Vermont Yankee nuclear power plant closing triggers studies of impact on region’s economy

Last modified: Monday, February 02, 2015

In towns like Rowe and Vernon, Vermont, where a nuclear power plant with its highly paid workforce can serve as an “economic mask” that shields the rural community from workplace losses, the permanent shutdown of the reactor can be like removing that mask, revealing the true condition of the local economy, according to Jennifer Stromsten, one of the researchers who founded the Institute for Nuclear Host Communities last year to study the closing of Vermont Yankee and other commercial reactors.

That mask can hide an aging population, an under-trained workforce, a shortage of good jobs overall and a lack of community assets to retain or attract new workers to the rest of the economy, according to Stromsten and co-founder Jeffrey Lewis. There’s usually little preparation for the economic bombshell resulting from that a plant closing like the shutdown of Vermont Yankee.

Entergy Nuclear announced the closing of Vermont Yankee in August 2013, giving some warning of the impact from the loss of its roughly 600 workers — many of whom earned more than $100,000 annually.

Unlike earlier nuclear power plant shutdowns, there have also been planning efforts so that the community was not entirely blindsided, beginning in 2007 with a Windham Regional Commission analysis of the regional economic, fiscal, socioeconomic and cultural impacts of the eventual closure of the plant, which was then being considered for an “uprate” and the potential 2012 expiration of its federal operating license.

The regional planning agency also completed a “resiliency action plan” for the town of Vernon in June 2012 — even though it had been granted a 20-year federal license extension — for which it recently received an “innovation award” from the National Association of Development Organizations in recognition of its “proactive planning.”

“We knew the plant was closing, and we knew it wasn’t going to be good,” said Chris Campagny, executive director of the agency, which has also been working with the Franklin Regional Council of Governments and the Southwest (New Hampshire) Regional Planning Commission to plan for the aftermath of the Vermont Yankee closing. A University of Massachusetts Donahue Institute report estimates it will cost about 1,200 jobs in the tri-state area’s economy over the next five years — a 4 percent hit.

Stromsten said her group’s effort is reviewing historical information from the decommissioning of the Yankee Atomic plant in Rowe, which closed permanently in February 1992, as well as of the Connecticut Yankee and Maine Yankee closings to help Plymouth and other nuclear-host communities consider what could lie ahead.

“We try to understand a little more about what was going on in the underlying economy,” said Stromsten, who works with the UMass Center for Economic Development, whose director, John Mullin, is also updating his 1997 economic analysis of the Rowe closing. “We’ve literally been delving into historic records to understand the dynamic of this regional economy in which factories were closing and the medical infrastructure was unraveling. But there’s this nuclear thing, which we think is kind of special in particular because it’s such a quiet thing, almost like a Willy Wonka thing people don’t really understand, where your neighbors really make a substantial wage for the area. It has an outsized impact, and even though that impact was very invisible while it’s there, it’s really felt as it goes away.”

In the case of Vermont Yankee, with a $58 million payroll last year, the number of employees is expected to drop from 550 in late December to 316 by the middle of January after its fuel is removed from the reactor to the spent fuel pool. The number of jobs is expected to shrink further — to about 127 — as that radioactive waste is prepared for moving into dry cask storage, between 2017 and 2020.

Looking ahead to the shutdown of dozens of nuclear plants around the country in the next 20 to 30 years, Stromsten said she had learned from talking to town officials in towns like Heath and Readsboro, Vermont, about highly paid workers who left after Yankee Atomic’s closing for other nuclear plants, and about those who had been living in the area for years and chose to downscale or retire, remaining here.

“You lose not only the jobs, but also the human beings, the intellectual capital,” she said.

“Rowe, as much as it’s in the middle of nowhere, in general was happy going back to being the way it always was, because it didn’t want growth or change. Having a nuclear power plant allowed it to do exactly that, but still have a wonderful school and wonderful services,” said Stromsten. “Rowe got lucky because they had replacement property tax (from the Bear Swamp pumped storage plant.) ... They got ‘the white whale,’ which never happens to anybody. They’re happy to be going back to being what they were” before the plant began operation in 1960.

In Readsboro or Monroe, she said, “The plant closure wasn’t the thing that killed it, but it was the last thing that was keeping anything going commercially in any of these towns.”

The Institute for Nuclear Host Communities, a “loose consortium” affiliated with the UMass Center for Economic Development, is simultaneously preparing an economic analysis for the town of Plymouth and that region’s planning agency, where Entergy’s Pilgrim Station plant has been relicensed to operate until 2032.

The eventual report, examining the strategies employed and lessons learned from each plant closing, can give planners tools to understand the effects they may face, and ways to reduce the negative impact.

In each community, Stromsten said, “It really means different things, depending on the context of each local and regional economy, and how the nuclear plant payroll relates to overall median salaries and to median home prices for each region.

“What are the kinds of things where you can contextualize these losses to understand them a little better?” she asked. “We all know it’s special and weird and different because it’s nuclear, but why?”

Despite the federal government’s regulation of commercial reactors, and the control it maintains over the nuclear waste that remains at the decommissioned sites in the absence of a permanent repository, communities and regions are largely on their own in the aftermath of a plant closure, which Mullin has likened to the closing of a military base more than of an ordinary factory.

“Probably at the end of this, there will be 70-odd plants closed,” Stromsten said, “And we’ll have 70 slightly different stories, but all these communities have things they can learn from each other.”

In the case of Vermont Yankee, decommissioning will likely wait decades until investment income increases the decommissioning trust fund to the $1.2 billion estimated to return the project to a usable site of about 100 acres,

“One of the things that’s funny about nuclear power plant closings is that you can see them coming,” she said. “There is pretty much an end date, and that gives you a planning horizon that’s almost impossible to find with any other big economic event.”


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