At the close of business yesterday Entergy issued a press release straight out of “Deal or No Deal.”
The deal? The company announced that it had completed contract talks with Vermont Electric Cooperative (VEC), the state’s third largest utility, on a two-year agreement to sell power.
The no deal? That it had failed to find a buyer for Vermont Yankee.
In reality, the proposed deal with VEC is subject to approval by VEC’s Board of Directors, and is contingent on the plant running after March 2012.
Last week, the U.S. Nuclear Regulatory Commission issued VY a 20-year license extension, allowing it to operate until 2032. However, the state Public Service Board has yet to issue a certificate of public good, because the Vermont Senate last year voted to deny VY a license extension. In 2006, when the Vermont Legislature approved the storage of spent fuel in dry casks it also inserted itself as an arbiter in whether VY could remain open beyond 2012.
It is expected that Entergy will file suit against Vermont, arguing that federal law preempts any state decision on the operation of nuclear power plants.
“Of course, we’re expecting an Entergy preemption suit, perhaps any day now,” Attorney General Bill Sorrell tells Seven Days. Sorrell is continuing to investigate whether Entergy Vermont Yankee officials lied under oath to state regulators about the existence of underground pipes — pipes that later were the source of several leaks of tritium into the groundwater and Connecticut River.
The Agency of Natural Resources, along with Sorrell’s office, is examining whether the tritium leak violated the state’s new law governing groundwater as a “public trust.” The law, passed in 2008, declares groundwater as worthy of protection for all Vermonters, not just the landowners of the soil the water flows through.
Despite the potential legal battles, a top Entergy official said the proposed VEC plan is just one more step in an effort to keep VY up and running beyond 2012.
“Entergy continues to seek successful resolution related to the long-term future of Vermont Yankee to benefit all stakeholders, including the approximately 650 men and women who work at the plant,” said Richard Smith, president of Entergy Wholesale Commodities. “Securing agreements with the local electric companies to sell power from the plant at affordable prices is one of the efforts that has been under way for some time.”
Entergy will provide around-the-clock energy and capacity beginning in March 2012 to the Vermont Electric Cooperative, which serves approximately 34,000 people in 74 towns throughout northern Vermont. The power price for the first year of the contract is fixed and will be $49 per megawatt hour, which is below the current market, Entergy said in a news release. That’s 4.9 cents per kilowatt hour. Future prices will fluctuate with the market.
VEC’s CEO David Hallquist said Entergy’s press release was “misleading,” noting there is “no agreement.” VEC presently purchases 10 megawatts of power from Entergy at a much higher prices than contemplated in the deal.
“Even with this as a backdrop, the VEC Board of Directors is struggling with any decision to take power from Entergy after 2012, even if Vermont agrees to allow Entergy to operate,” said Hallquist in a statement. “A number of the VEC Board of Directors have voiced concern with Entergy’s poor relationship with Vermont, the fact that the Fukushima reactor in Japan is the same design, and there is one million pounds of radioactive waste at VY with no plans on what to do with it.
The VEC’s board will take up this contract again at its April 26 meeting, and it will likely be a topic at VEC’s annual meeting in May, added Hallquist.
Entergy also stated that the previously announced process to explore the sale plant has concluded without a sale.
“Although we received interest from a number of companies, the conclusion of the sale process, without a sale, was driven primarily by the uncertain political environment in Vermont,” Smith said. “The plant’s strong operating performance was attractive to potential buyers; the political uncertainty was not.”
A key opponent of their continued operation is Gov. Peter Shumlin. In a statement, Shumlin said he wasn’t surprised that Entergy couldn’t find a buyer.
“It is not surprising that Entergy could not find a buyer for Vermont Yankee. The plant and its operators have had numerous issues — cooling tower collapses, a transformer fire, leaked tritium, and misinformation about the underground piping — and I have no confidence in the continued operation of the plant or in its owners,” said Shumlin.
A change in ownership, along with power deals with Vermont utilities, were seen by VY supporters as key changes necessary to curry favor with Vermont lawmakers in hopes of getting the legislature to take a new vote this session. That remains unlikely.
