This Is What Happens When a Nuclear Plant Shuts Down

Plans to close an infamous plant were just announced. Such closures can be devastating for local economies -- even more so than when mining and manufacturing ceases to exist in a town.
by | May 30, 2017
large gray buildings of nuclear power plant in Vermont
The Vermont Yankee nuclear power plant shut down in 2014. (AP)

There’s at least one thing worse than having a nuclear power plant in your town. That’s having your nuclear power plant shut down. On Tuesday, Exelon Corp. announced it will close the Three Mile Island plant, the site of the worst nuclear disaster in U.S. history, in 2019.

For obvious reasons, nuclear power plants were mostly built in fairly remote places, away from population centers. But they’re big facilities, with highly paid staff. When one of them closes, it can leave enormous holes in the local tax base. The closure in 2014 of the Vermont Yankee plant in Vernon, Vt., led to an overall drop in economic activity to the tune of $100 million. There aren’t a lot of other employers in the area to make up anything like that sum. As a result, taxes have shot up. “We saw roughly a 20 percent property tax increase last year,” says town clerk Tim Arsenault. “and we’ll likely see the same thing this year.”

The story is similar in other communities where plants have shut down. A decade or two later, taxes are up and the population is down. Communities that have relied on a single employer for decades suddenly have to rethink their economies. In certain ways, that’s harder than similar efforts in areas that lose their main manufacturing plant or have an extractive industry taper off. Nuclear workers are highly skilled in a specialized field. Rather than getting retrained to do something else, they simply move away. That affects the tax base, Arsenault says, and leads to a loss of human capital.

On top of that, the fuel rods are generally left behind. That makes recruiting new residents and companies a strain. “Not only do you not have the economic benefits,” says Melissa James, director of economic initiatives at the San Luis Obispo Chamber of Commerce in California, “but you have all the environmental impacts.”

Last year, Pacific Gas & Electric, the main utility company in California, announced it was shutting down the Diablo Canyon reactor near San Luis Obispo. The city is luckier than many communities. It is home to a university and a thriving wine and tourism industry. The power plant makes up about 8 percent of the local economy -- a big chunk, but not the mainstay that nuclear plants have been in other places. Also, the plant won’t be shut down until 2025, which is more notice than most places get. Local officials now talk a lot about having a “runway” for implementing changes. “Diablo’s definitely a big part of the economy, but if we can do things to help the other sectors grow, we have a shot,” says Lee Johnson, the city’s economic development manager.

The city and county of San Luis Obispo convened local governments and other affected parties to plan together. That’s an encouraging start, says Jennifer Stromsten, program director at the Institute for Nuclear Host Communities, which consults with regions that lose their plants. These regions have to fend for themselves, she explains. They don’t get much help from the federal government or their states.

It’s a challenge. Most towns with nuclear power plants aren’t used to doing long-term strategic planning. Whatever their environmental risks, nuclear power plants are such good providers that local governments in their areas haven’t had to think about the economic realities that hit some of their neighbors years ago.

Such towns should start thinking about their reality changing sometime in the foreseeable future, Stromsten says. They may not get as much formal notice as San Luis Obispo, but they need to be aware that the local plant is bound to shut down someday. “They all close,” she says. “They all do. That’s how they’re designed.”

*This story was originally published in the June issue of the print magazine and has since been updated.