Last week’s decision by the Nuclear Regulatory Commission to extend Vermont Yankee’s operating license for another 20 years does not end the controversy over the future of the plant.
Vermont law requires that a nuclear generating plant cannot operate in the state without a certificate of public good from the Public Service Board. Vermont Yankee’s certificate expires on March 21, 2012, the date the plant’s previous NRC license expires. In 2006, the Legislature passed a bill, which was signed by then-Gov. Douglas, providing that the PSB could not extend the certificate until the Legislature determines that the continued operation of the plant “will promote the general welfare and grants approval for that operation.”
There is almost no chance that the Legislature will authorize the PSB to grant the renewal certificate. The Senate went on record against continued operation of Vermont Yankee last year, and a majority of legislators in both houses wants the plant to shut down next spring. The nuclear emergency at Japan’s Fukushima plant, which uses the same General Electric reactor design as Vermont Yankee, makes it even more unlikely that Yankee could win approval from the Legislature to continue operating.
Entergy, the Louisiana-based company that owns Vermont Yankee, is rapidly running out of options. Last fall, there were rumors that Entergy had hired investment banks to shop Vermont Yankee to potential new owners. There are too many regulatory and financial uncertainties surrounding the plant to make purchasing it at all attractive to other utility companies. Entergy’s CEO has indicated that the company may file suit against Vermont in federal court, claiming that the federal government, through the NRC, has exclusive jurisdiction to regulate nuclear power plants, and that the Legislature and the PSB cannot require the plant to get a separate certificate of public good from the state.
If Entergy goes to court, the state could make two strong arguments against Yankee’s owners. First, Entergy itself agreed to the certificate of public good process that was established by the Legislature in 2006. Second, the U.S. Supreme Court has ruled, in a case from California, that there is a difference between the economic and the safety regulation of nuclear power plants. While safety regulation is a matter for the federal NRC, states may properly regulate the economic aspects of nuclear power.
Opponents of Yankee’s continued operation note that Entergy and Vermont’s electric utilities have not been able to agree on a price for the plant’s power, assuming it were to continue operating beyond March 2012. Meanwhile, the Vermont utilities have signed a power contract with Hydro Quebec that runs from 2012 to 2038. Beginning in 2012, Hydro Quebec, which has a surplus of power at the moment, will charge the Vermont utilities a price that is lower than their current contract with the Canadian generator.
Next year, Hydro Quebec will charge 5.8 cents per kilowatt hour for electricity sold to Vermont. The lowest price Entergy was apparently willing to offer the Vermont utilities was between 6 and 7 cents per kilowatt hour. If Entergy cannot offer a price that is competitive with Hydro Quebec, that would certainly be a justifiable reason for the state to exercise its economic regulatory authority and refuse to extend Vermont Yankee’s certificate of public good.
However, even if Yankee were to shut down next March, the spent nuclear fuel rods would remain at the plant in Vernon, some in a storage pool in the reactor building, others in dry cask storage on site.
Eric L. Davis is professor emeritus of political science at Middlebury College.