it correctly, the report
9 stated, Indian Point's closure could result in a
10 500-megawatt reliability need by 2021.
11 Is that correct?
12 BRADLEY JONES: I don't recall the figures,
13 but I'm certain that you've got that right.
14 SENATOR CROCI: Okay.
15 If that's the case, did -- hold on one
16 minute.
17 So there could be a 500-megawatt shortfall?
18 BRADLEY JONES: Yes, sir.
19 SENATOR CROCI: And has that been
20 contemplated in the closure -- is it our
21 understanding -- or, what's been presented to us
22 today, is that, between wind and solar and other,
23 that 500 megawatts is supposed to be made up?
24 BRADLEY JONES: The 500 megawatts, let's
25 characterize that appropriately.
370
1 Again, that was a 2016 study.
2 It doesn't seem like that far ago, does it?
3 But, 2016, a number of things have already
4 changed.
5 For example, FitzPatrick and Gannett were
6 both expected to be shutting down very soon. They
7 both looked like they will be online at the time of
8 the Indian Point retirement.
9 So that's just an example of how the system
10 changes rather dramatically very quickly. And we'll
11 have to wait until we do the assessment to have a
12 real accurate value for you.
13 SENATOR CROCI: But chances are, when you're
14 taking 2,000 megawatts out of the system, there's
15 going to be some shortfall, at least for a period of
16 time. Does that make sense?
17 BRADLEY JONES: Well, I wouldn't agree with
18 that.
19 There is certainly a load reduction that
20 we're seeing in the Lower Hudson Valley, in New York
21 and Long Island, that has -- it could be a very
22 significant contributor; as well as, we see a number
23 of generators that are very close. One that's
24 already started construction, one that's very close
25 to starting construction.
371
1 So, it's not necessarily true that we would
2 be short. We'll have to do the analysis.
3 SENATOR CROCI: And that reduction in load,
4 is that because people are leaving, or what is that
5 from?
6 BRADLEY JONES: No, in fact, interestingly,
7 it's not because of the economy, it's not because of
8 departures.
9 It's, largely, because of energy efficiency
10 and solar panels.
11 We believe that we have, in New York State,
12 over 700 megawatts of rooftop solar. That's an
13 extraordinary value.
14 SENATOR CROCI: And when rooftop solar is
15 covered in snow, you guys go to peakers; right?
16 BRADLEY JONES: That's correct.
17 But in the winter, when we don't usually get
18 much rooftop solar support, during those months, we
19 have a much lower load than we do during the summer.
20 SENATOR CROCI: Where we get the power from
21 at that point, though? And where do -- where we get
22 that?
23 BRADLEY JONES: We will get it from wind.
24 We'll get it from hydro. We'll get it from nuclear.
25 We'll get it from our gas-generation sources.
372
1 SENATOR CROCI: So during blizzard conditions
2 or storm conditions, when you have both high wind
3 and you have snow cover or low-light days, where do
4 we get the power?
5 BRADLEY JONES: Then, if we assume that wind
6 is not available, then we'd be getting our power
7 from hydro, from nuclear, and from our
8 gas-generation facilities.
9 SENATOR CROCI: But now we're losing that
10 nuclear.
11 BRADLEY JONES: We still have a great number
12 of nuclear available to the system.
13 SENATOR CROCI: Okay. In -- within New York
14 State?
15 BRADLEY JONES: Yes.
16 SENATOR CROCI: Okay. Very good.
17 Thank you very much. I appreciate your
18 testimony here today.
19 BRADLEY JONES: My pleasure.
20 Thank you.
21 SENATOR GRIFFO: Thank you, Mr. Jones.
22 Appreciate you being here today --
23 BRADLEY JONES: Thank you very much.
24 SENATOR GRIFFO: -- and, your style.
25 Thank you very much.
373
1 We -- our next panel will be some of the
2 local officials, and we'd ask:
3 The Honorable Theresa Knickerbocker, who is
4 the mayor of the village of Buchanan;
5 The Honorable Linda Puglisi, the supervisor
6 of the town of Cortlandt;
7 And Joseph Hochreiter, who is superintendent
8 of the Hendrick Hudson School District.
9 Mayor, we're going to probably going to let
10 you lead.
11 THERESA KNICKERBOCKER: Okay. Good. That's
12 great.
13 I do want to thank you today, Senator Griffo
14 and Assemblywoman Paulin, and also, Senator Murphy,
15 who represents us, and, Assemblywoman Galef, and
16 other distinguished members.
17 I do want to tell you it was quite an
18 education today. It was really eye-opening, a lot
19 of things that were said.
20 And I appreciate a lot of the questions that
21 were asked.
22 A lot of it is contained within here. I'm
23 going to read this, because this kind of gives the
24 essence of the village, and the different questions
25 we have.
374
1 My name is Theresa Knickerbocker, and I've
2 had the honor and privilege to be the mayor of the
3 great village of Buchanan since 2014.
4 I have lived in the village of Buchanan my
5 entire life, and I am a fourth-generation resident.
6 I am here today to represent the concerns and
7 fears for the future of my village.
8 Buchanan is a 1.3-square-mile community
9 located in northern Westchester County, of which
10 Entergy owns 240 acres.
11 Buchanan is the smallest municipality in the
12 world with a nuclear power plant. We have hosted a
13 nuclear power plant for over 50 years.
14 It's a wonderful community to raise a family
15 or retire.
16 The trend now is for young families to
17 move north, away from lower Westchester and
18 New York City, to our small town to raise their
19 families.
20 As a result, we have a good mix of seniors
21 living on fixed incomes, along with young families.
22 We are not a wealthy municipality.
23 According to the last census, we have
24 826 households, of which 621 are cost-burdened.
25 Many of the seniors have lived here their
375
1 entire life. Some are still living in homes they
2 were raised in.
3 They are concerned they will not be able to
4 keep their homes and live here the rest of their
5 lives.
6 They are also concerned about the value of
7 their homes which, for many, is their largest asset.
8 It's important to put a face on this problem
9 and how it affects real people's lives.
10 And please find enclosed in the packet, an
11 article in the "Journal News," February 23, 2017,
12 "Life after Indian Point: Buchanan residents grapple
13 with the coming loss of a nuclear power facility and
14 it's effect on the village."
15 The following are our concerns:
16 Loss of tax base and revenue.
17 Buchanan receives almost 50 percent of its
18 operating budget from the Entergy agreement.
19 Residents could see 155 percent increase in
20 their tax bills.
21 Number two: Loss of over 1,000 well-paying
22 jobs.
23 Some of these people live in this community,
24 and will be hit twofold: loss of their job, along
25 with a significant increase in taxes.
376
1 How, and where, will these jobs be replaced?
2 Loss of grants.
3 Energy is a good corporate neighbor, and I'm
4 going to repeat that.
5 "Entergy is a good corporate neighbor."
6 Over the years, the grants were given to the
7 village for police vehicles, a Code Red system, and
8 many community events.
9 Also, I'm sure Linda and...
10 JOSEPH HOCHREITER: Joe.
11 THERESA KNICKERBOCKER: -- Joe --
12 It's been a long day.
13 -- also, the school district, town, and local
14 organizations received various grants which are
15 important to our community.
16 Number four: Storage of spent-fuel rods.
17 The security and storage of the spent-fuel
18 rods is a concern of our community.
19 Currently, spent fuel is stored, both, in
20 pools, and so-called "dry-cask storage" which is
21 located on concrete pads at the Entergy plant.
22 After shutdown, all the fuel will be removed
23 from the pools and stored in dry casks on-site.
24 The federal government promised decades ago
25 to construct a recycling facility or a national
377
1 repository, but has not met that obligation to date.
2 And also, for 25 years, New York Power
3 Authority operated Unit 3 and contributed to many of
4 these spent-fuel rods.
5 Number five: Affordable replacement of
6 energy.
7 There are several articles and studies
8 touting the replacement of energy.
9 However, today I've gotten an education, but,
10 there's not concrete details.
11 There have been subsidies given to other
12 nuclear power plants, solar, and other renewable
13 energy, and the cost is passed on to ratepayers and
14 taxpayers.
15 I'm asking for an independent study of the
16 true costs of replacement power, and how it will be
17 achieved.
18 And mentioned several times today, the
19 Champlain Hudson Line.
20 The $2.2 billion Champlain Hudson line is
21 under consideration, but far from assured.
22 Even if approved, is it wise to leave the
23 state energy vulnerable and contingent on a power
24 provided from Canada?
25 Also, all of these effects of the plant
378
1 closing trickle down to our local businesses.
2 In summation:
3 The Village of Buchanan is asking for support
4 with the loss of a major employer and taxpayer, and
5 the economic fallout from this closing.
6 We are asking for support from both our
7 federal and state officials.
8 Can we work together to reinvent or
9 reenergize this 240-acre commercial site?
10 We are asking for a feasibility study to be
11 done for the reuse of this property.
12 And I do understand Entergy does own the
13 property, but I'm trying to be proactive instead of
14 reactive four years from now.
15 And may I also add, that with the newer gas
16 plants, they're more energy-efficient and also more
17 environmentally-friendly.
18 So my other question: Is it possible to
19 reuse the site for a gas-fired plant?
20 My understanding is, in California, they did
21 do a -- from nuclear to a gas-fired plant.
22 Con Ed, who owns the switch yard across from
23 the plant, has recently completed a $2 million
24 upgrade. The transmission lines are always --
25 already in place. So it would just seem natural to
379
1 reconvert it to another energy source.
2 Can we make this model for future communities
3 facing the loss of a major business?
4 On February 26th, the "New York Post"
5 article states, there is a $1.5 billion state fund
6 which covers a range of economic-development
7 projects, included, are a $5 million to help CBS
8 refurbish the Ed Sullivan Theater in Midtown
9 Manhattan, and, a $25 million grant to help build
10 Empire Outlets, a planned $350 million mall next to
11 the proposed New York Wheel on Staten Island.
12 I've also enclosed that article.
13 We are asking to have access to this funding,
14 or similar.
15 New York is ranked 49th as a
16 non-business-friendly state.
17 This has to change.
18 As we move forward, Buchanan will need money
19 to transition.
20 What economic-development money is available?
21 Is there support from New York State
22 departments for planning and consultings regarding
23 this site?
24 The Village of Buchanan is asking for your
25 assistance during these challenging times.
380
1 Sincerely,
2 Theresa Knickerbocker, Mayor of the village
3 of Buchanan.
4 LINDA PUGLISI: (Microphone turned off.)
5 Well, I'm Linda Puglisi, supervisor of the
6 town of Cortlandt.
7 I thank you all for staying to hear us today.
8 I appreciate it very much.
9 I'd like to thank Chairman Griffo,
10 Chairwoman Paulin.
11 I'd like to thank our State Senator,
12 Terrence Murphy, our Assemblywoman Sandy Galef, and,
13 also, Assemblyman Palmesano.
14 Okay. Thank you all so much for hearing us
15 today. It's so very, very important.
16 And as the Mayor said, we -- it has been an
17 education today.
