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Local economies take a hit when nuclear plants close

Maine Yankee’s nuclear reactor was demolished in 2004 after the plant closed in 1996. Wiscasset, a small community in mid-coast Maine, hasn’t recovered economically from its closing.Globe Staff/File

Shortly after getting word last week that the Pilgrim Nuclear Power Station would shut in 2019, Kevin O’Reilly, head of the Plymouth Area Chamber of Commerce, said his first concern was for the nearly 600 Pilgrim workers.

But a more complicated and broader concern for O’Reilly involves the economics of his community after Pilgrim stops generating electricity. Pilgrim’s annual payroll of $77 million, including benefits, will fall to a fraction of that figure within five years, based on the histories of other nuclear plant closings. Some 500 jobs in local businesses that sell goods and services to the Pilgrim plant and its employees will be put at risk, as will some $10 million in property taxes — about 7 percent of Plymouth’s levy — and $300,000 a year that the plant contributes to local nonprofits, according to a recent economic effects study.


“Our job now is to understand how other communities have been affected,” O’Reilly said, “and also how they have reacted.”

He won’t have many happy stories to draw on. Nuclear plants have long been “sugar daddies” to their host communities, many of them in rural areas where flagship companies — and their loss — make a real difference in employment, business activity, charity, and tax payments.

Rowe, in Western Massachusetts, still hasn’t recovered from the 1992 closing of what was then the oldest commercial nuclear power plant in the nation, Yankee Rowe. Rowe’s property tax collections took a serious hit — the plant’s tax payments represented 33 percent of all tax revenues. A major supermarket in town closed, and plans for a new local restaurant were scrapped.

Wiscasset, a small community in mid-coast Maine, hasn’t found an economic engine with anything close to the oomph of Maine Yankee, which closed in 1996. High school enrollments are half what they were back then, and sewer and utility services are no longer free to residents.


“We’re still feeling the loss of jobs, the economic downturn, and the huge tax increases,” said Laurie Smith, the town manager.

In Vernon, Vt., on the banks of the Connecticut River near the Massachusetts border, the shutdown of its nuclear power plant, Vermont Yankee, in December cut off hundreds of thousands of dollars of charitable contributions for everything from school science projects to local theaters to a summer baseball league.

Rowe, Mass., has seen lower property tax collections since the 1992 closing of what was then the oldest commercial nuclear power plant in the nation, Yankee Rowe.Globe Staff/File

Meanwhile, in upstate New York, state legislators are scrambling to prevent the closing of the FitzPatrick nuclear power plant in Oswego County, near Syracuse, because it generates $17 million annually in local property taxes and a payroll of $74 million, the largest around. Entergy Corp. of New Orleans, which also owns Pilgrim and the Vermont Yankee, recently said it is considering shuttering FitzPatrick because of competition from power generators using low-cost natural gas.

Awareness of what these plants mean to local economies will probably spread as more nuclear plants are pulled from service by owners squeezed between the high costs of maintaining aging facilities and the falling price of natural gas. Over the years, the economic effects of these plants were often obscured by concerns about safety, environmental effects, and future energy supplies.

Such was the case with the closing of the Vermont Yankee nuclear power plant, which employed about 600 workers before the shutdown. Through all the years of debate and legal challenges about the plant’s ultimately successful effort to win a 20-year license extension in 2012, there was little public discussion about its role in the local economy.


After Entergy unexpectedly announced plans to shutter Vermont Yankee, a regional government group across the state border in Franklin County commissioned the Donahue Institute at the University of Massachusetts to measure the plant’s local economic punch. The institute projected a drop in the company payroll from $80 million to about $2 million, and a loss in overall economic activity of $100 million — a huge hit to an area that has few big private employers and weak job growth.

Even before the Donahue report — indeed, even before Entergy in 2013 announced plans to close the plant — a small group in nearby Brattleboro, Vt., had begun to examine what the eventual and inevitable closure of the plant could mean to the region, which encompasses parts of Vermont, Massachusetts, and New Hampshire.

The leader of that group is Jeffrey Lewis, a former Boston area businessman who retired to Brattleboro only to find that retirement didn’t come easy. His interest in economics led him to ask whether anyone in the community had given a thought to what would happen when Vermont Yankee inevitably closed its doors.

Entergy Corp. announced last week it is closing Pilgrim plant in Plymouth no later than 2019.Jonathan Wiggs/Globe Staff

“There was no folder that said, ‘When Vermont Yankee closes, open this folder,’ ” Lewis, 71, recently recalled.

Lewis pulled together a group that included John Mullin, a professor at UMass Amherst who has studied, and continues to study, the effects of the closing of Yankee Rowe nearly a quarter-century ago.


The group, called the Institute for Nuclear Host Communities, helped produce the report about the Pilgrim plant’s economic contributions in association with Plymouth officials. That was before there was any talk of the plant’s closing — Pilgrim is licensed to operate until 2032.

Anticipating more plant closings among the nearly 100 nuclear plants operating in the United States, Lewis’s group has organized a conference on the subject at the University of Massachusetts in Amherst Oct. 21. His goal is to help develop a network of communities around the nation, most of them rural and remote, to help their economies prepare for the inevitable, whether it comes with the expiration of operating licenses or before.

Lewis conceded he doesn’t have any specific strategies for communities right now but said getting them to talk about the prospect and share experiences is a good first step in developing responses to plant shutdowns. In the region around Vermont Yankee, for example, local officials quickly mounted campaigns to win hundreds of thousands of dollars in grants from federal and state governments and plant owner Entergy for revolving loan programs to help local companies expand and new companies get started. But those grants came in a scramble — only after the plant’s closing was announced.

Nuclear power and economic development specialists say the earlier communities begin planning for their post-nuclear economies, the better. At a conference on nuclear plant decommissioning in New York last week, authorities said communities and states with nuclear plants should develop the political clout and know-how to win important concessions down the line, such as requiring plant owners to clean up their sites shortly after they close so the properties don’t remain blighted and unusable for decades — a sure turn-off to new businesses considering moving to town.


“The states that begin the process well in advance are the ones that come through the [decommissioning] process the best,” said Peter Bradford, a former member of the federal Nuclear Regulatory Commission.

Some 500 jobs in local businesses that sell goods and services to the Pilgrim plant and its employees will be put at risk, as will some $10 million in property taxes — about 7 percent of Plymouth’s levy — and $300,000 a year that the plant gives to local nonprofits, according to an economic effects study.Keith Bedford/Globe Staff

James A. Rousmaniere Jr. can be reached at jamesrousmaniere@gmail.com.