Decommissioning: Facts versus Fantasy

In general, I make the optimistic (and I believe correct) assumption that Vermont Yankee will continue to operate until 2032. However, opponents like to talk about the "jobs bonanza" of decommissioning. This blog post looks at the facts of decommissioning. It is updated from a post I did about three months ago at True North Reports.

Governor Shumlin's View of Decommissioning

A company has two main choices for decommissioning a nuclear plant.

• Prompt decommissioning: starting the decommissioning project as soon as the plant is closed.
• SafStor: keeping the plant intact for many years, until decommissioning is more convenient.

In the video below, posted by Vermont Digger from Shumlin's press conference on August 11, Shumlin explains that SafStor (delayed decommissioning) wasn't part of the Vermont Yankee purchase agreement, no matter what papers the state signed, and no matter what words somehow sneaked into those signed papers.

As reported in True North Reports, Shumlin said that decommissioning the plant quickly means:

The jobs gap doesn’t really happen for about 16 years,” he said. “Five to six years for the plant to cool down, gotta keep all the systems running, that requires a number of employees, several hundred. And ten years of decommissioning. So the jobs cliff, despite what they tell you in those 30 second advertisements, is not as significant as long as they keep their promise on decommissioning the plant whenever it shuts down.

Unfortunately, the facts do not agree with Shumlin's optimistic statements.

There is a jobs cliff.

The Reality of SafStor

Shumlin does not believe that Entergy has the right to put Vermont Yankee in SafStor. You can see this in this in the video clip above, and I also described Shumlin's misconception about SafStor in my post In Vermont Our Word is Our Bond, So We Don't Honor Contracts. But Entergy can legally use SafStor, whether Shumlin believes it or not. What will happen if they choose to use it?

Many nuclear plants have been put in SafStor. Usually, an older reactor at a site is put in Safstor while newer reactors at the site continue to operate. At Indian Point, for example, the small Unit 1 reactor (274 MW) has been in SafStor since 1974. Meanwhile, Unit 2 and 3 reactors, around 1000 MW each, continue to operate.

However, stand-alone plants are also placed in SafStor. For example, the Zion plants in Illinois have been in SafStor since 1998 and they are now beginning decommissioning. In the case of Vermont Yankee, the plant would be put in SafStor while the decommissioning fund (now around $490 million dollars) grew to a larger amount. Meanwhile, the radiation at the plant would decrease, leading to a less expensive clean-up.

Shumlin is correct about one thing, however. SafStor does not require many staff people. The site must have security, the fuel pool must be maintained and monitored, and the rest of the system has scheduled inspections. SafStor generally requires a staff of around 100 people, instead of the 650 at Vermont Yankee now. With SafStor, around 80% of the staff at VY would be laid off within a year of shutdown. No further staff would be needed until decommissioning began, which could be many decades in the future.

Prompt Decommissioning

Clearly, SafStor is a "jobs cliff", and Entergy can choose to use it. But what if Entergy chooses prompt decommissioning? This is the option Shumlin wants Entergy to chose, if the plant is shut down.

Shumlin says that it would take "five or six years for the plant to cool down" while hundreds of employees monitor it. Shumlin's tale is cheerful but wrong. With prompt decommissioning, the staff at the plant is laid off as soon as possible.

Wayne Norton was President of Yankee Atomic during the prompt decommissioning of three nuclear plants: Maine Yankee, Yankee Rowe, and Connecticut Yankee. At an industry forum on decommissioning in 2006, Norton presented a paper on lessons learned from the decommissioning experience. Norton considers the need for rapid layoffs to be an important lesson:

The biggest controllable cost in decommissioning is manpower... However, the plants that have been slow to efficiently accomplish...downsizing [the workforce] have had higher decommissioning costs....Severance packages, early retirement, and worker transition services helped workers make the transition. The major downsizing occurred over about a three month period.

Norton's statements are supported by an Electric Power Research Institute (EPRI) report on the decommissioning of Maine Yankee. Decommissioning began in 1997, with an on-site staff of approximately 600 people. By the end of 1997, the staff was down to 300 people, and by the end of 1998, it was down to 135 people. In 1999, the staff shrunk to 85 people

In Either Scenario, the Employees are Gone

With SafStor, most plant people lose their jobs within six months. With prompt decommissioning, it takes two years to downsize to a skeleton staff. Shumlin says decommissioning includes hundreds of people keeping their jobs for many years, but that is not the case.

In the case of prompt decommissioning, contractors are brought in for the majority of the decommissioning work. Norton describes the use of contractors:

Another advantage to early and aggressive downsizing is that it opens up opportunities to bring in workers with skill sets that are more suited to a decommissioning environment. Also, if these workers are contractors, they tend to be more accustomed to completing a given scope of work and moving on to another job.

How many contractors? The number of people in the contract work force is hard to estimate because it varies as the job goes through various phases. Decommissioning activities are done on a subcontract basis, with various groups of contractors brought in and later terminated. Decommissioning is basically a construction (de-construction) project.

Since radiological safety is important, the construction workers must follow protocols. However, the construction workers don't have the protocol-mindset of nuclear workers, and this can lead to problems. In the case of Maine Yankee, the company hired a general contractor to supervise the subcontractors, but then found so many problems that they terminated the general contractor. This has also happened at other plants.

Falling Off the Jobs Cliff

With SafStor or prompt decommissioning, there is a jobs cliff. The people at the plant are mostly gone within six months or two years. The decommissioning workers are not permanent employees, and not encouraged to think of themselves that way. Morale is often low, job security is non-existent, and well-trained people who have other options tend to leave town.

Despite Shumlin's optimistic statements about "five years, then another ten years" it's all over for the regular employees within two years. The contractors do not become permanent residents of the area. The contractors come to town and then move on quickly.

Decommissioning leads to an instant loss of jobs and community.

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An earlier version of this post appeared in True North Reports. I thank Rob Roper of True North Reports for permission to repost it here.

The picture of dry casks at Maine Yankee is from the 3yankees website about the decommissioned plants.

Update: I thank Vermont Tiger for their good words about this blog post in Yankee, What If?

There is No Jobs Bonus. Decommissioning Helps Long-Haul Truckers But It Destroys Local Communities.

Decommissioning Plans, Made by Nuclear Opponents

A recent post described the new taxes that Governor Shumlin's administration wants to place on Vermont Yankee. There are two taxes, actually: one on fuel rods, and one to increase the decommissioning fund. Meanwhile, at ANS Nuclear Cafe, Howard Shaffer wrote about opponent tactics. Opponents plan to form new "affinity groups" with the same people as members, but new names for the groups. Decommissioning is a major focus of these groups.

It's also a major way for the opponent groups to salve their conscience about throwing hundreds of people out of work. "Decommissioning will be a jobs bonus!"

No. It won't.

Will Decommissioning Funnel a Billion Dollars into the Vermont Economy?