18 We did learn a lot of details, some answers
19 to our questions that we didn't have before.
20 However, I am going to reiterate some of the
21 questions that we have, so I can get them into the
22 record, if you don't mind.
23 As I mentioned, I'm Linda Puglisi, the proud
24 supervisor of the town of Cortlandt, located in
25 Westchester County, population of 42,000 terrific
381
1 people.
2 We have 16,000 houseboats.
3 And, I have had the honor of being supervisor
4 for 26 years.
5 Also, I have dealt with Indian Point issues;
6 we've all had them.
7 By that I mean, going to their information
8 meetings, being on conference calls, public
9 hearings, and receiving phone calls all the time on
10 updates from Indian Point, as our Assemblywoman, our
11 Senator, and all of us have throughout the years.
12 And I would like to also state that Entergy
13 has been good partners to us and our community
14 throughout their 16 years, and a few more to go.
15 They have assisted us with grants for various
16 events on -- for our community.
17 So I just want to say that.
18 I gave you all a packet. It has some
19 information, more details about my testimony today.
20 I'm just going to give you the summary,
21 verbally, I may.
22 I do have to state that I found out about the
23 closures of Indian Point on Friday, January 6th,
24 2017, at 2:35 p.m., but, who remembers?
25 And by that, finding that out was an online
382
1 newspaper article that we saw from our computers,
2 and then we all started talking to each other that
3 Friday afternoon, as you recall.
4 So that's how I first found out about it.
5 And then on Monday, January 9th, I attended
6 Entergy's press conference, officially --
7 It's not working?
8 (Microphone turned on.)
9 Would you like me to start over?
10 (Everyone says "No.")
11 [Laughter.]
12 LINDA PUGLISI: I can, you know.
13 SENATOR GRIFFO: That was a long-time elected
14 official (indiscernible).
15 LINDA PUGLISI: But, on January 9th,
16 I attended Entergy's press conference, where they
17 made it official that they were going to be closing
18 IP-2 and IP-3 in the years 2020 and 2021.
19 I, too, would like to say that I was a little
20 disappointed and dismayed, because we have been
21 partners for all these many years.
22 And I feel that, myself, and we, should have
23 been given the courtesy of prior knowledge; a
24 heads-up, if you will.
25 We're very responsible, confidential people,
383
1 and we certainly wouldn't have said anything.
2 So I just have to say that, if I may.
3 But, we need to go forward.
4 We can't look back, and we can't state the
5 things that should have occurred.
6 We need to go forward, and that's really why
7 we're here today.
8 I'd like to say to you, the issues that we
9 are going to be faced with, with the closing of
10 these two nuclear plants.
11 I'd like to state also, that our issues are
12 not sustaining nuclear energy.
13 That's not why I'm here.
14 The reason I'm here is that the closure of
15 the plants, our major taxpayer in our community, is
16 the reason that I am here today.
17 So our issues are, you've heard them stated
18 before, but I need to reiterate them, if I may:
19 Tax stabilization is critical.
20 The Hendrick Hudson School District is the
21 whole school district, and receives 33 percent of
22 their annual revenue from Indian Point;
23 The great village of Buchanan, the host
24 village, receives from -- 47 percent, I believe --
25 Theresa, correct?
384
1 THERESA KNICKERBOCKER: (Nods head.)
2 LINDA PUGLISI: -- from Entergy annually;
3 Hendrick Hudson Free Library, 28 percent of
4 their annual revenue comes from Indian Point;
5 And one of our local fire departments,
6 Verplanck, 64 percent of their annual revenue comes
7 from this industry;
8 Westchester County, 1 percent;
9 And the town of Cortlandt receives $1 million
10 a year in our annual revenue, which equates to
11 2 percent.
12 We are all partners of what's called a
13 "PILOT" (payment in lieu of taxes) for tax
14 stabilization.
15 Entergy entered into this PILOT plan with us.
16 We're in our second year.
17 Of this current PILOT, they had entered into
18 it with us, and we negotiated with them, when they
19 bought the plants in 2000 and 2001.
20 So we're into our second PILOT.
21 A PILOT is a terrific way to stabilize tax
22 revenue from an industry, and it's been beneficial
23 to us for all these many years.
24 Job losses.
25 And this is really, really difficult to talk
385
1 about, because, you know, I know so many of the
2 families.
3 Grandpa worked there. Mom works there now.
4 Son, grandchildren, are thinking of working
5 at this terrific industry.
6 In our community, we're all one big family,
7 we know each other.
8 And to lose 1100, 1200 permanent jobs, and
9 the ramification of those losses trickles down
10 throughout our entire community, and it's very, very
11 sad and tragic, if I may say.
12 Plus, part-time jobs.
13 And also, contractors.
14 There are many contractors that are retained
15 by Entergy, and they come and they do various tasks,
16 throughout the years.
17 And a good portion of them live in Cortlandt
18 and Buchanan, and adjacent to us, the city of
19 Peekskill.
20 I'm going to, probably, about 65 to
21 70 percent of their workers live in our communities,
22 so, we know most of them, if not all of them, and
23 they're a part of the fabric of our town and our
24 community.
25 They don't want to move away.
386
1 Nothing against New Orleans. You know, we
2 love going there for a vacation or a long weekend,
3 or something. That's the headquarters of Entergy.
4 But these workers don't want to relocate.
5 They want to stay here where their grandparents
6 live, or lived; their parents, they live, and
7 they're raising their kids, they're playing Little
8 League, they're playing soccer, they're going to
9 terrific schools.
10 They want to stay here.
11 Safety and security issues.
12 The radioactive spent-fuel rods which have
13 been talked about a lot today, they are a real
14 serious concern that they'll remain on the site.
15 Who will be monitoring them?
16 All good intentions, but, truly, who will be
17 securing this site, these rods, into the future?
18 If you remember your science, the isotopes of
19 these spent-fuel rods, the radioactivity could go on
20 for thousands of years.
21 Environmental issues.
22 The reclamation, cleanup of the land,
23 including the 33 wells currently on the property.
24 We lived through the wells going onto the
25 property -- right, Assemblywoman? -- so that they
387
1 could monitor the groundwater.
2 And, of course, the Hudson River is adjacent
3 to Indian Point.
4 So, a lot of environmental issues as well.
5 Further, economic issues.
6 Impact to our local small businesses, very
7 important to our chamber of commerce.
8 A local deli said to us at the chamber
9 meeting recently, that about 25 percent of their
10 annual revenue comes from the people that work at
11 Indian Point because they're in close proximity to
12 the plant.
13 Just think of it, restaurants, gas stations,
14 and the like; local businesses which are the
15 foundation of any town, and especially ours.
16 So the employees of Indian Point are the
17 consumers of these businesses.
18 Also, the reduction of assessment on this
19 property, once closed, will be a big factor of our
20 tax-stabilization issues.
21 Further property values are big questions
22 already being raised by property owners and
23 residents.
24 I went to one of their local grocery stores
25 the other day. A family was in the grocery store
388
1 and said to me: Linda, what is going to happen to
2 our taxes?
3 I can't definitively tell them what's going
4 to happen to their taxes in the future.
5 I try to tell them to remain calm, and that
6 we will do everything we can to help them, with your
7 help, with your help.
8 The reuse of this facility is critical.
9 Whether it can be reused the year after it
10 closes, or three, four, five, ten years thereafter,
11 but we have to start planning for that now.
12 We need to do an environmental assessment of
13 those 240 acres to see which part of those acres can
14 be reused for a future industry, commercial
15 establishment, to come onto that property.
16 The total loss of $32 million, which is the
17 total for all of our stakeholders, is just going to
18 be extremely difficult to make up.
19 Ever since the announcement of Indian Point
20 closures, my colleagues and I have spent every day
21 discussing the challenges and impacts facing our
22 area due to this decision announced by the Governor
23 and Entergy.
24 We have established a community task force
25 comprised of a cross-section of the town, including
389
1 business owners, realtors, residents, chamber
2 members, officials representing the school, the
3 village, the town, and Westchester County.
4 Our goal was to address these critical
5 issues, and to develop plans to offset the loss of
6 this revenue, loss of jobs, and, hopefully, the
7 reuse of the 240 acres with other industries.
8 However, we need your assistance, the state's
9 economic department. We really need the assistance
10 to help us.
11 So we're starting right away. We have a task
12 force. We're talking amongst ourselves. We're
13 having speakers come in. We're talking to other
14 communities.
15 Theresa went to Vermont to talk to the folks
16 up there, to see what they're dealing with, and so
17 on.
18 So, it is a concerted effort, and we are
19 starting right away. We're not awaiting to just
20 have something handed to us on a silver platter.
21 We're there, working every single day for our
22 constituents, our residents, our terrific people.
23 But, we need help, we need assistance,
24 please.
25 Therefore, we are here today to ask for your
390
1 assistance in working with us, and with the New York
2 State administration for reuses, environmental
3 cleanup, and for job replacements.
4 We need funding for consultants to help us,
5 as I mentioned, with the environmental assessment.
6 But also for, perhaps, a business incubator,
7 to talk about future plans for the site.
8 I'd like to tell you, and thank them,
9 representatives from the administration came down to
10 our town government and met with Theresa, Joe, and
11 I, and others, on February 17th.
12 We were appreciative of that.
13 Some were from PSC. We had a representative
14 of state -- of the state education department as
15 well, and others. And some attorneys too.
16 So -- and then we were told yesterday, late
17 afternoon I got a call, I think you all did also,
18 that there will be new state commission being
19 established.
20 And I'm so delighted to hear that.
21 And, of course, I immediately said that
22 I would love to participate, and I pledged to do so.
23 We need to reuse and find new rateables for
24 the state's help.
25 Just one other aside:
391
1 The year 2011, I did write a letter to the
2 State, to the Governor, asking for him to start a
3 commission to discuss, if Indian Point closed.
4 So, we could have been a little bit further
5 along.
6 But once again, that's the rear-view mirror.
7 We need to go forward.
8 But I do have to mention that to you.
9 It's been said today by some, that we have a
10 long time to plan for this; 3, 3 1/2, 4 years.
11 Well, trust me, three years goes by quickly.
12 It goes by quickly, so it is not a lot of
13 time.
14 We need to start immediately, yesterday.
15 We need to start planning, collectively, to
16 address these challenges that we face in this
17 wonderful section in northwestern section of
18 Westchester County, on the Hudson River, in this
19 wonderful state of New York.
20 So, I thank you so much for listening to me,
21 and I'm looking forward to working with all of you
22 in the future.
23 JOSEPH HOCHREITER: Chairman Griffo,
24 Chairwoman Paulin, Senator Murphy,
25 Assemblyman Palmesano, and Assemblywoman Galef,
392
1 thanks for having us today.
2 And let me be the first to wish you all a
3 good evening, as we ticked past the 5:00 hour.
4 OFF-CAMERA SPEAKER: Not quite.
5 JOSEPH HOCHREITER: Close.
6 Four years ago, almost to the day, I was
7 appointed superintendent of the Hendrick Hudson
8 School District.
9 I represent 2400 kids, 17,000 residents, and
10 more than 400 staff.
