 White Plains, NY - Westchester County faces an energy crisis, and state and local officials must act quickly to avoid the prospect of power shortages, blackouts and skyrocketing electricity bills that will hurt the county’s quality of life and undermine economic growth. These are some of the warnings issued January 31st at a news conference by a coalition of major regional business groups.
Electricity consumption in Westchester is rising 2 percent a year (or 100 megawatts to 150 megawatts a year), which will result in 800 megawatts of increased demand by 2015 on top of current demand of 5,000 megawatts, according to a report released by the Westchester Business Alliance.
But no new power plants currently are being planned and the region’s ability to import electricity from other areas is limited, which will drive up costs and increase the potential for power shortages resulting in rolling blackouts or voltage cuts known as brownouts.
“Demand for electricity in Westchester County is growing quickly and threatens to overwhelm existing supplies,” said Marsha Gordon, president and CEO of The Business Council of Westchester, one of the groups that sponsored the study. “State and local officials need to start working now to identify locations for new power plants and to attract companies to build and operate those power plants. If we don’t act soon, the entire region could face power shortages in the future. This is an emerging crisis that must be addressed now. This would have a terrible impact on our quality of life and economy.”
Existing economic and population growth are enough to cause concern about future power supplies, Gordon said, and closing the Indian Point nuclear power plants – the largest in the region – would dramatically exacerbate the situation. If the Indian Point plants are retired in 2013 and 2015 when their licenses expire, power bills in Westchester will jump more than 150 percent by 2017, according the study by Energy Strategies Inc., a national consulting firm based in Albany, NY.
If this happens, an estimated 11,000 full- and part-time jobs will be lost in Westchester County by 2017 because of higher energy prices, Energy Strategies says, resulting in a reduction of $2.1 billion in cumulative lost wages and nearly $5.5 billion in cumulative lost economic output. (To put this in perspective, Westchester created about 3,500 jobs during 2007, according to a recent Journal News article.) Overall, ESI says the higher prices would reduce economic growth by as much as 20 percent from an annual growth rate of 1.94 percent down to 1.55 percent a year.
Even smaller increases in electricity costs will hurt employment. A 5 percent annual rate of increase (just slightly above the 4 percent increases in recent years) would result in the loss of 2,000 jobs in Westchester County by 2017. This rate of increase is possible even if Indian Point remains open.
“These figures show how devastating an impact that higher power costs could have on the economy in Westchester and the surrounding region,” said Gordon. “We recommend that state and local officials collaborate in a stakeholders’ task force composed of key business, community and governmental leaders to develop the parameters for a comprehensive integrated energy resource plan.”
Affordable, reliable power is essential to the health of the region’s economy and its ability to attract and retain companies and residents, noted P. Gilbert Mercurio, Chief Executive Officer of the Westchester-Putnam Board of Realtors Inc., a member of the Alliance.
“From a real estate perspective, Westchester competes with other areas for business relocations and investments,” said Mercurio. “It will hurt Westchester’s competitive position to have electric costs that are significantly higher than the competition’s. High energy costs will also hurt Westchester on the residential side. Every dollar spent on energy is an extra dollar of monthly housing expense that increases the monthly income requirement for prospective purchasers of Westchester properties, thus worsening our already difficult housing affordability problem.”
A key challenge facing regional leaders is the years of planning required to build new power plants.
“It takes eight years to build a new power plant and secure the required licenses, so officials need to act now to prevent a crisis in the future,” said Ross Pepe, president of the Construction Industry Council/Construction Advancement Institute of Westchester and Hudson Valley, Inc., another member of the Westchester Business Taxpayers Alliance.
“Even if the Indian Point plants continue operating – which isn’t assured given the current political and public climate – the region will need additional power plants to meet the growing demand. We have to start planning now to avoid a crisis in the future.”
The Indian Point plants account for about 40 percent of demand in Westchester and the Lower Hudson Valley, and also are one of the region’s lowest-costing sources of power, with fuel costs that are roughly one-sixth the cost of a gas- or oil-fired plant.
Indian Point’s current licenses expire in 2013 and 2015, but the Nuclear Regulatory Commission is not expected to announce a decision on extensions until late 2009 – only four years before the first reactor might have to close.
“We cannot wait until 2009 to start planning new power plants,” said Pepe. “There won’t be enough time if we wait. Planning should have begun in early 2007 for 2,000 megawatts of replacement capacity by 2015. It is critically important for state, county and local officials to immediately start planning for our future energy needs, regardless of what happens with Indian Point. The uncertainty about Indian Point only make it that much more important to adopt a long-range plan for addressing our power needs.”
Conservation and development of renewable energy sources such as windmills will not be sufficient to offset the loss of Indian Point, Energy Strategies President Howard J. Axelrod says in his report.
“It is unrealistic to believe that electric capacity derived from the Indian Point plants could be totally replaced by energy conservation, energy management and renewable power resources,” the report states. “Without a definitive plan in place, it is highly unlikely that 2,000 megawatts of generation – conventional and renewable – could be built in time for the 2015 summer peak period.”
The Westchester Business Alliance is a non-partisan group bringing together a number of the region’s leading business organizations to address issues of concern to the entire business community. Its members are The Business Council of Westchester, the Construction Industry Council/Construction Advancement Institute of Westchester and Hudson Valley, Inc., the Westchester County Board of Realtors Inc. and the Building and Realty Institute Inc. For more information or to download a full report, visit the website: www.westchesterny.org
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