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Entergy to close Vermont Yankee

Nuclear plant will close in 2014; owner cites low energy prices

VERNON—What many nuclear wonks have predicted over the past year has finally come to pass: Entergy announced on Tuesday that it would close its Vermont Yankee nuclear plant long before its 20-year federal license extension expires.

The company anticipates closing the 41-year-old plant in the fall of 2014.

Entergy refueled the plant earlier this year. The plant’s anticipated 2014 fourth-quarter shut down coincides with VY’s next scheduled refueling.

In a press release, the company attributed its decision to “a number of financial factors:” a booming gas market that has driven down natural gas and wholesale energy prices, the high costs of running a single-reactor nuclear plant, and “wholesale market design flaws” that keep energy prices in the region “artificially low” and penalize wholesale merchant plants like VY.

In a press release, the company also pointed out that since 2002, it had invested over $400 million in the operation of the plant. In the wake of the disaster at Japan’s Fukushima plant in 2011, brought on by a double natural disaster, the U.S. Nuclear Regulatory Commission ordered additional safety upgrades for U.S. nuclear plants. Estimates for these upgrades start at $30 million per reactor.

The artificial caps on energy production in the New England region mean that the price of electricity does not truly reflect the cost of generating electricity, Bill Mohl, president of Entergy Wholesale Commodities (the subsidiary that owns VY and five other operating plants), told reporters at a press conference on Tuesday at Entergy’s headquarters on Old Ferry Road in Brattleboro.

Mohl told reporters that the company decided to close the plant on Sunday.

“It was really the last decision we wanted to make,” he said.

Entergy announced earlier this summer it would lay off 30 VY employees as part of a company-wide reorganization and belt tightening that started in 2012. The company had repeatedly reported lower earnings and told shareholders that VY is not generating money.

The decision to close the plant is all about the economics, said Mohl. The plant’s expenses outpaced its revenues.

“When you look at all these [financial] issues, it becomes overwhelming,” said Mohl.

Entergy attempted to sell the VY plant last year to Exelon, which similarly operates a fleet of reactors, but the deal fell through.

According to its website, Entergy kept all its options open for selling, holding onto the plant, or shutting it down.

The company asserts that its other four plants in the region — James A. FitzPatrick Nuclear Power Plant in Oswego, N.Y., the two reactors at Indian Point Energy Center in Buchanan, N.Y., and Pilgrim Nuclear Power Station in Plymouth, Mass. — will remain open.

Mohl estimated that once VY shuts down, the New England electrical grid’s nuclear power contribution will drop from 28 percent to 24 percent.

Although people might not experience any impact in their electrical service, he claimed that the “biggest impact” would be an annual increase of about 2 million tons of carbon emissions into the region’s atmosphere.

Mohl said that Entergy plans to engage with the local community, state, and employees, working as a team during the shutdown.

Entergy officials contacted Vermont Governor Peter Shumlin earlier that day, telling him that the company sought a proactive and constructive partnership with the state.

Mohl also stressed that Entergy and its employees have an “unwavering commitment to safety.”

Approximately 630 people work at the 650-megawatt plant in Vernon, with 40 percent of the employees living in Vermont.

According to its website, Entergy expects to continue operating at current staffing levels “through to shutdown.” As the plant moves through milestones in the decommissioning process, the number of workers will decrease at each phase.

At the press conference, Jeff Forbes, executive vice president, nuclear operations and chief nuclear officer for Entergy Nuclear, said that safety remains the company’s top priority.

The plant will remain under federal Nuclear Regulatory Commission oversight, he said.

Forbes and Mohl told reporters that Entergy would complete a site-specific study to determine the best path forward as the plant undergoes decommissioning.

Mohl and Forbes also praised the hard work of VY employees, describing everyone at the plant as “world class.”

Entergy is assembling severance and retention packages for employees, said Mohl although he would not reveal any further details at the press conference.

Entergy pledges to “treat employees at the station fairly and assist them through this transition.”

SAFSTOR over DECON

Nuclear plant owners have two choices when decommissioning a plant. Companies can completely dismantle the plant using the DECON model, effectively returning the property to a brown field. Or a plant can go the route of SAFSTOR, or safe enclosure, effectively mothballing the plant for 40 to 60 years.