11 It was four years ago then, and sadly, now,
12 the priority of our community, board of education,
13 and my administration remains ensuring a stable and
14 financially-beneficial PILOT plan with Indian Point
15 for our district.
16 As many of you have heard, the current PILOT
17 accounts for just more than 30 percent of our annual
18 revenue, which, for next year, is about $24 million,
19 and it escalates for the duration of the PILOT.
20 As a result of this aggressive PILOT that was
21 negotiated twice, our taxes are among the lowest in
22 Westchester County. In fact, they've only been
23 raised an average of 1 percent in the last 5 years.
24 Therefore, I would suggest taxing our way out
25 of a $24 million revenue gap, or, cutting programs,
393
1 cannot be our only option for our children.
2 Our belts have been tight.
3 In fact, in my four years alone as
4 superintendent, we've cut costs in many ways.
5 We've looked at transportation issues.
6 We have installed solar panels, one of the
7 first districts in New York State to do that.
8 We've had to raise some class sizes, and
9 we've had to reduce some staff, as we moved through
10 attrition.
11 We've looked at enrollment projections, and
12 we've also looked at the potential of engaging in
13 school closure or redistricting studies, which is
14 not an exciting venue for any community to go
15 through.
16 While tax revenue is paramount to me and our
17 community, our town stands to be negatively
18 impacted; our village, with widespread job losses;
19 with losses in business revenue; and potential for
20 oversaturated housing market, as families may fear
21 the unknown, which has happened.
22 I can't tell you how many phone calls
23 I receive, how many parents come to meet with me,
24 wondering if they should sell and where they should
25 move to.
394
1 It's a big, big concern.
2 We also know that we don't have to look far
3 to see what happens in our communities throughout
4 New York State when businesses close, when jobs are
5 lost, and when school funding goes away.
6 I grew up in Western New York. I have family
7 in Buffalo. I've worked in the Southern Tier. And
8 I've lived and led in districts where communities
9 still try to attempt to recover from such decisions.
10 We wish to mitigate these potentially
11 negative impacts in our community.
12 We heard early this morning, Mr. Kauffman,
13 and Supervisor Puglisi, suggest that we have, quote,
14 ample time to address a wide range of issues.
15 While that may be true, I want to assure all
16 of you, and promise you, that our community is
17 fearful of what could be a 13 percent, on average,
18 school-tax increase for four years as Indian Point
19 shuts down over the four-year period.
20 Will the Hendrick Hudson taxpayer be solely
21 on the hook; what assurances do we have?
22 Most importantly, perhaps, that we were two
23 hours away from announcing a $14 million capital
24 improvement project on Monday, January 9th, before
25 we received notice Indian Point was going to close.
395
1 In fact, that Saturday, on January 7th,
2 I spent three hours with our board of education,
3 touring our facilities, to sign off on the project,
4 to announce it at 10 a.m. on Monday, the 9th.
5 What we have heard since, is that our bond
6 rating is at risk. That, we cannot be assured
7 low-interest loans to go out and borrow $14 million.
8 And as a result, shortly after Indian Point's
9 announcement, we shelved that plan because of fear
10 of the unknown.
11 So, again, while Mr. Kauffman suggests we
12 have time, I'm assuring you that we don't, and that
13 the impacts of Indian Point's decision in early
14 January have already impacted our community, have
15 impacted our ability to move our organization
16 forward and provide world-class facilities for our
17 students.
18 So while 36 or 48 months is a great deal of
19 time for us on our calendar, my residents, my
20 parents, our taxpayers, need immediate assurances
21 that their kids' programs will not be hatcheted,
22 that their taxes will not go up some 13 percent a
23 year, as a result of this shutdown.
24 I've given you all an infograph, in lieu of a
25 formal submitted testimony, that highlights our
396
1 successes in the classroom, and it also clearly
2 indicates what's at risk through this major
3 30 percent funding gap.
4 Thank you for the opportunity, and I'll
5 address whatever questions you have.
6 SENATOR GRIFFO: Thank you for being here.
7 I think you sit in a very challenging and
8 difficult position.
9 And I indicated to you earlier, as a former
10 mayor, I was in a similar position, where we lost
11 over 8,000 jobs in the city of Rome, upon taking the
12 office of mayor, in the loss of the military air
13 installation, air base, that was there.
14 This is not an easy time, and I think you're
15 approaching it in the right manner, though, from
16 everything that I'm hearing here today.
17 The only question I have to you is, what is
18 the top two needs that you would ask the State right
19 now?
20 Because I understand a lot of what you're
21 going through, and I know there's different aspects,
22 whether it's in education, in real-estate market, in
23 population loss, revenue...I get all that.
24 But what would you say right now, if you had
25 to identify the top couple of needs that you have
397
1 right now?
2 THERESA KNICKERBOCKER: I think one of the
3 things, I think we would all agree, is that, like
4 Linda said, the time goes by fast, so there's a
5 transitional time.
6 So, I don't know if there's any funding in
7 the state available to help us do trans -- slowly
8 transition to the new world.
9 Then, once again, also, is looking at
10 economic development. You know, is there any
11 potential for that?
12 So that's my two biggest asks.
13 LINDA PUGLISI: Yeah, we'll be -- you know,
14 we're going to be members of this new commission,
15 which is going to be very, very helpful. And, you
16 know, we'll talk about things such as a new -- you
17 know, negotiating a new PILOT, as we go forward,
18 what happens in 2021? Can we negotiate and -- the
19 new PILOT?
20 We're looking -- we're seeking Entergy's
21 assistance in that also.
22 But, we are open to all kinds of suggestions.
23 We are working with our -- my town board
24 members, who are so supportive of helping our
25 community get through this.
398
1 The loss of the $33 million a year, I don't
2 know if that can ever be made up. Mostly likely
3 not. It's a knew era, as Theresa said.
4 But we are willing to work like crazy to help
5 our wonderful town, and this part of New York State,
6 because it is a trickle-down effect.
7 I've spoken to other supervisors in
8 Westchester County and mayors, who have said, you
9 know, Linda, there are people in our community that
10 works at Indian Point, and there are contractors,
11 and so on.
12 So, it's felt throughout the community.
13 And I'd just like to make a comment about,
14 you know, there was someone today who said, you
15 know -- you know, I'm so glad Indian Point is
16 closing, you know.
17 And we've -- we've heard that throughout the
18 years, in our community, and throughout
19 Westchester County. There are people who wanted it
20 to close down immediately.
21 As I said earlier, this is our position:
22 It's not about it being a nuclear energy.
23 It is about it being a good, vibrant,
24 industrial site, once again, to help us, to some
25 degree, with the loss of this upcoming revenue.
399
1 JOSEPH HOCHREITER: I would say, for the
2 school district, the first is some assurances from
3 whatever agencies exist in the state, that we're
4 good for our loans.
5 $14 million is not that big of a project for
6 school districts in the state. But when you're only
7 receiving 9 percent state aid, and we're footing the
8 bill for 91 percent of it, we have urgency, and we
9 have support in our community before January 9th
10 to have done that.
11 So, I know one of our priorities are to move
12 forward with that project, so our kids today, and
13 our next generation of kids, can have world-class
14 facilities.
15 I think the second, and I'll echo what
16 Theresa and Linda said, some sort of stopgap funding
17 while we figure out what options exist for the
18 property. Tax stabilization -- tax stabilization,
19 in particular, but, also, can that be redeveloped?
20 But, 25 million -- 24 to 28 million dollars
21 over the course of the remaining period of this
22 PILOT is revenue that can't be filled by cuts and by
23 taxes alone.
24 And what I've heard from our community is,
25 they're willing to pay a little bit more, so long as
400
1 we're continuing to tighten the belt in the
2 district, and so long as the State, whatever agency
3 it is, the Governor's Office or Assembly and the
4 Senate, are working as diligently to find an
5 opportunity to find some stopgap funding.
6 SENATOR GRIFFO: Again, I just want to thank
7 you all for your leadership and your efforts.
8 And I think you have excellent representation
9 to advocate on your behalf.
10 And I think you've made a reasonable
11 presentation.
12 And I know we're going to continue to do our
13 best to work with you, too, during this difficult
14 and challenging time.
15 I'd like to recognize the presence of
16 Senator Latimer too.
17 I want to thank the Senator for being here
18 today.
19 Senator Latimer, thank you.
20 Chairwoman.
21 ASSEMBLYWOMAN PAULIN: Yes, and I'd like to
22 recognize Assemblymember Shelley Mayer, who is also
23 right -- sitting next to Senator Latimer.
24 I want to concur, first, with my colleague in
25 the Senate, you have our commitment and assurance
401
1 that we, as the Chairs of the Energy Committee, and,
2 for me, a resident of Westchester County, that we're
3 going to continue to advocate on your behalf, and to
4 work alongside your very able and capable
5 representatives, to ensure that the communities are
6 taken care of and made whole.
7 In that vein, when it becomes more clear
8 exactly who's on the commission, if there are people
9 who you think would add, please let us know so that
10 we can advocate to the Governor's Office to include
11 additional people who might be of a great resource
12 to the conversation.
13 LINDA PUGLISI: Thank you for that.
14 ASSEMBLYWOMAN PAULIN: I want to just, for
15 the record, if you could -- I know that you've
16 indicated that, you know, for the library example,
17 it was 28 percent of the budget, and, school
18 district, about 50 percent.
19 If you could actually run down the
20 45 million, the PILOT, where -- how much money each
21 of you receive, that might -- just for the record,
22 that would be helpful.
23 And I wanted to ask a question about the
24 library.
25 Is it a town library? a village library?
402
1 independent library? so that we have another tax
2 entity that we have to worry about independently of
3 the three of you.
4 LINDA PUGLISI: Do you want to start, Joe,
5 because the library goes through your school
6 district?
7 ASSEMBLYWOMAN PAULIN: The school district
8 library?
9 Ah, I didn't name them all.
10 JOSEPH HOCHREITER: Yeah, our -- our PILOT
11 for the current year is 23.3 million, and it
12 escalates at a fixed rate that -- which we
13 negotiated.
14 Eventually, that PILOT ends after the '23-'24
15 school year, because the way -- the way we
16 negotiated it was, Indian Point 2 and Indian
17 Point 3, when they go offline, they deescalate at
18 an agreed-upon rate. 30, 60, 90, we heard.
19 So, we're out of the PILOT, we're all out of
20 the PILOT, starting in the 2024-25 school year.
21 And, certainly, we can get you those specific
22 numbers.
23 Where we should end up in 20 -- 2024-2025 is
24 north of $28 million, is where we would be with our
25 Entergy PILOT.
403
1 Where we'll end up instead, is 1.26.
2 LINDA PUGLISI: That's huge.
3 ASSEMBLYWOMAN PAULIN: Yeah, are there -- so
4 it's a school district library, so that -- but the
5 money is -- I mean, with the -- with -- they said
6 you vote on their -- you vote on that budget
7 separately. Right?
