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Task force asks question: What happens when VY closes?

BRATTLEBORO—Uncertainty surrounds the future operation of Entergy’s Vermont Yankee power station.

One thing is certain, however: Windham County’s fragile economy will face economic upheaval after the plant closes.

The Post-VY Task Force made that point as it released a 13-page report on Monday, detailing the results of a year-long research and development process viewing the county’s economic fate after the nuclear power plant ends its service.

The report’s writers admit that no one knows when the nuclear plant in Vernon will close, but it will close eventually.

Dealing with the loss of 650 high-paying jobs requires urgent action, the task force recommends.

“The certainty of [VY’s] eventual closure raises the urgency of action,” writes the task force. “We are not just coping with the long slow decline that has marked southeast Vermont for 15 years, but with the prospect of a precipitous change in employment and economic activity whenever the plant owners decide to close.”

“This [closure] is likely to occur with very short notice so planning and mitigation needs to begin now,” added the report.

Chair Stephen Morse said that the report of the 17-member task force, a subcommittee of the Southeast Vermont Economic Development Strategy Planning group (SeVEDS), has introduced a new topic to the VY conversation.

While other community debates about VY hinge on whether the plant is good or bad, Morse said that the group focused on the inevitable economic impact of losing 650 jobs.

Action needed

In the report, the task force advocates for measures to mitigate the losses that will accompany VY’s closure: the absence of comparable above-average paying jobs, a decline in gross domestic product (GDP), the loss of tax revenue, and the exodus of workers from the region.

The measures include creating an economic mitigation and growth program, funneling tax revenues paid by VY to the state into a county-wide Special Economic Development Zone, and requiring that Entergy, the plant’s owner, embark upon a swift decommissioning process (DECON) rather than mothballing the plant (SAFSTOR) for decades.

The task force suggests that the state redirect the estimated yearly $2.7 million in income and property tax monies generated by VY after March 21 to a state-designated Special Economic Development Zone (SEDZ).

The taxes after March 21, the group argues, would be surplus funds. The state had not budgeted these monies elsewhere because the plant was presumed to stop operating this March.

The Post-VY Task Force asks the surplus tax monies go to the SEDZ for five years.

The SEDZ would allow the county to access more capital through the Vermont Economic Development Agency and community block grants. The zone would also have designated funds for marketing the county as a great place to live and work and to support social resources.

Morse said the task force’s suggestion breaks new ground with suggesting the tax-funded economic development zone, though he acknowledges a tough sell in persuading the state to send the tax monies to Windham County. He also understands that the state has its own tough economic situations, especially the consequences of repairing the devastation from Tropical Storm Irene.

Still, according to Morse, members of the administration have said that the state shares some responsibility in supporting Windham County after VY.

“We plan on calling them on it,” said Morse.

Other recommendations include tax credits to encourage investment in the region in a variety of areas: Improving housing stock. Attracting new businesses. Taking steps to attract and retain recent college graduates like career services, job training, and entrepreneurship training. Promoting Southeast Vermont to immigrants and immigrant communities. Partnering with World Learning/SIT to assist with international outreach.

Finally, the group recommends the consolidation of municipal services and/or exploring regional or county-level services.

Morse said the task force does not advocate a potential county government’s structure. He said traditionally Vermonters shy from county-level government or services. Instead, he said, townspeople live in one municipality “but depend on other towns like Brattleboro, or maybe Mount Snow, to provide economic vitality.”

VY’s exit will affect the entire region, and we can’t continue looking to one town; we must all depend on one another, he said.

State of the county

Windham County had slumped into an economic recession long before the 2008 credit crunch, Jeffrey Lewis, executive director of the Brattleboro Development Credit Corp., has asserted in previous interviews.

The county has the lowest average wage in Vermont, he said. In addition, the area’s population is stagnant, and the region is experiencing valuable housing stock declining, business activity growing slowly, young people exiting the area for better economic opportunities, and a population that’s aging.

