Commentary: The Ripple Effects from Losing Vermont Yankee (November, 2014)

by Meredith AngwinMeredith Angwin

Vermont Yankee will close at the end of the year. I have blogged at Yes Vermont Yankee for five years. It’s hard to even know how to begin a description of the effects of closing Vermont Yankee. The pain starts with the people who work at the plant.

Hundreds of Goodbyes

Jan. 30, 2014, was the day that the “lists were up” at the plant. The plant will cease operations by the end of December 2014, and fuel should be unloaded to the fuel pool by the end of January 2015. In August, 2013, Entergy announced that the plant would close and not be refueled. “This was an agonizing decision and an extremely tough call for us,” said Leo Denault, Entergy’s chairman and chief executive officer, when the company announced its plans to close the facility. However, given the economic situation, he said, “we have reluctantly concluded that it is the appropriate action for us to take under the circumstances.”  The lists were the layoff lists: which workers would be laid off in what month. Layoff list day was ignored by the local news media at the time.

Now, public meetings about decommissioning are taking place, and reporters are covering employment at Vermont Yankee. As reported in the Keene Sentinel, plant staffing will drop from 550 employees this fall to 316 at the end of January. Approximately a year later, in April 2016, staffing will drop again, to 127 people.

Hard Choices in Vernon

Vermont Yankee is located in Vernon, a town that will lose a huge portion of its tax base when the plant closes. While people in town are aware that they have to cut back, it is not easy. In Vermont, budgets are determined at the town meeting. The Vernon town meeting is usually held on one or two evenings. This year, the town meeting turned into a multi-day and, later, a multi-week affair. During the meetings Vernon decided to abolish the town police force. Instead, the town will pay a small amount for less protection from other law enforcement agencies like the state police. The school budget is also in some disarray, despite the fact that Entergy has made voluntary deals with the town to gradually decrease tax payments instead of cutting them off suddenly.

The Pain Beyond Vernon and on the Grid

The fiscal pain spreads far beyond Vernon.

Around 200 people work at Vermont Yankee but live in New Hampshire. New Hampshire is just beginning to deal with the implications of this.

Vermont Yankee adds more than $60 million to the local economy each year and donates more than $150,000 to local charities.

Recently, the generation tax on Vermont Yankee was raised to $12 million a year. At the end of last year, Entergy cut a deal with the state for a Certificate of Public Good for this final year of operation. In this agreement, Entergy will pay a $5 million “generation tax” to the state in 2015, even though VY will not be generating power.

But after 2015, the Entergy generation tax ends. Considering that the state is facing a $30 million budget shortfall this year, even with VY running, this is not small potatoes. Estimates of the 2015 budget shortfall run as high as $90 million. Nobody knows which programs will be cut, or which taxes will be raised, to make up for the shortfall. Closing Vermont Yankee has added to this pain

Then there is the price-pain on the grid.

For years, I did presentations and wrote op-eds explaining that if Vermont Yankee closed, our electric rates would rise. And yet, people are still surprised! With the polar vortex, the coming closing of Vermont Yankee and the closing of the Salem Harbor coal plant, some local utilities are posting winter prices that are 50 percent higher than last year. Also, last year Vermont Yankee sent $17.8 million to local utilities as part of its revenue sharing agreement. This payment may help keep electricity rates in Vermont below the average for the area. Obviously, such payments will not be continuing.

No Relief in Sight

In the same late-2013 agreement with the state in which Entergy promised to pay a $5 million generation tax (while not generating power), Entergy also agreed to send money to the state for economic development. Entergy will send $2 million a year for five years (for a total of $10 million) to the state for economic development of the Windham County region. The state has already received the first $2 million, and local groups are bidding for grants based on this money. Most people would agree, however, that two million dollars a year in grants will not make up for what was available to the region when the plant was operating: nearly $60 million in payroll, hundreds of thousands of dollars of charitable giving, and millions in taxes. In short, there is no relief in sight.

- Meredith Angwin is a nuclear industry veteran, and is now project director of the Energy Education Project at the Ethan Allen Institute.

An earlier version of this essay was published by the Nuclear Energy Institute as part of a report on the consequences of Vermont Yankee’s closing.

 

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