Wednesday, December 4, 2013

Pay for Education, Not Tribute: Vermont Yankee ANS Nuclear Cafe

Viking Longship Reconstruction
Extorting Money from Vermont Yankee

On ANS Nuclear Cafe today,  I have posted a history of the extortion against Vermont Yankee, and some advice for the nuclear industry going forward:

Millions for education, but not one cent for tribute.

Vermont Yankee made  certain agreements with the Vermont Public Service Board. They made these agreements in order to get permission to run their plant and upgrade their equipment. These agreements were straight extortion.

According to these agreements, Vermont Yankee paid for cleaning up Lake Champlain (it's the other side of the state from the power plant) and for wind turbines.  In other words, in order to keep operating, Entergy paid for pet projects of the legislature and Public Service Board.

But to save money, Entergy closed the visitor center.

Keep the Visitor Center, Lose the Extortion

In my opinion, this was a backward strategy.  The visitor center was important.  The money for legislative-pet-projects was counter-productive.

I suggest nuclear plants should fund outreach (visitor centers and more).  They should fund their lawyers, when necessary.  They shouldn't give in to extortion and to paying Dane-geld.  Paying off the Vikings doesn't work.

Rudyard Kipling has a memorable poem about Dane-geld. It explains why trying to pay off the Vikings is a bad idea.  "Once you have paid him the Dane-geld, you never get rid of the Dane."  The extortionists will certainly come back later, for more money.

Deliver the Public Service Board From Temptation

The Kipling poem includes some surprising advice. It suggests you should save the Vikings from
John McClaughry
by not paying the Dane-geld:

"It is wrong to put temptation in the path of any nation,
  For fear they should succumb and go astray;"

John McClaughry of the Ethan Allen Institute wrote about this shake-down back in 2005, though he called it the extortion "simony" instead of "dane-geld."  In that article, McClaughry quotes the state auditor, who also wants to protect the Public Service Board from itself:

In November 2003, in return for Public Service Department support for a reactor power uprate, Entergy agreed to pay $7.8 million to cleanup algae in Lake Champlain, 180 miles away, plus $2.1 million to subsidize low income home heating. The deal was criticized not only by the anti-nuclear activists, but also by state Auditor Elizabeth Ready: “(Vermonters) health and safety could be placed at risk if utility regulation is allowed to become a pay-to-play endeavor, fueled by extracting millions from applicants for pet projects in order to get the Public Service Department’s stamp of approval.”

In other words, this sort of thing is just too tempting for the Danes and for the Public Service Board.

Instead of giving money to clean up Lake Champlain, or whatever pet project the Public Service Board requires, nuclear plants should spend money on outreach. And, if necessary, on lawyers.

Kipling and State Auditor Ready would agree: Do not put temptation in the path of any nation...or any Public Service Board.

Don't pay.


I am sorry.  I cannot easily find a link to McClaughry's 2005 Commentary: "New State Revenue Technique: Simony."

John McClaughry is the founder of the Ethan Allen Institute. The Energy Education Project is part of that Institute, and I am the director of the Energy Education Project.


Joffan said...

Not sure if it's relevant, but there's an Ethan Allen Institue article from 2008 on a similar theme, in the context of an application from Walmart. Corrupt Government Squeeze on WalMart

Joffan said...

Got it: State Revenue Technique

Meredith Angwin said...

Thank you, Joffan!

Anonymous said...

Meredith. I was unable to find your "history of the extortion against Vermont Yankee" article. Can you post a link to it please? Thank you.

Meredith Angwin said...

Hi Anon

It's the article linked at the top of the post: Millions for education, but not one cent for tribute.

I hope this link will also work.

<a href=">Millions for education, but not one cent for tribute.</a>

Meredith Angwin said...


Sorry. My link was messed up somehow.
Use the link at the top of the blog.


Robert said...

This is why I like my idea of turning a closed NPP (Might Kewaunee be a good candidate?)into the National Nuclear Power museum that would have cutaways of some of the machinery and also classes, games, information, and maybe even a ride through the place. There must be some way to remove as much radioactivity to do this as possible. I suppose all the fuel would have to be gone too but that would be a way to show dry storage. Anyone to pitch this idea to? I would think a pressurized water reactor might be a better candidate so sorry I cannot help with VY.

Which brings up, if the closure is a done deal and Entergy has to safestore, maybe there could be a compromise where the outbuildings and tanks could be removed but maintain the green turbine and white reactor buildings so they do not become eyesores. In the model, it looks like some of the concrete is as thick as a tall person, its going to take a long time to make it go away.

Which also brings up: Could some of VY parts be used in other GE plants? Maybe Entergy is closing to sell and use some of the parts.