In a press release, Entergy unambiguously declared that it would decommission VY using SAFSTOR.

“There are a number of advantages to SAFSTOR methodology, including lower potential radiation exposure for workers doing the decommissioning work and the need for fewer shipments of radioactive material to the low-level waste site,” the press release said.

During the press conference, Forbes again stressed the choice of SAFSTOR as the way forward.

When the spent fuel is cool enough, employees will transfer the radioactive waste from the spent-fuel pool into on-site dry casks, steel-and-concrete containers designed to store the material safely.

The spent fuel will be stored in dry casks until the US Department of Energy fulfills what he called a “contractual obligation” — or, in other words, begins to comply with the Nuclear Waste Policy Act of 1982, which squarely made it a federal responsibility to construct a national nuclear waste storage facility, said Forbes.

No national storage site exists. One site, Yucca Mountain in Nevada, has been under consideration and development since 1987 but is now officially off the table.

When asked if the spent fuel would sit at VY indefinitely, spokesperson Jim Sinclair said he would not speculate and to wait for Entergy to release its site-specific plan.

Forbes was vague about whether the site would be fully dismantled while the dry casks were on site or until after the casks have been moved to the still-hypothetical federal storage facility.

When asked if members of the current VY workforce could conduct the SAFSTOR activities or if Entergy would have to hire specialized workers instead, Forbes said he anticipated members of the current workforce could complete SAFSTOR.

Entergy will assemble a planning group to build a framework for decommissioning, said Forbes.

He added that Entergy has never decommissioned any of its plants. The industry, however, can supply insight and some of Entergy’s employees have gone through decommissioning at other plants.

The Windham Regional Commission has advocated for the DECON methodology over SAFSTOR.

Executive Director Christopher Campany said that, based on the WRC’s analysis, SAFSTOR is the “harder landing” for the economy and VY’s workforce.

Although SAFSTOR has a longer period of decommissioning, the stepping down of the workforce happens more quickly and thus would have a “much more acute impact” than DECON, he said.

The DECON process is more likely to use the “legacy knowledge” of current employees, Campany added.

Community discussions

Campany has contacted his counterparts at regional planning agencies in New Hampshire and Massachusetts to discuss how the region can mitigate the changes that will come as a result of Tuesday’s announcement.

“All the work staff and commissioners have done over the years focused on closure and DECON,” said Campany. “[This work] is important right now.”

The WRC has focused on VY’s eventual closure for about 10 years. The WRC is ready with studies and information, said Campany.

“A lot of the initial thinking is in place” for moving forward, he said.

Campany said past conversations have focused on the region’s best interests.

“Frankly, that should be the position of all parties involved,” he said.

Campany felt the region should understand that “the future does not lie in that site.”

That property will not be usable as long as spent fuel is stored there, he said, so no solar farms, no wind farms, no other industries can adapt the Vermont Yankee physical plant.

The WRC helped Vernon build a resiliency plan to use in the event the plant closes.

Vernon’s relationship with Entergy will likely change, said Campany. Before, the two entities needs were similar. But as the plant shuts down, the needs of Entergy and Vernon’s needs may diverge.

Questions remain

Questions still remain in the matter of Entergy’s request for a Certificate of Public Good (CPG) from the Vermont Public Service Board.

As a result of the company’s recent federal lawsuit, Entergy has resubmitted its application and is operating the plant without a current permit.

Mohl described the CPG process and recent litigation against the state as “ongoing.” He speculated that, if granted, the CPG would expire on a date consistent with Entergy’s plans to close the plant.

Entergy hedged a yes on the question of whether it had enough money in its federally required decommissioning fund.

According to the news release, to meet the NRC’s minimum decommissioning requirements will cost $566 million. Entergy reports $582 million in the fund as of July 31.

When asked if Entergy had enough money in the fund to decommission the site, Mohl said the final decommissioning costs are “yet to be determined.”

The company will submit final costs to the NRC as part of its required “post-shutdown decommissioning activities report.”

Mohl had “no confidence in the numbers without [the] study.”

“Filings with the NRC for planned shutdown activities will determine whether any other financial assurance may be required and will specifically address funding for spent-fuel management, which will be required until the federal government takes possession of the fuel and removes it from the site, per its current obligations,” wrote Entergy on its website.

