Vermont Yankee Union President Guest Post: You Done Good

Thank you for publishing former Gov. Thomas Salmon’s accurate assessment of Vermont Yankee nuclear power plant, specifically that during 42 years of operation it has been “environmentally benign” and “never hurt a soul.” I worked with the employees at Vermont Yankee for many years and I would like to comment on why it was such a safe workplace and neighbor. For starters, long before the first nuclear power plant went online, a commitment to safety was hardwired into the cultural and organizational circuitry of the International Brother of Electrical Workers (IBEW), whose Local 300 I was honored to serve as President and Business Manager for many years.

In the early days of America’s electrification, the IBEW fought hard to reduce the high incidence of line worker electrocution by improving safety design, equipment and training. At nuclear plants such as Vermont Yankee, labor’s zeal for the safety of its brothers and sisters was joined by the industry’s prudent commitment to zero tolerance for safety error and aggressive, skilled oversight by the federal government. It’s been this way for decades, and gets more so every year. And of course the good work will continue as the plant is decommissioned. I am sure I can speak for the past and present members of Local 300 when I say we are proud to have helped Vermont Yankee meet and exceed the very high standard of safety performance set by the IBEW by adopting our Code of Excellence program, forming superior labor /management team, working with the state Occupational Health and Safety the NRC as well as other institutions who deal with nuclear safety standards. I fully agree with Gov. Salmon: you done good.


George Clain,

Barre

Past President and Business Manager, IBEW Local 300

------

George Clain's letter has appeared in several newspapers, as well as this blog.

He is referring to Governor Salmon's praise of Vermont Yankee, published in this blog as
Governor Salmon Praises 42 Years of Vermont Yankee. (Guest Post)

Reliability and Business: Two Reasons Why Vermont Needs Vermont Yankee

Last week was a big week for writing letters about Vermont Yankee. I received (in various ways) two very informative letters about Vermont Yankee, and I want to share them in my blog. The first letter, about Vermont Yankee reliability, was sent by an Entergy Vice President. The second letter was an open letter to Peter Shumlin about the importance of Vermont Yankee to Vermont's economy. The letter about Vermont Yankee economics was signed by two business organizations and a union.

Vermont Yankee and Reliability

The letter about Vermont Yankee reliability was sent by Entergy to an email list, and I don't know who was on the list. (Media? Friends of Vermont Yankee?) At any rate, I was glad to get the letter, because it showed Entergy is reaching out to bloggers. For most companies, including Entergy, us bloggers don't get no respect. For most companies, we're not "real media." ( Areva, on the other hand, has conference calls and even tours for bloggers.)

So I was happy to see the letter come my way, and I sincerely hope that communication with bloggers is a new approach by Entergy. (Rod Adams has already blogged about the letter.)

Vermont Yankee and Reliability

In this letter, Entergy Vice President T. Michael Twomey, based in White Plains, New York, did a fabulous job of refuting the trash-talk about Vermont Yankee and reliability. The person to whom the letter was addressed, James Marc Leas, apparently has described Vermont Yankee as a "piece of machinery that is falling apart" and claimed that it has "extraordinary" reliability issues.

Twomey completely refutes Leas. In the letter, Twomey goes through the plant, practically section by section:

• Performance Indicators, as assessed by the NRC, show that Vermont Yankee is at the highest levels of performance and lowest levels of required oversight, year after year.
• Vermont Yankee's capacity factor (time on-line) is fourth highest of its group of sixteen "sister plants" (boiling water reactors that came on-line between 1969 and 1979).
• Major equipment upgrades ($400 million dollars worth of equipment) have been added by Entergy in the eight years it has operated the plant. Twomey lists the equipment that was added.

Yet, in my opinion, Twomey doesn't go far enough. He doesn't mention that in 2010, VY was awarded an industry-wide prize for their advanced steam-dryer inspection methodology. Well, okay. If Twomey was going to list everything, it would be a long letter.

The letter is pretty impressive as it is.