In an early March press conference, Governor Peter Shumlin called decommissioning Vermont Yankee “a huge jobs issue for us.” He wanted immediate decommissioning of the plant because it would “fuel $1 billion” into the Windham County economy over the next ten years.

The jobs Shumlin is describing are not jobs held by the current workers. As reported in an article in True North Reports and updated in this blog, more than 80% of the plant employees would be laid off within two years of plant closure, whether or not the plant is put into SafStor. There are 650 employees at the plant now: in two years, less than 100 employees would remain.

Though plant people would be laid off, contract labor would be brought in for decommissioning. What kind of payroll would the contractors bring to the area, compared to the payroll of the plant when it is operating?

The Contractors Come to Town

People who have lived through a local plant decommissioning say that the effect of contractors is not noticeable in the town. Bob Blagden, a selectman in Wiscasset Maine while Maine Yankee was decommissioned, said the “contractors must have picked up some people, but it wasn’t noticeable.” A long-time resident of the town, who did not want his name used, said “They may have hired some people, but this was nothing in comparison with what we lost.”

Are these people correct? Or is Shumlin correct in thinking decommissioning is a jobs bonanza?

The residents of Wiscasset are correct. It took some research to figure this out, but a best estimate is that the total salaries for contractors in the area would be about $20 million a year, while the plant has a payroll of $65 million a year. Decommissioning is a job cliff, not a job bonanza.

What is a Billion Dollars?

Before reviewing the question “would decommissioning fuel a billion dollars?” for Windham County, we have to ask what “fueling a billion dollars” means. Is this money straight payroll, or does it count “multipliers”?

The “multiplier” effect is the well-known economic calculation of how many other jobs are based on a group of steady jobs. For example, two economic studies of Vermont Yankee started with the fact that there are 650 employees at Vermont Yankee, and a yearly payroll of around $65 million An IBEW study in 2008 calculated that Vermont Yankee provided 900 “multiplier effect” jobs in the state, while a separate report prepared for the Vermont legislature in 2010 claimed Vermont provided about 700 multiplier-effect jobs. Both estimated a multiplier effect of at least two times the plant payroll.

Being conservative, we could estimate that Vermont Yankee adds a total of $100 million a year to the local economy (less than a times-two multiplier effect). At that rate, VY “fuels” one billion dollars to the local economy in ten years, and in twenty years (till 2032) it would fuel two billion dollars.

In comparison, how much money would the contract labor of a decommissioning project add to the local economy?

Decommissioning the Yankee Plants

The total expenditure for decommissioning Yankee Rowe, Connecticut Yankee, and Maine Yankee was $750 million, $500 million, and $850 million, respectively. (Data from a paper on “Lessons Learned from Decommissioning” by Wayne Norton, president of Yankee Atomic.). The projects took varying amounts of time, from 7 to 15 years, but let us assume they all took ten years, in parallel with the Shumlin time estimate. At that rate, expenditure rates on decommissioning were between $50 and $85 million a year, numbers similar to that of the Vermont Yankee payroll.

However, comparing total costs of decommissioning to payroll costs of an operating plant is an apples-to-oranges comparison. Most significantly, decommissioning a nuclear plant includes major expenditures outside of the plant locality.

Decommissioning a nuclear plant requires millions of pounds of slightly radioactive waste to be hauled to low-level waste disposal sites in the West. Maine Yankee shipped 460 million pounds of waste, and Connecticut Yankee shipped 350 million pounds. Container manufacturers, long-haul truck drivers, and waste disposal sites are the recipients of waste-disposal money, not the people in the towns near the plant.

How much money stays in the towns near the plant and how much goes to hauling and waste disposal sites? We can start by looking at the probable payroll (not total cost) of decommissioning.

The Zion Explanation

I could not ascertain the local payroll versus haulage costs for the decommissioning the Yankee plants. These numbers are proprietary to the companies that did the work, and I hit a dead end trying to find out. However, there's a current decommissioning project in Illinois. The company doing that project, EnergySolutions, was very helpful to me.

EnergySolutions is beginning to decommission the Zion Nuclear plant in Illinois. EnergySolutions has a Zion website partially devoted to showing that Zion decommissioning will bring economic benefits to the region. The accompanying pie chart is on that website. The EnergySolutions public outreach officer for the Zion project, Larry Booth, was also kind enough to send me the economic report on which the chart is based "The Economic Impacts of Decommissioning the Zion Nuclear Power Station." (The report is not on the web.)

On the pie chart, we can see that the salaries for the ten-year decommissioning process at Zion add up to $215 million dollars.

In more detail, page 14 of the Zion economic report has a chart of personnel. That chart is at the top of this blog post. Double-click to enlarge.

At its height, in years 2 through 5, there will be around 300 people on-site decommissioning the Zion plant. That is about half the number of people working at Vermont Yankee currently. The six other years, the staffing is much lower, down to five people in year 10. Clearly, decommissioning is not a ten-year jobs bonus for the site.

Much of the Zion economic project report is devoted to explaining the multiplier effects of the project. This is called “output” on the pie chart. In the report’s careful reasoning, $200 million in on-site salaries generates $600 million in other economic outputs over ten years. However, using that multiplier, $1.3. billion in salaries at Vermont Yankee ($65 million per year for twenty years) would add $3.9. billion in other economic benefits, for a total economic impact of $5.3 billion dollars over the next twenty years of operation.

Apples to Apples Comparison

The solid facts are that Vermont Yankee has a payroll of $65 million per year, and decommissioning Zion will be a payroll of $20 million a year. Decommissioning the Yankee plants probably had a similar payroll, since the people in town saw little economic benefit from the presence of the contractors. As one well-connected man from Maine said: “I didn’t know anyone who got a job there.”

By careful assessment of multipliers, the total economic benefit of any project can look excellent. However, comparing apples to apples (on-site salaries to on-site salaries) decommissioning a nuclear plant is not a jobs bonanza compared to continued operation of the plant.

The Jobs Cliff

Closing Vermont Yankee will push the current plant workers off a jobs cliff, as described in a previous article. It will push the local economy off a cliff also, despite the presence of contract laborers. The contract labor force can be expected to have only about a third of the payroll of the operating plant.

Shumlin says that decommissioning is a “huge jobs issue.” It is, indeed, a huge issue. Decommissioning will be a huge job loss for southern Vermont. The one clear financial beneficiary from decommissioning Vermont Yankee will be low-level waste disposal sites in the West, and long-haul truck drivers. Decommissioning will be a financial loss for southern Vermont. It will destroy the local communities and the local job base.

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A version of this blog post was published at True North Reports. I am grateful to Rob Roper for permission to republish it here.

Looking Back Toward Decommissioning

Picture of Dry Casks at Maine Yankee
From 3Yankees website

Let me start with a fact:

Entergy can use SAFSTOR or Prompt Decommissioning, their choice.  With either type of decommissioning, the current workers lose their jobs.

