Nuclear plant closures send towns into crisis
Maintenance hassles, alternative power sources have depleted industry that sustained rural communities
In many ways, this town of 2,200 on the southern edge of the state has the feel of a place where folks still rely on the land for their living.
But look up, and you’ll catch a glimpse of massive transmission lines extending out from the Vermont Yankee nuclear power plant on the banks of the Connecticut River.
When it opened in 1972, Vermont Yankee was in the vanguard of the age of nuclear power generation, offering unimaginable job prospects for small-town folks and decades’ worth of flush budgets for Ver- non. Vernon was listed among Vermont’s “gold” towns, on par with moneymaking ski meccas such as Stowe to the north.
Then in 2013, Vermont Yankee’s owner, Louisiana-based Entergy, announced it would close its single-unit reactor by the end of 2014. The announcement, though not unexpected, forced Vernon into some difficult decisions as Vermont Yankee employees put homes up for sale, taking with them six-figure incomes that fed the economy for decades. The town’s $2 million budget would need to be cut in half.
Patty O’Donnell found herself at the center of those decisions as chairwoman of the town’s Select Board when the announcement
came. “It was the most difficult thing I had ever been through as an elected official,” she said.
O’Donnell and others quickly decided it was better to look toward the future than sit back and wait while Vernon turned into a ghost town, a common fate of cities and towns slow to respond when a critical source of jobs packs up and leaves.
“We’re used to doing what we need to do for ourselves,” said O’Donnell, a Republican who served as Vernon’s representative in the state Legislature. “It’s what Vermonters are, and it’s what we’ve always been. … No white knight in shining armor is going to show up in our town.”
SIMILAR PLIGHTS
Vernon’s troubles, in many ways, mirror the challenges faced by towns across the USA — from California’s Pacific coast to the Florida’s Gulf Coast — where nuclear power plants shut down.
In recent years, more than a dozen nuclear power plants either have announced plans to close or entered the decades-long process of decommissioning their nuclear reactors, according to the federal Nuclear Regulatory Commission.
The cheap price of natural gas, coupled with costly repairs to aging plants, have hastened the nuclear industry’s decline, forcing more and more power companies to cut their losses.
At the end of May, the owners of Three-Mile Island, the Pennsylvania nuclear plant whose meltdown in 1979 hardened the resolve of anti-nuclear activists and inspired a host of industry regulations, announced plans to close by 2019.
In January, Entergy announced that in 2021, it will shut down Indian Point, a primary source of electricity for New York City and Westchester County for more than four decades.
The numbers tell part of the story.
Before it shut down in 1998, the Zion Nuclear Power Station on the shores of Lake Michigan, 50 miles north of Chicago, paid nearly $20 million to the town that had been its home since 1973. Last year, Zion’s tax income from the plant was about $1.6 million. That translated into fewer cops to patrol a town of about 24,000. Taxes on homes and businesses have more than doubled, and property values have plummeted.
“We can’t draw businesses because the taxes are so high,” Zion Mayor Al Hill said. “And the taxes are so high because we can’t draw businesses.”
Nearly 70% of Zion’s housing stock is in rentals, Hill said. In healthy communities, the figure should be about 23%. Taxes on a $300,000 home have surged from $8,000 to $20,000 per year, he said.
In 2013, Duke Energy shut down the Crystal River Nuclear Plant on Florida’s Gulf Coast, resulting in the loss of 600 highpaying jobs in a region reeling from the downturn in residential construction after the recession.
An attempt in 2009 by the plant’s previous owner, Progress Energy, to replace two 500-ton steam generators cracked the reactor’s containment wall. The plant was built in 1977.
As hundreds of high-paying jobs left the area, residential property values took a dramatic downturn. The average value of a single-family residence plummeted from nearly $154,000 in 2008 to $115,000 in 2016.
Citrus County’s tax base took a painful hit. In 2008, the county’s appraiser pegged the assessment for two parcels on the site at $10.5 million. Last year, the figure was $413,990, county records show.
Duke Energy is building a $1.5 billion natural gas plant at the site that is 40% done and scheduled to open next year. It’s likely to replace just a fraction — 50 to 75 — of the jobs the more labor-intensive nuclear facility provided.
In the aftermath of the shutdown, officials work toward diversifying the region’s economy. Topping the list is tourism. Crystal River is the largest winter refuge for manatees in Florida, and last year, 53% of the region’s nearly half-million tourists said they came to see the manatees.
On the Pacific coast, north of the city of San Diego, the San Onofre nuclear plant shut down in 2013 after workers discovered premature wear on steam generators.
A thousand workers lost their jobs, and five-and-a-half years lat- er, the plant’s owners, Southern California Edison and San Diego Gas & Electric, say they’re owed about $4.7 billion on their investment.
At issue is whether ratepayers should be on the hook for the money the utilities expected to make by selling electricity from San Onofre, as well as maintenance costs and nuclear fuel purchased before the plant was shut down prematurely.
The most severe economic consequences of San Onofre’s shutdown have been felt in the plant’s backyard of San Clemente. Businesses relied on a jolt of economic activity from workers who spent months at a time in the area while doing routine maintenance at the plant. Many stayed at hotels.
“They’d be pretty much going out to dinner every night,” said Lynn Wood, the CEO of San Clemente’s Chamber of Commerce. “So we lost all that.”
In Wisconsin, the shutdown in May 2013 of the Kewaunee Power Station, located on 900 acres on the western shore of Lake Michigan, 25 miles southeast of Green Bay, led to the loss of 600 jobs and about $85.5 million in annual salaries. The shutdown was a blow to the power station’s home in Carlton, where cows outnumber the town’s 1,000 residents four to one.
