Entergy reworks nuclear spin-off
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By SUSAN SMALLHEER Rutland Herald Staff - Published: July 15, 2009
BRATTLEBORO — Entergy Nuclear has improved the financial package for the proposed spin-off company of its five northeast nuclear plants, including the Vermont Yankee reactor.
Mike Burns, an Entergy spokesman in New Orleans, said Tuesday that negotiations between Entergy and New York state regulators had produced the changes, which he said would also apply to the pending spin-off in Vermont to a new company called "Enexus."
"Entergy is strengthening its offer," said Burns. "In Vermont, we hope for a positive reaction. Our intention is to satisfy the questions about the financial strengths of Enexus."
Burns said Entergy would be meeting with Vermont state regulators on the changes, which he said are expected to require new hearings on the state and federal level.
Under the proposal, the new company would have $1 billion less in debt and an additional $350 million in capital, however both figures would be spread over the five plants, which actually include six reactors.
In addition to Vermont Yankee, the plants are the Pilgrim reactor in Plymouth, Mass., Indian Point generating stations 1 and 2, north of New York City, FitzPatrick in upstate New York, and Palisades in Michigan. The Vermont Public Service Board had concluded hearings on the proposed new company, but hadn't issued a ruling. Entergy announced last fall that it was putting the project on hold, largely because of the financial crisis affecting the entire country and financial markets.
The biggest criticism of the deal in Vermont has focused on the long-term financial stability and resources of the new company, with legislative critics saying Enexus would be highly in debt with no real financial resources behind it, such as its parent company, Entergy or Entergy Nuclear.
The Enexus deal is one of the prime motivating factors behind two vetoed bills calling for Entergy Nuclear to make contributions to the plant's decommissioning trust fund.
Gov. James Douglas has vetoed both bills.
Vermont state regulators said they were aware of the New York offer, but declined further comment.
Meanwhile, the Nuclear Regulatory Commission released its figures showing an $87 million gap in Vermont Yankee's decommissioning trust fund. Entergy Nuclear is expected to file a plan in the coming weeks to address the shortfall, which was blamed on the recent stock market collapse.
According to the NRC, Entergy Nuclear only has $372 million set aside, which is expected to grow to $425 million, while $513 million will be needed, leaving a $87 million shortfall.
Vermont Yankee's decommissioning trust fund lost a significant portion of the value of the fund, but it has since recovered somewhat.
But Arnie Gundersen, a nuclear engineer who is a critic of Vermont Yankee, said that the NRC figures were misleading.
He said Vermont Yankee's decommissioning fund, according to the NRC, should only be $510 million to cover the radiological cleanup of the site, while studies by state-hired experts put the cleanup total at $910 million.
"The real shortfall is $487 million," he said. "The fact is that relying on the NRC's formula will not allow adequate funds to dismantle VY. Unless we get assurances from Entergy, not Entergy Nuclear Vermont Yankee, Vermonters will be left holding the bag for the additional $400 million," Gundersen said.
Neil Sheehan, a spokesman for the NRC, said the figures only covered radiological cleanup, and state requirements could make the costs higher.
Vermont Yankee's original owners had promised to return the Vernon site to a "green field" once its life was over.
Robert Williams, a spokesman for Entergy Nuclear in Vermont, said Vermonters would not be responsible for decommissioning costs.
"As we have said in the past, as the responsible owner of this plant, we will ensure that our decommissioning fund meets all NRC requirements to ensure adequate decommissioning," Williams said in an e-mail.
susan.smallheer@rutlandherald.com
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