Meanwhile---Current Posturing about SAFSTOR

Currently, a great deal of posturing is being published about decommissioning Vermont Yankee.

Here's an example.

The Windham Regional Commission published a position paper in The Commons newspaper: What's in our best interests when VY closes?  The author, Chris Campany, answers his own question in the paper's subheading: "Now more than ever, our region needs to attach conditions to Entergy’s CPG."

A quote from this article above:

"We asked that whether or not a Certificate of Public Good is granted, the Public Service Board consider the following.....Require the prompt and complete decommissioning and site restoration of the VY station after shutdown (whenever that occurs) and prohibit the use of SAFSTOR."

This request is pretty much nonsense on the face of it.  As Tim McQuiston wrote in Vermont Business Magazine: Vermont Yankee, the Decommissioning Dilemma:

"The new battle will be over SAFSTOR, or Entergy's plan to postpone dismantling the plant right away, and take up to 60 years to do so. Furthermore, since this is a federal issue, the state may have little to say about it."  (emphasis added by blogger)

McQuiston also noted that Vermont might have achieved prompt dismantling  of Vermont Yankee if they had bargained for it as part of a new 20-year Certificate of Public Good. But they didn't.

 In my own opinion, once Entergy announced it was closing Vermont Yankee, Vermont lost almost all its bargaining power with Entergy.  "We're going to shut you down three months sooner than you planned to shut down anyway" is not a very credible threat.  Entergy has little to lose in its bargains with the state, once it decided to shut down the plant.

Looking Back at My Blog Posts about Decommissioning

I have three blog posts about decommissioning, and I will reference and summarize them here.

Entergy can use SAFSTOR or Prompt Decommissioning, their choice.  With either type of decommissioning, the current workers lose their jobs.

1) SAFSTOR is in the contract, whether Governor Shumlin likes it or not

The first post is In Vermont, Our Word is Our Bond, so We Don't Honor Contracts.  In this post, you can see Governor Shumlin accuse reporter Terri Hallenbeck of "working for Entergy." This is his answer when Hallenbeck reminds him that the state signed a purchase agreement, and the purchase agreement allows Entergy to use Safstor.

Here's the link to the purchase agreement itself, the Memorandum of Understanding.   The use of SAFSTOR is explicitly allowed in item 9, page 5 of this document, which is a total of eight pages long (plus some signature pages).

2) SAFSTOR and Prompt Decommissioning are both jobs cliffs. They do not protect current workers.

In Decommissioning, Facts Versus Fantasy, I show that 80% of the workers are gone within one year with SAFSTOR.  With prompt decommissioning,  50% are gone in one year, 80% in two years.  Both methods are a jobs cliff.

Most decommissioning work is done by teams of contractors. Wayne Norton, who was president of the Three Yankees during decommissioning, wrote the following in a paper he presented to industry.

Another advantage to early and aggressive downsizing is that it opens up opportunities to bring in workers with skill sets that are more suited to a decommissioning environment. Also, if these workers are contractors, they tend to be more accustomed to completing a given scope of work and moving on to another job.

3) There's no local jobs bonus.  Long-distance truckers and waste disposal sites get most of the money.

In my post, There is no Jobs Bonus.  Decommissioning Helps Long-Haul Truckers and Destroys Communities,  I try to follow-the-decommissioning money very closely.  Let's just say I don't like what I see.

Only Someone Like Our Governor Could Love Decommissioning

I will undoubtedly be posting more on this in the future, but I thought I would start with a summary of my older posts on this subject.

Decommissioning is a miserable situation for the workers and the local people.  It's the kind of situation that only our current governor could love.

Entergy Uses Decommissioning Fund: State Officials Are Very Upset

Entergy Keeps Its Promises

In terms of decommissioning, Entergy has kept every one of its promises to the state of Vermont, and even gone beyond its promises.  Here's a list:

1) PSDAR: Entergy said it would finish its PSDAR (Post Shutdown Decommissioning Activity Report) by the end of 2014, although the NRC allows two years (till December 2016) for the report.  Entergy completed and released the PSDAR on December 19, 2014.
2) Fund Payment: Entergy signed an agreement with the state for the last few months of the plant's operation. This agreement required Entergy to send various payments ($2 million for Windham Country economic activity, for example) to the state.  All such payments have been made promptly.
3) Spent Fuel Management Loan: Entergy took out a $143 million dollar loan for spent fuel management, because the state wanted the fuel removed from the fuel pool very promptly.  Strictly speaking, decommissioning funds are not supposed to be used for spent fuel management.  The federal government is legally required to manage the spent fuel.

(Short pause here.  Time to let people get off the ground after the laughing fit. No, this post is not about Harry Reid. Are you standing up now? Onwards.)

Senator Harry Reid
 image from his website

Obtaining spent-fuel management funds from the federal government can be slow.  The company has to sue the federal government, win the lawsuit, and finally obtain the money. Entergy said it would remove spent fuel from the fuel pool very promptly.The state wanted the spent fuel out of the fuel pool ASAP or sooner than ASAP.  Entergy doesn't need to comply with "ASAP" but it is doing so.

Amazingly, Entergy has arranged to borrow $143 million dollars for spent fuel management and moving the spent fuel into dry casks. This borrowed money will be repaid after Entergy sues the federal government.  Note that taking out this loan was not in any agreement that Entergy signed with the state.   Entergy decided to do this to speed up the process.  It is possible that Entergy (with NRC permission) might have been able to borrow this money from the decommissioning fund itself.   Of course, that would have depleted the fund and slowed the decommissioning.

Entergy needs some reimbursement

Entergy has done lots of planning, written reports, taken the fuel out of the reactor, arranged loans.  All activities concerned with decommissioning the plant.  So it requested permission from the NRC to obtain $18 million from the decommissioning fund.  The NRC is in charge of the fund, and of decommissioning, and of ensuring that fund moneys are properly expended.

The state objected.  No, really, it did!  Vermont wants decommissioning very quickly but Vermont believes it has approval rights to determine exactly what the decommissioning funds are used for. In short: Vermont thinks the NRC needs state permission to release decommissioning funds. 

(Short pause here. Vermont has challenged the NRC's authority over nuclear power plants before.  On this subject, how many lawsuits has Vermont won?)

The state is upset!

DPS Commissioner
Chris Recchia

The first thing that I noticed about the state's attitude toward the withdrawal was a Vermont Digger article by John Herrick: Entergy Makes First Withdrawal from Decommissioning Fund.  In this article, Vermont Department of Public Service Commissioner Chris Recchia is quoted: “I am probably more OK with the actual withdrawal than I am with the process….I don’t get to see it in advance.”

Indeed, the attorney general of Vermont and others in state government wrote the NRC to object to this withdrawal. Their letter claimed that the state has the right to review expenditures of decommissioning funds, and the funds should not be released, pending state review of the request.

The state letter is posted in the Document Library of Entergy's VY Decommissioning website. The Document Library is a great boon to anyone who wants to follow this process.

