NYPA says Entergy Indian Point power contract to end in 2013

(Reuters) - The New York Power Authority (NYPA), a state-owned electric company, said Wednesday a contract to buy 200 megawatts (MW) for its government customers in New York City from the state's giant Indian Point nuclear power plant will expire in September 2013.

ENTERGY (ETR.NY)Corp, one of the biggest nuclear power operator in the United States, won a request for proposal to sell the 200 MW from its 2,063-MW Indian Point (100 MW from the 1,022-MW Unit 2 and 100 MW from the 1,040-MW Unit 3) from 2009 until 2013.

Indian Point is located about 40 miles north of Manhattan along the Hudson River in Buchanan in Westchester County.

A spokesman for Indian Point said the company does not comment on the plant's power purchase agreements but noted the two reactors provide about a quarter of the electricity used in New York City and Westchester County.

New York Governor Andrew Cuomo wants Indian Point shut, in part because it is located in the New York metropolitan area, home to some 19 million people, where he has said even the most unlikely possibility of an accident is too much.

New Orleans-based Entergy meanwhile says the plant is safe and wants to keep its two reactors running for another 20 years after their licenses expire in 2013 and 2015.

The reason NYPA's contract to buy power from Entergy ends in September 2013 is that is when Unit 2's operating license expires.

Entergy however can continue to operate the reactors so long as the federal license renewal process is ongoing. The parties involved in the Indian Point license renewal, which started in 2007, have said they expect the process to continue for at least a few more years.

The U.S. Nuclear Regulatory Commission (NRC) planned to start hearings on the numerous contentions against the renewal of Indian Point in October 2012.

NYPA, meanwhile, said it will not extend the contract with Indian Point, and that if the agreement were to expire today, it would not need to renew it because there were excess supplies of low-cost power in the marketplace.

NYPA said its New York City government customers use about 1,900 MW of power to run the city's subways, government offices, hospitals and schools, among other things.

POWER FOR THE CITY

In addition to the Entergy contract, NYPA gets power for New York City from its 500-MW combined-cycle, natural gas-fired plant at the former Poletti site in Astoria, Queens, and a power purchase contract with the 550-MW natural-gas-fired Astoria Energy 2 site, also in Astoria.

The Power Authority also gets some power for the city from its 1,160-MW Blenheim Gilboa pumped storage hydro plant, its small hydro power facilities in the state, and short-term market purchases. One megawatt can power about 1,000 homes.

NYPA said if it needs more power for its New York City government customers in the future, it would work with those customers to determine how to source that power.

Those sources could include generators in the giant PJM power grid, which runs from New Jersey to Illinois, when private transmission company Hudson Transmission's new 660-MW power cable under the Hudson River connects New York City to New Jersey in 2013.

NYPA's latest contract to meet the needs of its New York City government customers expires in 2017. The parties have renegotiated provisions of past agreements various times since the Power Authority started serving those customers in the mid-1970s.

(Reporting By Scott DiSavino)