Yankee Agreement May Offer Way Forward For Other States On Decommissioning

Dec 27, 2013

An agreement reached earlier this week between the state and the Entergy Corporation ends years of litigation with the owners of Vermont Yankee.

The deal is likely to speed up the timetable for decommissioning the plant. And it suggests that Entergy is willing to consider the region’s interest in how the Vernon nuclear plant is dismantled. The agreement could also provide a roadmap for how other states deal with nuclear plants that are close to their retirement age.

Entergy’s decision to close the plant in 2014 isn’t an isolated event.

It’s part of a larger pattern of changes in the nuclear power industry that could affect decommissioning in Vermont. And some experts say that what happens here could affect other plants around the country.

The Vernon reactor is one of five nuclear power plants that recently announced plans to close before their federal licenses expire.

More are expected to follow.

Competition from cheap natural gas has made some plants unprofitable. Meanwhile, new efficiencies and conservation measures have reduced the demand for electricity. That’s something Michael Dworkin says the industry didn’t plan for.

“So there’s really been ten years of less power needed than they were building for,” Dworkin says.

Dworkin is a former chair of the Vermont Public Service Board, which regulates utilities in the state. He now directs the Vermont Law School’s Institute for Energy and the Environment.

According to Dworkin, rising nuclear fuel prices and the prospect of costly new safety requirements in the wake of the accident in Fukushima, Japan, are also prompting what could be a wave of nuclear plant closings.

Dworkin says the need to maximize profitability at plants that remain on line could give local communities new leverage with plant owners -- and with the Nuclear Regulatory Commission.

“If they want to move through those proceedings with a reasonable chance of keeping as many of plants as possible in operation,” Dworkin says, “Then they should want to portray themselves as a good business partner. Because they’re going to need support from the states -- transport for their fuel, augmentation of transmission lines going into their facilities in order to make sure they provide power to the market that will pay the highest price for it.”

At a recent forum in Brattleboro, speakers said NRC rules seem to give host communities and local interests little say in the details of decommissioning.

University of Massachusetts economist John Mullin was among the speakers at the forum who called for a national discussion on decommissioning policy. It’s a discussion in which Mullin believes Vermont could lead the way.

“The first thing I would do,” he says, “I would call a national conference in Brattleboro and invite every nuke in the country to define the best practices. And the goal of it would be to get this on the national agenda very quickly. It’s time that we get a new playbook here.”

Michael Dworkin says the NRC could take a long time to change the rules on decommissioning.  But he says much can be gained by joining forces with other states.

Dworkin says he’d especially like to see the states work together to prevent industry players from creating spin-offs to protect the parent companies’ assets. He says Vermont prevented Entergy from doing that, though liability issues do remain.

“Allowing these plants to be run by limited liability corporations that don’t have access to their parents’ deep pockets is a real way of shifting the financial risk from the company to the public,” Dworkin says.

Christopher Recchia is the commissioner of the Department of Public Service, which represents ratepayers in utility proceedings.

He says Vermont could help lead the way to a more transparent and inclusive decommissioning process. He says the state’s agreement with Entergy has already broken new ground by giving the state a role in some areas where it may not have legal authority, such as the handling of spent fuel.

“And hopefully it does serve as an example for other states if they have to go through this,” Recchia says. “But we have a long way to go. This is just on paper. Now we have to actually implement the spirit and the words that are there.”

Recchia says many issues remain unresolved, and others have yet to surface in a process of dismantling that -- even in the best case -- is likely to take decades.