Playing chicken with Vermont Yankee

Legislature wants $600 million for plant shut down in two years.

The Vermont Legislature has entered into a high risk game of  chicken with Vermont Yankee with legislation that would require its parent owner Entergy to come up with $600 million for the decommissioning fund by 2011.  That’s a lot of cash in a short time, especially in this financial climate. What it looks like is a plan by Senate President Pro Tem Peter Shumlin (D-Windsor) to force the utility to shut down.  That would suit Shumlin just fine.

If that happens, Shumlin can count on two things.  First, there will be much higher electricity rates for the entire state. Second, there will be no change in the utility’s plan to store spent nuclear fuel at the reactor for at least the next several decades. 

The Brattleboro Reformer called the legislature’s actions irresponsible in an editorial this week.

The introduction of the decommissioning bill puts Vermonters in a high-stakes game of chicken over the fate of a power plant that supplies a third of the state's electricity needs -- currently at below-market rates -- and is a major reason for Vermont's low carbon footprint.

Low rates are popular but the plant is not

Vermont Yankee has had more than its share of troubles, like a cooling pipe breach in 2007, and has not done well in its efforts to bolster public confidence in the plant.  Although the NRC has noted there have been no safety lapses, as defined in federal regulations, several high profile mishaps, including dropping a cask of spent nuclear fuel, have unnerved the skittish public. Anti-nuclear activists, including Shumlin, have taken full advantage of them for their own purposes.

A more rational plan would be to expect the current decommissioning fund, now at $350 million, to grow over time to $900 million which would meet all of the needs of shutting down the plant if its license is not renewed by the NRC by 2012. 

It is not the legislature’s decision to determine whether the license should be renewed for another 20 years.  It is up to the NRC to renew the license or not.  That process is still underway.  What the demand for $600 million smackers looks like is an effort to extort concessions on electricity rates, already much lower in Vermont than the rest of New England.

One if by land, two if by sea

If the battle really isn’t over shutting down the plant, then the other reason may be an effort to leverage the utility over new rate contracts.

The Brattleboro Reformer reported that Vermont Yankee’s owners said they are days away from offering the state’s utilities a new 20-year power agreement and warned legislators that proposed legislation requiring the company to come up with $600 million for decommissioning could derail its future.

Entergy lawyer John Marshall fell just shy of saying to the legislature that would force the Vernon plant out of business. “That will effectively foreclose more options for continued operation of the plant,” he said.

Entergy Vice President for Operations Jay Thayer told the  legislature Vermont Yankee is Entergy’s least profitable nuclear power plant, Thayer said. “We are not returning a lot of money to the parent company,” he said.

There is an old phrase used by sailors that says “red sky at night sailors’ delight. Red sky at morning, sailors take warning.” There is definitely a red sky over Vermont for the future of cheap electric rates from nuclear energy.

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