The Vermont Yankee nuclear power plant in Vernon, Vt., will be shut down by the end of next year due to financial factors, the company that owns the plant announced Tuesday, in the latest sign of a difficult economic climate for nuclear power companies.
Entergy Corp., the New Orleans-based company that owns Vermont Yankee, plans on closing and decommissioning the plant by the fourth quarter of 2014, in cooperation with the US Nuclear Regulatory Commission. It is the fifth nuclear plant this year to close or to have plans made for its closure.
"This was an agonizing decision and an extremely tough call for us," Leo Denault, Entergy's chairman and chief executive officer said in a written statement. "Vermont Yankee has an immensely talented, dedicated and loyal workforce, and a solid base of support among many in the community. We recognize that closing the plant on this schedule was not the outcome they had hoped for, but we have reluctantly concluded that it is the appropriate action for us to take under the circumstances."
The company said the decision to close was based on “a number of financial factors” including sustained lower power prices stemming from the natural-gas revolution, a high cost structure for the plant, and what it called "wholesale market design flaws" that artificially deflate energy prices. Some 630 people work at the plant.
Likely also a contributing factor was the ongoing legal battle with the state of Vermont, where state officials had been trying to shutter the plant on their own authority. In 2006 the state legislature granted itself the authority to close the plant and in 2010 voted to do so.
The legal dispute had been turning in Entergy’s favor. Earlier this month a federal appeals court ruled that the Vermont Legislature did not have the authority to close the plant. Entergy had indicated in 2010 that it was considering selling the plant, a single unit boiling water reactor, The Wall Street Journal reports.
Entergy Corp. isn’t the only nuclear power company facing economic challenges. In June, Southern California Edison pulled the plug on the San Onofre Nuclear Generating Station, a 45-year-old facility in northern San Diego County, because of the high cost of repairs needed less than three years after the company invested $780 million in upgrades.
In May, Dominion Resources shut down the Kewaunee Power Station in Carleton, Wis., saying at the time that the “decision was based purely on economics," and in February, Duke Energy announced plans to shut down the reactor at the Crystal River power station in Florida because of a crack in the containment dome.
Meanwhile, utilities have plans to build three new reactors, the Monitor reported in June.
Supporters of nuclear power say that nuclear power is an important long-term energy source for the US and that the closures mean more support should be given to the industry.
“This announcement, and the retirement of Wisconsin’s high-performing Kewaunee nuclear facility earlier this year, is jarring evidence that market reform is essential to ensure that the nation maintains a diversified portfolio of electricity options,” said Marvin Fertel, Nuclear Energy Institute president and chief executive officer, in a statement. “Failure to do so will jeopardize reliable electricity supplies and leave consumers vulnerable to steep or long-term electricity price swings.”
The United States has 100 nuclear power reactors in 31 states, operated by 30 different power companies, according to the World Nuclear Association.
Electricity produced from the plants accounted for nearly 20 percent of total electrical output in 2011, the association says.
Since 2009, technological advances in extracting shale oil have resulted in sustained low prices for natural gas and wholesale energy.
Bernie Sanders, a US senator from Vermont, praised the decision to close Vermont Yankee.
“I am delighted that Entergy will shut down the Vermont Yankee nuclear plant which has had so many problems in recent years,” he said. “The closure will allow Vermont to focus on leading the nation toward safer and more economical sources of sustainable and renewable energy like solar, wind, geothermal and biomass."