Though the state letter is quite long, the main basis of the letter seems to be the  Memorandum of Understanding under which Entergy purchased the plant in 2002.  A great deal of that memorandum is about decommissioning funds.  The agreement states that, AFTER decommissioning is complete, Entergy must share 50% of whatever decommissioning funds are left over with the state. However, in the recent PSDAR, Entergy does not claim that there will be enough decommissioning funds available until the near the end of sixty years of SAFSTOR.  The funds will grow, and full decommissioning will commence close to 2070, when the funds have grown enough to support it.

In other words, concern with sharing excess funds with the state is a bit early and a bit theoretical!  However, the Memorandum agreement that excess funds "will be shared" seems to have given the state the idea that the state has authority over how the funds are disbursed.

But the state doesn't have authority. Yes, the state does have some limited say over how the funds are disbursed. If you look at item 7 in the Memorandum, the state must approve IF the funds are used for anything other than "qualified expenses."  There is no reason to believe that Entergy's first request to NRC was for not-qualified expenses.

My Conclusion: The Bank of Entergy is Still Closed

Attorney General William Sorrell

Once again, the state is over-reaching.  The state hasn't figured out yet that harassing Entergy with letters to the NRC and so forth will do no good.  The decommissioning funds are the only funds available now for Vermont Yankee (except for the loan, of course). The NRC determines if the decommissioning funds are being used correctly.

To me, this whole thing has unpleasant echoes of the time when the Vermont legislature tried to shut Vermont Yankee. They held a legislative vote  that was basically all about safety. Entergy sued the state, and the legislature reacted swiftly to the lawsuit.  They passed a law that Entergy had to pay the State's expenses in defending against Entergy's lawsuit.

Of course, that law was illegal and nobody in the Attorney General's office would even try to enforce it.  I wrote a blog post about this: Attorney General of Vermont Acknowledges "Shaky Concept" in Charging Entergy for Vermont's Expenses  The Attorney General acknowledged that the the law was unenforceable.  The Bank of Entergy was closed to the state.

It's time for the state to acknowledge that that Bank of Entergy is still closed. I hope they acknowledge this before taxpayers (like me) once again fund a hopeless exercise in which Vermont attempts to change the role of the federal government and the NRC.

These state-sponsored exercises are expensive.

Defending SAFSTOR planning at Vermont Yankee

The post and the objection

In a recent op-ed, I wrote that the proposed Entergy-Vermont settlement is good for Vermont. Here's the post on this blog

http://yesvy.blogspot.com/2014/02/the-proposed-entergy-settlement-is-good.html#.UwnmFSiyTAY

and here's the post as it appeared on the local news site, Vermont Digger

http://vtdigger.org/2014/02/11/meredith-angwin-entergy-settlement-psb-good-state/

There's a lively comment stream on the Vermont Digger post, with several comments objecting to my description of the plans for decommissioning.  Here's what I said in my op-ed:

You can’t begin tearing down the building while the fuel pool is still in use. So there has to be at least a five-year delay between plant closing and the beginning of major decommissioning work. Therefore, there will be a gap of several years in the economic activity around the plant.

Some comments basically  said: "I am not a nuclear engineer, but they can start decommissioning sooner."  I encourage you to read the comments themselves. I have my answer to these comments below. I have added subheadings (in bold) that weren't in my original answer.  Hopefully, these subheadings add to readability.

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My answer to the objection

You say you are “NOT commenting on how or when decommissioning needs to be done” yet you seem to think it can begin immediately, despite the requirements of the operating fuel pool. Sounds like you actually ARE commenting on how and when decommissioning can be done.

You give the impression that if Entergy doesn’t start decommissioning areas other than the fuel pool immediately, Entergy is stalling. Actually, this is not the case, in my opinion. In general, the nuclear industry is very conservative about decommissioning. You might think: Hey, they can always start by tearing down the office building, no big deal. Actually, the industry shows itself quite reluctant to begin big deconstruction/decommissioning projects in close proximity to active nuclear plants (or actively maintained fuel pools that can’t be isolated easily). This is basically a safety precaution.

SAFSTOR for Safety

Indian Point

For example, Indian Point 1 ceased operation in 1974. It is in close proximity to the operating plants Indian Point 2 and 3. Indian Point 1 is in SAFSTOR, which is safer than attempting to tear it down while it shares the same area with active plants. Similarly, Dresden 1 was shut down in 1978, and is right next to Dresden 2 and 3. Millstone 1 ceased operations in 1998, and is close to the operating plants, Millstone 2 and 3. Dresden 1 and Millstone 1, like Indian Point 1, are also in SAFSTOR.

Considering the position of the fuel pool at Vermont Yankee, I would expect the owners to do nothing on site (except perhaps move some of the fuel to dry casks) while that fuel pool needs to be maintained. That’s the conservative way. I frankly have no particular opinion on when they move some of the fuel from the fuel pool. They can’t finish moving the fuel out of the pool for five years, and nothing much else can happen on site while the fuel pool is in active service.

Or rather, in my opinion, nothing much SHOULD happen on site while the fuel pool is in active service. Similarly, I think it would be a bad idea to decommission Dresden 1 while still operating Dresden 2 and 3 right next door.

Maine Yankee

No doubt, someone is going to say: “They dismantled Maine Yankee quickly! So what’s the problem here?” Well, Maine Yankee was a PWR with the fuel pool in the basement of a building that was comparatively easy to isolate. Vermont Yankee is a BWR with the fuel pool in a position that is not easy to isolate.

Waiting five years to begin serious decommissioning is the safest and most conservative way to proceed with the Vermont Yankee plant, and this has nothing to do with money.

Workforce issues and the nuclear opponents desire to feel good about themselves

About the workforce. Alas, decommissioning rarely uses very many members of the original workforce. The decommissioning jobs include chemical cleaning and deconstruction. These are not the same skills as running the plant. As others have noted, for decommissioning, teams of contractors with either specialized skills (chemical cleaning) or moderate skills in the building trades (deconstruction) do the jobs. In many cases, a decommissioning contractor is hired by the utility, and that contractor hires the teams. EnergySolutions is one such company, but there are others.

The people at the plant will be laid off, and there will be few of them involved in decommissioning. That is what has happened at other plants also. The opponents of Vermont Yankee do not want to admit this, because otherwise (conceivably) they would feel guilty about causing their neighbors to lose their jobs. But all their sweet sayings about “hoping the good people at VY will continue to work” doesn’t change reality. Decommissioning is almost completely done by teams of outsiders, no matter when decommissioning is done, early or late. That is just the way it is.

