By Scott DiSavino
(Reuters) - New York utility regulators approved the construction of three power transmission lines needed to keep the state's electric system reliable in case the giant Indian Point nuclear power plant shuts at the end of 2015.
There is no certainty that Indian Point will close.
Entergy Corp, the plant's owner, wants to keep Indian Point's reactors running and has filed with the U.S. Nuclear Regulatory Commission (NRC) to renew the plant's operating licenses for another 20 years.
The two reactors at the 2,037-megawatt plant provide about a quarter of the power used in New York City. The reactors' operating licenses expire in 2013 and 2015.
The three transmission lines are part of a proposal filed by New York power provider Consolidated Edison Inc and the New York Power Authority (NYPA) at the request of the New York Public Service Commission (PSC). The NYPA is a state-owned generation company.
Because of the importance of Indian Point to the state's power grid, the PSC approved the start of work on the three power lines but only authorized the electric companies to spend up to $10 million at this time.
In response to the PSC's decision, Entergy said it believes the best reliability contingency plan would be for New York to support the continued operation of Indian Point and not spread the cost of transmission upgrades to ratepayers across the state.
But New York Governor Andrew Cuomo has said he wants Indian Point to shut when its licenses expire, in part, because it is located just 40 miles north of Manhattan.
Concerns about nuclear safety, especially in densely populated metropolitan areas, have risen since the Fukushima nuclear accident in Japan in 2011.
The NRC, which regulates the country's nuclear power plants, has said repeatedly that Indian Point is safe.
In November 2012, the PSC asked Con Edison and the NYPA to develop contingency plans in case Indian Point were to shut at the end of 2015.
Con Edison and NYPA filed a three-part proposal in February.
The first part, which the PSC approved in March, was for NYPA to seek proposals for about 1,350 MW of generation or transmission that could be online by June 2016.
NYPA issued a request for proposals in March with bids due by May 20. U.S. power company NRG Energy Inc and others have said they would offer proposals.
The second and third parts of the Con Edison/NYPA proposal were for about 100 MW of energy efficiency and the three transmission lines, which the PSC approved on Thursday.
The PSC staff said they would conduct cost and recovery studies to determine what the various proposals will cost, who will benefit and who should pay, and produce a recommendation to the PSC commissioners over the summer.
That will allow the commissioners to make a final decision in September on which transmission and generation proposals the state should allow to go forward.
The proposals allow the state to stop the projects if they are deemed unnecessary if, for example, the NRC renews the Indian Point operating licenses.
In its proposal, Con Edison and NYPA said the three transmission lines would cost about $511 million and could enter service by the summer of 2016.
The PSC staff said it was premature to estimate the cost of the lines or say who would pay for their construction.
The three lines are located in the Ramapo area just north of New Jersey, on Staten Island and in upstate New York.