Shutdown of Vermont Yankee will eliminate jobs, resulting in ‘very, very sharp hit’ on region’s economy



Last modified: Sunday, January 11, 2015

When the Vermont Yankee nuclear plant shuts down permanently Tuesday, after 42 years of operation, it will mark more than the loss of a 640-megawatt electricity generating station.

With 550 employees earning an average of $105,000, the Vernon plant has also been a significant economic engine for the tri-state region, and the elimination of most of those jobs over the next five years will have a chilling effect on the economy, according to a new study by the University of Massachusetts Donahue Institute.

The loss of the plant’s payroll, which totals about $58 million this year, would be significant enough, said Donahue researcher Branner Stewart, but the “multiplier effect” in the region, which includes Franklin County as well as Windham County, Vermont, and Cheshire County, New Hampshire, is about double the 2 percent loss from wages and salaries alone.

That’s an estimated 4 percent hit, totaling about 1,200 jobs across the three counties to be lost over the next five years, with about half of that occurring over the next couple of years — “a very, very sharp hit over not a very long period of time,” said Stewart.

A few more than 100 of the plant’s 550 remaining employees — down from 625, when the shutdown was first announced in August 2013 — live in Franklin County, and Stewart said it is believed that the loss of their incomes will be felt by reduced spending in groceries, restaurants and retail stores in their communities, although there was no geographic salary breakdown.

Paul Paradis, decommissioning manager at Vermont Yankee, said last week that once fuel is moved from the plant’s reactor to its spent fuel pool, by mid-January, employment will drop to just 316.

The study, done by Donahue Institute for the Franklin Regional Council of Governments, the Windham (Vermont) Regional Commission, the Southwest (New Hampshire) Region Planning Commission and the Brattleboro (Vermont) Development Credit Corp., made use of employment and payroll data provided by plant owner Entergy, as well as its projected time line for decommissioning to determine the impact over time of closing the plant.

The number of employees is expected to shrink further, to about 127, as the spent fuel is prepared to be moved into dry cask storage, around 2017 to 2020. Still, according to the report, because those will be highly compensated workers, they will be expected to contribute significantly to the region’s economy before the numbers reduce further to 58, and ultimately 24 workers when dry-cask fuel storage is the main activity at the site after 2021.

By 2021, Stewart said, economic activity around the region that is generated by the plant and multiplied in the larger economy will be about one-tenth of what it is today.

The impact of the closing is even more significant on a rural region without the large array of employers that could provide a cushion, he said. And it’s exacerbated by the large salary differential between Vermont Yankee and the average for the region as a whole.

It could be 40 or more years before the Decommissioning Trust Fund earns enough through interest to reach the estimated $1.24 billion cost to decommission the plant, which is expected to be mothballed until then. The trust fund now totals $665 million.

Chris Campany, executive director of the Windham Regional Commission, said his agency had advocated for prompt decommissioning of the plant, as occurred at the Yankee Atomic plant in Rowe. That would have ensured that more employees remain at the plant longer rather than the “precipitous drop” envisioned now.

“It may be like tilting at a windmill, but we’re still going to be pushing for prompt decommissioning,” he said, “It would be better to have those people in the community, spending that money, investing that money. That would have been a much softer landing.”

Vermont Yankee’s closing takes place when the economy is already under-performing, with some population decline and “signs of fragility,” said Stewart.

Campany added, “There’s a great sense of urgency ... I’m not sure people are aware of what the impact is. There are going to be impacts. It’s going to be real. It’s going to hurt people who are already in the margins.”

“A 4 percent impact on our economy is huge,” said Linda Dunlavy, executive director of the Franklin COG. When Yankee Atomic shut down, the major focus was on the environmental impacts and where the fuel would be stored, she added.

The COG has begun planning a meeting in January or February with economic development organizations, regional planning agencies, regional employment boards, community development corporations and other officials from the three states, Dunlavy said. It also plans to seek help from the federal Economic Development Administration to create a three-state plan to diversify the region and recover economically.

Dunlavy and Campany said the analysis does not track other effects of the plant’s closure, and they are not necessarily equipped to track or predict changes in the housing market or to project declines in contributions by Entergy to charities.

The company donated more than $175,000 to charities in 2014 — already a drastic reduction from levels in the past, according to Campany — and has said it will “continue with charitable contributions in 2015 at reduced levels.”

“We know that will be a huge impact to all community groups,” said Dunlavy.




 


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