I have to say, however, that I wish I had had access to this information months ago. For example, when I speak about VY, I have said things like: "It is one of the most reliable plants in the fleet." Saying "fourth out of sixteen in capacity factor" would have been much better. I have said: "They have kept up the plant effectively, as proved by its reliability." Saying "400 million in capital improvements" would have been more convincing.

To quote Rod Adams, Like many of my pronuclear blogging friends, I have been a little disappointed in the lack of quotable responses from the plant owner.

I am pleased that this letter has been written, but I wish it had been written months ago.

Vermont Yankee and Vermont's Economy

The letter about the economic consequences if Vermont Yankee does not get relicensed did not contain any information which will be new to readers of this blog. A quote from the letter:

Vermont will face 1) increased electric rates from more expensive replacement power than Yankee would offer, 2) increased rates from the cost of projects required to shore up the electric grid's reliability, 3)possible periods of reduced reliability if such projects are not completed in time, and 4) the loss of well over 1,000 jobs from Yankee itself, companies doing business with the plant, and other businesses facing higher electric rates.

The new information in this letter is the list of the groups signing it, which includes Associated Industries of Vermont. The other two organizations who signed the letter are IBEW, a union which has long supported Vermont Yankee, and VTEP, another long-time supporter. However, I see the signature of Associated Industries of Vermont, along with IBM's recent press conference, as evidence of a new mobilization of Vermont industries to support Vermont Yankee.

Two letters: one with new information, and one with new supporters. I am happy to share them.

Economic Report: Well-Constructed

A year ago, the Senate ordered a panel of economists to write a report on the economic effects of closing Vermont Yankee. Two months ago, President Pro Tem Shumlin forced a vote about Vermont Yankee before that report was ready. Many senators were upset that they were forced to vote before they had received and reviewed it.

A few days ago, the legislature's consensus report on the Economic Impacts of Closing Vermont Yankee was finally released. Since then, I have gotten emails and notes from all sorts of people: have you seen this? Why haven't you blogged about it? Why indeed.

I have seen it. Let me sum up my understanding of it. Some of it is good, and some of it is pretty questionable. I don't know why nobody else has mentioned this before. I feel like the little kid pointing out the nakedness of the Emperor. I feel like...well, enough about me. Let's talk about the report.

I'm concentrating on the good parts in this post. However, I believe the legislative report had some serious weighting against Vermont Yankee, but Vermont Yankee still came off as a strong contributor to the economy. Because Vermont Yankee IS a strong contributor, and you can't hide that, even if you try.

It will take me several posts, over a few days or maybe weeks, to do this analysis fairly completely. This is the first post, concentrating on the simplest options in the consensus legislative report.

I apologize for the length of this post. Imagine if I had tackled all four scenarios, instead of just the first two!

Three Economic Reports

I can't review the consensus report without comparing it to two other relatively recent economic reports. The electric workers union (IBEW) funded a report issued in February; this IBEW report reviewed the economic effects of shutting down Vermont Yankee.

Another report, issued last summer by VPIRG, cannot be called an economic report because it is not very firm on dollar figures. However, VPIRG's Repowering Vermont describes the "green" options VPIRG recommends. These options are similar to some of the options in the legislative consensus report. (You have to register at the VPIRG site to download the full report, but you can read the executive summary at the link above.)

The Four Scenarios

The legislative consensus report on closing down Vermont Yankee has four scenarios, also described by Rod Adams in his recent post.

The four options are:

1) Shut down VY and continue other business-as-usual

2) Relicense VY and continue other business-as-usual

3) Shut down VY and start an aggressive Green Energy building program (Green Scenario)

4) Relicense Vermont VY and start an aggressive Green Energy building program (Hybrid Scenario)

This post discusses the first two options: simple shut-down and simple relicense.

