BRATTLEBORO -- The closure of Vermont Yankee nuclear power plant is a challenge to grid operators, but it's not insurmountable, said Kerrick Johnson, Velco's vice president for external affairs.

Velco, which is tasked with delivering electricity through Vermont's transmission system, built a $54-million switchyard in 2010 in the shadow of the power plant as part of its Southern Loop project, which upgraded the transmission system in southern Vermont.

Though the power produced by Yankee passes through the switchyard, the closure of the power plant in late 2014 won't affect the facility, said Johnson.

"In fact, the switchyard affords more flexibility in a world in which Vermont Yankee is no longer generating power," he said.

Yankee's closure does mean Velco will have to upgrade about 100 yards of transmission lines, but it also means two steel structures at the switchyard in Velco's capital plan for $6 million worth of improvements may not need the upgrades after all, said Johnson.

Once the plant is offline, he said, power will actually flow from the grid to the power plant to maintain its safety systems during the decommissioning process. But overall, said Johnson, site reclamation won't affect Velco's switchyard.

Since before Entergy's Aug. 27 announcement that it was closing its 620-megawatt reactor in Vernon, Velco has been analyzing the power market and trends in power production, he said.

Velco, like ISO New England, which manages energy distribution in the six New England States, is concerned over an increasing dependence on natural gas, despite its low costs.

Currently, New England gets 52 percent of its power from natural gas fired generators.

"We agree with ISO that the level dependency on natural gas is of concern," said Johnson.

Velco is involved in ISO's evaluations of immediate, near-term and long-term solutions to address the issue, he said, though Velco has no opinion on market incentives being considered by ISO.

If ISO goes ahead with market incentives and the Federal Regulatory Energy Commission approves them, generators could be paid for the guarantee that they will have power available when ISO determines the grid needs it the most.

Mark Cooper, a senior research fellow at the Institute for Energy and the Environment at Vermont Law School, has likened market incentives to "a bribe," costs for which will end up being paid by ratepayers in the form of a surcharge. However ISO attempts to reduce the region's dependence on natural gas, Velco is keeping its eye on the state of solar and wind power and its contribution to Vermont's electrical needs.

"There is an explosion in distributed generation and distributed variable generation going on," said Johnson. "While the biggest component is solar, wind is also growing by leaps and bounds."

One thing ISO needs to do is "get a handle on here these distributed generators are and when they are on and when they are off," he said.

On Sept. 30, said Johnson, ISO is convening the first meeting in a long process of how best to incorporate the benefits and address the challenges that distributed generation present to the regional grid.

"We are headed in a distributed generation direction, however, there is a transition that we will work through and different people have different ideas as to how long that transition will take," he said. "Most people would agree there are going to be some system and policy bumps in the road."

Distributed generation employs small-scale power generation to produce electricity close to the end users of the power, ranging between solar panels on a house or a wind turbine in a backyard to the proposed 2-megawatt solar farm along Interstate 91 in Brattleboro and the 500-kilowatt project proposed for Putney. "Those projects might light our way to the future, but we've got to keep the lights on in the meantime," said Johnson. "This is clearly where we are headed."

Bob Audette can be reached at raudette@reformer.com, or at 802-254-2311, ext. 160. Follow Bob on Twitter @audette. reformer.