Legislative nonsense on VY

Senator Jim Condos's recent opinion piece in the Freeps would be laughable were the issue of VY's future not so important to the state.  He doesn't appear to understand how decommissioning funds work, nor basic economics.  Decommissioning funds are similar to a mortgage on your house.  The idea behind a decommissioning fund is to ensure that, at the time of decommissioning there are enough funds to pay for it.  Thus, every nuke decommissioning fund is "underfunded" in the same way that, when you take out a mortgage on your house, you have an "unfunded liability."

The Nuclear Regulatory Commission (NRC) established this approach for a few reasons.  First, since few nuclear plants have been decommissioned, estimating the future cost of doing so is subject to a lot of uncertainty.  To address this, the NRC adjusts the amount nuke owners must contribute each year.  NRC also does this because the funds that are set aside earn interest. 

But let's suppose nukes had to collect all of the decommissioning money up front.  First, it would make nukes unaffordable or electric rates far too high.  Second, it would punish today's ratepayers while letting future ratepayers "free ride."  Most of us take out mortgages because we don't have the cash to buy a house outright.  The same goes true for decommissioning funds.

Finally, if the market value of VY is as high as Sen. Condos says, then it will be worthwhile for the owner to keep operating it, or sell it to someone else for a very high price.  In either case, the owner will want the plant to keep operating, which will require that owner to contribute to the decommissioning fund.  Sen Condos's real agenda, of course, is to force the plant shut down immediately.  In that case, the decommissioning fund might not be fully funded, because the plant would not have operated for its full license period.  But, decommissioning wouldn't begin immediately anyway (the plant would most likely be put into what is called "safe stor" mode) and all the while the decommissioning fund would continue to grow.

It's really too bad that shuttering VY immediately would have such catastrophic consequences on Vermonter's electric rates and the reliability of their power.  A bit of "be careful what you wish for" might just do the trick

Comments

[Lazarus Long]

How about a dose of reality, but then all of us would suffer in order to 'educate' the luddites.

[Sheldon Katz]

Jonathon,
Thanks for illuminating the issue. Without commenting on which is worse, Condos is either dense or insincere. I don't know which is worse.

I wonder if there is any connection between Condos's position and his affiliation with VGS. Could it be VGS has something to gain from shutting down VY, or is Condos just playing to the politically correct crowd?
I would like to hear the views of others as to what if anything Condos and his employer may gain from closing VY.

[Gordon Smith]

Jim Condos is the same guy who, not too many years ago, put on a yellow fisherman's rainhat at UVM hockey games and exhorted the crowd to yell 'sieve!' at the opposing goalie. Enough said?