Nuclear power plants are curious animals. They hum along anonymously for decades, generating electrons, tax revenues and nuclear waste. They employ several hundred highly paid, skilled workers and contractors, and are a sizeable contributor to local economies. Annual economic impacts measure in the hundreds of millions of dollars. Where it gets interesting, however, is what does and does not happen when these plants shut down.
The Brownfields Context
Back in the 1990s, redevelopment of distressed real estate, known as “brownfields”, was just gaining traction. Through the leadership, dedication and hard work of many, what was once groundbreaking and trail blazing has now become standard practice. Today, we find ourselves at the dawn of a similar age as we face the redevelopment challenges posed by these former nuclear power plant sites. There are a growing number of these new nuclear plant opportunities, and their transformation would benefit from the collective experience and wisdom of the brownfield practitioner community.
Local Economic Impact
The economic impact of plant closure is often severe. An operating nuclear power plant can account for upwards of 50% of local tax revenues. Nuclear power plant host communities are often akin to “company towns” and lack a diversified economy necessary to facilitate revitalization
The dismantlement of the site and subsequent restoration is a process governed almost exclusively by the Nuclear Regulatory Commission (NRC). States may play a role with respect to standard setting and remediation of non-radiological contamination, but the NRC is the lead authority. Under NRC regulations, plant owners have up to 60 years to complete the decommissioning process although new business models are emerging where sites are transferred to decommissioning contractors who promise expedited cleanup.
Decommissioning is expensive. A small and relatively simple site may cost $500M, where the decommissioning budget for the more complex facilities ranges from $2 billion to $4 billion. Decommissioning financing comes from an NRC-mandated Nuclear Decommissioning Trust (NDT) associated with each plant. The trust is funded over the plant’s operating life through a ratepayer levy attached to the generation of electricity. At the time of plant closure, the value of the NDT may, or may not, be sufficient to fully support expedited cleanup.
The typical nuclear power plant is situated on hundreds (if not thousands) of acres. Once the plant has been fully decommissioned and the buildings taken down, all that generally remains is bare dirt and a small concrete pad to store spent nuclear fuel. To date, the redevelopment of these sites has been a non-starter. The process is hindered largely by stigma and a general unwillingness, on behalf of property owners, to enter into meaningful redevelopment arrangements. As a result, there are a growing number of closed nuclear power plant sites across the country laying fallow and hindering local economic development.
Case Study – Zion Illinois
The City of Zion (population 23,952 as of 2017) sits on the shores of Lake Michigan, 60 miles north of Chicago and once hosted the Zion Nuclear Power Station which operated from 1973 to 1997. Annual tax payments to the City of Zion from plant operation were $19.5 million. Post-closure, that figure is now approximately $500,000. The property tax rate in Zion is now over 19% which has caused many homeowners to move elsewhere, depressing housing values and increasing the proportion of renters to approximately 60%. The former plant site (267 acres of lakefront property) will likely remain undeveloped for the foreseeable future. While the State of Illinois has recently designated Zion an Enterprise Zone, the economic promise of the former plant site remains shackled by the corrosive forces of stigma and risk aversion.
As more nuclear power plants close, the plight of local communities is gaining increased attention at the regional and federal levels. This growing awareness is similar to what we saw in the early days of the brownfields industry. In response, the U.S. Economic Development Authority has been tasked by Congress to develop effective strategies to assist these host communities. Chief among the early tasks is developing tools to help communities plan for, and respond to, plant closure. The experiences of brownfields practitioners can help apply lessons learned and best practices to advance and accelerate redevelopment at former nuclear sites.
Join Us At Brownfields 2019 – Los Angeles, CA
To learn more about this emerging topic, please attend a special Town Hall session at Brownfields 2019. “Nuclear Decommissioning and Brownfield Redevelopment: Articulating the Overlap,” will take place Thursday, December 12th at 12:15pm in room 502B. The Town Hall will feature myself and colleagues Sarah Sieloff from the Center for Creative Land Recycling and Ryan Smith from the U.S. Economic Development Administration. We are actively engaged in raising awareness, building capacity and providing technical assistance to nuclear power plant host communities. Additional information may also be found on our website.