The group says that the loss of VY will exacerbate the tenuous economic situation, furthering job and human capital loss and declines in the gross domestic product, real estate values, and revenues from local and state taxes.

VY’s shutdown will also have an adverse impact on local companies from whom Entergy buys goods or services, as well as on local nonprofits that receives corporate charitable donations or employee volunteer time.

The task force estimates that the area will lose between 617 and 650 high-paying jobs, translating into the loss of a payroll totaling between $68 million and $72 million annually.

The task force estimates that Windham County residents earn about 42 percent of the plant’s total payroll, accounting for 2.44 percent of total household income in the county.

According to the task force, VY’s economic activity has helped generate and support more than 400 area jobs that will also presumably disappear when the plant closes.

When the jobs leave, said the report, workers and their families will likely leave as well. The county will feel the loss of the people who give to their communities, use community services like local hospitals, coach Little League, volunteer at the local libraries, or support crucial nonprofits.

State Sen. Peter Galbraith, D-Windham, praised the report. During the last legislative session, Galbraith helped allocate $50,000 of state funds for the post-VY process, which funded the study.

He agrees that more tax revenues from VY should remain in Windham County because the area bears greater economic and environmental burdens as a result of the plant. The state has also benefited from the electricity generated by the plant and from tax revenue.

“I think it will be a hard sell statewide, but the idea is good, and I will push for it,” Galbraith said.

The DECON process, which would decontaminate and dismantle the plant and return the site to a green field, is also the right approach, he said.

According to the NRC website, spent fuel remains on site after DECON as the federal government determines what it will do with the contaminated material.

The alternative — SAFSTOR, the NRC protocol of mothballing the plant for decades — leaves the plant intact and dormant for decades, with nuclear waste on site, making the surrounding area vulnerable to man-made and natural disasters, Galbraith said.

Mixed feelings

The community at large has had a love-or-hate relationship with VY, which Entergy purchased in 2002, since the plant broke ground in the late 1960s.

In 2011, the NRC extended the plant’s federal operating license until 2032. The plant also needs a state-issued Certificate of Public Good (CPG) to operate after its current one expires March 21.

The Vermont Senate voted 26-4 to deny the plant a CPG hearing in 2010.

Entergy filed suit in the U.S. District court against the state last April. Murtha recently ruled almost entirely in Entergy’s favor, a decision that allows the plant to continue operating past March 21. The state has appealed the decision.

Galbraith views U.S. District Judge J. Garvan Murtha’s decision as “wrongly decided” and said the Vermont Public Service Board should not issue a new CPG, which is still explicitly allowed in Murtha’s ruling as long as it is based on criteria other than radiological safety.

Still, Galbraith hopes the community and Entergy can find a way to work together, because when the litigation ends, the two entities will still have to co-exist.

According to the task force, the group decided to continue its work in the shadow of litigation because it felt the legal activity could possibly stretch over years.

Even if Entergy is ultimately given permission to operate the plant until the end of its 20-year federal license extension, federal law will shutter the plant in 2032, the writers say.

Morse feels pleased with the task force’s report.

“We had a difficult task to tackle, and a diversity of opinions,” he said. “But we knuckled down and managed to narrow the report down to five areas.”

The task force’s recommendations mirrored many of the goals put forward by its parent organization, SeVEDS.

According to Morse, the task force invited representatives from VY and the town of Vernon, where the plant is located, to participate. Both politely declined, he said.

“We have not made a final determination about the nature, or the extent, of Vermont Yankee’s participation in the economic planning process, and we will not make such a determination until there is more certainty surrounding the continued operation of the plant,” wrote Entergy spokesman Larry Smith.

Morse said the task force will continue to refine the report, eventually presenting it to the state Senate Committee on Economic Development, Housing, and General Affairs.

Finally, Morse said, the report will make its way to the Agency of Commerce & Community Development.

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Originally published in The Commons issue #143 (Wednesday, March 14, 2012).

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