The Barre Montpellier Times Argus, The Rutland Herald
April 27, 2005
By Ross Sneyd Associated Press

MONTPELIER — A political showdown is developing at the Statehouse over whether the owner of the Vermont Yankee power plant should be allowed to store its spent nuclear fuel in dry casks on the plant's grounds in Vernon or whether it might close in two years.

The prospect of losing the plant, which provides more than a third of the state's current power supply, has gripped the Legislature and the attention of the largest electric utilities, who fear losing what has turned out to be cheap power in an era when the cost of electricity is rising rapidly.

"We're very concerned because of the value of this power purchase agreement to Vermont," said Steve Terry, senior vice president of Green Mountain Power.

Entergy Nuclear currently stores its spent nuclear fuel in a large pool of water in Vernon. But that pool is filling and could be at capacity in 2008, a year earlier if the company is successful in its effort to expand the amount of power it currently can produce.

As an alternative, Entergy wants to put the fuel waste into concrete casks, which then would be stored on dry land on the plant's grounds.

A quirk in state law gives the Legislature authority over whether Entergy can seek permission from the Public Service Board for the new storage plan. And majority Democrats have argued that Entergy should pay for that right, a fee of perhaps $4 million a year.

And Entergy says that's a deal breaker.

"Any significant tax which has never been contemplated and never been discussed will place a severe financial burden on this plant ... and will call into question its viability to the end of its current license," Entergy regional executive Ken Theobalds told the House Natural Resources Committee.

The clear message is that if Entergy does not get authority to store spent fuel in Vernon through 2012, it will close Vermont Yankee, which employs 600 people in Windham County. And the utility companies say that would take with it electricity that costs them a bargain basement 3.9 cents per kilowatt hour.

Energy prices are now significantly higher than that. The peak wholesale price on the open market was 6.9 cents Tuesday and 5.3 cents off peak, Terry said. If a utility wanted to sign a contract for peak power for 2006 and 2007, the price would be 7.6 cents per kilowatt hour for peak power and 5.8 cents off peak, which is the hours between 10 p.m. and 6 a.m.

"That means this is a volatile energy market but it also means the value that the Vermont Yankee power purchase agreement to Vermont customers is priceless," Terry said. "It is so important. It is so valuable."

Under the terms of the deal, good through 2012, the Vermont utilities get the 3.9-cent price only so long as the Vernon plant is operating.

When Vermont Yankee was first proposed in the 1970s, though, no one believed it would still be storing spent fuel — and contemplating an expansion of that — 30 years later. The federal government was supposed to build a storage site in Nevada, but that has been tied up in politics and there is no sign it will open in the immediate future.

"Never did anyone in Vermont expect we would be hosting nuclear waste on our soil," said House Natural Resources Chairman Robert Dostis, D-Waterbury. "I don't imagine if anyone came into Vermont and said we want to store nuclear waste there wouldn't be a charge for that."

Others on that committee respond that's a moot argument, because the nuclear waste is here and there is very little prospect for it going away for a very long time.

"It's here and we have to deal with it," said Rep. Steve Larabee, R-Danville.

The question for many lawmakers is whether Entergy really means it would close if it had to pay a waste tax or whether it will negotiate.

For now, the company is showing no signs of negotiating.

"Entergy feels like they made the deal," said Yankee government affairs manager Brian Cosgrove. "There's just not room in the business deal for that (tax)."

Vermont Yankee has applied to the State Legislature to expand the storage of spent nuclear fuel at the plant site to include dry cask storage. Without using dry cask storage the spent fuel pool will fill in 2008 and the plant will no longer be able to produce electricity.

Dry cask storage is currently in use at 24 nuclear sites in the United States. The casks are 19 feet tall with a diameter of 11 feet. They have concrete walls that are 2 feet thick and have a steel lining. They are built to withstand terrorist attacks as well as extremes in weather, or natural disasters. There has never been a release of radiation from dry cask storage that has threatened the public.

If approved by the Legislature and Public Service Board Vermont Yankee would move fuel from the spent fuel pool to the dry casks.