Mohl added that Entergy’s planning process would also include looking forward 60 years to ensure that the VY site will remain safe and clean while in SAFSTOR.

Painful news

Controversy has plagued the plant since it opened 41 years ago.

For supporters, the well-paying, highly technical jobs are a blessing to the region. For opponents, the nuclear plant has threatened or outright endangered the health and welfare of the region.

Mohl said that he and Forbes personally “delivered the painful news” to plant employees Tuesday morning.

According to Entergy, the company also contributes approximately $435,000 annually in local charitable giving.

Mohl said the company does not have a concrete plan for how it will deal with its charitable giving going forward.

“We will continue to be a good corporate citizen. We recognize that this is a significant event for the local economy and for surrounding communities. We will have future discussions to talk about transition plans, as it is too soon to know the specifics,” the company stated in a press release.

Reactions and looking ahead

As people filled Entergy’s press room, opponents to the plant stood outside delivering statements to those exiting the company’s headquarters.

“The town of Vernon is in mourning today,” said Patty O’Donnell, Vernon Selectboard member and former state representative for Vernon and Guilford.

O’Donnell said that she has seen audits estimating that Entergy pays $100 million in taxes to the state annually. Losing the plant will create a “huge void,” she said.

The biggest void in O’Donnell’s mind will be the cultural and social loss to Vernon as Entergy employees move away for new jobs.

VY employees volunteer to coach sports teams, she said, citing one example.

O’Donnell expected Vernon and Entergy will continue to “work together as a team,” as she said they always have, throughout the decommissioning process.

State Sen. Jeanette White, D-Windham, said Entergy’s news didn’t come as a surprise.

“I don’t know what the state should do,” said White when asked how the state should support Windham County in this time of change.

White said she didn’t want to sound cold, but the state isn’t any more responsible to other areas that have recently lost jobs, like IBM in Chittenden County, so Windham County shouldn’t expect special treatment.

“I can’t see an upside to any of this,” said Rep. Mike Hebert, R-Vernon.

Hebert said he worries for Vernon and Guilford, which he represents.

According to Hebert, Vernon Elementary School was one of the few schools experiencing population growth.

This news could completely change the school, he said.

Still, Vernon is slightly ahead of the game because the town has engaged in a discussion about how it might react if the plant closes.

“[But] there’s a general pall over the community,” he said, adding he expects the town to go through all the stages of grief.

News ‘a body blow’ to the region

“We’re not starting from zero,” said Laura Sibilia, director of economic development for the Brattleboro Development Credit Corp., one of two employees who staff the Southeastern Vermont Economic Development Strategy (SeVEDS).

SeVEDS has conducted extensive research into the region’s economy in order to reverse what it calls a 20-year economic decline. In the fall, the organization intends to submit a Comprehensive Economic Development Strategy (CEDS) to the state Economic Development Authority.

In a statement, SeVEDS wrote that, in March 2012, the group “commissioned the Post-Vermont Yankee Task Force, chaired by Stephan Morse, to report on the additional economic impacts a Vermont Yankee closure would have on the regional economy.”

The report outlined those impacts as job loss, a decline in the region’s gross domestic product, major declines in real estate value, major declines in available human capital, and declines in state and local tax revenue.

As a result, the region has numerous tools and plans to grow its economy, she said.

Still, Sibilia described Entergy’s announcement as another “body blow.”

First, the region was dealing with a sluggish economy. Then Tropical Storm Irene hit. Now it’s VY closure, she said.

This latest news “lends much more urgency” to the region’s economic planning, she said.

Sibilia said she thinks the region will weather this latest upheaval.

“[We must remember] we are not 27 silo towns, or 600 silo businesses, or 44,000 people,” she said. “We truly are connected in many ways.”

BDCC Director of Workforce Development Patricia Moulton Powden, who works on SeVEDS with Sibilia, said the organization intends to construct a workforce profile of skills held by VY employees.

She “fully expects” that a percentage of the current employees can transfer their skills to jobs in the area.

A number of current employers are looking for engineers of all stripes, she said.

Powden noted that BDCC and SeVEDS’ first concern, however, is for the 630 families affected by the closing.

Regardless of people’s perspective on nuclear power, job losses are never welcome news, she said.

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Originally published in The Commons issue #218 (Wednesday, August 28, 2013).

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