This year, Kewaunee County, which includes Carlton, increased its sales tax a half percent in an attempt to make up for the $750,000 in annual income generated by the power plant.
After the closing, the plant’s owner, Dominion Energy of Virginia, sued Kewaunee County and others disputing assessments of the plant’s value. Dominion claimed the plant was worth $1 million.
A settlement set the property’s value at $15 million for the next eight years.
There’s been talk of building a state prison or marketing Kewaunee as a gateway to Door County and its emerging wine industry.
At the height of its power, Ver- mont Yankee delivered nearly a third of Vermont’s electricity.
The property tax revenue that flowed from Vermont Yankee financed one of the finest elementary schools in the state, including a gym to rival any high school. The police department’s cruiser was too old? Not a problem. Buy a new one.
No one talked about cutting budgets. “That wasn’t the mentality in this town because we always had so much money,” O’Donnell said. “It was like it doesn’t matter that there’s only 30,000 miles on this car, the capital plan says the new car is ready, so let’s go get the new car.”
Around 2012, rumors began to spread that Vermont Yankee might shut down. Years of litigation with the state of Vermont, which called for the plant’s shutdown, had taken its toll. Beyond that, low prices for natural gas, which dictate prices in the energy market, made it harder to keep the plant open, according to Mike Twomey, the vice president for external affairs for Entergy.
“I think a lot of the folks in Vernon felt like this was not an unexpected outcome, but this was a very disappointing outcome,” Twomey said.
The plant’s workforce of 620 retired, found jobs with Entergy plants in other states or moved on. About 50 workers were retained to work on the decommissioning.
Houses went up for sale. The economy lost the cash that Vermont Yankee employees, who had an average salary of $105,000, spent in Vernon and neighboring towns. Vernon lost coaches for its youth sports teams, volunteers for the Boys and Girls club and nuclear engineers who used to walk across the street to Vernon Elementary School to help out with math homework.
NO GHOST TOWN
Vernon needed to find a way to cut half of its $2 million budget. Town meetings that once attracted a few dozen residents grew to more than 300. At town hall-style meetings that are a hallmark of government in Vermont, residents offered up suggestions for cutting budgets.
One led the town to contract with the Windham County Sheriff ’s Department to take over the town’s police duties. “We have to keep Vernon a town that people want to live in,” O’Donnell said. “We can’t turn it into a ghost town.”
In November, Entergy announced that it had agreed to sell Vermont Yankee to NorthStar Group Services, a New Yorkbased industrial demolition company, which includes in its portfolio the implosion of the Riviera hotel and casino on the Las Vegas Strip in 2016.
NorthStar has partnered with AREVA Nuclear Materials, which boasts 30 years’ experience decommissioning and dismantling nuclear reactors. The company said it can cut decades off Entergy’s plan to finish the decommissioning by 2075. If allowed to take over the property as planned next year, the company said it could finish the dismantling of the reactors and other buildings by 2030.
Critics of the NorthStar proposal urged caution. Deb Katz, the executive director of the Massachusetts-based Citizens Awareness Network, is not convinced NorthStar will have enough money to complete the decommissioning of Vermont Yankee and fears communities such as Vernon are being “seduced” by the promise of a quick cleanup.
“The colossal failure of nuclear power is really seen in the issues of decommissioning and cleanup,” said Katz, whose anti-nuclear group participated in protests at Vermont Yankee. “If they run out of money, then they’re not going to get it done quicker.”
NorthStar’s plan does not factor in the removal of hundreds of spent fuel assemblies that will remain at Vermont Yankee for the foreseeable future.
By 2018, Entergy expects to transfer nearly 4,000 spent nuclear fuel assemblies to 58 dry cask canisters on two massive concrete pads on the Vermont Yankee property. The company will pay for a security force to protect the fuel assemblies for as long as they remain there.
There’s no telling when or whether they’ll find a permanent home.
In June, Energy Secretary Rick Perry expressed support for permanently storing the nation’s spent nuclear fuel at Yucca Mountain, north of Las Vegas. The plan stalled during the Obama administration and has encountered deep opposition in Nevada.
At a House hearing June 20, Perry said the Trump administration budgeted $110 million to restart the licensing process for Yucca Mountain and $10 million to develop interim storage facilities that would take in spent nuclear fuel and high-level nuclear waste removed from 120 sites in 39 states.
Officials in towns living with spent nuclear fuel are losing patience. They back a bill that would force the Department of Energy to compensate communities that have become “de facto nuclear storage facilities.”
The Stranded Nuclear Waste Accountability Act would provide nearly $100 million in payments to communities storing nuclear waste until a new national facility is opened. The act was introduced last year but did not come up for a vote. The bill’s sponsors said there are 13 communities across the country storing spent nuclear fuel.
Communities would be compensated by a rate of $15 per kilogram of spent nuclear fuel. Zion’s compensation is about $15.2 million, and Vernon would qualify for more than $10 million, according to the bill.
O’Donnell hopes help comes soon, so Vernon can get to work on finding new uses for the Vermont Yankee property on the banks of the picturesque Connecticut River.
“It is a gold mine piece of property, and every nuclear plant sits on a gold mine piece of property,” O’Donnell said. “We have the railbed, we have the river, we have the switch yard that connects to the whole southern loop right there on that property. So we can do something else, and it’s up to us to control our destiny not anybody else.”
“We’re used to doing what we need to do for ourselves. It’s what Vermonters are, and it’s what we’ve always been.” Patty O’Donnell, chairwoman of the Vernon, Vt., Select Board