8 JOSEPH HOCHREITER: Yeah, and they're part
9 of -- yeah, they're part of our annual budget in
10 May.
11 But their PILOT is connected with ours.
12 ASSEMBLYWOMAN PAULIN: Is connected.
13 THERESA KNICKERBOCKER: Yeah, and we're
14 approximately $3 million.
15 ASSEMBLYWOMAN PAULIN: And what percentage of
16 your budget is that?
17 THERESA KNICKERBOCKER: It's almost
18 50 percent.
19 ASSEMBLYWOMAN PAULIN: It's almost
20 50 percent?
21 LINDA PUGLISI: Right. And we are about
22 $1 million a year. It's 2 percent of our budget.
23 But, to lose a million dollars on a
24 38 million annual budget, that's a lot of money, as
25 you can imagine.
404
1 And we've all, you know, done our best to be,
2 you know, good officials and good leaders. We've
3 always been under the tax cap.
4 And so, you know, we've tried really hard to
5 share services whenever we can.
6 And so we've been doing a lot of that --
7 those things for many, many years, and keeping our
8 taxes low, the school, the village, and the town.
9 So we've been working hard for so many years
10 to do that.
11 We want to continue that effort for our
12 taxpayers, as best we can.
13 ASSEMBLYWOMAN PAULIN: So I think that we've
14 all learned a lot today.
15 You know -- you know, for me, especially on
16 the decommissioning end of it, and to understand
17 exactly what we need to continue to do to advocate
18 to make the land available for economic development,
19 because I'm assuming Buchanan might have some other
20 land available. But, 240 acres is a lot of the
21 available land.
22 And if it's not available for 60 years
23 because of SAFSTOR, that could be a tremendous
24 problem.
25 So I think, together, we're going to have to
405
1 figure out how to advocate for a quicker
2 decommissioning process, even though that still may
3 be 10 years out from the time they close, and
4 5 years after the spent-fuel rods are available to
5 go into dry cask.
6 So it could be a -- we're in for a long
7 process.
8 I was wondering if you could -- the school
9 district could elaborate a little more on the
10 immediate $14 million project that you had to --
11 JOSEPH HOCHREITER: Shelve.
12 ASSEMBLYWOMAN PAULIN: -- abandon, because
13 that's, obviously, an immediate loss.
14 JOSEPH HOCHREITER: Yeah.
15 ASSEMBLYWOMAN PAULIN: And I just didn't
16 understand exactly what that was going to do.
17 JOSEPH HOCHREITER: Yeah, so back in the fall
18 we engaged our community, with revisiting some of
19 the previous projects that had failed, and also
20 projects that had been supported.
21 And we did a community survey right before
22 Thanksgiving, asking our taxpayers what they would
23 support in terms of upgrades to our facilities.
24 These included upgrades to our middle school
25 and high school science rooms to make sure they're
406
1 outfitted with twenty-first-century technology for
2 kids who are interested in STEM careers, at the
3 college level, and in the real world.
4 Also, just fixing doors and windows and
5 sidewalk repair and roof repair, very standard,
6 run-of-the-mill things that we do to our homes.
7 And we shared that information with the board
8 of education and community in December, and we had
9 widespread support through a survey.
10 We spent, pretty much, the New Year's
11 vacation ramping up to communicate that.
12 Our first week back, when we came back
13 January 2nd, we were finalizing our plans, our
14 communication plan.
15 We were ready to roll, 10 a.m. on Monday,
16 January 9th, and we all received the -- a call
17 probably within two minutes of one another.
18 So, while we were contemplating what the
19 shutdown of Indian Point meant, that Wednesday, two
20 days after the shutdown notice, we heard from our
21 financiers, and they essentially said: We can't
22 guarantee anything to you. We can't guarantee any
23 sort of fixed rate, we can't even guarantee your
24 bond rating, knowing that 30 percent of your revenue
25 is going out the door. We recommend you slow down,
407
1 and work with your board of education to postpone
2 this.
3 Because we were getting ready for a mid-May
4 vote. That's how quickly we were moving, because we
5 had a lot of support.
6 ASSEMBLYWOMAN PAULIN: What is the percentage
7 that the State reimburses in your school district?
8 JOSEPH HOCHREITER: We're around 10 percent
9 for a couple of the projects.
10 So this was going to be largely footed by our
11 taxpayers.
12 We also had a benefit of some debt that was
13 going to be retired by the time we would borrow
14 again, and so we wanted to capture that time and the
15 financial benefit of that.
16 But even taking retired debt and reissuing
17 it, $14 million of retired debt may not get you
18 $14 million of work if you're paying 15 percent on
19 interest rate.
20 So there were too many unknowns for our
21 community, and they were very nervous, but that was
22 the least of their worries .
23 They were worried about selling their house,
24 they were worried about where their kids are going
25 to school -- what school their kids are gonna go to
408
1 go to. Are we going to have to merge?
2 A lot of unknowns, which, you know, our work
3 together, and sort hanging together, and working
4 with many of you there, have calmed those fears.
5 We did meet with folks from the Governor's
6 team, and the Governor's announcement today,
7 formalizing what his commitment is, helps.
8 But, planning for something that's going to
9 happen in four years doesn't answer a lot of our
10 questions today.
11 We have staff who are asking for letters of
12 recommendation, because they want to go to a
13 district where perhaps there's more stability for
14 them.
15 And that's a really uncomfortable work
16 environment for a lot of people.
17 ASSEMBLYWOMAN PAULIN: Understand.
18 LINDA PUGLISI: It's very troubling.
19 You know, we do -- you know, we try to pay as
20 you go.
21 We have low town debt, and we want to keep it
22 that way.
23 You know, like, last year, we did $2 million
24 in paving, and we paid it from our highway fund.
25 And, so, it's that kind of financial planning
409
1 that we've been doing for all these many years.
2 We want to continue to do it, as to the best
3 of our ability, and as best as we can.
4 ASSEMBLYWOMAN PAULIN: All right.
5 Well, thank you, and we're all with you.
6 Joe.
7 SENATOR GRIFFO: Senator Murphy.
8 SENATOR MURPHY: First off, thank you for
9 your indulgence, 7 1/2 hours now, hanging in there
10 with us.
11 LINDA PUGLISI: Thank you.
12 SENATOR MURPHY: Troopers, like you are --
13 I know you always are, and we're going to be -- get
14 through this together, you know, since we've had
15 multiple phone calls together, bumped into each
16 other, I've already started our task force.
17 You heard what I've said today, I was kind of
18 disappointed.
19 Out of the three men in a room came out and
20 announced this, without having you at the table, the
21 significant shareholders in the whole entire region,
22 along with the workers, our union guys that are here
23 today.
24 It was just something that, obviously, we
25 were all shocked about.
410
1 But, you know, Theresa, there was a quick
2 question I had for you, if you don't mind, Mayor.
3 The percentage of the commercial tax base
4 that comes from you -- from Indian Point makes up
5 how much? 47 percent?
6 THERESA KNICKERBOCKER: It's about
7 47 percent. But it comes to 50 percent because
8 there's a -- what we've done we've is, we've added
9 in the -- there's an agreement for infrastructure.
10 So that was something that was negotiated
11 during the last PILOT, which brings us up close to
12 50 percent.
13 SENATOR MURPHY: Have you heard anything from
14 the Governor's Office, with the decimation of your
15 tax base, from anyone of us, besides, you said,
16 quote/unquote, last week, when they wanted to call
17 you to be on a task force, which they announced when
18 we're in the middle of our hearing today.
19 Has the Governor's Office -- not you, let's
20 be specific on this -- not you reaching out to them.
21 Have they reached out to you, with regards
22 to, on your tax base, what their plan is to do?
23 THERESA KNICKERBOCKER: No.
24 JOSEPH HOCHREITER: No.
25 LINDA PUGLISI: No.
411
1 SENATOR MURPHY: "No" is the answer. Okay.
2 And how many -- how many do know
3 specifically, Mayor, or Supervisor, and even you,
4 Superintendent, of your residents in the area, do
5 you know how -- a percentage of any of them that
6 actually work at the Indian Point?
7 LINDA PUGLISI: Well, I think the figure that
8 I recall, Theresa, is about 60 percent of the
9 employees live in our little area, you know, our
10 area.
11 The city of Peekskill's right next to us.
12 (Indiscernible).
13 SENATOR MURPHY: Some in my town.
14 LINDA PUGLISI: The town of Yorktown, where
15 you're from, Senator.
16 And then, of course, Buchanan and Cortlandt
17 and the village of Croton.
18 So that little vicinity, it's about
19 60 percent.
20 So, it's a good portion.
21 SENATOR MURPHY: It's a significant number of
22 people --
23 LINDA PUGLISI: Right.
24 SENATOR MURPHY: -- within the area, whether
25 or not they're going to be able to, have to, sell
412
1 their house, have a job, be retrained, if they want
2 to be retained, if they could be retained, to stay
3 there.
4 Like we were saying earlier, whether or not
5 they have five years left to retirement, through
6 attrition, buyout clauses, these are things that
7 most certainly all need to be addressed.
8 But, one other quick question.
9 Has anyone from the Governor's Office or the
10 Empire State Development contacted you to discuss
11 the economic development that is going to impact
12 your town?
13 LINDA PUGLISI: Not yet.
14 But we're hopeful that, on this commission
15 that's being established, that they'll be part
16 thereof.
17 SENATOR MURPHY: Well, I hope the task force
18 gets put together rather quickly --
19 LINDA PUGLISI: Me too.
20 SENATOR MURPHY: -- and everybody is
21 inclusive of one another.
22 Throw the R's, the D's, the I's, and the
23 C's out the window, because we have a massive
24 problem there, that we all need to come together and
25 work together and address it.
413
1 LINDA PUGLISI: Thank you.
2 Yeah, and we need help.
3 ASSEMBLYWOMAN GALEF: I just have --
4 ASSEMBLYWOMAN PAULIN: Yes, Sandy.
5 ASSEMBLYWOMAN GALEF: -- I just wanted to say
6 thank you for your patience again.
7 It was great to have you here.
8 And I just want to say, if you-all don't know
9 Linda Puglisi, but as supervisor -- town supervisor,
10 she has kept within the tax cap for, oh, I don't
11 know, 25 years before there was ever a tax cap.
12 And she's consolidated her highway
13 department, police department. I think water,
14 sewers. Everything.
15 So she is an example of somebody who is
16 really, really saved money.
17 So, now you're in a situation where it's
18 probably helpful that that's happened, but, you've
19 done a great job.
20 So, there's a lot to do.
21 LINDA PUGLISI: Thank you, Assemblywoman.
22 We call ourselves the "original tax capper."
23 ASSEMBLYWOMAN GALEF: Yeah, you were the
24 original tax capper.
25 But it's interesting, this whole tax cap,
414
1 because I don't know what happens with all of you as
2 we go forward.
