When nuclear plants close, communities get little help for their ailing economies

Editor’s note: Diablo Canyon’s closure in 2025 means an annual economic loss of about $1 billion locally. This is the fourth of a four-part series on how other communities dealt with the financial consequences when their nuclear power plants closed.

Closures of nuclear power plants are taking an economic toll on communities across the nation, leading those left to pick up the pieces to ask: What about us?

There’s been a growing call for more economic development assistance for host communities that face years of financial decline from the loss of jobs, tax revenue and charitable donations.

The effects are especially hard on small, rural communities such as Kewaunee County, Wisconsin, where the nuclear power plant owned by Dominion Resources contributed an estimated $630 million per year to the regional economy.

When the plant closed, economic leaders searched in vain for federal assistance similar to what’s available to communities that lose a military base or a coal mine.

“If you asked if there is money for a community to repurpose a military base when it closes, you only have to ask DOD (Department of Defense). If you have a coal plant facing closure and need to consider reuse or repurposing, you just need to ask EDA (the federal Economic Development Administration), ” said Jennifer K. Brown, executive director of the Kewaunee County Economic Development Corp.

“As far as I know, there is no economic development assistance for a community facing a nuclear plant closure,” she added. “However, the community is left with the substantial economic loss, an environmental stigma, 60 years of decommissioning and a pile of nuclear waste.”

Through negotiations, one community did manage to secure funding from a power company seeking to shut down its nuclear plant. Entergy agreed to pay Windham County, Vermont, $10<TH>million to help kickstart its economy when the Vermont Yankee plant closed.

Usually, though, communities are on their own if they want to fund a post-closure economic recovery program, according to Jennifer Stromsten, a co-founder of the East Coast-based Institute for Nuclear Host Communities, a planning and community development firm that helps regions deal with the socioeconomic effects of nuclear power plant closures.

“Over $100 billion will be spent to close America’s (nuclear) plants, yet leave communities without the means to replace lost taxes, jobs, workers, economic activity,” Stromsten said in an email.

The organization believes more should be done to fill the economic holes created when plants shut down.

“For the Diablo community, that’s around $1 billion a year,” said Stromsten.

Eyes on the future

When the Kewaunee Power Station closed in 2013, economic development organizations banded together and brought in David Beurle. He heads up the consulting firm Future iQ, which has developed economic revitalization plans for communities throughout the world.

Beurle was hired to develop a plan to advance the economic future of the tricounty region affected by the plant’s closure. The planning process included surveys, a two-day workshop with stakeholders, a report on the outcome of that workshop and, finally, an action plan chock-full of recommendations ranging from the relatively simple — sponsoring an annual festival/farmers market — to a highly complex plan to explore launching a biogas industry that would convert cow manure into fuel.

The cost of implementing the recommendations was estimated at $1.5 million. That money never materialized — not from government, nor from the power company that owns the plant, Dominion Resources.

“What didn’t work was the overall approach to try to get financial assistance from (Dominion) to reinvest in the community,” said Peter Wills, executive director of Progress Lakeshore, formerly the Economic Development Corp. of Manitowoc County, which is located next to Kewaunee County.

He believes there was a lack of political will to negotiate a deal similar to the one reached in Windham County, Vermont. There, the governor’s office took part in negotiating the settlement for the $10 million in economic aid, and Vermont Sen. Patrick Leahy lobbied successfully for some additional federal funding.

“Here, we’ve had much more disengagement,” said Wills.

Jobs and harbor improvements

Still, the region did implement some elements of the action plan, Brown said, and although it did not receive money to implement a broad economic development plan, it did secure grants for some specific projects:

▪  The city of Kewaunee was awarded a $4.2 million state grant for a waterfront revitalization project that would include visitor-serving businesses, a new harbor wall and boardwalk, renovation of the Kewaunee Pier Head Lighthouse and improvements to the city’s boat-launching facilities.

Brown believes the funding was directly related to the closure of the nuclear power plant.

“I spent much time in my state capital explaining the loss and making sure they understood we needed a jump-start,” she said.

▪  In 2013, the U.S. Department of Labor awarded an $807,193 emergency grant to help former Kewaunee power plant employees find new jobs. The grant was projected to help about 220 individuals by providing career and skill assessments, job search assistance and retraining, according to a Department of Labor news release.

▪  Though it was not directly related to the nuclear plant’s closure, Kewaunee County received $50,000 to study the feasibility of harvesting biogas from liquid manure produced at the area’s hundreds of dairy farms.

They may be successful in picking up grants here and there, but communities such as Kewaunee are not eligibile for the type of assistance available to areas affected by the closure of a military base or the decline of the coal industry.

Under the federal POWER initiative, for example, nearly $66 million in grants was allocated this year to communities in Appalachian states hurt by the downturn in coal. Grants can be used for projects that diversify local and regional economies; create jobs; provide workforce services and skills training; and attract investors.

Information deficit

Nuclear host communities also deal with another scarcity: information.

There is no central clearinghouse to share knowledge about closure negotiations, how to deal with the decommissioning process or how to keep up with legislation relating to nuclear plant shutdowns.

On top of that, communities can face a backlash from neighboring jurisdictions that did not reap the tax benefits of having a nuclear power plant in their backyard. Host communities may have been able to afford more public services, for instance, or lower property tax rates for homeowners. When those benefits disappear, other communities may be less than sympathetic.

“You had your good times, now take it,” is how Stromsten describes it.

The Institute for Nuclear Host Communities is trying to raise awareness of the challenges facing regions that lose their key economic driver. It’s sponsored regional conferences and may do something on a larger scale next year, possibly in San Diego.

The group hopes the attention will lead to policies and programs that will help communities recover economically.

At this point, it’s not clear how such a program would look, or what agency would be in charge. Borrowing the assistance model developed for communities that lose a military base is one idea. Expanding the POWER program for coal to include communities that lose a nuclear power plant is another.

The first step is bringing communities together.

“We want a national conference to gather communities,” Stromsten said. “They must be made to realize more quickly that there’s no solution out there for them right now. We need to achieve consensus among a critical mass of affected towns and regions on a new national approach.”

Military base closures triggered coordinated aid

Between 1988 and 1995, more than 350 communities in the United States lost military bases as part of a national cost-cutting effort.

Affected communities were eligible for a variety of assistance programs — including one that helped identify and coordinate financial aid from multiple sources, run though the Department of Defense’s Office of Economic Adjustment.

According to a 2009 report from the Congressional Research Service, the OEA provided $280 million to communities affected by base closures, with the money primarily used to help prepare strategies for local economic development. Most communities averaged between $400,000 and $500,000 a year for three to five years. But in some cases, aid was as much as $10 million in a single year.

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