It also remains unlikely that Vermont’s largest utility — Central Vermont Public Service — will sign an agreement with VY anytime soon, either.
“We concluded that there were four conditions if we were to sign a deal: NRC approval of relicensing; the sale of the plant to a new owner; an agreement for Entergy to sell 20 megawatts in Vermont in addition to sales to CV and GMP; and state approval of the decommissioning and any other issues of interest to the state,” said CVPS CEO Bob Young. “It has been our position that we would not enter into a formal contract absent a sale and tacit state approval of any proposed deal.”
CVPS and Green Mountain Power believe that if VY operates beyond 2012 that Entergy will have to share a portion of any power sales with the two utilities, according to a memorandum of understanding that Entergy signed with the utilities back in 2002 when it bought the reactor. The MOU is not contingent upon a CPG from the state, only if the plant remains in operation, CVPS officials said.
This article appears in Mar 30 – Apr 5, 2011.
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“In the haste to have a no vote on relicensing in place for the Gov’s race, they directly harmed the possibility of a sale of VY.” JCarterExactly what did I miss?
A.) Greenberg, you continually say I’m wrong and yet most of the time your rebuttals don’t even address anything I’ve stated, or in some cases even strengthen my point. B.) “The premise of his argument” John, perhaps you should stop reading IN to my posts and just try to read them. OR not, it’s probably best if you and I stop the back and forth.C.) 7DAYS… in other forums I have been in there is an ignore option that hides specified posters comments…. any chance we can get one of those?
First, I hate to interrupt JCarter’s fantasies with the facts, but that appears to be my job these days. The premise of his argument is that the Senate vote prevented Entergy from selling VY. At the time of the vote, however, Entergy had no interest in selling VY. It had already spun it off into what it hoped would be a separate company called Enexus, along with the rest of its “non-utility” nuclear fleet. Indeed, the shabby finances behind that deal, and its transparent attempt to shed its liability for its aging nuclear fleet motivated more than one senator to vote against VY. I discussed the Enexus deal with at least 4 senators otherwise reasonably favorably inclined towards VY prior to the vote. (Obviously, I can’t say with any certainty whether, absent Enexus, any would have voted for VY. I CAN say it was a major issue for all of them and for other senators as well.)Eventually, Entergy realized that their maneuver was not going to succeed, and they opted to abandon it when the NY Public Service Commission balked at the deal. Months AFTER the Senate vote AND AFTER the decision to abandon Enexus, Entergy decided to try a different tack to shed its liability: namely, a sale to a third party. It’s now clear that this latest strategy has also failed.Carter also writes: “I think everyone can agree that the MOU seems to be disregarded by both sides.” Shumlin has attempted to disregard it concerning SAFESTOR; who else would Carter include in “everyone?” {The utilities are quite right and Carter is entirely wrong about the revenue sharing agreement, but since, as I’ve argued for years now, it’s likely to be of no value except as an insurance policy, I won’t argue the several points here, since it’s really a moot point.)Murphy suggest a similar argument: “Shumlin has no legal basis for saying the Safsor provision in the MOU should be ignored ….” I agree. Shumlin is perfectly entitled to say that he thinks that this provision was a mistake and to look for ways to renegotiate that part of the agreement; indeed, I think he should. But the basic fact remains: the MOU, until or unless it’s modified, DOES allow for SAFESTOR.Finally, as to Murphy’s other point about the MOU, yes indeed, I do know full well that Entergy agreed in the MOU to accept a decision of the PSB “under current law.” And it’s certainly true that Act 160, which gave the legislature the right to effectively preempt the PSB from making a final decision was passed subsequent to the MOU. Two questions.1) So what? The right to regulate VY on non-nuclear and non-safety aspects comes NOT from the MOU, but from the Atomic Energy Act of 1954, as interpreted by the Supreme Court. In the Court’s words: “From the passage of the Atomic Energy Act in 1954, through several revisions, and to the present day, Congress has preserved the dual regulation of nuclear powered electricity generation: the Federal Government maintains complete