The Flip Flopping of Nuclear Regulation and Political Sentiment

In 2021, New York state closed the Indian Point nuclear power plant after 59 years of operation. The plant consisted of three units. Units one and two retired earlier. However, Unit three occurred earlier than planned.

Unit 3 was a major power producer. It generated over one gigawatt of electrical generation capacity.

That’s because its operator, Entergy, couldn’t get its operating license renewed. The company applied for a 20-year license renewal in 2007. The state of New York objected to renewing the license because of environmental and safety concerns. The fight lasted for fourteen years, before Entergy turned off the lights.

To replace the lost electricity, three natural gas power plants came online. In hindsight, this was a huge mistake. Grant Dever authored a white paper in 2024 titled: Autopsy of a Perfect Policy Failure: The Closure of Indian Point.

He makes several important points about the change in makeup of New York’s power supplies. Natural gas power jumped from 39% to 50%. The issue with natural gas is the price volatility.
The Indian Point closure coincided with the Russian invasion of Ukraine. That sent natural gas prices to 15-year highs:

That had a huge impact on the price of electricity. It exploded from $24.70 per megawatt hour in 2021 to $45.39 per megawatt hour in 2022. According to his model, New Yorkers paid an extra $258 to $304 million electricity bills due to the closure.

Fast forward to this past monday, when New York Governor Kathy Hochul announced plans to build the first advanced nuclear power plant in the country. The new plant will produce one gigawatt of power, equal to Indian Point. Hochul told reporters:

“If we don’t increase our capacity over the next decade we will see rolling blackouts. We must radically increase supply. This is the best technology to meet this demand. To power New York’s future we need reliability, affordability, and sustainability. Nuclear is today’s answer to that.”

We couldn’t agree more. We need new power plants sooner rather than later. And this is an excellent test case. We will watch this process closely. Our concern is that the political will won’t shorten the permitting process.

Remember, Indian Point fought for fourteen years to try to get its operating license renewed. New York has a fantastic opportunity to streamline this process. But only if they can overcome the bureaucracy and political infighting that plagued this industry for the last twenty-five years.

For the Good,
The Mangrove Investor Team

Numbers You Need to Know

59 Years

The Indian Point nuclear power plant began operations in 1962 and produced over 565 terawatthours (TWh) of electricity in the 59 years it was open. (U.S. Energy Information Administration)

3

Three natural gas-fired power plants have been introduced over the past three years to help support the electric supply needed by New York City that Indian Point had been providing. (U.S. Energy Information Administration)

80%

Indian Point was the largest energy source New York State for years, reliably providing over 80% of the metro New York City area’s carbon-free electricity. (Nuclear New York)

What’s New in Sustainable Investing

I run a $145 billion U.S. energy company.

The debate over clean energy tax credits cannot be just about renewable energy. It’s much more than that. It’s about whether we want to turn our backs on the only forms of power generation available at scale at a time when the U.S. needs every electron it can get.(Fortune)

No one has made fusion power viable yet. Why is Big Tech investing billions?

Breakthroughs in fusion have triggered a frenzied race to harness a clean energy source that has eluded scientists for decades. (The Washington Post)

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