The owners of the 600-megawatt Vermont Yankee nuclear power plant on the Connecticut River plan to close the facility by the end of 2014, impacting long-term New England electricity pricing and showing further disruption in the energy sector providing the plurality of Connecticut’s power.
Entergy Corp. announced Tuesday it would close the Vermont facility late next year, largely due to the impact of low-cost electricity on power prices. As more natural gas facilities have come online in New England, the wholesale price of power has dropped, decreasing the margins of large, continually operating plants like nuclear.
The loss of 600 megawatts in the New England electricity market will have an impact on long-term price stability. Those 600 megawatts likely will be replaced by natural gas facilities. While natural gas is currently lower cost than nuclear, the commodity price of natural gas and other fuels like oil and coal is more volatile than nuclear, which could lead to increased electricity prices if the commodity price increases.
Entergy’s announcement marks the fifth planned reactor shutdown in the past 12 months. In October, Dominion announced the closing of its Kewaunee Power Station in Wisconsin, also citing natural gas prices.
Dominion also owns the Millstone Power Station in Waterford, home of Connecticut’s only two nuclear reactors. Combined, the two generate about 45 percent of Connecticut’s power.
In the past three years, Dominion has threatened closure of the Millstone facilities, although not due to natural gas prices. Dominion was opposing the state’s tax on power generation, which is set to expire in October.
The last two nuclear reactors to shutdown in Connecticut were one Millstone reactor in 1998 and the Connecticut Yankee facility in Haddam in 1996.
