NY denies permit for Entergy's Indian Point

* NY rules Indian Point plant violates Clean Water Act

* Ruling says cooling systems kill fish, waste water

* Entergy may challenge ruling in court, NY Times says

NEW YORK, April 4 (Reuters) - Entergy Corp (ETR.N) was denied a request for a water-quality certification for its Indian Point nuclear power plant in New York, setting back efforts for a 20-year renewal of its license to operate the controversial plant.

New York State's Department of Environmental Conservation on Friday concluded that the plant's cooling systems, whether operated as they have been for decades or modified under a proposal by Entergy, "do not and will not comply with existing New York State water quality standards."

The New York Times said the ruling means Entergy might be forced to spend hundreds of millions of dollars to build new cooling towers, or risk that Indian Point's two operating reactors, which supply 30 percent of the electricity used in New York City and Westchester County, could be shut down.

Entergy did not immediately return a call on Sunday seeking comment.

The New York Times reported that officials of New Orleans-based Entergy said they were "disappointed" in the ruling and might fight it in court.

Indian Point is located about 40 miles (64 km) north of Manhattan. Critics of the plant have long complained that a disaster could threaten the safety of millions of people.

According to Friday's ruling, the plant's two units violate state law and the federal Clean Water Act because they kill close to 1 billion aquatic organisms a year, including the endangered shortnose sturgeon, while consuming 2.5 billion gallons of water a day.

The original federal licenses for Indian Point Units 2 and 3, which were licensed in 1973 and 1976, respectively, expire in September 2013 and December 2015, respectively, the ruling said. Unit 1 was shut down in 1974.

A water quality certificate would run concurrently with the proposed 20-year license extension that Entergy is seeking from the U.S. Nuclear Regulatory Commission.

An Entergy spokesman told the Times that converting Indian Point's cooling system would cost the company $1.1 billion and require shutting both reactors down for 42 weeks.

A prolonged appeal could delay a shutdown, a spokeswoman for the Nuclear Regulator Commission, Diane Screnci, told the newspaper.

Last month, the New York Public Service Commission rejected Entergy's plan to spin off three nuclear power plants in the state to a new company, Enexus Energy Corp, saying it was not in the public interest. [ID:nN25241630]

Entergy shares closed Thursday at $82.32 on the New York Stock Exchange. The stock market was closed on Friday for the Good Friday holiday. (Reporting by Jonathan Stempel; Editing by Leslie Adler)