Vermont's feeble job creation philosophy

My Turn: Vermont's feeble job creation philosophy - Burlington Free Press

Three months from now Entergy Nuclear Vermont Yankee (VY) will be forced to make a fateful decision: whether to give in to the furious anti-nuclear campaign led for years by Vermont's anti-nuclear new governor, and abandon a safe, reliable, low-cost nuclear plant that generates about a third of Vermont's electrical consumption.

VY's federal operating license expires in March 2012. On March 10 the Nuclear Regulatory Commission approved a license extension for a 20 year license.

But in 2006 the Legislature passed a law declaring that the Public Service Board cannot take any final action to authorize continued operation of nuclear plant without an affirmative vote of both houses of the Legislature.

It is now clear that the legislative leadership -- Speaker Shap Smith and Senate President Pro Tem John Campbell -- have absolutely no intention of allowing a resolution of approval to come to a vote. That resolution would likely be voted down, but not allowing anyone to vote on it will shield the anti-nuclear legislators from having to answer to their voters for the likely consequences of a shutdown.

Those consequences are potentially grave. VY produces 620 megawatts of baseload power. It's currently the lowest cost 24/7 power purchased by Vermont utilities. IBM, with its $35 million annual electricity bill, is deeply concerned that without VY, its power costs will rise by as much as 30 percent. That concern is shared by other manufacturers, hospitals, colleges, local governments, and ski areas.

The anti-nuclear activists' pipe dream of wind turbines and solar photovoltaics notwithstanding, the power to make up for the loss of VY power will largely come from coal and gas fired plants -- just the kind of plants that enviros staunchly oppose because they release the carbon dioxide that they believe leads to the dreaded "climate change."

Suppose the Legislature departs Montpelier in May without voting to allow VY to seek PSB approval for its continued operation. Then what?

VY operates with an 18 month fuel cycle. After 18 months online, a new fuel load is installed and the plant starts a new power run. The next scheduled refueling falls in October.

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When a refueling shutdown takes place, a new fuel load must be on site. The lead time for purchasing fuel assemblies is about five months. So VY will have to place its order in June.

But by the time the refueling is completed, the plant would have only three or four months to live. What company is going to spend millions of dollars on 18 months' worth of new fuel, when thanks to anti-nuclear politicians the plant would have only four months of operation left?

Unless the Legislature turns around on this issue by May, and the PSB (as widely expected) issues a Certificate of Public Good by June, Entergy is almost certainly going to have to abandon VY.

This is despite getting the green light from the Nuclear Regulatory Commission to produce power for 20 more years.

The only uncertainty has to do with a possible Entergy appeal to Federal courts to invalidate the 2006 statute. The litigation might well continue long enough for VY, with a stay of execution, to run through another fuel cycle to mid-2013.

If VY is forced to shut down next March, the New England grid operators may find some way to replace VY power, though at a significantly higher price. Perhaps more seriously, what business would be willing to locate or expand in a state where a Legislature, answering to the demands of anti-nuclear activists, insisted on shutting down a safe, reliable, low-cost source of electricity, vital to the state's economic future?

John McClaughry is vice president of the Ethan Allen Institute, www.ethanallen.org.