Vermont Yankee nuclear power plant will lose 30 of its 650 employees by the end of the year as part of a reorganization announced Tuesday by parent company Entergy Corp.
In a quarterly earnings conference call Tuesday morning with reporters and financial analysts, Entergy CEO Leo Denault announced that 800 Entergy employees altogether would lose their jobs by the end of the year.
Entergy operates five nuclear reactors in New England and New York state, while in all the company has 15,000 employees. One third of all the cuts will come in Louisiana and New Orleans, its home base.
Denault did not give particulars of how the layoffs would be divided among its various companies but said the cutbacks would save the company between $200 million and $250 million by 2014.
Entergy had launched an evaluation of company staffing earlier this year along with what the company called seven “strategic imperatives.”
The company did not consider shutting down Vermont Yankee or any of its nuclear power plants as a cost-saving measure, Entergy Vice President Terry Young said after the earnings call.
“We’ve been very clear that short-term prices in the merchant market are challenging,” he said. “But we do believe our markets are going to recover.”
Company executives have said in the past that Vermont Yankee was not covering its capital costs, but Young said Entergy still had confidence in nuclear power.
According to Entergy’s news release about the second-quarter earnings, the company’s nuclear plants were selling power at about $42 per megawatt-hour, down from $45 in the previous period.
The state of Vermont has been actively trying to shut down the Vernon reactor for several years, but so far Entergy has been successful in continuing to operate. Its legal challenge to two Vermont laws is currently pending in the 2nd Circuit Court of Appeals, and it is waiting for a new certificate of public good from the Vermont Public Service Board.
Federal regulators have already cleared Vermont Yankee to continue to operate for another 20 years beyond its original 2012 license expiration, but Yankee has been operating without a state permit since March 21, 2012.
Entergy’s “as reported” earnings for its second quarter are about half of what they were a year ago. Entergy reported a drop from $2.06 earnings per share in 2012 to 92 cents for 2013 for the second quarter. For the year to date, earnings are down 62 cents per share compared to last year.
The company said utility earnings were lower because of “substantially higher” income tax expenses, as well as lower net revenue and higher decommissioning expenses.
Young said it would mean the loss of about 30 jobs at Vermont Yankee, and similar losses at Pilgrim Nuclear in Massachusetts — in both cases a 4 percent reduction in the workforce. The FitzPatrick plant in Oswego, N.Y., will lose 35 positions, or about 5 percent.
At the Indian Point nuclear plant outside New York City, which is a two-reactor site, job losses will affect 75 people, a 7 percent cut in the workforce.
Denault and Young both said the company was dedicated to safety and that the cuts would not have an adverse effect on safety.
The Nuclear Regulatory Commission said earlier this month that it has required staffing levels for only certain positions at nuclear power plants, such as in the control room and in security, and those staffing levels cannot be cut.
Young said individual employees had not yet been notified of possible job losses, since the company is going to initiate rounds of new evaluations for various positions. He said the company’s restructuring had been started several months ago.
“We took a blank piece of paper and created from scratch how to rebuild the company, and how to create a company as efficient as possible,” he said.
He said cuts were going to be across the board. Young said it was even possible that he too might not have a job after the first round of evaluations.
“They will determine who can best do the job,” he said.
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