Meredith Angwin said...


It's a good idea, and it might work at another plant. The general idea in Vermont is that the plant is an "eyesore" and the footings must be removed to whatever depth they are at (20 feet? 40 feet?) in order to Greenfield the plant site. Merely removing footings to a depth of three feet is enough for rebuilding on the site, but not enough for the nuclear-haters around here!

In other words, this could work, but maybe somewhere else....It's a good idea.

I am pretty sure they can't reuse any parts of the plant, though. Alas.

Pete51 said...

I can understand Entergy finally giving up on VY and all of the extra costs (tribute) associated with it that are required by the state. However, I found the following article at Forbes.

The natural gas futures price for New England is $11.75 per MMBTU? And Entergy still can't make money on VY? Something isn't right here. Entergy said the low NG price is what is forcing VY to become uneconomic. Is the price of wholesale electricity still too low?

Meredith Angwin said...

Hi Pete

I completely agree with you. At the time that Entergy announced the decision, I said that I thought it was the wrong decision because local gas prices were going up.

Recently, I quoted that same FERC prediction about $11.75 gas prices. I also noted that electricity prices in Boston are scheduled to rise by 20%

I wrote an an op-ed in my local paper a few weeks ago, in which I predicted this price rise. Here's my blog post about the op-ed, including a link to the Boston article on the 20% price rise

and here's the op-ed itself, which I will also post on this blog this week.

I personally think Entergy made a mistake by closing VY, but nobody asked me.

On the other hand, there were changes of pricing on the grid, and there was the extortion (aka "regulatory environment"). So I don't know the entire story.

Pete51 said...

Apparently, the $11.75/MMBTU gas price is a seasonal spike up. Also, as mentioned in the Forbes article, it is really a supply issue of not enough pipeline capacity. Perhaps those pipelines will eventually be built.

A longer term look at wholesale power and NG prices from the ISO-NE:

Last August, the gas price was only $4, and wholesale power was $35.08 per MWh (3.5 cents/kwh) It is evidently difficult for a small, single unit plant such as VY (or Kewaunee) to stay competitive. Then there is the issue of wind farms bidding negative prices into the wholesale power market.

Still, the longer term price for gas could well be headed higher. Fracking allows for more gas to be extracted, but the depletion rates from those wells can be very high. You get a lot of gas in the first year, but not so much after 3 or 4 years.

Robert said...

I would hope that a nuclear power ride or museum facility would be more interesting than what I saw at Epcot, Ellen's Energy Adventure. There is an impressive dinosaur scene (oil is dead dinosaurs) and there is mention of nuclear fission for a minute as the "most controversial" but the attraction is mostly Ellen answering wrong questions on Jeopardy. This is in a show building as big as a Sears or a Target so what a waste of space. I wonder if there is an organization that would be interested in my idea, because I don't think Disney would be - Although I think Walt was pro-nuclear.

Anonymous said...

Remember that the energy pavilion at Epcot is sponsored by Exxon, so it should be no surprise that the one time they mention nuclear in the whole show is a negative comment. It was a much better show before they "improved" it by adding Ellen DeG. and Bill Nye, the so-called Science Guy (he isn't).

Anonymous said...

While I appreciate your positive attitude concerning educating the public, the best possible use of both Kewaunee and VY is to keep them operating as nuclear plants. Operationally there is nothing wrong with them. Their safety record is fine. They are valuable pieces of national infrastructure and if private owners don't want them then as a matter of national policy we should have a quasi-government (like TVA or Bonneville Power Administration) organization take them over and operate them as facilities that are for the national interest in terms of energy security and reduction in the use of carbon-emitting fuels. I know that sounds a lot like collectivism and I don't advocate that as a general policy, but in these cases only as a last resort to preserve what should be viewed as national assets.

Robert said...

Anonymous and Meredith too: Well then maybe Ellen's Energy Adventure could be turned into a nuclear power tour using props rather than real equipment and it could be sponsored by Westinghouse or Areva or some company like that. Unfortunately, Disney is not putting any money into Epcot, it looked like the worst maintained park there, especially the future side so I think Ellen and Bill will be there for awhile. As for plants that are damaged, would it not be possible to "raid" San Onofre and Crystal River for parts, to at least get some use out of them?

Anonymous said...

SONGS needs a new steam generator. I think Edison should go after Mitsubishi to either pay for a new one or give them a new one since they screwed up the first one. We know how to replace steam generators. Edison trashed the plant because of regulatory uncertainty and political pressures. CR3 is a bit more problematic, but it still could be saved if they hired a competent contractor to do the work, perhaps with a surety bond to make sure the job got done correctly. Until they starting tearing the places down I don't think anyone should be picking over the bones.