More reading

I have more explanations and some links in this blog post, including some workforce analysis from the Maine Yankee experience. I have written other blog posts on the subject also: you can search my blog for “decommissioning” in the little keyword box at the upper left.

http://yesvy.blogspot.com/2011/11/decommissioning-facts-versus-fantasy.html#.UwtoCRZ5ufQ

Thoughts on Money: Revenue Sharing and Decommissioning Costs

My op-ed about Vermont Yankee economics appeared in the Valley News this Sunday.  In that article, I discussed the state position in the appeals court hearing in New York last month. The state tried to make the case that Vermont Yankee had a negative economic effect on Vermont and its utilities.  Nothing could be further from the truth. Vermont Yankee is an economic asset to the state.  Also, if grid prices rise, the revenue-sharing part of the Memorandum of Understanding could send more than half a billion dollars from Vermont Yankee to state utilities.   

My "half a billion dollars" number comes from a quote from the attorney for the state, who apparently thinks  that if Vermont Yankee shared money with Vermont utilities, that would be a Bad Thing.

In the past few days, several local people told me that they had never heard of the revenue share arrangement before I wrote about it in the op-ed. They had no idea that Vermont Yankee might be paying a $500 million dollar bonus to local utilities. 

Yesterday, I received an email from a local man who is basically in favor of Vermont Yankee. He asked if perhaps the revenue share money could be added to the decommissioning fund?  I wrote him a long response answering his question.   I decided to share my email here, with a few changes.


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Hi and thanks for the email!  Actually, revenue sharing is one issue, and decommissioning is a separate issue.

Revenue Share: 

The purchase agreement for the plant (Memorandum of Understanding between Entergy, former owners, and the State Department of Public Service)  requires ten years of revenue sharing. This contractual obligation kicks in after 2012 and when the grid price is above 6.1 cents.  This revenue share money goes to the utilities.Vermont Yankee gives this money to the utilities, and the plant cannot use it for anything at the plant, including decommissioning.

Decommissioning:

Decommissioning is a separate issue and a somewhat complicated one.  Three interlocking points.

1) The NRC supervises decommissioning funds and makes sure they are adequate. 

When the stock market dropped around 2010, NRC required many plants (including VY) to add tens of millions of dollars to their decommissioning funds, because NRC judged that the funds had fallen below the required level.  NRC does, indeed, watch these things.

2) What is "adequate"?  Greenfields?

NRC requires that the decommissioned site be radiologically safe and ready for another industrial facility.  Many opponents want to raise the cost of decommissioning (Conservation Law Foundation has a branch, Conservation Law Foundation Ventures, that actually does decommissioning legal work, for money.) Opponents want to raise the costs, both for their own gain and to harass nuclear plants.  

For example, for Vermont Yankee, opponents are pressing the idea that the site should be "greenfield" with ALL underground concrete structures removed, switchyards removed...basically, a cow pasture.  This would cost Yankee tons of money, estimated at more than $40 million dollars. "Greenfield" or "not-greenfield" is not something the NRC cares about, one way or the other.  The NRC criteria require that a dismantled industrial site should be safe, and it should be ready for another industrial facility, not a cow pasture.  If a state wants a cow pasture, that is between the state and the power plant.  

In the Vermont legislature, nuclear opponents are trying to pass a bill to require Vermont Yankee to instantly add  "greenfield" money to a  decommissioning fund. 

Conservation Law Foundation Ventures...gaining money from legal work about decommissioning for a nuclear plant and helping with site planning and popular acceptance for a gas-fired plant. They definitely stand to gain, monetarily, if Vermont Yankee is closed.  My words in italics are not precisely their words.  I suggest your read their boasts for yourself.

http://www.clfventures.org/our-results/facility-owners/

Indian Point, from Wikipedia

3) What is "adequate"? SafStor?

 Both the Vermont Yankee Memorandum of Understanding and the general  NRC rules allow the plant to be mothballed (SafStor) for up to 60 years before full decommissioning is complete.  This allows the plant to be less radiologically hot when decommissioned. It also allows the decommissioning fund to grow through accumulated interest while the costs of decommissioning (in constant dollars at least) actually sink, because the plant is less hot.  

The opponents constantly say they "won't allow SafStor" but actually, they can't stop it.  If Vermont Yankee chooses to decommission using SafStor, they have both federal and state permission.  At the federal level, SafStor is in their license and part of NRC policy.  At the state level, it's in the Memorandum of Understanding.

Many plants have used SafStor, but usually only for a few years.  However, sometimes (for example Indian Point) a small plant was built, retired, and two bigger plants were built next to it.  In that case, the small plant (Indian Point 1) may well be in SafeStor for more than 40 years, because decommissioning the small one might interfere with the other plants' operation.

http://en.wikipedia.org/wiki/Indian_Point_Energy_Center

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Ah, Valentines Day!

My husband is off singing love songs to other women.  Yes, it's the annual Barbershop Singing Valentines Fundraiser! So I am sitting around writing overly-long emails.

Here's an example...not his group.

Have a lovely day my friend!

Best,
Meredith

Vermont Yankee to close in 2014

Today, Entergy announced plans to close Vermont Yankee in 2014.

Here's a link to their press release:, sent this morning.


I decided to copy their FAQs directly to this blog post.  The FAQs include assessments of their other plants (none in immediate danger of closing) and the fact Vermont Yankee will be put in SafeStore.

I have also boldfaced a very important part of the FAQ, for easy reading.

I will comment on this of course, but not today....

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Entergy to Close, Decommission Vermont Yankee



Frequently Asked Questions

When will Vermont Yankee close?

The company anticipates shutting down the Vermont Yankee Nuclear Power Station in fourth quarter 2014, with the exact date still to be determined.

Why was this decision made?

Vermont Yankee has an immensely talented, dedicated, and loyal workforce (about 630 employees) and a solid base of support in the community. We recognize that closing the plant on this schedule was certainly not the outcome they had hoped for, but we have reluctantly concluded that it is the appropriate action for us to take under the circumstances.

The decision to close Vermont Yankee in 2014 was based on a number of financial factors, including:

(Bloggers bold-face and bullets below, not in the original FAQ)

• A natural gas market that has undergone a transformational shift in supply due to the impacts of shale gas, resulting in sustained low natural gas prices and wholesale energy prices.
• A high cost structure for this single unit plant. Since 2002, the company has invested more than $400 million in the safe and reliable operation of the plant. In addition, the financial impact of cumulative regulation is especially challenging to a small plant in these market conditions.
• Wholesale market design flaws that continue to result in artificially low energy and capacity prices in the region, and do not provide adequate compensation to merchant nuclear plants for the fuel diversity benefits they provide.

Couldn't Vermont Yankee be sold to another company?

We are constantly evaluating our portfolio of assets and businesses to determine if it makes sense to hold and optimize, to sell, or to shut down. As a matter of policy, we cannot comment on any specific efforts, however, we did consider all options before making this decision. Closing the plant on this schedule was certainly not the option we hoped for, but we have reluctantly concluded that it is the appropriate action for us to take under the circumstances.

What will happen to employees?

We expect to continue operations with current staffing levels through to shut down, at which time we will transition into decommissioning. Staffing levels will change and be reduced as the plant moves through the various stages of decommissioning. The company will treat employees at the station fairly and assist them through this transition.

