When Vermont Yankee Nuclear Power Plant shut down in 2014, the state faced a predictable economic storm. The closure left a gaping hole in Vermont’s economy, leading to job losses, higher electricity costs, and diminished state revenue. Despite ample warning, Vermont’s response to this disruption reveals a startling lack of foresight and fiscal restraint.
The Economic Toll
The shutdown of Vermont Yankee eliminated approximately 1,060 jobs annually between 2013 and 2031 compared to a relicensing scenario, according to the 2010 Consensus Economic and Fiscal Impact Analyses (Economic Analysis Executive Summary). These job losses were compounded by the fact that nearly 60% of the plant’s workforce resided in neighboring states, meaning the ripple effects largely bypassed Vermont’s economy.
The plant’s closure also created a fiscal void. Over the forecast period, the VY Shutdown scenario predicted a net fiscal impact of -$100 million through 2040, with an annual revenue loss peaking at $6 million in 2014. Despite these stark projections, Vermont failed to adjust its budget significantly to absorb the financial blow, continuing to allocate substantial funds toward high-cost public services, including education and state assistance programs.
Electricity Rates Skyrocket
Following Vermont Yankee’s closure, energy costs rose sharply as utilities turned to the open market for replacement power. By 2024, Vermont’s average residential electricity rate reached 20.98 cents per kWh, compared to the national average of 16.63 cents. The transition to renewable energy—though environmentally beneficial—added additional costs, including expenditures on Renewable Energy Certificates (RECs) and grid upgrades to support new infrastructure.
These higher rates had a measurable economic impact. According to the study, increased retail power bills resulting from the shutdown contributed to the loss of an additional 120 jobs annually and reduced Vermont’s economic output by over $15 million per year, measured in 2012 dollars (Economic Analysis Executive Summary).
No Cuts to Match Losses
Despite mounting economic pressures, Vermont largely maintained its existing spending priorities. Education expenditures, among the highest per capita in the nation, remained unchanged even as school enrollment continued to decline. The state’s public sector workforce also grew disproportionately large relative to its population, further straining the budget. Analysts projected that the state’s failure to recalibrate its fiscal policies exacerbated the economic fallout from the plant’s closure.
Promises vs. Reality
Proponents of Vermont Yankee’s closure emphasized the potential long-term benefits of shifting to renewable energy. However, these benefits have been slow to materialize. The Green Scenario in the report, which modeled aggressive renewable energy policies, projected a net positive impact by 2040, with an increase of over 2,600 jobs annually and nearly $400 million in Gross State Product compared to the relicensing baseline. However, this growth hinged on timely and aggressive implementation of renewable projects—a level of urgency Vermont struggled to achieve in practice.
The SAFSTOR decommissioning process, implemented post-closure, provided some economic activity but could not offset the broader economic losses. Furthermore, the state’s decision not to immediately undertake full decommissioning—which would have resulted in significantly higher expenditure flows—further diminished short-term economic benefits.
Lessons Learned
More than a decade later, Vermont’s experience with Vermont Yankee highlights the importance of proactive planning in the face of foreseeable disruption. This includes exploring whether Vermont could invest in new-generation nuclear reactors to provide a clean, reliable energy source while addressing long-term economic and environmental challenges. The state’s policymakers had access to detailed impact analyses outlining potential economic and fiscal outcomes under various scenarios. Yet, fiscal adjustments and strategic investments failed to materialize at the scale required to mitigate the shutdown’s impacts.
Looking ahead, Vermont’s challenges offer a cautionary tale for other states navigating major economic transitions. Planning for long-term sustainability should not come at the expense of addressing immediate economic needs. A new nuclear project, such as a next-generation reactor, could provide a unique opportunity to balance these goals by delivering clean energy and creating jobs in the short term while establishing a foundation for future economic and environmental stability. Balancing these priorities is critical to ensuring both economic stability and environmental progress in the decades to come.
Dave Soulia | FYIVT
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