Shut New York Reactor May Hit Boston With Higher Power Pricesby
The shutdown of a nuclear reactor outside New York City typically means higher power costs for local customers. This time, though, Boston may well end up bearing the brunt of any supply shortfall.
Entergy Corp. is extending an outage at its Indian Point 2 nuclear plant on the Hudson River by several weeks after engineers found bolts were missing in the reactor, which had been shut on March 7 for scheduled refueling.
The prolonged shutdown, which is just the latest in a series of incidents that have raised concerns over the plant’s safety, may limit how much power the New York grid can export to New England. It also coincides with transmission work beginning April 1 that will cut supplies into Massachusetts from Canada, according to Genscape Inc. New York City will be able to make up for the shortfall with wind and other supplies from upstate.
“Overall, the worst of the effects of the continued Indian Point outage might be felt in New England,” said Ben Chamberlain, an analyst with Genscape Inc. in Boston. “Even so, mild weather and low demand should prevent many large price jumps.”
On-peak power for Northeast Massachusetts for April delivery rose 2.9 percent to $32.25 a megawatt-hour at 10:58 a.m. , according to Bloomberg Fair Value prices. New York City power for next month gained 4.2 percent to $27.15.
New York Governor Andrew Cuomo, who has campaigned for Indian Point to be permanently shut given its proximity to New York City, said the faulty bolts and other recent issues “raise deep concerns” about the plant.
It’s not unusual to see several power plants offline for maintenance this time of the year before the peak summer cooling season, said Mike Clendenin, a spokesman for Consolidated Edison Inc.’s New York City utility . “This time of the year, you are likely to see very little impact on supply and prices because demand is so low.”
It helps that most of the planned work has been completed on a line bringing supplies into the city from upstate, Chamberlain said.
New England is another matter. Transmission lines which transport power from Hydro-Quebec to Massachusetts will be down for planned work on April 1 through June 15, according to ISO New England Inc. data.
“This constitutes almost 2,000 megawatts of imports that New England relies on significantly,” according to Chamberlain. Without Indian Point 2, the New York grid will “likely be less able to support” the region with additional supplies, he said.
Also on April 1, Spectra Energy Corp. will begin work on the Algonquin natural gas pipeline system, which will limit cheap shale gas into the Boston area and potentially boost costs for generators that rely on the fuel.