3 But, it's a problem.
4 I just wanted to know something, because
5 I think what bother -- you know, I was listening to
6 everything, I didn't hear every detail from every
7 speaker, but, the one that bothered me the most is
8 about -- was Entergy talking about decommissioning,
9 and it was the DECOM method or the SAFSTOR method,
10 and it was so spread out.
11 And I was really very concerned about their
12 comment.
13 I don't know whether you heard from anybody
14 else, that there was something that you didn't know,
15 that bothered you from what you heard today, that is
16 something we really need to address.
17 Because I just feel like there's such a way
18 of wanting to spread all this out, you know, without
19 the money being there.
20 I don't know.
21 I mean, that really concerned me, because how
22 do you get the community back online, really, as
23 quickly as possible, if somebody is going to put it
24 into storage for a very long time?
25 So, you know, was there anything else that
415
1 came up, that popped up, in discussion that --
2 LINDA PUGLISI: From the initial
3 conversations?
4 ASSEMBLYWOMAN GALEF: Any conver -- any of
5 the testimony that you would just like to address.
6 LINDA PUGLISI: Well, decommissioning is
7 going to take a long time.
8 You know, we heard that here.
9 And then we also heard questions being asked
10 about, can you move the radioactive spent-fuel rods?
11 And I think what I gathered, correct me if
12 I'm wrong, is that that would be very difficult to
13 do.
14 So even if part of the 240 acres can be
15 reutilized, a different industry, I believe that
16 they're going to be there for a long period to come,
17 because it's not going to Yucca Mountain in my
18 lifetime, you know?
19 So those are some of the things.
20 I took copious notes, and, you know, wrote
21 down a lot of things.
22 Theresa, have you found anything else that
23 you --
24 THERESA KNICKERBOCKER: No, I think
25 I understand, we would like the decommissioning
416
1 process to happen within a year.
2 But, you know, this is not a small plant.
3 This is a massive plant.
4 And it just takes time to just, not only the
5 cooling time that it takes --
6 And, I'm sorry, I'm not an expert, so let me
7 just put that out there.
8 -- but I did understand today, that it takes
9 five to seven years for it -- you know, the -- to
10 get down to the decay part, where they can be moved
11 and then placed on the pad.
12 But, you know, you have to really look, my
13 understanding is, and this is not recent, I've
14 understood this for years, that, eventually, the
15 property will go back to a "park-like."
16 It was a park before Indian Point came in.
17 So it's -- you know, you have to remember,
18 the domes have to come down, everything has to come
19 down, everything has to get dismantled, everything
20 has to get moved.
21 So, you know, I just think it's -- that's why
22 the process is so long.
23 And it seems like, you know, the
24 $1.7 billion, you know, the jury's still out on
25 that, until we -- until they close, to see, you
417
1 know, if that's enough in the fund.
2 LINDA PUGLISI: And, also, I just want to
3 applaud all of you. I mean, you asked really
4 terrific questions, and pertinent questions, that,
5 you know, we appreciate, so we can gather some more
6 information.
7 The Senator was asking about public-health
8 costs. And that's something that's important to
9 find out about.
10 SENATOR MURPHY: We're on your team.
11 THERESA KNICKERBOCKER: Thank you, and we
12 appreciate it.
13 ASSEMBLYWOMAN GALEF: Joe, was there anything
14 you wanted to say you learned?
15 JOSEPH HOCHREITER: Yeah, I would say two
16 things.
17 One, I would have liked to have heard a
18 greater sense of urgency, while we figure out the
19 decommission process, and the timeline and the
20 options and the funding, and, you know, whether
21 1.7 billion is enough, not enough, how we withdraw
22 from that fund.
23 And we had talked about this earlier, Sandy:
24 Is there a way to get some boots on the ground,
25 walking that property, to start to determine what
418
1 can be redeveloped, and begin building plans?
2 We had met with some folks a few weeks ago,
3 about identifying consultants who can come in and
4 advise us and our task force, to determine which of
5 the -- which plots of the 240 acres can be flipped,
6 for lack of better term, quickly, so plans can start
7 to be made while some of these other federal
8 decisions sit in red tape, which is fine, and I can
9 appreciate that.
10 LINDA PUGLISI: I think that would be a good
11 use of the $15 million --
12 JOSEPH HOCHREITER: Well, that's the other --
13 LINDA PUGLISI: -- and tap into that for the
14 environmental assessment and for the
15 business-incubator planning for the future use of
16 the property.
17 So, if there's anything you can do to help us
18 with that effort, we'd appreciate it.
19 JOSEPH HOCHREITER: -- and the other --
20 ASSEMBLYWOMAN GALEF: And Entergy has to say
21 yes, because it is their property.
22 JOSEPH HOCHREITER: Well, they're still here;
23 right? Get them to commit now.
24 And only other thing I would say --
25 They're here.
419
1 -- is I wish we were leaving with a greater
2 understanding of what that $15 million fund is.
3 And Senator Murphy had said, and I'll go on
4 record and agree with him, saying, that 15 million
5 should probably start and end at this table, or
6 least it should start at this table.
7 And as a person representing a community
8 who's going to lose 24 to 29 million dollars in
9 PILOT payments from Entergy, that's a drop in the
10 bucket, but it's a good-faith effort to start some
11 conversations of how we keep things going.
12 SENATOR GRIFFO: Phil?
13 ASSEMBLYWOMAN PAULIN: Yeah, first, I just
14 want announce that we have two other Assemblymembers
15 who have joined us, and one rejoined us,
16 Angelo Santabarbara, and, also, Chris Friend is up
17 at the top.
18 ASSEMBLYMAN PALMESANO: I'll just be brief.
19 Certainly, it's very -- I feel for you with
20 what you're going through. I mean, this is a
21 tremendous hit to the community.
22 Before I was an elected representative,
23 I went through a similar situation, where we had a
24 power plant up in Dundee, New York. It was a
25 clean-coal plant, and that shut down and had a
420
1 devastating impact.
2 But I'm sure, you know, with your leadership,
3 you'll be resilient, and have a resilient community.
4 We just -- fortunately, we powered that plant
5 to natural gas recently.
6 So, who knows what can happen in the future.
7 And another thing I just point out and
8 mention, I mean, obviously, your representatives are
9 going to fight very hard. You can all see in the
10 questions they've asked today.
11 I know they'll continue to fight, and I know
12 our two Chairmen and Chairwoman of the Energy
13 Committee, and I think all of us, because this could
14 happen to any one of us anywhere across the state.
15 And I just wanted to let you know, I know, in
16 last year's budget, there was funding in the budget
17 to help communities that had a loss of a power
18 plant.
19 Certainly, I think, as you continue with that
20 task force, to make sure that -- you know, that's
21 something they can continue, and that's part of the
22 discussion.
23 We certainly might not make up the job loss
24 and the impact it has, but any little bit can help
25 along that line.
421
1 And I'm certainly, you know, going to be
2 committed to working with your representatives and
3 their energy chairs, to help along that way, and
4 convince whoever we need to, to do that, we need to
5 have some help for your communities.
6 LINDA PUGLISI: Thank you very much.
7 SENATOR GRIFFO: Thank you all for being
8 here.
9 We really thank you all for --
10 SENATOR MURPHY: Thank you for hanging in
11 there with us.
12 ASSEMBLYWOMAN PAULIN: I just want to let you
13 know, I mean, there's a page in the agreement that
14 speaks to the community fund specifically.
15 It's very vague, and it doesn't say exactly
16 when it's going to be set up, either.
17 So, you're going to be on the commission.
18 You'll be asking those important questions.
19 And I would just say, I'm not on the
20 commission, so I won't know those answers, or what
21 they're saying.
22 And I will also won't know to what degree we
23 need to advocate, based on those conversations.
24 I know that we're going to be hoping for a
25 continued dialogue so that we don't leave you in the
422
1 lurch.
2 LINDA PUGLISI: We're very appreciative.
3 We know we're not alone.
4 And, we really, really thank you for
5 listening to us.
6 SENATOR GRIFFO: Thank you for being here.
7 SENATOR GRIFFO: Our next -- the last panel
8 today will be Mr. Craig Dickson, the business agent
9 for the Utility Workers Union of the America.
10 Mr. Greg -- Craig Dickson.
11 Louis Picani, president of Teamsters
12 Local 456;
13 And, John Murphy, the international
14 representative of the United State -- the United
15 Association of Journeymen and Apprentices of the
16 Plumbing and Pipefitting Industry of the
17 United States and Canada.
18 Mr. Murphy, Mr. Picani, and Mr. Dickson.
19 SENATOR MURPHY: Guys, thanks for hanging in
20 there.
21 SENATOR GRIFFO: And we really would
22 appreciate, if everybody could just abbreviate the
23 statements, and allow everybody to be able to
24 interact with you.
25 And I'll let you choose who goes first.
423
1 CRAIG DICKSON: I'm the cutest one.
2 SENATOR GRIFFO: No comment.
3 Just press the button in front of you on
4 the --
5 CRAIG DICKSON: It doesn't matter. I think
6 you can hear me.
7 SENATOR GRIFFO: All right.
8 CRAIG DICKSON: My name is Craig --
9 Senator Griffo, Assemblywoman Paulin, members
10 of the Committee, I appreciate the opportunity to
11 speak before you.
12 My name is Craig Dickson. I'm a business
13 agent for Local 1-2, and I'm here to represent
14 360 members of my union who work at Indian Point.
15 Like you, Local 1-2 was blindsided by
16 Governor Cuomo's precipitous announcement on
17 January 9th that he had reached deal to close
18 Indian Point by 2021.
19 Before the announcement, Governor Cuomo
20 declined to inform any entities, including the
21 Legislature, let alone the employees at
22 Indian Point, of his secret talks with the owner,
23 Entergy, about shuttering this facility.
24 For years the Governor has railed against
25 Indian Point as a hazard to public, contrary to all
424
1 scientific evidence, and ginned up public fear with
2 no basis.
3 At the same time, he hectored that same
4 public to embrace his vision for a sustainable
5 clean-energy future for the citizens of New York
6 State.
7 We can state, unequivocably, that nuclear
8 energy is one of the cleanest non-emission forms of
9 power generation, right up there with wind; yet,
10 because of willful ignorance of nuclear energy and
11 its benefits, the State cut a quick deal to enrich
12 Entergy, transfer nearly $500 million of taxpayer
13 money upstate to prop up the failing
14 James A. FitzPatrick Nuclear Plant, and inform
15 New Yorkers, that absence of any real plan to
16 replace it, that Westchester County and New York
17 City were about to lose a quarter of its power
18 generation.
19 In a more cynical view, this was a backroom
20 deal of the worst kind: Keep the public in the
21 dark, cut a deal with private business to get it off
22 the hook, and then announce by fiat, that the public
23 be damned.
24 And just like that, he blew a hole in the
25 local economy that will cost hundreds of millions of
425
1 dollars in lost revenue, loss jobs, bankrupt
2 municipalities, in one fell swoop.