Beyond the financial aspect, what's the reasoning behind closing the plant?

We looked at the impact of this decision through the lenses of all our stakeholders, and while extremely tough for many, we believe the decision was ultimately the right one:

Owners -- It is consistent with our disciplined approach of constantly evaluating our portfolio of assets and businesses to determine if it makes sense to hold and optimize, to sell, or to shut down. This shutdown decision was made because this asset is not financially viable.
Employees -- It provides employees the best opportunity to properly plan their future, whether at the plant, other Entergy-owned facilities or in the broader industry. We will treat our employees fairly throughout this entire process.
Customers -- It provides more certainty to our wholesale customers and to the broader markets in which we participate.
Communities -- It allows us to move forward and constructively engage with the impacted communities as we transition from an operating nuclear facility into and through the decommissioning process. We will continue to be a key part of the communities in which we do business as that moves forward.

What has to be done to decommission a nuclear plant?

The decommissioning process is clearly defined by the Nuclear Regulatory Commission in Title 10 of the Code of Federal Regulations, Section 50.2 (10 CFR 50.2). The initial activities involve extensive planning to safely and efficiently decommission the station and terminate the station license. Activities include removing the plant from service, transferring used fuel to safe storage, removing any residual radioactivity and restoring the site which includes the removal of structures and, if appropriate, re-grading and reseeding the land.  

How can we be assured that decommissioning will be handled properly?

The safety of our operations will continue to be a top priority. In addition, the NRC will provide oversight during the decommissioning process.

How long will the entire decommissioning process take?

The complete decommissioning process is likely to take decades. We plan to follow the NRC-approved SAFSTOR methodology of decommissioning, where the facility is maintained and monitored in a safe condition and the decontamination and dismantling of the station occurs later. There are a number of advantages to SAFSTOR methodology, including lower potential radiation exposure for workers doing the decommissioning work and the need for fewer shipments of radioactive material to the low-level waste site.

Entergy expects to decommission using the SAFSTOR method. What is SAFSTOR?

SAFSTOR places and maintains a nuclear facility in a condition that allows it to be safely stored until the removal of radioactive materials and components, eventually permitting unrestricted use of the area. During SAFSTOR, the facility is left intact, with structures maintained in a sound condition. Systems that are not required to support the spent fuel pool or site surveillance and security are drained, de-energized and secured.

What will happen to the Vermont Yankee site after decommissioning?

Once Vermont Yankee's license has been terminated and the NRC has released the site for unrestricted use, the area can be used in any way permissible by federal, state and local laws. Entergy retains ownership of the property on which Vermont Yankee operates. Entergy has committed eventually to restoring the site by removing structures and, if appropriate, re-grading and reseeding the land.

What happens to the used fuel?

The used fuel will remain secured on site, under guard, monitored during shutdown and decommissioning activities, and subject to the NRC's oversight. Removal of the fuel from the reactor vessel to the spent fuel pool is expected to begin as soon as the reactor has cooled sufficiently, in a matter of days after shutdown. This is similar to what happens in a refueling outage. From the spent fuel pool, fuel will be moved to NRC-licensed casks. The fuel will remain onsite in dry casks until it is removed by the federal government in accordance with its legal obligations.

How many U.S. nuclear power stations/units have been decommissioned?

Since 1960, more than 70 test, demonstration and power reactors have been retired throughout the United States.

Vermont Yankee contributes about $435,000 annually to the community through open grants, site sponsorships, annual events and other charitable giving. What will happen to that support?

We will continue to be a good corporate citizen. We recognize that this is a significant event for the local economy and for surrounding communities. We will have future discussions to talk about transition plans, as it is too soon to know the specifics.

How can the public be assured of radiological safety during the decommissioning process?

The environmental monitoring program in place now will continue after the plant is shut down. The program will be modified to monitor the types of releases that may occur during decommissioning. Again, the NRC will provide oversight during the decommissioning process.

Will the closing cause electric reliability supply issues in the state or elsewhere in the region?

ISO New England will conduct a grid reliability review before Vermont Yankee's closure.

What about other Entergy plants in the region?

Each of our merchant plants has unique characteristics, some operating in different market environments, some of which are more favorable than others.

For example, Vermont Yankee and Indian Point are on two opposite ends of the spectrum. Vermont Yankee is a small, single-unit plant in a very challenging economic market. Indian Point is a large, two-unit station in a more favorable market. Indian Point continues to be a vital component of the region's power supply and we are committed to its continued and safe operation.

Regarding FitzPatrick, while in a difficult market environment, we currently expect to refuel in the fall of 2014.

While Palisades' market environment is certainly difficult, it has a power purchase agreement.

Although Pilgrim's market environment is the same as Vermont Yankee's, Pilgrim's higher power output provides greater economies of scale.

Does Entergy have the required decommissioning funds in place?

Regarding decommissioning, assuming end of operations in fourth quarter 2014, the amount required to meet the NRC minimum for decommissioning financial assurance for license termination is $566 million. The Vermont Yankee decommissioning trust had a balance of approximately $582 million as of July 31, 2013, excluding the $40 million guarantee by Entergy Corporation to satisfy NRC requirements following the 2009 review of financial assurance levels. Filings with the NRC for planned shutdown activities will determine whether any other financial assurance may be required and will specifically address funding for spent fuel management, which will be required until the federal government takes possession of the fuel and removes it from the site, per its current obligations.

How does Vermont Yankee's closing change Entergy's viewpoint on nuclear energy?

Entergy remains committed to nuclear as an important long-term component of its generating portfolio, and for meeting the nation's energy needs. Nuclear energy's benefits are numerous and important. Nuclear provides reliable and cost-effective power over the long term, it contributes to supply diversity and energy security as part of a balanced portfolio, and it provides almost two-thirds of America's clean-air electricity. Nuclear is an important part of Entergy's portfolio.

Tell me more about Vermont Yankee. How many employees are there? What type of reactor does the plant have?

Vermont Yankee is a boiling water reactor manufactured by General Electric. The plant uses the Connecticut River as a cooling source, with once-through cooling towers. It began commercial operation on Nov. 30, 1972, and it is currently licensed to operate through 2032. It has a maximum dependable capacity of 605 megawatts and employs approximately 630 people.

Where can I get more information on decommissioning nuclear plants?

The NRC maintains frequently asked questions on nuclear plant decommissioning at this site: http://www.nrc.gov/about-nrc/regulatory/decommissioning/faq.html

Decommissioning, Governor Shumlin, and Dry Cask Storage

Did I Write "Patronizing Bunk"?

I wrote an op-ed about the state's agreement with Entergy about decommissioning. I published it on this blog, and it was also published on Vermont Digger. On Vermont Digger, the title was Entergy Settlement Before the PSB is Good for the State. It had a lively comment stream on Vermont Digger.

Governor Peter Shumlin

In this op-ed I wrote:

However, in the course of the negotiations, I suspect the state learned some facts about  decommissioning.

