Vermont Yankee closure could have wide-ranging economic impacts
BRATTLEBORO -- In a report issued early last year, Southeastern Vermont Economic Development Strategies concluded the closure of Vermont Yankee nuclear power plant in Vernon would have a severe impact on Windham County's economy.
The effects of closure include the most obvious: The loss of more than 600 well-paying jobs. But other effects include declines in the county's gross domestic product, real estate values, human capital and state and local tax revenue. And all of this just adds to the economic hardships Windham County has been struggling with for years.
On Tuesday, following Entergy's announcement that it would be closing the power plant in late 2014, SeVEDS issued a press release stating "Today's announcement, given our current economic situation, is a serious blow. We are deeply concerned about the loss of over 650 highly paid jobs and the impacts that will have on the lives of the VY employee families. We are equally concerned about the overall impact to the regional economy and the impact to the many contractors and other businesses that do business with VY."
SeVEDS has been in existence since 2007, but in 2011 it began in earnest to evaluate and develop strategies to help the region recover from 20 years of economic decline.
"The telltale symptoms of that decline have been stagnant wages, population loss, and loss of younger population," stated the press release.
Stephan Morse, the chairman of the task force, was in Montpelier meeting with Gov. Peter Shumlin on Wednesday. Morse said following Entergy's announcements, the task force's report is even more relevant than it was a year ago.
"All those concerns in the report are real," he said. "SeVEDS and the task force and the community need to get to work to find solutions."
Morse said Entergy's surprise announcement might seem like a gray cloud, but in fact it has a silver lining.
"It occurs to me there may be a real opportunity for Windham County. We've been a divisive community for years but now that that's behind us it may be a great time for the community to come together and work for economic recovery. With this issue resolved and with a serious economic crisis facing us, it's in our best interests to work together to solve this."
The difficulties facing Windham County with the closure of Yankee are well documented.
"While Vermont has experienced slow growth as compared to other states, Windham County is an even slower-growing area," stated Richard Heaps, in testimony given to the Vermont Public Service Board on behalf of Entergy. "This suggests that any major, negative economic impacts could be felt more acutely in Windham County than elsewhere in Vermont."
From 2000 to 2010, according to Vermont Department of Labor statistics, the county lost 2,200 jobs. And while wages and median family income grew during that 10-year period, they lagged behind the state, with family income about $8,000 less than state average. Population growth in the county has also lagged behind the state.
In 2011, Entergy VY paid total compensation of $65.7 million, and accounted for 2 percent of the employment and 5 percent of payroll in the county.
In addition to the 627 employees at Yankee, noted Heaps, another 400 or so jobs in the county are created in retail sales, accommodations and food services, as well as the construction trades, health care and professional services. Yankee is also responsible for the creation of another 246 jobs around the state, according to Heaps. Those jobs account for another $21 million in payroll in Windham County and $10.7 million elsewhere in the state. Yankee is the largest private employer in Windham County, and more than 220 of its employees live in the county.
He noted continued operation of Yankee through 2032 would result in more than $2 billion in payroll, the state would collect in excess of $227 million in tax revenues and local governments would collect another $67 million in property tax revenues.
If the plant was to remain open until 2032, those economic benefits would continue until then.
"Disposable income of all Vermont residents is $55.8 million higher than otherwise due to operation of the VY Station," stated Heaps.
But in a scenario in which the plant closes in 2013 and decommissioning doesn't commence until 2066, job loss in all sectors in the first five years of closure could range between 625 and 1,050, said Heaps.
"While the loss is significant standing on its own in a state such as Vermont, the comparative impact of the loss of the VY Station raises a greater concern when considered in the context of Windham County, a county that has experienced negative growth in recent years and has consistently lagged behind Vermont as a whole in economic terms."
The Post-VY Task Force organized by SeVEDS reached many of the same conclusions, but it also worked on mitigation strategies.
It proposed a Special Economic Development Zone, supported by funds from the Vermont Economic Development Authority, federal Community Development Block Grants and the Vermont Employment Growth Incentive, as well as redirected tax revenues produced by the power plant.
The task force declared its support for immediate decommissioning, rather than placing the plant in SAFSTOR for up to 60 years, which could delay reuse of the site for up to 80 years.
"We are not just coping with the long slow decline that has marked (southeast) Vermont for 15 years, but with the prospect of a precipitous decline in employment and economic activity whenever the plant owner decides to close," noted the report. "This is very likely to occur with very short notice so planning and mitigation needs to begin now."
The task force noted home values are likely to drop -- up to 15 percent -- as Yankee employees leave the area for jobs elsewhere and place their homes on the market.
"In addition, there could be a downward spiraling effect on both residential and commercial property values resulting from the perceptions of buyers who see closed stores, closed businesses and many ‘for sale' signs."
In addition to the economic impacts, noted the task force, there also is the loss of "human capital," people who contribute to their communities, donate to charities and get involved as volunteer firefighters, teachers, mentors, members of boards and at local non-profit agencies.
The task force recommended a number of short-term options to mitigate the impacts of closure.
They include: Expansion of services for existing businesses; marketing outreach to promote the region; state resources dedicated to the plan; and advocating for the immediate decommissioning of the plant.
Long-term strategies include: Expansion of education services, healthcare services and senior housing and assistance services; and support of business startups.
Some of the impact of the plant's closure could be mitigated by immediate decommissioning.
Chris Campany, the executive director of the Windham Regional Commission, said it's been WRC's long-standing recommendation that when the plant ceases operation, decommissioning should begin immediately.
Commencing the cleanup immediately is not only necessary for the region's long-term economic revitalization, but also would take advantage of the knowledge base currently in place at the plant.
"And more people will stay employed for a longer time under immediate decommissioning," he said.
But Campany said it's still not clear that whenever mitigation is done, to what standard it will be benchmarked. The NRC requires only that the site be returned to brownfield status, with structures removed to only three feet below the surface. But Vermont wants all structures removed in their entirety and the site returned to a greenfield.
"We don't want a massive brownfield site sitting on the banks of the Connecticut River."
Campany would also like to see the waste stored in the spent fuel pool transferred to dry casks while the plant is still operating so that the costs will be applied to the operating budget and not to the decommissioning fund.
"The reality is, no matter what happens, we're not going to use that site for several years. And the site is so small that while spent nuclear fuel is stored on site it will be difficult, if not impossible, to use it for anything else."
Bob Audette can be reached at firstname.lastname@example.org, or at 802-254-2311, ext. 160. Follow Bob on Twitter @audette.reformer.
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