3 Please remember, that Indian Point pays a
4 large share of the school and municipal budgets in
5 Westchester County.
6 We submit to you that the secret deal will
7 have adverse effects on you and your constituents
8 for decades to come.
9 This will also come at ratepayer expense, as
10 the State will have to scramble to replace the
11 2,000 megawatts lost to the most vital economic
12 region in the world.
13 This was a deal that does a disservice to all
14 New Yorkers.
15 Where will all those loss megawatts come
16 from?
17 How they will be paid for?
18 How do we find good-paying jobs for the
19 members of my union who operate Indian Point and
20 keep us safe and warm, and the hundreds of other
21 jobs that will be lost by Indian Point suppliers,
22 local businesses, and most devastating of all,
23 losses to the local school districts?
24 Now, for me, and the members of Local 1-2 who
25 work at Indian Point, we have already started some
426
1 hard-nosed talks with Entergy on how they will treat
2 the men and women who served them so long.
3 Nuclear energy is a safe, clean,
4 emission-free energy source, but we also know, ever
5 since we split the atom to create nuclear fission,
6 that it requires intense diligence to keep it
7 running that way.
8 That's why our members are paid a premium
9 wage to operate Indian Point, and they take great
10 pride in their handiwork.
11 And, we cannot just turn out a light, lock a
12 door, and walk away from Indian Point.
13 Maintenance, safety, and vigilance will
14 always be needed at Indian Point because no
15 provision has been made to remove its nuclear waste.
16 Therefore, it will be buried on the property
17 in concrete caskets that can never be left
18 unattended, until our nation decides where and how
19 we dispose of our spent nuclear fuel.
20 I submit to you that the Legislature will be
21 left to figure that -- out this one, and that the
22 taxpayer will eventually foot the bill.
23 And so far as Local 1-2 can discern, the plan
24 to replace the missing 2,000 megawatts will be to
25 run an elaborate extension cord to Canada.
427
1 This we will have to file under "bright
2 ideas."
3 I suggest to you that because Entergy wants
4 out of the business, and, yes, Indian Point is
5 making a profit for Entergy, a perfect economic
6 crisis is in the making for years and years to come.
7 My major concern here, is to make sure my
8 members, and every other working men and women, who
9 will be put out of work because of this precipitous
10 action, has assistance from the dealmakers
11 themselves to shape a future for themselves, and
12 this is not the time to walk away from the people
13 who keep your lights on, your homes warm.
14 We must have help to see that this doesn't
15 happen.
16 New York State has been running a series of
17 ads, talking about business, that end with "Tomorrow
18 starts today."
19 We're here today to make sure that we don't
20 hear "tomorrow never comes."
21 Thank you for listening.
22 LOUIS PICANI: Good evening, and thank you
23 Senator Griffo, Assemblymember Paulin,
24 Senator Murphy, and the Assembly that's here today.
25 My name is Louis Picani. I'm the president
428
1 and principal officer of Teamsters Local 456, and a
2 proud representative of over 4,000 members, which
3 200 work at Indian Point, keeping the plant safe and
4 secure.
5 The teamsters also represent an additional
6 250 public-sector employees and private contractors
7 that depend on Entergy for their families and the
8 survival of vital programs for our communities in
9 Peekskill, Cortlandt, Buchanan, and the Croton
10 areas.
11 It is disappointing that, after years of
12 defending the incredible work that over a thousand
13 employees perform every day at Indian Point, the
14 State and Entergy is pulling out of the nuclear
15 power plant here.
16 This is unacceptable to my members and the
17 communities where they reside.
18 Indian Point is a large-scale regional
19 employer, with about 1,000 workers on-site. Another
20 thousand employees are added to the workforce during
21 refueling and maintenance, outages, and its direct
22 employment supports about 9700 additional jobs in
23 other industries in the region and statewide.
24 This may seem like numbers game, until you
25 think how these on-site workers spend their money on
429
1 taxes, mortgages, and in our businesses.
2 When additional workers are called in from
3 out of town, they eat in our restaurants, stay at
4 our hotels, and frequent our local businesses.
5 This is real money that went a long way when
6 we were faced with serious economical harm in the
7 past.
8 While other industries faced downturns,
9 Indian Point kept my members and their communities
10 afloat.
11 On average, our contract with Entergy
12 provides for a well-funded company pension, a 401
13 program to provide for retirees, excellent medical
14 plan, paid time off, and competitive salaries for
15 our region.
16 Our members are highly-trained professionals,
17 many of whom with former military service or police
18 backgrounds.
19 Their training is rigorous, and the skills
20 required to work in a place like a nuclear power
21 plant are not easily transferable.
22 Entergy has offered to transfer workers to
23 other plants, and entered to effect bargaining, so
24 that we can ensure that there is some financial
25 security offered to my members in the short term.
430
1 But with deep community ties, most are
2 uncomfortable with uprooting their families and
3 moving to other parts of the country.
4 Both the company and the State have offered
5 various retraining programs, and assured us that
6 they will bargain the terms and conditions of the
7 shutdown, but nothing's to come forward so far.
8 As a union official, I appreciate these
9 gestures and good-faith efforts by the State of
10 New York and Entergy, but I have to ask myself, why?
11 Why are they doing this now?
12 We know the history of the plant.
13 It is well monitored and documented by the
14 federal government, and it is safe, well run, and
15 Department of Homeland Security, Department of
16 Defense, coordinates with the NRC, New York State
17 Office of Emergency Management, and regional
18 government authorities on a daily basis to ensure
19 public safety, because it's top priority for
20 Indian Point, and it's top priority for our members
21 and the community.
22 It is our job and our commitment to continue
23 to fight for its survival.
24 Thousands of good-paying jobs will be lost,
25 while electrical bills will rise, and entire region
431
1 will suffer.
2 Indian Point's continued operation is
3 necessary for our economic health, and the Teamsters
4 Local 456 works to keep it safe.
5 Just to give you a snapshot on the -- for the
6 money that's provided:
7 There's 140 million in payroll annually;
8 20 million in payments to local and state
9 governments;
10 1 million in charitable contributions;
11 1.3 billion in annual economic output for the
12 four surrounding counties: Westchester, Orange,
13 Rockland, Putnam, and Dutchess.
14 So, this will be domino effect all over,
15 1.6 billion annually across the entire state.
16 As a union leader, it is my responsibility to
17 not only represent the workers that will be
18 immediately affected by a shutdown, but the members
19 that reside in these communities as well.
20 Indian Point is an economic-driver in the
21 region, supporting thousands of well-paying jobs
22 across the county and Lower Hudson Valley.
23 Shutting down Indian Point would have a
24 catastrophic impact on the area.
25 Our 200 members at Entergy, Local 456
432
1 construction workers that are contracted to work the
2 site, and hundreds of public-sector union members in
3 the Hudson Valley area, particularly in Buchanan,
4 will be left without high-paying jobs and benefits.
5 It's going to be a ghost town in these
6 communities.
7 Teamsters Local 456 is responsible for the
8 safety and security of Indian Point.
9 We have the experience and know-how that is
10 necessary to ensuring Indian Point maintains its
11 current record of safe operations.
12 We are proud of the job we do there; we are
13 proud of the plant.
14 In all my years at Teamsters Local 456,
15 I have yet to hear from any company, saying, with
16 these green technologies, that they want to come
17 forward and support organized labor, in any facet
18 that's here.
19 If this sounds like a lot of complaints that
20 you hear from the steelworkers or the coalminers, to
21 a certain degree, it is similar.
22 Replacing nuclear power, which is actually
23 clean, with new technologies will not make us a core
24 part of the picture, and leave our members behind.
25 I have some major serious concerns.
433
1 I'm concerned about the future of our
2 members.
3 I'm worried about the communities that they
4 live in.
5 And I am still unconvinced that they will --
6 that any green-area technology will have an impact
7 on our society now.
8 My position remains, that closing down
9 Indian Point is a mistake; a mistake, until my
10 members and community are made whole, which would
11 include replacing these jobs with good, high-paying
12 jobs.
13 In closing, I'm going to ask also that I'm
14 included in the Governor's task force, so teamsters
15 and labor have a voice on that, because, as it was
16 stated today, I don't think labor is even a part of
17 that.
18 So I'm gonna to ask today, publicly, and I'm
19 going to reach out to the Governor's Office
20 tomorrow, to be -- 456 wants to be a part of that.
21 And, Senator Murphy, I'm looking forward to
22 my members, tomorrow, coming to your event -- not
23 tomorrow, Thursday --
24 SENATOR MURPHY: Thursday, yep.
25 LOUIS PICANI: -- and I'll be there with our
434
1 membership.
2 So thank you for hosting that.
3 SENATOR MURPHY: Awesome.
4 LOUIS PICANI: Thank you.
5 JOHN MURPHY: Chairman Griffo,
6 Chairwoman Paulin, Senators of the Committee, my
7 name is John J. Murphy, and I am the international
8 representative for the United Association of
9 Plumbers and Pipefitters, representing more than
10 23,000 members here in the state of New York.
11 I'm am also a Westchester County resident for
12 more than 40 years.
13 And I want to commend you on the depth and
14 diligence of your questioning, because it was a
15 tremendous education.
16 It makes me proud to be New Yorker, to see
17 elected officials, and the elected officials here,
18 doing the work of the people.
19 So I'm very proud.
20 Our members perform work across the whole
21 State, and helped in the initial construction of
22 Indian Point.
23 Even today, they continue to help and
24 maintain its facilities, working more than
25 1.3 million manhours since 2000.
435
1 The jobs that our members perform at
2 Indian Point allow them to provide middle-class
3 lives for their families, and are part of the
4 significant economic impact that the plant has on
5 surrounding communities and on New York.
6 There's always been a degree of controversy
7 around the Indian Point plant; however, one thing
8 that everyone agrees on, is that facility provides
9 great jobs, for the workers, for their families, the
10 ones that are employed at the plant or provide
11 services to maintain its operations.
12 The plant's economic footprint is over
13 $1 billion in the surrounding counties alone.
14 We were very disappointed to hear of the
15 Governor's plan to shut down the plant's operation,
16 but there are three essential questions that must be
17 answered as the plant closes.
18 The first is, how the power output of the
19 plant is going to be replaced.
20 The second is, what will happen to the men
21 and women who work there today?
22 And the third is, what will substitute the
23 economic engine that Indian Point is for our
24 communities and for our state?
25 So last week, both the Riverkeeper and the
436
1 Clean Energy for New York groups released a report
2 entitled "Clean Energy for New York."
3 The report concludes that Indian Point's
4 power can be replaced by very ambitious conservation
5 efforts, coupled with the Champlain Hudson Power
6 Express power line.
7 Their report has no answer for those men and
8 women who depend on the plant for their livelihood,
9 nor does it comment on any of the communities who
10 depend on the tax revenue.
11 In fact, the report would export New York
12 jobs to Canada.
13 So we have another idea.
14 We believe that Indian Point should be
15 repurposed as a clean natural gas facility,
16 utilizing gas from American wells.
