Paying for Yankee

The Legislature last session decided that public utilities could bill ratepayers for the remaining costs of building or contracting for state-ordered energy sources. But before the so-called stranded costs for the prematurely quiet Maine Yankee nuclear power plant show up in electric bills, state regulators should consider why the plant is not still operating.

The answer, in part, comes in a recent letter to Yankee officials from a Nuclear Regulatory Commission administrator, Hubert J. Miller, and it is damning. Many of Yankee’s “violations and the underlying causes were longstanding and appeared to be caused by ineffective analyses, review and processes which led to indequate design and configuration control; a corrective action program that was fragmented; a quality assurance function which was not effective at both the individual and organizational level; and ineffective oversight as well as inadequate knowledge of vendor activities.”

Mr. Miller’s review found what others have found before at the plant. Maine Yankee, he said, “was a facility in which pressure to be a low-cost performer led to practices which over-relied on judgment, discouraged problem reporting and accepted low standards of performance, as well as informality rather than rigorous adherence to program and procedural requirements. Lastly, Maine Yankee had become insular, failing to keep up with industry practices and failing to communicate adequately with the NRC.”

The question for lawmakers and members of the Public Utilities Commission is whether Maine electricity users should pay for these failures.

There is some argument that the NRC itself failed to properly inspect Maine Yankee and allowed the plant’s shortcomings to become fatal, and further that NRC regulations had become so onerous that few plants could meet them. Nevertheless, reviews from both within Yankee ownership and from the NRC point to mismanagement and poor maintencance as contributing factors in closing the plant a decade early. The shutdown, which means that Yankee cannot pay off its costs through power sales, is going to cost someone plenty.

If the NRC had found the plant to be well-run but no longer cost-effective because of newer technologies, then the public should be responsible for the costs, much as it will be for the non-utility generator contracts the utilities were forced to sign when state regulators in the 1980s bet oil would cost $100 a barrel by now. But Yankee’s problem is not that its technology failed to meet expectations, but that its operators did. And the people who oversaw the Yankee operation should be held financially responsible.

The cost of shutting down Maine Yankee now instead of in 2008 as its license allowed is in the tens of millions of dollars. That is, admittedly, a small percentage of the total bill for stranded costs in Maine, which is well over $1 billion. But it is a cost ratepayers should not have to bear.