ML12334A747
| ML12334A747 | |
| Person / Time | |
|---|---|
| Site: | Indian Point  |
| Issue date: | 12/17/2011 |
| From: | Sheppard S State of NY, Office of the Attorney General |
| To: | Atomic Safety and Licensing Board Panel |
| SECY RAS | |
| References | |
| RAS 21573, 50-247-LR, 50-286-LR, ASLBP 07-858-03-LR-BD01 | |
| Download: ML12334A747 (5) | |
Text
United States Nuclear Regulatory Commission Official Hearing Exhibit NYS000227 Entergy Nuclear Operations, Inc. Submitted: December 17, 2011 In the Matter of:
(Indian Point Nuclear Generating Units 2 and 3)
V\..~P.R REG(J<.q)<o ASLBP #: 07-858-03-LR-BD01 l~\
Docket #: 05000247 l 05000286
" 03:
Exhibit #: NYS000227-00-BD01 Identified: 10/15/2012
'" ~ Admitted: 10/15/2012 Withdrawn:
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'1"'....1-: 0' i Rejected: Stricken:
" .***. " Other:
Potential Impacts of Indian Point Relicensing with Delayed Site Reclamation
.summary of finding If the "no action" option of ceasing operations at IP2 i'n 2013 and IP3 in 20 15 pennits more rapid site '
reclamation and restoration, while the option of relicensing operations to run through 2035 is associa~ed I with a delayed process of site restoration, there are significant additional burdens imposed on off-site property va~ues iflicense renewal is approved. If the diminution"in curren~ property values is approximately
$500 million, then the burden caused by the additional delay in restoration due to the period of extended plant operation plus the 10I?ger period required for site reclamation is reasonably estimated as between $300 and $340 million.
Introduction In my initial report submitted on November .
29 , 2007, lreviewed a variety of studies that had appeared
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in peer-reviewed journals concerning the potential impacts on off-site land use and property values resulting from continued operation ofIndian Point 2 and Indian Point 3 nuclear power plants in the Village of Buchanan in Westchester County. ,Making use of census data and estimated impacts of large power plants on off-site property values I demonstrated thatthe effects resulting from relicensing could be over $500 million, with a more exact measurement requiring detailed data from the local property markets. In that, analysis I assumed that iflicense renewal were approved, the additional wastes generated by license renewal would be gone from the site and the site would be fully restored no later than 30 years after the renewed license expired,. i.e. by 2065. However, as discussed below, I have now been advised that it is possible the wastes generated by license renewal may remain on the site for much longer and perhaps indefinitely.* This substantial' additional delay in restoring the site to unrestricted use will have a substantial additional impact on off-site l~md values.
Diminution of off-site property value can be expected to be associated with important and visible ch~nges in land use, including delayed development of land, lower density of development ~n land that is deve~oped, and deferred maintenance on affected parcels.
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A full analysis oft~e impacts naturally depends on the dynamic structure of the nuisance. In particular, I have been told to assume that the "no action" option (denying the request to relicense IP2 and IP3) invol~es operating the power plant at present levels until 2015, and then commencing a process of site reclamation so that by 2025 the site can be developed to its most efficient use, and the nuisance impact o~ off-site
. properties resulting from proximity to the power plant would be removed.
In comparison with this "no action" option I am asked to consider the impact resulting from relicensed operation ofIP2 and IP3 until 2035. Following this period will commence a period of undetermined length during which of the nuclear waste products produced at the plantduring'extended
, license operation will continue to be stored at the site. The site would no longer be a sigriificant source of employment and would
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possibly be a reduced source of property tax revenue for the community. The implication is that the J
relicensing option is likely to continue to impose a nuis;mce burden on off-site property. values with a combined magnitude equal or greater to the ~agnitude imposed on property values at present. This impact is expected to continue for at least a period of 60 years (until 2095) and potentially much longer. What impact does the extended delay in full site reclamation associated with IP2 and IP3 have on the off-site costs?
