Alternatives to Yankee

By JOHN GREENBERG – Published: November 12, 2009

If Vermont Yankee is not relicensed, how will we replace the power, and with what consequences to electric rates?

These questions are easy to pose, harder to answer. Uncertainties abound. Without power contracts, we do not know how much Vermont Yankee power will cost, should the plant be relicensed. And with a volatile economic environment, and many possible replacement alternatives, it is hard to nail down those costs either. Nevertheless, we can now ballpark enough of this information to make policy decisions.

Vermont Yankee supplies approximately 275-plus megawatts of electricity to customers of CVPS and GMP. Under the current contract, this power will cost 4.5 per kilowatt-hour from January to March 2012, when the plant’s operating license expires. Both utilities have stated that they intend to buy less power if the plant is relicensed than they do now.

The cheapest source for power — and overwhelmingly the best from an environmental point of view — is energy efficiency: using less power to do what we are now doing. Examples include energy-saving lighting, replacing old refrigerators and freezers (newer models use considerably less power than older ones), etc. A report commissioned by the Vermont Department of Public Service in 2007 conservatively estimated that 19 percent of Vermont’s electric energy could be saved by 2017, at a savings to Vermonters of just under $1 billion.

Efficiency Vermont has been saving approximately 2 percent of Vermont’s power demand each year, statewide, at a cost of under 3 cents per kilowatt-hour. In the areas of the state which have been specially targeted because of transmission bottlenecks, they’ve saved twice as much. What can be done in these target areas can be done statewide: 4 percent annual savings is an achievable, conservative goal for efficiency efforts. This translates to a per-year savings of 30 megawatts, totaling more than 60 megawatts before closure in 2012.

These figures do not include any of the additional efficiency which will stem from federal stimulus money, or from the recently announced federal grant of $69 million for Smart Grid technology, though both should encourage additional large efficiency gains. In short, these savings can — and in my view, should — be carried forward indefinitely, and at the fastest possible pace: They are an economic-environmental win-win. Vermont policymakers should choose efficiency before considering anything else.

That said, the choice of which generating sources will ultimately be chosen to replace the remainder of the power is a decision for CVPS and GMP to make, unless the Legislature intervenes with mandates. What alternatives are available?

To examine potential sources, a consortium of Vermont utilities commissioned a study issued last year as the “CEA report.” Based on this report, the Department of Public Service provided testimony to the Public Service Board in the relicensing docket (#7440), which included, among others, a portfolio of renewables including mainly wood biomass costing 7.1 cents and wind power at an estimated cost of 7.8 cents. Market prices beginning in 2012 are now expected to be in the 7-cents-plus range as well, and there is considerably more excess capacity in our region than will be needed to replace Vermont Yankee.

In other words, by choosing power from either the market, a portfolio of wind and biomass, or some mix of all three, the cost of power is likely to be in the 7-8-cents-per-kilowatt-hour range. If efficiency efforts successfully reduce the amount of power to be replaced, however, this cost would probably fall into the 6-to-7-cent range.

Electricity accounts for only about half of our electric bills (the remainder being distribution, transmission, overhead, etc.), and Vermont Yankee represents only about one-third /3 of Vermont’s electricity. So if Vermont Yankee were offering power at 4.5 cents after relicensing, and if we assumed a portfolio consisting of some mix of efficiency, biomass, wind and market based power (costing on average somewhat less than 7 cents overall), the rate increase for commercial and residential customers would be in the 5 percent range.

Remember, though, that this assumes that Vermont Yankee is offering power in a new contract at the old price of 4.5 cents. If this were the case, however, is it probable that the utilities have missed four contract deadlines and still be haggling?

We cannot know with any precision what options the utilities will choose, but we can now see that, regardless of their choice, the consequences to Vermont ratepayers are unlikely to be dramatic if Vermont Yankee shuts down in 2012. Indeed, depending on what rate is ultimately offered to Vermont ratepayers, there may be no impact at all.

In sum, alternative sources are readily available, in plenty of time to replace Vermont Yankee when its current license expires. Efficiency efforts should be maximized, because efficiency is the cheapest available source, creates the least environmental damage of any kind, and creates more jobs (per megawatt) than either Vermont Yankee or many alternative generating sources. Development of in-state renewable resources also creates good jobs for Vermonters. In addition, both wind and biomass are greenhouse gas neutral.

Depending on the amounts of in-state renewables which are chosen, bringing some projects on line may take longer than the 2-plus years now remaining before Vermont Yankee’s license expires. Having spoken to many sources, I was told to expect a five-to-six-year period from inception to power production, due mostly to the permitting and appeals process. However, it is important to note that a number of projects have gone part or even most of the way through this process already. To the extent that any gap remains, there is plenty of similarly priced power available in the region to fill any temporary gaps.

We can and should allow Vermont Yankee to retire when its license expires in 2012 to make way for a new and brighter vision of the Vermont economy. The costs will be minimal; the rewards will be great.

John Greenberg is a resident of Marlboro and owner of The Bear Bookshop in Brattleboro.

Clairifying the problems of Nuclear Power in the Green Mountain State and beyond