Relicense or Shut Down: The Economic Impact

Comparing Shutting Down versus Relicensing, with business--as-usual otherwise, the Legislature's report concludes (page 8) about the overall economic impact:

Total VY Shutdown scenario impacts, relative to the Relicense scenario, result in about 1,100 fewer jobs per year and real disposable personal income levels more than $60 million per year (in 2012 dollars) below VY Relicense levels between 2013 and 2031

The IBEW study has similar numbers. On page i, the executive summary, we read this about the economic impact:

In 2009 the disposable income of Windham County residents was $64.5 million higher due to the presence of the VY Station than it would be otherwise. Elsewhere in the state, disposable income was $14.0 million higher due to the VY Station. In total, disposable income of all Vermont residents was $78.5 million higher in 2009 than otherwise due to the presence of the VY Station

The Fiscal Impact

On page 11, the legislative report describes the fiscal impact (impact to state revenues) of VY Shutdown as $4 to 6 million per year below the base-case of relicensing, with a total fiscal impact of minus $110 million over thirty years.

On page ii of its summary, the IBEW report also describes the fiscal impact: In 2009, VY station and the economic activity it generated resulted in $7.67 million to Vermont's General Fund and $4.94 million to Vermont's Education fund.

Assessment Comparison

These both seem to be well-constructed assessments. Econometric models answer certain sorts of questions very well: "What effect will shutting this plant down have on the local economy?" Or "How will raising gas prices affect economic growth in America?"

To me, it looks as if both the legislative report and the IBEW report used reasonably standard economic models to assess the effects of closing Vermont Yankee, and they came up with very similar results.

• For general economic impact, IBEW gives somewhat more credit to the stimulating effects of Vermont Yankee on the general economy than the legislature's report does: $78 million a year( IBEW) versus $60 million (legislative) for total economic effect.
• For fiscal impact (tax revenues to the state), IBEW lists $7 million general plus $4 million educational ($11 million total) while the legislature assumes $4 to $6 million a year. I don't know if the difference between IBEW and the legislative document is due to methodological differences or not. Perhaps the legislature's report doesn't count the educational fund?

Methodologies Compared

There were significant differences between the report methodologies, however.

• The IBEW report used existing 2009 data without manipulating it excessively or projecting far into the future.
• The legislative consensus model projected far into the future (2040).
• The IBEW model did not consider the (as yet undefined) power agreements after 2012, but evaluated past experience.
• The legislative model made assumptions about the future, including the extent of the Revenue Sharing Agreement and load growth to 2040.

Models Depend on Inputs: Load Growth

The legislative report used an advanced econometric model, the La Capra model. This sounds great, except that the economists determined load growth by consensus assumption and then sent this information to the La Capra model.

Page 5 of the report contains this statement above a boxed set of assumptions used in the econometric modeling.

Energy supply assumptions, including VY purchases by Vermont utilities, in-state renewable energy development, and modified peak and average load forecasts were developed through a consensus process with the group and provided to La Capra as model inputs. (emphasis added)

The boxed set of assumptions includes the following (for the regular, non-Green scenarios)

• By 2040, there will be 1,568 GWh per year saved through efficiency.

Since Vermont only uses 6,800 GWh per year now, I question this assumption. However, if you assume load growth to 10,000 GWh per year by 2040, perhaps this level of efficiency will occur. The total electricity requirement for Vermont in 2040 is not in the legislative consensus document that I have downloaded (the executive summary). 10,000 GWh? 5,000 GWh? Certainly, however, if Vermont needs less electricity in the future, relicensing any particular power plant will have a smaller economic effect. This assumption works against Vermont Yankee, in my opinion.

Revenue Sharing Inputs

On page 4, the legislative report states that it is making a conservative assumption about the revenue sharing agreement. I do not know enough about this assumption to evaluate it here, but I thought I should point out this statement. With a more liberal (or perhaps more realistic) assumption about revenue sharing, the economic benefits of Vermont Yankee would be higher. Coupled with the 1,500 GWh demand decrease, this assumption helps stack the deck against Vermont Yankee.

(As a matter of fact, if they had made only this assumption about the Revenue Sharing Agreement, I would be okay with it. It is this assumption PLUS that huge "efficiency" savings that looks bad to me.)

In contrast, IBEW assesses existing conditions which include a Power Purchase Agreement, but not revenue sharing. Since this assumes less income to the plant, and therefore probably less taxes and a tighter rein on the payroll, it is also a conservative assumption.

Green and Hybrid

When the legislature's report discusses the Green and the Hybrid options, things get considerably more confusing and less believable. But that is a post for another day.