Entergy's decision to close Yankee was unexpected, to say the least
BRATTLEBORO -- Aug. 27 was a day that started in the newsroom just about like every other day starts at the Brattleboro Reformer. Executive Editor Tom D'Errico was knocking out his daily Internet duties, posting stories on social media, checking various e-mail accounts and double-checking to make sure all the day's stories had made it online when he clicked on the Reformer's Twitter account.
"I was doing our morning social media updates, when I saw the Tweet from Entergy go out -- that Vermont Yankee would be closing," said D'Errico. "For a moment, it almost seemed like a joke. You hear about accounts being hacked all the time. It seemed unbelievable after all the battling in the courts. But I immediately sprang into ‘journalist' mode and began doing some research and digging, getting a hold of the official paperwork from Entergy, and putting together the breaking news."
Once D'Errico posted the breaking news, his attention shifted to, "How are we going to cover this?"
"I think, as the story evolved over the course of the day, the newsroom did an amazing job of covering the actual news and also looking at the various effects that would ripple through the community."
I've been covering Vermont Yankee for almost as long as I've been with the Reformer, since late 2005. In those eight years, I've become, if not an expert on nuclear power, at least knowledgeable enough to hopefully put together a coherent report on anything from the water temperature of the Connecticut River, to how a cooling tower works, to what is a safety-related component, to what the government considers to be safe levels of tritium in drinking water.
As the story of Entergy's ownership of Yankee unfolded, I have followed it through the state Legislature, before the Agency of Natural Resources and the Atomic Safety and Licensing Board, through the federal district and appellate courts and before the Vermont Public Service Board. I have sat through interminable meetings hosted by the Nuclear Regulatory Commission, the Vermont State Nuclear Advisory Panel and the Federal Emergency Management Agency, in which proponents and opponents of the plant talked at and through each other. At one memorable meeting, an anti-nuclear activist actually tossed compost on a panel of federal regulators and Entergy representatives. I have plowed through legal filings and technical documents until my vision blurred, leaving my head spinning.
But nothing prepared me for that phone call from Tom on Aug. 27 when he told me about the Tweet from Entergy. Just as he thought someone had hacked Entergy's Twitter account, I thought my editor was joshing me. But he wasn't, and he said in no uncertain terms that I should get to work ASAP (not his words, but I can't repeat them here) and be prepared for covering the press conference scheduled for that afternoon.
When I arrived at Entergy headquarters on Old Ferry Road in Brattleboro, there was a hushed atmosphere, like at a wake at a funeral home. The media gathered in front of an empty table with four empty chairs behind it. We nodded at each other and shook our heads in disbelief that after all of this -- the lawsuits, the public disagreements, the millions of dollars in legal and consulting fees, the half-decade review of Entergy's relicensing application -- Entergy had decided it was time to shut down Vermont Yankee nuclear power plant. We expressed our incredulity in whispers and raised eyebrows and sunk into an uneasy quiet as four men from Entergy shuffled into the room and sat down at the table with a look in their eyes I imagined was the result of having been told their boat was taking on water and it was their job to start bailing.
"Today is an extremely tough day for us here at Entergy, and more importantly for the 630 employees at Vermont Yankee," said Bill Mohl, the president of Entergy Wholesale Commodities. "I can personally tell you that this was an agonizing decision."
Mohl said the decision to stop producing power at the plant was based on the economics of the plant, and not operational performance, litigation risks or political pressure.
"Simply put, the plant costs exceed the plant's revenues and this asset is not financially viable," he said.
Vermont Yankee is being closed, not because, as its critics had contended, it was an accident waiting to happen or because the Vermont Public Service Board had refused to issue a certificate of public good for continued operation. The reason was much more mundane and it can be boiled down to just one word: Fracking.
During the press conference, Mohl said natural gas markets have undergone a transformational shift in supply due to the impacts of shale gas, resulting in sustained low natural gas prices and wholesale energy prices. In other words, Vermont Yankee, a single-unit nuclear reactor, couldn't produce electricity as cheaply as power plants fired by natural gas. In addition, said Mohl, the capital costs of keeping a 40-year-old power plant operating safely and reliably were prohibitive in today's energy market.
Lastly, Mohl blamed the decision to close on "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."
In other words, commented analysts after the announcement, a plan to provide incentives to keep open plants that were producing electricity at a loss to their operators wouldn't be in place soon enough for Entergy to justify keeping Yankee open after the end of 2014.
As a result, a plant that had been operating at a capacity factor of 92.4 percent for the past 10 years and had for several fuel cycles operated from "breaker to breaker" was headed for the radioactive dustbin of history.
Entergy's decision created ripples throughout the tri-state region. Yankee's more than 600 employees were left wondering whether they would seek early retirement or pull up stakes and find employment elsewhere. Entergy offered retention incentives to keep critical personnel in the facility and also offered jobs, where available, at its other power plants.
Meanwhile, the town of Vernon slipped into a state of shock upon realization that its budget was going to take an incredible hit after the power plant, which was responsible for half of the town's tax base, would no longer be producing electricity. Businesses around the tri-state region wondered how the loss of 600 employees and their families would affect their bottom lines and real estate agents wondered what would happen to the housing market if all those homes went up for sale at the same time. Charities and event organizers who depended in a large part on Entergy's and its employees' largesse are scrambling to figure out who will fill the hole left when Entergy's wallet is no longer open.
But just as momentous as the decision to shutter the power plant was, the news that the state and Entergy were in discussions in how best to deal with Yankee's closure left many of us just as surprised. After so much disdain was expressed over the years by both sides, it was hard to envision them sitting together in closed-door sessions without coming to blows. But after several months of pragmatic discussions between Entergy and the state, there appeared to be a light shining from the tunnel that ends in December 2014.
In what this paper described as a "grand bargain," Entergy agreed to give Windham County $10 million in economic aid, to release more than $5 million it had held in escrow for the Clean Energy Development Fund (half of which is assigned to the county), to drop any further lawsuits against the state, including one to recoup more than $5 million in legal fees for its successful federal lawsuit against the state, and to seed a "greenfielding" fund with a $25 million down payment.
But perhaps most welcome to the residents and businesses of the tri-state region was the news that Entergy wouldn't wait up to 60 years to clean up the site. Instead, its representatives promised that once the official decommissioning trust has accrued enough funds to do the job, it would commence with the project. It is hoped that cleanup can be finished before the end of the 2020s. Entergy also promised to remove all of the nuclear waste from the plant's spent fuel pool within the next seven years and place it in dry casks while the federal government continues its as yet fruitless quest to establish a repository to house all of the nation's nuclear waste.
And what did Entergy get in return? Simply put, the guarantee that the state won't fight the issuance of a certificate of public good for the plant's final year of operation, nor the construction of a facility to store Yankee's spent fuel.
We at the Reformer will continue to follow the unfolding story of Yankee's last year of operation, and into 2015 as the plant is shutdown, spent fuel is moved out of the reactor building and decommissioning planning begins in earnest. We will also continue to examine what the plant's closure will have on the region's economy and how the funding provided by Entergy might help to soften the impact.
But one thing's certain -- the announcement that Yankee will be closing next year is undoubtedly the No. 1 story of 2013.
Bob Audette can be reached at email@example.com, or at 802-254-2311, ext. 160. Follow Bob on Twitter @audette.reformer.
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