New York Saw 875% Higher Energy Prices Last Winter--A Nuclear Controversy

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New York state gets about a third of its electricity from nuclear power plants. That's a big slice of the power pie, but there have been rumblings from nuclear opponents that these plants should be closed. And as the plants have aged, the push for closure has gained steam. Not only would that pose a problem for the state's power reliability, but it would also be a huge setback on the environmental front.

Too much of a good thing
The Northeast, including New York, has been increasingly reliant on natural gas. That fuel is still trading hands at historically cheap levels and is cleaner than coal. However, there are some unique issues that make an over reliance on natural gas worrisome for New York, and other eastern neighbors. The biggest being a lack of pipelines into the region, which led to supply issues and gas prices as much as 875% above the 12-month average last winter.

According to a report from Consolidated Edison , which serves New York City and other areas in the region, "Any proposed project to provide relief by reducing pipeline constraints will likely take years to complete, so consumers exposed to energy markets over the next few winters should expect higher-than-average prices during those months."

Source: Daniel Case, via Wikimedia Commons

But what happens if you close nuclear power plants? The easy answer is that other sources have to step up to the plate and make up for the lost power. The hard answer is that natural gas will become even more important than it already is to the northeast's grid. Although that shouldn't be a problem most of the time, the lack of diversity causes notable problems during peak demand periods -- like last winter's so-called polar vortex. Taking nuclear plants offline would reduce New York's power diversity, which would have notable consequences.

Carbon problems
The other reason why New York might not want to close its nuclear power plants is carbon dioxide. Whether you believe in global warming or not, there's a huge push to limit greenhouse gas emissions like CO2. And the Environmental Protection Agency's (EPA) proposed carbon limits, though years away from implementation, clearly show that ignoring the issue isn't an option.

Unlike power plants burning coal and natural gas, nuclear power plants don't emit greenhouse gases. That's a big plus for nuclear, even though it has an image problem on the safety front. But how big is the CO2 problem?

According to UBS estimates, closing Indian Point, owned by Entergy , would increase the state's carbon emissions by over 25%. Closing three smaller plants (Ginna, Fitzpatrick, and Nine Mile) would increase carbon dioxide emissions by nearly 40%. Why? Because the lost power has to come from somewhere and that would most likely include carbon-based fuels.

Source: WPPilot, via Wikimedia Commons

If you're wondering if these estimates are realistic, they are. According to the California Air Resources Board, California's carbon emissions increased by 35% when the state's San Onofre nuclear power plant, which at the time was partially owned by Edison International , was shuttered in January 2012. Even if UBS's estimates are on the high end for New York, shutting clean power down will have a detrimental environmental impact at the same time that the EPA is looking for states to reduce carbon emissions.

The nuclear meltdown in Fukushima, Japan, refocused the world on the dangers of nuclear power. At a time when clean power sources like solar and wind are surging, that's left nuclear lumped in with other out-of-favor fuel options. That's a problem on the environmental front because, like wind and solar, nuclear is a clean power source. And in some regions, like New York, it plays a vital role in ensuring the reliability of the power grid.

And this issue isn't actually unique to New York. For example, nuclear supplies over 60% of the United States' carbon free power. Wind and solar clock in at roughly 15%. Moreover, nuclear provided nearly 20% of total U.S. power last year, wind and solar was something on the order of 5%. So, image problem or not, New York, and the country, need to think long and hard before closing nuclear power plants.

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The article New York Saw 875% Higher Energy Prices Last Winter--A Nuclear Controversy originally appeared on

Reuben Brewer has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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