17 This action would save thousands of jobs for
18 New Yorkers, while, in the process, maintaining our
19 generation capacity, and keeping Indian Point as an
20 economic engine for the whole region.
21 So today we're calling on the Governor and
22 the Legislature to work with us on this repowering;
23 and doing so will create thousands of new
24 construction jobs for New Yorkers.
25 It will also provide a constant tax base for
437
1 the region, and should be a top priority for
2 New York State.
3 But whatever policy choice New York makes at
4 Indian Point, the plant must be decommissioned.
5 We believe that it's imperative that the
6 workers and contractors who operate and service the
7 plant today are also the workers who decommission
8 the plant.
9 Those workers and contractors know the plant
10 better than anyone, and because their families live
11 in the region, we can guarantee they'll do the job
12 right.
13 So it makes no sense, either economically or
14 programmatically, to use out-of-state contractors
15 for this work.
16 So as the plant is decommissioned, workers
17 will have to find new jobs.
18 So we believe that new job-training programs
19 should be funded through existing job-training
20 programs of the unions who represent the workers at
21 Indian Point.
22 And I'm very proud of the UA training
23 programs, and I know we can do the job.
24 The decision to close Indian Point will have
25 a major impact on our state's economy, the energy
438
1 grid, and Hudson Valley as a whole.
2 We believe that a commission should be formed
3 to examine all the aspects, and we heard that there
4 was.
5 And I concur with you, that labor should be
6 on the committee.
7 It would add -- it should have local
8 government officials, business leaders, labor.
9 This hearing is a start in that process, but
10 we believe that a commission is direly needed to
11 explore all aspects of the closing of Indian Point.
12 And I thank you very much for the opportunity
13 to testify today.
14 SENATOR GRIFFO: Thank you, guys.
15 Thanks for holding up through the whole day
16 too. Appreciate that.
17 The only question I really have for you,
18 based on what you've said right now, is: What do
19 you think -- first of all, that's a task force
20 I believe that he's created.
21 JOHN MURPHY: Yes.
22 SENATOR GRIFFO: And I think it's supposed to
23 talk about the redevelopment, or the future, of the
24 community, because it is regional, even though the
25 epicenter may be in Buchanan.
439
1 So the biggest question I think, and I've
2 heard a number ideas that you're proposing, but what
3 do you think is the greatest need that has to be
4 met, from a labor perspective, from either the
5 State, the company?
6 If you all could just give me, what is the
7 greatest need there for your members?
8 LOUIS PICANI: I think, basically, the
9 training that they're claiming they're going to
10 provide, is not going too far.
11 We have the security officers.
12 There's only so much security you're going to
13 be able to do, whether it's 60 years, keeping it
14 safe here, or sending it out.
15 I believe it's just a smoke screen right now.
16 And I don't think -- where -- the jobs are
17 going to hold out as long.
18 At 200 jobs, like somebody testified, the
19 Senator told you about the windmills. 7 jobs.
20 So, you know, where's it going?
21 Where's it going?
22 It's just a Band-Aid, and I don't think
23 anybody's gonna benefit from this.
24 SENATOR GRIFFO: Okay.
25 CRAIG DICKSON: When Entergy talked about the
440
1 decommissioning, and that he didn't think nuclear
2 plant operators were really up for that task, as
3 you've heard from brother Murphy and brother Picani,
4 we have a lot more than just operators there.
5 We have RAD people, we have chemistry people,
6 health-physics people, security people, laborers,
7 mechanics, electricians, steamfitters, plumbers.
8 They built the plant. They know best how to
9 take it apart.
10 So, all it takes is some -- and I already
11 looked up training programs -- some additional
12 training in dealing with radioactive -- low-level
13 1radioactve waste to keep those people employed.
14 What we came down with, is we have three
15 pools of people:
16 Some that started with NYPA, that had a NYPA
17 pension program;
18 Some started with Con Ed;
19 And then some that started with Entergy;
20 And, a combination of them.
21 The NYPA people have both time in NYPA and
22 Con Ed.
23 One idea is to combine those, to give them
24 additional time.
25 We also have military people that came over
441
1 from the Navy.
2 And there was a program, I believe that bill
3 was -- you were one of the sponsors -- to give them
4 military time towards their years of service. And
5 there's also the ability to buy back that time.
6 Now Entergy is denying them that ability.
7 So that's a fight that we can use your help.
8 But we have to be able to combine all those
9 programs, so we can get them additional time, so
10 they can get closer to getting a pension.
11 Not that they can retire, a lot of them still
12 have to work. But a lot of them may.
13 The tough thing, and when I speak from the
14 heart, when you walk in and look at these young
15 people in their faces, "What's my future?"
16 So the longer we can keep them engaged, be it
17 decommissioning, security, health, RAD, allied
18 services, all of us together, the longer they have
19 to plan their future and work towards it, because
20 not everybody, as you would like to hear, you know,
21 and people have said from the Governor's Office,
22 that they can retire.
23 No, they can't.
24 There's a lot of people that -- and most of
25 our members live in that area.
442
1 We're not just union members.
2 They're also residents, constituents,
3 taxpayers, and voters, and we want to keep them in
4 the area as long as we can.
5 Realistically, a young person, with a baby,
6 and a mortgage, can't just pick up and move to
7 Louisiana.
8 We're New Yorkers.
9 New Yorkers don't live in Louisiana. We live
10 in New York --
11 [Laughter.]
12 CRAIG DICKSON: -- by choice; not by chance.
13 JOHN MURPHY: Especially with our accents.
14 SENATOR GRIFFO: Except for one day of
15 visiting during --
16 CRAIG DICKSON: I'm dying here.
17 SENATOR GRIFFO: Except for a one day
18 visiting Mardi Gras. Right?
19 JOHN MURPHY: And just to expand a little bit
20 on the thought of gas generator, there's new
21 technology that now provides for zero carbon
22 emissions.
23 So they actually use carbon dioxide to spin
24 the turbines and create electricity, and emitting
25 nothing into the atmosphere.
443
1 So this is good, clean technology that should
2 be.
3 And if you think about the abundance of
4 natural gas in New York, it's a perfect fit.
5 SENATOR GRIFFO: Thank you.
6 ASSEMBLYWOMAN PAULIN: My turn?
7 Firstly, thank you so much for coming in.
8 And, you know, I know that you were here
9 really bright and early, because we had that
10 conversation, I think, about 9 hours ago, waiting
11 for the hearing to begin.
12 So, thank you for sitting out.
13 You know, I -- I've learned a lot today.
14 I know that you have as well.
15 And, so, we're going to be following this.
16 You know, this isn't just a one-day activity.
17 You know, this was the beginning, to learn,
18 which is what hearings are about, so that we know
19 how to intervene.
20 And I do agree, we have a representative from
21 the Governor's Office still here as well, you know,
22 that, you know, labor needs to be part of the
23 commission that was established, so that the people
24 who live in the community, who are working in those
25 plants, can be assured that whatever training, or
444
1 whatever happens, whatever retirement plans are
2 established, there's an understanding and
3 acknowledgment that this might be a little different
4 than other places, because of the ownership issues,
5 the transfer of ownership issues.
6 You know, the military buy-back bill, very
7 familiar, and we're gonna look and help you with
8 that as well.
9 The question I would ask is, you know, to
10 what degree?
11 You can't prioritize everything.
12 So, to understand who the workers are was
13 very helpful today, you know, to understand, you
14 know, and we probably need even a better
15 understanding of that, you know, so that we --
16 because some people are trainable.
17 Some people are in jobs where they're
18 probably at their potential, so you can't
19 necessarily transfer them from one place to another.
20 So to get a real breakdown of who's there,
21 what the issues are, so that we can be better
22 advocates for you.
23 And I don't know whether you have any of that
24 information today, but I suggest that, if you don't,
25 that would be an important piece of information that
445
1 we get.
2 I don't know if there's --
3 JOHN MURPHY: Well, gas generation is our
4 industry, so there is no retraining required if it's
5 a gas-generated plant.
6 ASSEMBLYWOMAN PAULIN: I see.
7 So -- but we know that those are years away.
8 You know --
9 JOHN MURPHY: Yes. Oh, yeah, we learned that
10 today.
11 ASSEMBLYWOMAN PAULIN: We learned that today.
12 So I think we can all be advocates together,
13 to find out how much land we can siphon off almost
14 immediately.
15 I just don't know, considering the process
16 seems so lengthy. Even the filing of the
17 application to the NRC is a two years before, with
18 a -- with the plan.
19 I don't know whether, you know, together we
20 can urge Entergy to begin that process earlier, and
21 they know they're closing, so that we could at least
22 see on paper what the plan is, to know if any of
23 those acres are free.
24 I think it's in their best interests also so
25 they can sell them more quickly.
446
1 And, potentially, build a gas plant, or
2 whatever, you know, might be appropriate, and keep
3 the workers employed on the -- on the -- in the
4 area.
5 So, I have, really, no further questions, but
6 I do want as much information as I can from you, so
7 that we can be better advocates.
8 SENATOR GRIFFO: Senator Murphy.
9 SENATOR MURPHY: Yeah, I'd just like to start
10 with -- go right down the row, if you don't mind.
11 Craig, it's great to have you here today, and
12 to hear your perspective of the UWA.
13 As you know, my father, John Murphy -- my
14 son's name, great name, no relation, though. --
15 held -- you know, was a business agent for Local 21
16 for 38 years.
17 And you do some of the most dangerous work
18 out there, and we owe it to you for keeping the
19 lights on.
20 You don't get the recognition that your guys
21 deserve, and it's important to me that the State
22 fully understand the impact of this on your
23 membership, and to our local economy.
24 I'd like to also personally thank you for the
25 years of your hard work, and making sure that you
447
1 have a stellar safety record at the plant there.
2 It's been, as you heard with the previous
3 testimony, that the plant is safe.
4 The plant is safe.
5 Can you just remind me of how many of your
6 members work there?
7 CRAIG DICKSON: I have 360.
8 SENATOR MURPHY: You have 360 guys.
9 CRAIG DICKSON: 360.
10 SENATOR MURPHY: I'm going to get to you,
11 Lou, next.
12 Has that number been static recently, or is
13 there any fluctuations?
14 CRAIG DICKSON: It fluctuates up and down,
15 depending -- you know, depending on retirements.
16 I mean, I just went to another retirement
17 party.
18 But, it stays between 360 and 400.
19 SENATOR MURPHY: About 360, 400.
20 So if the plant gets decommissioned, how many
21 of those workers do you think would stay there?
22 CRAIG DICKSON: During the decommissioning --
23 SENATOR MURPHY: Yeah.
24 CRAIG DICKSON: -- if we could get them to --
25 to work?
448
1 SENATOR MURPHY: Yeah.
2 If you could -- if they -- if you could get
3 them to stay there, instead of running for the hills
4 or -- and/or get retrained, how many of the 360 to
5 400 guys do you think would possibly want to stay?
6 CRAIG DICKSON: I would say -- I would say at
7 least half of them, at least half of them, that
8 wouldn't be, you know, available for bridging, you
9 know, pension payments, looking four years ahead,
10 looking at the demographics.