control of the safety and “nuclear” aspects of energy generation, whereas the States exercise their traditional authority over economic questions such as the need for additional generating capacity, the type of generating facilities to be licensed, land use, and ratemaking.” (PG & E v. State Energy Comm’n, 461 U.S. 190 (1983) Entergy agreed with that right in the MOU. At best, if Murphy’s argument were correct, the change in Vermont law would give it some basis to explain to a judge why it had changed its corporate mind. But that would NOT provide it with an answer to the core question: what’s the basis for thinking that Vermont does not have this right? So, now to Jimmy, JCarter, and Murphy, cite your cases and explain why Vermont does NOT have a right which, quite clearly, the Supreme Court of the US (and Chairman Jaczko of the NRC, following them) believes it DOES have.2) Why does Murphy think that Act 160 CONTRADICTS the MOU? The Public Service Board exists in the first place because the legislature passed a law to bring it into existence. From a legal point of view, the legislature has the right to create it, modify it however it wants (within state and federal Constitutional bounds) and limit its activity as it chooses.In fact, Act 160 was passed with Entergy’s consent (because it also allowed VY to offload spent fuel into dry casks, which they needed to do since their spent fuel pool was full). The law was signed by pro-VY governor Jim Douglas. But even without the consent of either, it would be perfectly legal, and does NOT in any way contradict the MOU.
@ Todd and Greenberg:in the 2002 MOU Entergy agreed to abide by a decision of the Public Service Board. Greenberg, at least, knows very well that that’s true. That’s a different thing from the Legislature later passing a law that purports to deprive the PSB of the authority to make the decision. That sneaky little maneuver was not anywhere in the MOU. @ Greenberg:Shumlin has no legal basis for saying the Safsor provision in the MOU should be ignored just because he doesn’t like it. Period. Period. Period.
Hmmm, better deal then HQ. It’s too bad that the public is so blind as to see the damage Shumlin has done. When it was announced VY was up for sale, Shummy must have gotten that sick feeling in his stomach. With much of the negative attack on VY directed at Entergy a sale would derail his attempt to shut down the plant, and that after all is the goal. In the haste to have a no vote on relicensing in place for the Gov’s race, they directly harmed the possibility of a sale of VY. The committee set up by the Legislature noted that VY could be operated safely, with the caveat under different management. The Shumlin led Senate halted that possibility, because after all, it was never about Entergy or their trustworthiness, it was about garnering support for the Gov’s race by appealing to the anti-nuke/anti-big corp crowd that has proved so fruitful for Sanders. Now, Entergy will remain as the owners of VY, they will likely file for pre-emption, and if successful continue to operate selling ALL the power out of state without benefit to Vermonters, accept for the few VEC customers. CVPS and GMP are holding fast in their denial of a power contract as it would cause a loss of reason as to why they need to hike future rates for renewables. We will look back at this as an energy blunder on par with not purchasing the hydro dams on the CT river. Difference being this one was purely politically motivated. Finally CVPS and GMP are grasping at straws with the profit sharing contained in the MOU. I think everyone can agree that the MOU seems to be disregarded by both sides. Toss that thing and move on. But it does bring up the question, IF VY did give shares to CVPS and GMP what would that money be used for? I’ve got 10-1 odds it doesn’t go to reducing rates.
“@Todd, Shumlin’s doing the same thing wrt Safstor, and he doesn’t even have a legal precedent to fall back on.” Neither does Entergy, or perhaps you’d be so kind as to cite it for us.
@Todd, Shumlin’s doing the same thing wrt Safstor, and he doesn’t even have a legal precedent to fall back on.
LOL, arguing that Federal law pre-empts the State’s when they agreed in the MOU to abide by VT law? Stay classy, Entergy.
“Of course, we’re expecting an Entergy preemption suit, perhaps any day now,” Attorney General Bill Sorrell tells Seven Days.”From tritium in groundwater to sugar in soft drinks, Bill Sorrell is always there for us.
Paraphrasing a pundit on NPR the other day: “VY will most likely continue to operate with or without the state’s approval. What are they going to do, send in the militia to shut them down?”