Emerson Lynn On Politics

Vt. Yankee, Budget: part of same debate

Over the next six months, two debates will dominate the political landscape in Vermont; one will be the reconciliation of the state’s budget with our changing economic realities; the other will be whether to extend Vermont Yankee’s license to operate its nuclear plant in Vernon.

They are not separate issues. How the Legislature treats Vermont Yankee will, in no small part, affect the state’s economic future, and, by extension, our budget, which makes the next six months among the most important in the state’s recent history.

It’s a given that our economic climate is such that the budget will be cut, and cut dramatically. There will be a rethinking of the state’s core mission and what it is that Vermonters can afford. Unemployment will rise, businesses will struggle and people will try to hold on to what they have. The state’s evolving budget will need to address each of these needs.

The first rule will be to protect what is vital, and discard that which is not.

The second rule will be to do no harm, which, in this example, means the need to avoid doing something that hurts, not helps.

And it’s the second rule that applies to Vermont Yankee. To deny the license extension would hurt our economy, and it’s a hurt that is not only unnecessary, but blindingly dumb.

According to a report just released by the Vermont Energy Partnership, Vermonters would pay about 19.3 percent more for their electricity if Vermont Yankee were to be shut down. If the energy were to be replaced by renewables and conservation, the report estimates that the increased costs to Vermonters would be close to 40 percent.

Figure that into your budget.

Any decision to extend the license must proceed from the obvious – the understanding that the plant has been ruled safe. But if that test is met, it’s hard to imagine a cogent argument against extending the plant’s license. The price of energy is a substantial percentage of any manufacturer’s cost of doing business. Figuring out ways to increase that cost is tantamount to opening the state’s exit doors. It should be obvious that businesses are in no position to absorb unnecessary increases in costs – they will leave, and take the jobs with them.

It also makes no sense from an environmental point of view. Vermont Yankee’s environmental footprint is minimal. If we were forced to increase our power purchases from the grid, we would then be supporting a system that is far less environmentally friendly than what we have. And keep in mind that over the 20 years of the proposed license renewal there is no chance of replacing Vermont Yankee’s power with alternative energy or conservation. Alternative fuel development is critical, but it’s also a longer-term vision than what we have before us today.

Then, there are the basics. If Vermont Yankee were to be shut down – as some within the Legislature would like – we would not only be chasing jobs out of state, and increasing costs to Vermonters, we would be denying ourselves a revenue sharing proposal of considerable significance.

Vermont Yankee, as part of its original sales agreement, is required to split the profits of all energy sold on the wholesale market. The trigger price is $61 per megawatt hour. Anything above $61 is split with us, 50/50. Even if the state did not work out a contract with Vermont Yankee, the last thing we would want to do is to shut the place down. Even without a contract, we would still benefit from the revenue sharing proposal, which would help cushion Vermonters from the full effects of paying for energy on the spot market.

But why wouldn’t we do both? Why wouldn’t we negotiate the best contract possible, AND take advantage of the revenue sharing?

It’s also important to remember that Vermont has the lowest price of energy in New England. We pay 12.08 cents per kilowatt hour. The average in New England is 14.91, which is a 20 percent difference. We are already an expensive place to do business, why would we add to that burden?

Given the state’s circumstances, it’s remarkable that the extension of Vermont Yankee’s license is being considered the most contentious issue the Legislature will consider this session. One can’t help but think this defines the Legislature as being far more liberal than the average Vermonter. No one questions the value of the debate in terms of validating the plant’s safety, but beyond that it seems insane to give any credibility to the argument that the plant’s license should be terminated, that the plant should be shut down, that Vermonters should pay dramatically more for their power, and that our manufacturers, and the attendant jobs, should be threatened.

The study prepared by the Vermont Energy Partnership provides some valuable insight into the Vermont Yankee debate. It should be required reading for all legislators.

(Emerson Lynn is editor and publisher of the St. Albans Messenger where this essay first appeared.)