Analysis To answer the question posed at the end of the previous section with precision requires an estimate of the total impact on off-site property values. In order to illustrate the impact of delayed site reclamation and illustrate,the r~nge of possible impacts, I assume a present market impact of $500 million on property values. To the extent that more detailed evaluation of these impacts suggests an amount more orless than this, the results discussed below would increase or decrease.
All options under consideration allow the continued operation ofIP2 and IP3 until 2015. Following this, the "no action" option imposes a continued cost of $500 million in reduced wealth on local property owners for aperiod of 10 years until site reclamation is complete. The relicensing option imposes this cost on local property owners through the period of continued, operation (until 2035) followed by possibly larger costs imposed for an indefinite amount of time. For this example I assume the costs continue at\the l~vei of$500
~illion, but a detailed evaluation may well suggest a substantial increase.
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'.' . The difference between the two options depends critically on folir variables:
- 1. The total diminution in off-site property values
- 2. The real rate of increase in local property values
- 3. The appropriate discount rate chosen to evaluate the dynamic flow of costs
- 4. The time required for complete site reclamation following the relicensed operation 0{JP2 and IP3 As indIcated. above, for this report I will assume that the diminution - in values caused by the current plant operation is $500 million, and that this lost value could be recovered in 2025 if relicensing were not allowed. I will als9 make the conservative assumption that there is no real increase in local propertY values (meaning that property values increase or decrease at exactly the same rate as the general price level).
The impact of the discount rate is shown below in Figure 1. This figure assumes a' delay in site reclamation until 2105 (70 years after the plants cease operations). A range of possible discount rates is shown along the horizontal axis, and the additional burden on off-site property values ariSing from relicensing and delayed reclamation is shown on the vertical axis. As indicate, the impact ranges from about $240 million to $310 million, depending on the discount rate chosen.
$ impact 3.0x108 2.6x 108 0.03 '0.04 0.05 0.06 0.07 Real Discount Rate Figure 1: Burden on off-site properties at various discount rates While there can be debate about the appropriate discount rate to u~e for analysis, a reasonable starting point .
wOJ.lld be the realinortgage
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interest f<lte, or the mortgage interest rate less the rate of inflation. This would 3
- ' suggest a discount.rate of between 3 and 4 percent (.03 to .04). Figure 1 shows that over this range the burdeI?-.on off-site property values from relicensing and delayed r~clamationwould be between $300 and
$310 million.
What about the duration of the delay in site reclamation and restoration? It is clear that increasing the delay imposes gr~ater burdens on off-site properties, because the penalty of reduced values and.reduced wealth is being imposed for a longer time period. The exact magnitude depends on the dis~ount rate used, but a range of possible impacts is shoWn in Figure 2 below. Figure 2 shows the burden on off-site property values at various durations of delay, assuming a discount rate oL0325,or 3.25 percent. As one might expect, the burden is increasing as the delay increases. The impact is particularly severe as we increase the delay from 60 or 70 years of delay (where the burden imposed is $300 to $310 million) to 140 years of delay (where the burden rises to $350 million). Beyond that the additional delay imposes only modest increases in the cost to off-site property owriers because the remedy (removal of the nuisance) is so far in the future as to be of little or no market value.
$ Impact 3.4x 108 .
80 . 100 120 140 160 180 200 Years of delay until complete site reclamation Figure 2: Burden on off-site properties at various years of delay It should be noted that the calculations in Figure 2 are sensitive to the assumption of zero increase in real property values.
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Conclusion If the "no action" option permits complete site reclamation and restoration within ten years after the end of
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operations, ~hile relicensing delays site reclamation by not only the additional time period of plant operations but also a significant delay during which nuclear waste is stored on site, there are important additional burdens imposed on off-site properties. Making reasonable assumptions about this delay, and using the potential property value impacts identified in my earlier report, the option that provides for relicensing of IP2 and IP3 would impose additional burdens of $300 to $340 million on these properties.
This" is not only a burden on the individuals involved but could have significant land use and development impacts.
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