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Decommissioning Vermont Yankee Doesn't Have to Spell Economic Doom 

Local Matters

The Senate’s historic “no” vote on the relicensing of Vermont Yankee isn’t likely to be the final word on the state’s sole nuclear power plant. But Vermont’s utilities are preparing for the very real possibility of a nuclear-free energy future come 2012. Most are negotiating new energy contracts to replace VY’s baseload power.

There’s been plenty of speculation about how higher electricity prices will affect the state’s economy, but other questions remain about how Vermont’s economy will fare in a post-Yankee future. Among them: What are the other economic impacts of closing and decommissioning a nuclear plant? Will all of Vermont Yankee’s existing jobs disappear right away, or will new jobs be created by the decommissioning process? And what are the longer-term economic prospects for Vernon and its surrounding communities?

No one knows definitively, but some people are making educated predictions. After all, this isn’t the first time a nuclear plant would be retired. One need only look to Vermont Yankee’s sister plant, Maine Yankee, to get a glimpse of what might happen here.

Maine Yankee was a 900-megawatt plant located in Wiscasset, Me., a small, coastal community about 45 miles northeast of Portland. Wiscasset is located in Lincoln County, whose population in 2000 was 33,616 with a median household income of $35,696.

In the same census, Windham County, which is home to Vermont Yankee, had a 2000 population of 44,216 and a median income of $35,590.

Maine Yankee operated from 1972 through 1996, when it was shut down unexpectedly because of serious structural problems. In August 1997 the plant’s owners announced that the plant would close for good, 11 years ahead of schedule. The decommissioning process began almost immediately and was completed eight years later, in 2005.

In 2000 Wiscasset had a population of about 3700 — Vernon’s was 2141 — and more than 50 percent of the region’s economy was based in service and retail industries, most of which supported tourism, according to a 2005 Community Advisory Panel’s report on the decommissioning of Maine Yankee.

According to that report, there were “significant and immediate” consequences from the closure of Maine Yankee. Additionally, there were fears about the loss of property taxes and jobs, the long-term storage of spent nuclear fuel, cleanup of the property, and other unknowns about the decommissioning process.

But the impact on Lincoln County hasn’t been all that dire. At least, that’s the assessment of Charles Colgan, a professor of public policy, management and economics at the University of Southern Maine. Colgan also chairs the State of Maine Consensus Economic Forecasting Commission. About 20 years ago, he was hired by the owners of Maine Yankee to make some predictions about what would happen if Maine Yankee suddenly disappeared from the economy. As for his personal views of nuclear power in general, Colgan says, “I think nuclear power is OK. As soon as we solve the nuclear waste issue, I think it’ll be fine.”

In his assessment, Colgan determined that the biggest economic impact to Maine would be, as in Vermont, a hike in electricity rates, as well as the significant impact to the municipal tax base. At the peak of Maine Yankee’s operation, the plant supplied more than 500 permanent jobs to the local economy, as well as 90 percent of Wiscasset’s municipal operating budget. Immediately after the plant’s closure, towns throughout Lincoln County saw their property taxes rise 56 percent.

Nevertheless, Lincoln County didn’t suffer long-term unemployment and economic collapse, nor were there wholesale closures of local businesses. In fact, Colgan describes the economic fallout as “not pleasant but manageable.” Why?

“At the end of the day, a large nuclear plant like this one isn’t tightly integrated into the local economy,” he explains. Nuclear plants are unlike other large industrial facilities, such as paper mills, which have hundreds of people in the woods logging trees, driving trucks and working as foresters.

Also, many of its purchases and supplies are exotic and highly specialized goods; it’s not as though you purchase a nuclear pump at the local hardware store. A nuclear power plant, he adds, is really “an economic island. The only impact it has on the local economy is the property taxes and the income earned by the workers there.”

Ray Shadis, an independent consultant who works for the New England Coalition on Nuclear Pollution, which opposes the relicensing of Vermont Yankee, lives about 2 and a half miles from Maine Yankee. He’s re-released a 2002 case study on the economic consequences of closing that plant.

Among its key findings, Shadis says that many Maine Yankee employees immediately left the company after its announced closure due to the high demand for nuclear energy experts in the industry. Moreover, while some qualified for early retirement, hundreds of others were retained or hired back to assist in the decommissioning process, since, as he puts it, “They knew where the piping was buried.” At the peak of that process, which lasted eight years, as many as 430 people were employed on the site, with an average of 300 employees over the eight-year decommissioning process.

“When you decide to shut down a plant and go into decommissioning, there is no ‘guillotine effect,’ where one day you suddenly lock the gate and all the employees are outside,” Shadis says. Decommissioning a nuke, he explains, is like “building a plant in reverse, because taking it apart requires all the care [of] putting it together.”

In fact, the NECNP report documents a number of positive developments that occurred after the Maine Yankee closure, including strength in the real estate market, more new home construction and increases in the average price of a home sold in Lincoln County. Overall, the report concludes, the local economy “took a hit, but statistically, the impact is hard to find.” And as for the state’s economy, “We have been able to detect no measurable effect of the Maine Yankee closure … reflected in published statistics.”

A spokesperson for Entergy Vermont Yankee didn’t respond to Seven Days’ repeated requests for information on the economic consequences of closing and decommissioning the plant starting in 2012. However, a report published last month by the International Brotherhood of Electrical Workers Local 300 claims that Vermont Yankee employs 670 people and creates 618 other jobs “as a direct result of the plant’s operations.” In all, their annual payroll exceeded $93 million last year.

VY itself reports that it purchased about $7.6 million in goods and services from Vermont vendors in 2008, and paid about $16.5 million in state and local taxes and other payments. In all, the company claims it provides about $100 million every year in total economic benefit to the state and region.

But Shadis advises Vermonters not to fear the unknown. As someone whose own community survived the loss of its nuke plant, he says, “Come on in. The water’s fine.”

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About The Author

Ken Picard

Ken Picard

Bio:
Ken Picard has been a Seven Days staff writer since 2002. He has won numerous awards for his work, including the Vermont Press Association's 2005 Mavis Doyle award, a general excellence prize for reporters.

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