Economics Force Vermont Yankee Nuclear Power Plant to Close

Vermont’s nuclear power era is almost over. Entergy Corporation will shutter Vermont Yankee nuclear power plant in 2014, ending nuclear power production in the Green Mountain State. Tuesday’s announcement ended years of controversy and legal wrangling over the plant’s future; in the end, the millions of dollars needed to run the facility simply no longer made economic sense.

Three-fourths of all the electricity generated (though not used) in Vermont was from nuclear power as recently as 2011, a higher percentage than any other state, acccording to U.S. Depearment of Energy Information statistics. But the New Orleans, Louisiana-based Entergy Corporation said the plant will now complete its current fuel cycle and begin a safe shutdown in the fourth quarter of 2014.

“This was an agonizing decision and an extremely tough call for us,” said Leo Denault, Entergy’s chairman and chief executive officer, in a statement.

High Nuclear Costs, Cheap Natural Gas

The small facility’s high cost, along with competition from lower-priced natural gas, contributed to the closure of the 605-megawatt, single unit, boiling water reactor, according to Entergy.

The plant is expected to operate around break-even during 2013, Entergy reported. But rather than face declining revenues in coming years, the company will now boost cash flow by some $150 to $200 million through 2017 by shuttering the plant.

Christoper Recchia, commissioner of Vermont’s Public Service Department, an executive branch organization that represents the public’s interest in matters of energy, said the Yankee decision wasn’t entirely a surprise. “We always knew that the size of it and the age of it would be challenges economically, and that clearly drove business decisions,” said Recchia, whose organization supported the closure of Vermont Yankee.

“That’s certainly not the main reason that we wanted the plant closed,” he added, noting that Vermont has adopted a goal of 90 percent renewable energy by the year 2050. (Read Vermont’s Comprehensive Energy Plan.)

The latest reactor closure announcement is the fifth this year: San Onofre’s two reactors in California, Kewaunee in Wisconsin, and Crystal River 3 in Florida are also being retired. As the United States’ fleet of reactors ages, more operators are finding that the expense of maintenance and repairs, particularly in the wake of heightened caution following Japan’s Fukushima Daiichi disaster, isn’t worth the returns. (See related story: “Latest Radioactive Leak at Fukushima: How Is It Different?”)

Sixty-five commercially operating nuclear power plants are currently in action across 31 U.S. States, according to the EIA, and produce about 20 percent of U.S. electricity. (See related: “First ‘Small Modular’ Nuclear Reactors Planned for Tennessee.”)

The federal government will take possession of Yankee Power’s spent fuel and remove it from the site as part of a Nuclear Regulatory Commission-defined decommissioning process that also includes removing residual radioactivity at the site and restoring it for new possible new uses. That process will take decades, and Entergy will retain ownership of the Vernon, Vermont land on which the plant is sited along the banks of the Connecticut River.

Vermont Yankee currently employs some 630 workers, most of whom will be kept on during near-term operations and gradually phased out as the plant winds down towards 2014.

Minimal Power Supply Impact

Vermont Yankee has frequently made news in the past. For some four decades after its 1972 opening, the plant provided about one thirdr of the total electricity consumed in Vermont. It was owned and operated by Vermont electric utilities, and regulated by the state, until a 2002 sale to Entergy.  Afterward, Vermont Yankee’s capacity was expanded and the corporation was granted permission to store radioactive waste on site.

But Vermont’s power supply sources shifted, and today Recchia said the closure won’t impact in-state power use at all. “In Vermont, we actually don’t use any of the power from Yankee anymore. It’s a big power plant, the biggest one in Vermont, but we get no electricity from it at all,” he said, noting that Yankee electricity is shipped elsewhere on the New England grid. (Take quiz: “What Do You Know About Nuclear Power?”)

In a 2012 study, ISO New England, the grid operator for six New England states, determined that the region’s electric grid would remain stable and reliable without Vermont Yankee because local electric companies had upgraded infrastructure across the region. However, the closure will likely make the region more dependent on natural gas for power needs.

While the closure won’t affect Vermont’s current power source mix, the desire to close Yankee is tied to the state’s goal of a 90 percent renewable energy supply by 2050. “We’re well on our way,” Recchia said. “We’re moving pretty quickly on solar, wind, and hydro. We get aboutone third  of our electric power from [public utility] Hydro-Québec.” Recchia did note that one utility has purchased a small amount of nuclear power from Seabrook Station in New Hampshire, so there is still some nuclear power being used in the state.

Vermont Governor Peter Shumlin, who became a vocal opponent of the plant, told the press in Montpelier today of the closure, “This is the right decision for Vermont and it’s the right decision for Vermont’s clean energy future.”

Operational problems in recent years contributed to the plant’s woes. In 2007 one of Yankee Power’s cooling towers collapsed, leaving a visible, gaping hole and increasing questions about the facility’s reliability. During 2010 and 2011 Vermont’s Department of Health reported traces of radioactive tritium in the Connecticut River and sourced them to the plant, though Entergy said its own tests found levels below detectable minimums. In 2011, Vermont’s Department of Health also reported that fish were found with detectable levels of strontium-90 a few miles upstream from the plant. The governor ordered weekly river water sampling that summer—that same year Entergy committed $92 million to refueling the plant for another cycle of power generation. (See related pictures: “Ten Oldest U.S. Nuclear Plants: Post-Japan Risks”)

While many Vermonters did back the plant, opposition eventually reached such levels that the state legislature attempted to shut down the plant entirely, refusing to certify Yankee for continued operation after March 2012, when its original license was set to expire. Entergy subsequently spent an estimated $5 million to win a 2012 U.S. District Court decision that Vermont could not close the plant, because it fell under the jurisdiction of the Nuclear Regulatory Commission, which had already granted a renewal through 2032. Just two weeks ago, Vermont lost its appeal to that decision of Judge J. Garvan Murtha.

But now Vermont’s only nuclear power plant is operating on borrowed time. Neighboring New England states New Hampshire and Massachusetts have one functional nuclear power plant apiece; Seabrook Station in Seabrook, New Hampshire, and Pilgrim Power Plant in Plymouth, Massachusetts.

Recchia said he didn’t have poll numbers or hard data on whether most Vermonters wanted the plant closed or not, but he felt the decision would be received positively by most. “I know a majority of Vermonters support the 90 percent renewable goal, so we were moving in another direction, and this was an older, out of date plant that doesn’t meet our needs anymore,” he said.