BRATTLEBORO — Entergy Nuclear has a parting gift for its former Vermont customers.
In a letter sent to Green Mountain Power late last week, Entergy announced it would be sending $17.8 million to the state’s largest utility as part of the revenue-sharing agreement the state had struck with Entergy during its 2002 purchase of Vermont Yankee.
The money comes from higher-than-expected energy prices Entergy received from the sale of power from Vermont Yankee this winter on the open market, said GMP spokeswoman Kristin Carlson.
Carlson said the $17.8 million would go back to the utility’s ratepayers, although in what form was still being worked out between Green Mountain and the Department of Public Service.
Carlson said GMP does not buy power from Vermont Yankee.
She said the $17.8 million represented 2.89 percent of its annual $615 million revenue.
The revenue-sharing agreement went into effect only after Vermont Yankee’s original permit to operate expired in 2012, and is triggered after the price of electricity rises to more than $61 per megawatt-hour.
The little-known provision in the 2002 sales agreement was the work of current Public Service Board Chairman James Volz, who at the time was the director of advocacy for the Department of Public Service; Sarah Hofmann, an attorney for the department, who is now the executive director of the New England Conference of Public Utility Commissioners; and the state’s former nuclear engineer, William Sherman, who is now a retired Russian Orthodox priest, living in Vermont.
As recently as 2008, the state estimated the revenue-sharing agreement, if Vermont Yankee continued to operate for 10 years after 2012, could mean $750 million for Green Mountain Power and Central Vermont Public Service, which was purchased by GMP in 2012.
In a letter from Marc Potkin, vice president of power marketing for Entergy Wholesale Commodities in White Plains, N.Y., dated April 24, Potkin said the company’s calculations put the revenue-sharing amount at $17,886,739.49 for the period between March 13, 2013, and March 12 this year.
Entergy Nuclear spokesman Robert Williams declined to say whether the state could expect another check before Vermont Yankee shuts down at the end of this year.
Potkin’s letter notes that the $17.8 million is 50 percent of the “excess revenue.” According to the agreement, Entergy gets to keep the other 50 percent.
“This is great news for our customers as we work to keep costs down,” said GMP President Mary Powell in a statement. “GMP has already committed to no increase in base rates until 2016. This good news just ensures that rates can go lower and stay low for a couple of years.”
Powell said double-digit increases were being experienced in other states and New York.
“This agreement negotiated in 2002 will provide a benefit in the form of lower rates. We are working right now with state regulators on the best way to return this money to customers to reduce rates.”
Christopher Recchia, the commissioner of the Department of Public Service, said in the same statement that he was pleased the revenue “will go directly to benefit GMP ratepayers.”
Green Mountain Power now provides power to about 70 percent of all Vermonters.
Recchia said Entergy usually sells Vermont Yankee’s power via long-term contracts, but because it is closing this year, it sold power on the open market, resulting in the substantial windfall.
Recchia said power prices on the open market were “unusually high due to the bitter cold winter. These unique circumstances triggered the revenue-sharing provision.”
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