11 We just started to get the statistics from
12 them, and we're trying to figure out who is where.
13 But, more than half.
14 SENATOR MURPHY: Like you said, they're
15 New Yorkers. Right?
16 CRAIG DICKSON: They're New Yorkers.
17 We don't leave New York. We're here because
18 we love New York.
19 SENATOR MURPHY: They live locally and they
20 want to stay here?
21 CRAIG DICKSON: We leave our homes at four in
22 the morning during storms and hurricanes and snow,
23 because we always looked at it, not as a business;
24 we're a service, and do a service to the citizens of
25 this state.
449
1 And utility workers here are a very unique
2 breed.
3 SENATOR MURPHY: In your opinion, do you
4 think it's even possible for the State to come up
5 with plans to replace this plant in a timely manner?
6 CRAIG DICKSON: Not right now. Not right
7 now.
8 It's gonna take time.
9 I mean, I -- I'm on the transmission end.
10 I spent 44 years in substation operations, so
11 I know an awful lot about transmission and the
12 replacement power.
13 I've been to all the meetings for Cricket.
14 You know, I make sure I show up at things,
15 even before I got reengaged in the whole labor
16 moment, because I was always going to be an
17 engineer, until I got into my alternate life, and --
18 which was a lot more fun.
19 But, I was -- I was a geek. You know,
20 I mean, I was always a geek and I wanted to know
21 what was going on.
22 And it's not there yet. It's not there yet.
23 So it's going to cost the ratepayers money.
24 SENATOR MURPHY: Yeah.
25 CRAIG DICKSON: You know, regardless of what
450
1 they say, it's going to cost them money.
2 My mother is 97 years old in the Bronx, and
3 is terrified of what's gonna happen to her rates.
4 SENATOR MURPHY: There was a lot of
5 assumptions here today.
6 CRAIG DICKSON: An awful lot.
7 SENATOR MURPHY: We've heard that there's
8 some plan in the works to possibly relocate some of
9 the workers to areas of the state, or even some
10 states, like Louisiana.
11 Has anyone from Entergy or the Governor's
12 Office reached out to you about a possible plan to
13 relocate these people?
14 CRAIG DICKSON: No, because what they want to
15 do, these retention agreements keep them there for
16 four years.
17 So they dangle the carrot to keep you in
18 place.
19 You cannot leave -- they'll give you a
20 portion up front, but if you leave, they take it
21 back, plus taxes.
22 So, their lives have to be on hold, if they
23 want that carrot, for four years, so they can't even
24 look forward. They're waiting for that.
25 Now, they haven't even sat down with us and
451
1 discussed that.
2 It's been done at all the other plants.
3 So we're kind of formulating a spreadsheet on
4 what to expect, but they haven't had those
5 discussions with us.
6 So everyone's holding on.
7 Retirees that can retire.
8 You know, if they offer a package, it will
9 clear the way for younger people to stay longer.
10 SENATOR MURPHY: So no one's gotten in touch
11 with you guys to figure out a possible plan --
12 CRAIG DICKSON: No.
13 SENATOR MURPHY: -- of how we can keep close
14 to 400 jobs in New York State, except, what
15 I only -- what I've heard, is through attrition,
16 rework the workforce, rework them, you know
17 reeducate them at a different plant, or, go down to
18 Louisiana or the south.
19 CRAIG DICKSON: That was their -- when they
20 rolled this out, and, you know, not for nothing,
21 I let Lou know about that meeting.
22 I mean, they didn't have the courtesy to let
23 him know --
24 LOUIS PICANI: The day before.
25 CRAIG DICKSON: -- that this was going down.
452
1 Okay?
2 So, we all stay -- we're brothers. I mean,
3 we all stay in contact with each other.
4 That's we have to do that, we stick together.
5 But, no, no, there was no plan, there was no
6 reach out.
7 You know, it's just: Here it is. Deal with
8 it.
9 SENATOR MURPHY: Well, you know, you guys are
10 the people on the ground where the rubber meets the
11 road. And like you said, you built the plant, you
12 should know how to take down the plant.
13 At least get you involved in a conversation.
14 And that was the most disappointing thing
15 about today, is the lack of transparency.
16 Nobody knew anything about this.
17 And speaking of that, Lou, you know, how many
18 indirect jobs did you say would be lost from your
19 guys?
20 LOUIS PICANI: We have 200 security officers
21 working in the plant. And at any given day, we have
22 any parts or material coming in and out of the plant
23 with our teamsters or our drivers.
24 So, that varies. It depends, you know, if
25 there's outages, if they need equipment in.
453
1 But 200-plus we're gonna lose.
2 SENATOR MURPHY: 200-plus.
3 And how many of those do you think live in
4 the area?
5 LOUIS PICANI: I would say 90 percent.
6 SENATOR MURPHY: 90 percent of them live in
7 the area?
8 LOUIS PICANI: And as far as moving out of
9 state, a lot of people now, we have extended
10 families. You know, we live with our -- people live
11 with their parents, their grandparents, because they
12 have to survive that way.
13 So, if one person has to uproot, you're
14 talking about maybe two, three generations have to
15 go with them.
16 It's not gonna happen, it's not gonna happen.
17 It's going to cripple so many lives.
18 SENATOR MURPHY: I think it's a tremendous
19 idea, getting involved in the task force -- the
20 Governor's task force, and putting everything on the
21 plate, and figuring out how we make sure that close
22 to 1100 jobs stay right here in New York, and allow
23 these guys to be able to raise their families right
24 where they've been doing it for the past 20 years.
25 Mr. Murph, if you don't mind me inclining,
454
1 you know, our unemployment rate is currently above
2 the national average.
3 How do you think that this decision, closing
4 the plant, will affect that number, and the decision
5 directly impact your membership?
6 JOHN MURPHY: Well, it does.
7 We have a lot of seasonal workers on
8 shutdowns. We have some permanent workers there.
9 But as I mentioned, it's almost 1.4 million
10 manhours, and those manhours, these are sustainable
11 jobs that have pension and medical coverage, to
12 support their families.
13 Because we're a building-trades division,
14 and, for the most part, when you -- where there's
15 work, then you're protecting your family's health
16 and you're paying the bills.
17 And they relied on that plant for years, for
18 years.
19 Again, they were there when they built it.
20 And my brothers at Local 21 will tell you,
21 you know them very well, and it's devastating to
22 them. I was receiving texts as soon as the news
23 came out.
24 And they're going to do everything they can
25 to be part of the solution to this problem.
455
1 SENATOR MURPHY: So you guys, Local 21, is
2 located right in Peekskill?
3 JOHN MURPHY: It is.
4 SENATOR MURPHY: Do you think it was just by
5 chance you landed there, or was it because
6 Indian Point was there?
7 JOHN MURPHY: I'm sure it was Indian Point.
8 SENATOR MURPHY: It was Indian Point.
9 JOHN MURPHY: That was -- they were a result
10 of several mergers of local unions, so they were all
11 over. And when they were merged, it was
12 Indian Point, because that was the heartbeat of what
13 takes place right there in Westchester.
14 SENATOR MURPHY: And -- and -- and what's
15 that, a mile and a half, two miles?
16 JOHN MURPHY: That's it. Sure.
17 SENATOR MURPHY: Right there.
18 JOHN MURPHY: Sure.
19 SENATOR MURPHY: So if they needed to get the
20 guys there, it was a sneeze away --
21 JOHN MURPHY: Immediately.
22 SENATOR MURPHY: -- fall down and be there.
23 JOHN MURPHY: And the majority of the members
24 live right in the area.
25 SENATOR MURPHY: There was a couple other
456
1 unions that were affected by this, that weren't able
2 to be here today: the millwrights, the asbestos
3 workers, and heating and frost insulators.
4 Would you mind, if you can possibly talk, if
5 you'd have any information, a little bit about what
6 they do at Indian Point? Or --
7 JOHN MURPHY: Unfortunately, I don't.
8 That would -- I would have to rely on
9 Frank Palen (ph.) and Tom Carey (ph.), to what
10 extent those trades do.
11 SENATOR MURPHY: I know they wanted to be
12 here.
13 JOHN MURPHY: Sure.
14 SENATOR MURPHY: And I wanted to mention
15 them, and get it on the record, that we need for you
16 to be part of this conversation.
17 And I thank you for your indulgence of being
18 here for 8 1/4 hours, and finally getting to the
19 table to hear your voice.
20 But, thank you.
21 JOHN MURPHY: Thank you.
22 SENATOR MURPHY: It's been a pleasure, and
23 I look forward to working with you more.
24 JOHN MURPHY: Thank you.
25 LOUIS PICANI: Thank you.
457
1 CRAIG DICKSON: Thank you.
2 SENATOR GRIFFO: Assemblywoman Galef.
3 ASSEMBLYWOMAN GALEF: (Microphone turned
4 off.)
5 I just -- in closing, I just want to thank
6 you.
7 I learned a lot from your discussion.
8 And I just wanted to offer an apology.
9 I know on Thursday night Senator Murphy is
10 having an event at the steamfitters.
11 But I have my town meeting, which I scheduled
12 two months ago, in Peekskill, at the library.
13 I have a feeling I'm not going to be able to
14 hear your issues, but if there's anything you would
15 like to come and talk with me about, I'd love to
16 hear that.
17 I'm sure people will come to my town meeting
18 to talk also about Indian Point, because they
19 usually do, on -- you know, on all different issues.
20 So -- but I look forward to continuing
21 dialogue.
22 Thank you for being here.
23 JOHN MURPHY: Thank you.
24 CRAIG DICKSON: Thank you.
25 LOUIS PICANI: Thank you.
458
1 ASSEMBLYWOMAN PAULIN: And, Phil, you wanted
2 to --
3 ASSEMBLYMAN PALMESANO: Yeah, I just wanted
4 to say, thank you for your patience and time in
5 being here, and for sharing your testimony.
6 Please convey to your members our gratitude
7 for the hard work and dedication they have to keep
8 that plant running, keeping it safe, and delivering
9 power to downstate and all over, and being part of
10 the solution.
11 So, we're with you, but just, please, extend
12 our thanks and appreciation to your members.
13 ASSEMBLYWOMAN PAULIN: So that's it, folks.
14 SENATOR GRIFFO: Thank you, thank you, thank
15 you, all, for being here.
16 We want to thank everyone today who
17 testified, who stayed with us throughout the day,
18 who attended the hearing.
19 I think we got a lot of information over the
20 last 8 1/2 hours, and we appreciate everyone's
21 attendance.
22 And to the members who are with us today,
23 thank you.
24 And this closes the Joint Standing Committee
25 of the Assembly and Senate Energy Committees.
459
1 Thank you.
2 (Whereupon, at approximately 6:10 p.m.,
3 the joint public hearing held before the New York
4 State Senate Standing Committee on Energy and
5 Telecommunications, and the Assembly Standing
6 Committee on Energy, concluded, and adjourned.)
7
8 ---oOo---
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25