By Joseph De Avila

Westchester County is bracing for a hit to local employment and revenue after the Indian Point Energy Center shuts down in 2021 after more than 50 years of operation.

Democratic Gov. Andrew Cuomo, some local residents and environmental groups have been trying for years to close the nuclear plant. They have said it was dangerous to operate a plant located so close to New York City. Indian Point is located on the banks of the Hudson River in the village Buchanan, about 36 miles north of Manhattan.

At the same time Indian Point employed about 1,000 people and contributed $30 million in 2016 to the coffers of Westchester County and other municipalities. Elected officials are grappling with the impact to employment and municipal funding now that Entergy Corp. has said it plans to mothball the plant and eventually relocate its employees.

"We are concerned about the jobs," said Linda Puglisi, the supervisor of the town of Cortlandt.

Ms. Puglisi said that Entergy's payments in lieu of taxes make up about nearly half of the village of Buchanan's annual revenue. Buchanan is a part of the town of Cortlandt.

"This is our biggest taxpayer in our town," Ms. Puglisi said.

Entergy said it would continue its payments in lieu of taxes through 2021 before it begins reducing those payments. Mr. Cuomo's office said the state will assist the local municipalities to make up those revenue shortfalls.

While elected officials expressed concern for the future loss of revenue and jobs, local environmental groups applauded the news of the closure.

"This agreement is a win for the safety of our communities and the health of the Hudson River," said Paul Gallay, president of Riverkeeper.

Entergy has also agreed to set up a $15 million fund to pay for environmental restoration of wetlands and estuaries and other causes.

The Utility Workers Union of America Local 1-2 employs about 350 workers at Indian Point. All the workers are being offered jobs at other Entergy facilities. Still, the union said it was concerned about employees who will be forced to choose whether to move their position to another Entergy facility, or stay put and lose their job.

"The economic damage it's going to cause far outweighs the benefits," said John Melia, spokesman for Utility Workers Union of America Local 1-2.

New York state has plans to retrain Indian Point employees who don't want to relocate. Some might get jobs at other energy plants in New York state or in new industries like solar or wind energy, state officials said.

Bill Mohl, Entergy's president of wholesale commodities, said declining gas prices and higher operational costs were behind the company's decision to close Indian Point.

"The decision to shut down the plant was ours, and ours alone, and was due to economics," Mr. Mohl said.

Entergy has been applying to renew its operating licenses for Indian Point since 2007 and has spent more than $200 million on that process.

Now Entergy will close one of the units at Indian Point in 2020. The second will stop operating in 2021. The company will ask federal regulators for a license to continue operations until 2025 in case New York state still hasn't secured replacement power sources.

"That remains to be seen" whether New York state will have added enough new power by 2021, Mr. Mohl said. "It'll be up to the state to come up with plans to replace this plantin timely manner."

After the plant is fully decommissioned, Indian Point will continue to house the spent fuel rods on the site, Mr. Mohl said.

"It's really going to render that property a wasteland never to be redeveloped," said Rob Astorino, the Republican Westchester county executive. "The economic loss is going to be enormous for northern Westchester."

Write to Joseph De Avila at joseph.deavila@wsj.com

(END) Dow Jones Newswires

January 10, 2017 02:48 ET (07:48 GMT)

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