Thursday, May 26, 2011

North of the Border, East of the Border: Nuclear, Wind, Hydro and Vermont

A friend asked me what I thought of the recent Green Mountain Power (GMP) contract to purchase electricity from Seabrook Station. My blog yesterday on the Seabrook contract has links, charts, cost comparisons and so forth. Today, I decided to share my note to my friend, amended for this post.

Yes Nuclear! Yes Inexpensive Electricity!

Dear Friend,

You sent me a link to Emerson Lynn's blog post about the Seabrook contract and asked my opinion. Yes, I am glad to see this agreement between GMP and Seabrook. I am happy to see a good power purchase agreement for Vermont, and since I am pro-nuclear, I am glad to see power coming reliably from another nuclear facility. I don't consider the difference in price to be substantial: VY bid 4.9, but VY could probably match the Seabrook price (4.7 cents) especially if VY can sell the rest of their power at market prices.

In his post, Lynn describes the "negotiated deal" with HydroQuebec (HQ). The only deal so far with HydroQuebec replaces the power from current HQ contracts: those contracts end in 2016. The new HQ deal does not replace any Vermont Yankee power. This Seabrook contract also only replaces some of the power from Vermont Yankee. There is still a gap in Vermont's power supply for the future.

In other words, many of the uncertainties have not been removed, and power prices are still capable of rising if Vermont Yankee is not in the mix. Much power is bought "at the market" and taking low-priced supplies out of the mix will affect the price.

Still, the Seabrook purchase news is basically good news, and very hopeful for Vermont's future.


At another level, this news is also troubling. It shows a NIMBY attitude that I don't like. "We hate nuclear plants in-state, but we are delighted with cheap power from out-of-state nuclear plants." A friend of mine asked if Vermont is going to end up with hydro plants and nuclear plants lined up on our borders in neighboring countries and states. They would provide Vermont's baseload supply, while Vermont builds nothing by wind turbines. I am sorry to say this could happen.

Aside: Actually, Vermont is not even building wind turbines. It is buying wind turbine power from New Hampshire. GMP made a recent deal for the output of a wind farm in NH, while GMP's Vermont wind project, Lowell Mountain, appears stalled by local opposition. End aside.

The power plants lined up on Vermont's borders will pay taxes and fees to their own states or countries, not to us. They will employ people in Canada or at the New Hampshire seacoast, not Vermonters. The power grid will still have to adjust to the new sources of power, certainly raising some transmission costs. In other words, the purchase from Seabrook is good news, but doesn't mean we don't need Vermont Yankee.

Every time I make a presentation about VY economics I explain that the existing economic studies are about payroll loss and tax loss to the state. No study addresses loss of Vermont jobs because of increased cost of electricity. (I generally show a picture of an iceberg at this point of the presentation---that is, the loss of jobs due to electricity price rise is the hidden effect.)

So, this business of "gosh, we have low-cost power so we are saved" means that "gosh, we have some low-cost power so maybe we are back to having only the economic losses predicted by the studies." That's $60 to $100 million a year loss in economic activity and about $10 million in taxes, including the Clean Energy Development Fund.

Spiritual Problem

The economic loss is a big problem, but maybe not the biggest. Howard Shaffer is fond of saying that Vermont Yankee is Vermont's fair share of the grid. We can't just take from the grid; we have to give back. As a fair share, VY is quite benign. No coal trains, no flooded valleys, no NOx from gas turbines.

However, as I see Vermont right now, though people talk about "community" this or that, many really don't see themselves as part of a community about electricity or jobs or pretty much anything. When I mention job loss if Vermont Yankee closes, one or two enterprising types in the audience will challenge my statement. They will stand up and with a bit of a smirk, remind me that many people who work at Vermont Yankee live in neighboring states. In other words, the loss of a job by a person who lives in Massachusetts but works in Vermont is not a loss that should concern Vermonters.

This attitude drives me nuts.

We buy our power from HQ in Canada. We buy nuclear power from New Hampshire, and even buy wind electricity from New Hampshire. We want to take and take and never give back a kWh to anybody else. The rest of the world exists to supply us.

To me, this is beyond an electricity problem. This is a spiritual problem. I truly worry about this state.

Well! Thank you for asking my opinion, though I probably gave you FAR more opinion than you wanted!

Hope to see you soon!


It's a lilac image because I have a beautiful lilac bush in full bloom right next to my study window. You can think of the illustration as lilac stationary for a note to a friend.

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