Two anti-nuclear commentators called my statement: "patronizing bunk." They claimed that the state was well-versed in decommissioning from the start.  The state didn't have to learn anything.

Well, I begged to differ.

Here is part of the answer I posted, with slight edits.

About Patronizing

I was not simply being patronizing. When I wrote: “the state learned something about decommissioning,” you thought I was referring to the DPS (Department of Public Service). Actually, I was referring to Governor Shumlin. I was not clear, which was my fault. But then again, I tend to use locutions like “the state” to avoid finger-pointing at individuals.

Perhaps, instead of being vaguely snarky, I should be more direct, even if it turns out a bit more pointed at one man. Frankly, this would have been uncomfortable for me to write originally, but I am writing it to show what I was thinking about.

Below, I have written something more accurate, more pointed, and with references. Perhaps I should have written the material below, instead.

About Governor Shumlin

What I should have written:

And, it looks like over the years, Governor Shumlin himself is learning something about decommissioning. Here’s one of his press conferences from 2011:

http://vtdigger.org/2011/03/03/govs-presser-on-video-shumlin-praises-school-boards-rails-at-gop-and-entergy/

The title includes SHUMLIN SAYS SAFSTOR WASN’T PART OF DEAL WITH ENTERGY. The article includes Governor Shumlin arguing with reporters who quote the MOU at him. It’s kind of funny, if it weren’t sad.

From the same press conference, but this time a direct quote from Shumlin:

http://truenorthreports.com/shumlin-talks-about-uvm-vermont-yankee-and-taxes

“The jobs gap doesn’t really happen for about 16 years,” he said. “Five to six years for the plant to cool down, gotta keep all the systems running, that requires a number of employees, several hundred. And ten years of decommissioning. So the jobs cliff, despite what they tell you in those 30 second advertisements, is not as significant as long as they keep their promise on decommissioning the plant whenever it shuts down.”

The Governor is Learning

Recently, the Governor has had to eat his words and acknowledge SAFSTOR is allowed. He has had to acknowledge that the plant will not keep running for five or six years with several hundred employees. It is nobody’s fault but his own that he said these absurd things at a press conference. Nobody forced him to make such a fool of himself.

You gotta give the man credit, though, Shumlin is learning. Maybe the learning didn’t happen at the negotiations, maybe it did. Maybe it happened before. I should not have said “when” it happened, because I don’t know. But he’s gone from myth-based “hundreds of people for five-six years” to “everything will be in dry casks within seven years.” He has more of a grasp of reality now. I don’t know and should not have said exactly when he learned these things. But he is learning.

I want to say something though about his advisers. Where were they? Surely someone could have told him the facts of life about the M O U and what happens during decommissioning. Apparently, nobody did. People just let him go out there and say a bunch of things that simply are not true. He is learning, for sure. Are his advisers learning?"

Updated: The Dry Casks.  Vermont Digger Special Report on Decommissioning

I wrote a draft of this a few days ago, but I didn't post it because I was busy with our daughter's book launch.

Yesterday, Vermont Digger published a special report on remaining areas of disagreement between Vermont Yankee and the state agencies in Vermont.  John Herrick wrote Despite Recent Agreement, State and Entergy Remain at Odds Over Funding for Dismantling Vermont Yankee. 

According to this article, the state is concerned that Entergy may use decommissioning funds to move used fuel from the fuel pool to dry casks.  Attorney General Sorrell says that If Entergy elects to remove money from the fund, Sorrell said the state will take legal action.  Mr. Sorrell apparently thinks that moving fuel  to dry casks is not part of decommissioning: the state wants the decommissioning fund reserved for "tearing down the plant."

Umm...last I looked, only the NRC could say what a decommissioning fund can or cannot be used for.

Sigh. I thought the state had learned that the federal government, not the state, is responsible for regulating decommissioning and nuclear safety.  Oh well.  

Maybe they are not learning as fast as I thought they were learning.

The Proposed Entergy Settlement is Good for Vermont

The Proposed Settlement

The state of Vermont and Entergy Corporation have been battling each other for years, but the two parties reached an agreement in December about the future of Vermont Yankee. Entergy has owned and operated the 42-year-old nuclear plant in Vernon since 2002. When Entergy announced plans to close the plant by December 2014, the state, which has passed laws aimed at preventing the plant from operating, seemed surprised. It also lost some negotiating leverage. Even so, the settlement, which the Vermont Public Service Board must still approve, is a good deal for Vermont — better than I thought possible. Let’s take a look its four main points: the Certificate of Public Good; pending lawsuits; payments; and decommissioning.

The Certificate of Public Good: In 2012, the Nuclear Regulatory Commission renewed Vermont Yankee’s federal license for 20-year-period, through 2032. However, to keep operating for that period, the plant also needed state approval, specifically a Certificate of Public Good from the Public Service Board. The Shumlin administration vigorously opposed granting such a certificate, and used the state approval process to try to force the plant to shut down when its original license expired. Now that Entergy has amended its petition to operate only through the end of this year, not through 2032, the state will be on Entergy’s side before the Public Service Board.

Lawsuits: The main federal lawsuit hinged on whether Vermont interfered in the federal regulation of nuclear safety. In both district court and in appeals court, Entergy won its case, arguing that the Legislature attempted to regulate nuclear safety when the state Senate voted in 2010 to deny the plant a certificate of public good. Nuclear safety, like airline safety and drug safety, is regulated at the federal level. Though Entergy won its case, both Vermont and Entergy conceivably had grounds to appeal to the U.S. Supreme Court. Now, according to the agreement, neither side will appeal. I suspect both sides breathed a sigh of relief.

The agreement also settled another lawsuit about a new “generation tax.” The state had raised the generation tax on Vermont Yankee to $12 million a year. This is a tax paid by Entergy for every kilowatt-hour that the plant generates. However, the higher tax rate applied only to power plants that were built after 1965 and were larger than 200 megawatts! Of course, there’s only one such plant in the state, and Entergy quite reasonably felt targeted. In the agreement, Entergy agreed to drop this suit and to pay the $12 million for 2014.

Payments: Entergy agreed to pay more than the new generation tax. In 2015, the plant won’t be generating any power, so Entergy won’t be required to pay the generation tax. However, Entergy agreed to pay the state $5 million in 2015, to help the state as it deals with the loss tax revenue Vermont Yankee generated. Entergy also agreed to other relatively short-term payments: a payment of $5 million to the Clean Energy Development Fund, and a further payment of $2 million a year for five years to help Windham County adapt to the plant closing.

In his address on the state budget, Gov. Peter Shumlin mentioned “one-time payments” from Entergy as part of his plan to close the state’s budget gap.

The state appears to have won the financial negotiations. However, the plant closing means that $60 million a year in payroll will disappear from the local economy. These payments hardly begin to close that gap for Vermont and neighboring states. As I have said before, it would have been far better if the plant remained open. Some people say that decommissioning will be a similar boost to the local economy, but it won’t be. Not in the next few years at least.

Decommissioning: This has been, and remains, the most difficult and contentious part of the agreement. When Entergy bought the plant in 2002, the agreement it signed with the state allows Entergy to use a delayed decommissioning plan called SAFSTOR, approved by the NRC. With
SAFSTOR, decommissioning can take up to 60 years but it could also be completed sooner. The state wanted to decommission the plant sooner, much sooner  —  immediately, as a matter of fact.

However, in the course of the negotiations, I suspect the state learned some facts about decommissioning. Decommissioning cannot start for six or more years after the plant is closed. After the plant is shut down, the last fuel from the reactor is placed in a spent-fuel pool. This fuel must cool in the pool for five years before it can be removed and put into dry-cask storage. In plants such as Vermont Yankee, the fuel pool is in the same building as the reactor.

You can’t begin tearing down the building while the fuel pool is still in use. So there has to be at least a five-year delay between plant closing and the beginning of major decommissioning work. Therefore, there will be a gap of several years in the economic activity around the plant. In the agreement, Entergy agreed to move the fuel from the pool in a timely fashion. In the press conference about the recent agreement, Shumlin said that all fuel bundles should probably be moved into dry cask storage within about seven years.

Maine Yankee dry cask storage

Other major decommissioning work can begin after the fuel is moved to dry casks. The decommissioning fund is around $580 million now, and decommissioning is estimated to cost between $600 million and $1 billion. Entergy agreed to start full decommissioning when the fund is large enough to to pay for the job. (Federal rules for SAFSTOR stipulate that owners can wait up to 60 years to complete decommissioning, no matter how big the fund.) Entergy also agreed to put $25 million into a separate fund for “greenfielding” the site. Greenfielding generally involves excavating, grading and seeding.

The Next Steps

Of course, not everyone is happy with the agreement. Opponents loudly insist that decommissioning must start immediately (it can’t), and others worry that it will take years for Entergy to have enough funds to start decommissioning. The definition of “greenfielding” is also contentious.

Even so, the agreement is a major step forward in what has been a hard battle between Vermont Yankee and the state. Both are arguing in favor of this agreement before the Public Service Board. That’s quite an unexpected development. Either side could withdraw from this agreement if the Public Service Board does not approve it by March 31, however. The board is now considering this plan, and the public comment period is still open. At the PSB website, you can read docket 7862 and write your comments. I encourage you to do so.

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Here is a direct link to the comment form on this docket.

http://psb.vermont.gov/docketsandprojects/public-comment?docket=7862

When reading docket 7862, you will note that there are two major document filings: the Memorandum of Understanding and the Settlement Agreement.  The Settlement Agreement is the agreement between Entergy and the state agencies, while the Memorandum of Understanding is the part of the Settlement Agreement that lies within the jurisdiction of the Public Service Board. The Board will rule on the Memorandum, but the Settlement Agreement was filed for informational purposes.


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The article above is an op-ed that I wrote (plus a short end section on links).

The op-ed has been published in the Valley News, True North Reports, and Vermont Digger.  It may also be published other places in Vermont. 

Broken Windows, Ruined Roads, the Glory Days of the Railroad, and Nuclear Decommissioning

The Seen and the Unseen

The Broken Window Fallacy says that destroying something (breaking a window), and then fixing it (hiring a glazier), stimulates the economy. The broken window fallacy was first described by the French economist Bastiat in 1850.

In the broken window story, a hooligan breaks the baker's window. The baker then pays a glazier to fix his window. However, this does not stimulate the economy. If the baker didn't have to pay for fixing his window, he might have bought something else (a new suit from the tailor) with the money.

The point of the broken window fallacy is that we can see what we get after the window is broken. We see the glazier getting paid.

However, we can't see what we don't get. We can't see the the tailor not being paid.

Irene's Broken Window in Hartford Township

There has been a lot of destruction of roads and property in my township. Irene broke the windows, for sure. However, it is a small town, the money has to come from somewhere, and this article in the Valley News describes the "unseen." The article describes some of the things my town had hoped to do, but will not be doing in the near future, because we have to fix the roads.

The town has decided to:

• cancel the Glory Days of the Railroad Festival this Saturday, because there is too much clean-up to be done
• cancel or postpone a bond to fix up the ice rink
• cancel or postpone a bond to fix up the town hall, a drafty and energy-inefficient Victorian edifice

After Irene, the town will see people employed on the roads, but people will not be employed to improve the municipal building or ice rink. What we don't get is visible in this case. We won't have a festival, we won't have a good ice rink, we won't have insulation in the municipal building. We will get the roads fixed, but we will be poorer (less fun, no improved town infrastructure) due to Irene's broken windows.

The "unseen" is visible in my township, and it isn't pretty.

Nuclear Decommissioning

In recent weeks, I wrote two articles on the jobs effect of nuclear decommissioning. Governor Shumlin repeatedly states that decommissioning Vermont Yankee will be a great jobs bonus and economic stimulus for the southern part of Vermont. He claimed that "several hundred" plant workers would continue to be employed for "five to six years." The Governor also said that decommissioning would "fuel the economy" of southern Vermont by a billion dollars over ten years.

Who is the Glazier in Decommissioning?

Decommissioning a working power plant is like throwing a brick through a window. It doesn't take many highly skilled people (compared to running the plant). It doesn't take much money (compared to running the plant).

The "glazier repair bill" isn't the actual decommissioning costs, though they may be part of the bill. (It depends on how you look at it.) The true repair bill is

• the cost of either new power plants (which will be needed eventually, but this is twenty years too early)
• and/or the higher cost of power bought from out of state.

Out of state power is far more likely: we are already buying nuclear power from Seabrook. New power plants and transmission lines in Vermont usually attract fierce opposition. I think we will buy from out of state. Governor Shumlin practically commutes to Canada, setting up new power deals.

Vermont will spend our money on out-of-state glaziers. We will see the money be spent, money that could have "fueled" the Windham County economy for twenty more years. What we would have spent the money for, here in Vermont...that will be unseen.

Related Information

In a recent post, I described the broken window fallacy in terms of the possible job stimulus of Hurricane Irene's destruction, or of decommissioning a nuclear plant. In both cases, destruction is not a job stimulus.

I also have two articles on decommissioning. My first article, Decommissioning Vermont Yankee: the Governor vs. The Facts, appeared in True North Reports on August 14. This showed that 80% of the plant employees would be laid off within six months to two years.

My second article was posted yesterday: Will Decommissioning Vermont Yankee Funnel a Billion Dollars into the Vermont Economy? The answer is "no." In a ten-year period, about $200 million can be expected in salaries for contract workers decommissioning the plant. If the plant is running, in ten years, $650 million in salaries are earned by plant employees. In other words, plant-related employment would drop by about two-thirds. Scarcely an economic boom!

Zion plant from Wikipedia