Entergy unable to sell VY
BRATTLEBORO -- No sale equals no deal for Vermont power utilities.
Late Wednesday afternoon, Entergy, which owns and operates Vermont Yankee nuclear power plant in Vernon, announced its attempts to find a buyer for the 40-year-old facility were to no avail.
"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," stated Richard Smith, president of Entergy Wholesale Commodities, in a press release. "The plant's strong operating performance was attractive to potential buyers; the political uncertainty was not."
Smith was referring to the fact that even though Yankee received approval last week from the Nuclear Regulatory Commission of its relicensing application, the plant still needs a certificate of public good from the Vermont Public Service Board.
In January 2010, the Vermont Senate voted 26-4 against allowing the PSB to issue the certificate.
The Vermont House of Representatives didn't vote on the issue last year and it doesn't appear it will be voting on it before the 2011 legislative session ends.
Shortly following Entergy's press release, Bob Young, CEO of Central Vermont Public Service, which has been attempting to negotiate an agreement with Entergy to purchase some of Yankee's electricity, said that three of the four conditions set out during the negotiations were not met.
Those four included the relicensing of the plant by the Nuclear Regulatory Commission, an agreement that Entergy would sell at least 20 megawatts of power to some other utility in the state besides CVPS and Green Mountain Power, that Entergy receive approval from the state of its decommissioning plans and any other issues pertinent to Vermont's deliberations and, finally, the sale of the plant to a different operator.
Those conditions had been kept confidential until Wednesday evening.
"It's been our position that we wouldn't enter into a deal absent the sale and tacit approval of the state," said Young.
Dottie Schnure, spokeswoman for GMP, said it has been working closely with CVPS on negotiating a power purchase agreement.
She said the ultimate goal for GMP was to achieve a good deal for all its customers.
"Without the conditions being met, there is still great uncertainty," said Schnure.
And with low-market prices for electricity available now, she said, there are other possibilities for long-term power purchases.
In the same statement announcing the failure to find a buyer for the plant, Entergy announced it had completed negotiations on a 20-year agreement to sell power from Yankee to Vermont Electric Cooperative, Inc., the third largest electric distribution utility in Vermont.
Entergy offered VEC 10 megawatts at a price of $49 a megawatt hour in the first year of the 20-year contract, said David Hollquist, CEO.
In ensuing years, Entergy would look at the 30-month forecasted price and average it with the price electricity was selling at 18 and nine months previous.
However, a cap of $61 per megawatt hour, adjusted for inflation, would be placed on the cost.
The agreement is subject to approval by VEC's board of directors, and is contingent on the plant running past March 2012.
Hollquist said up until the ongoing problems with the reactors in Fukushima, Japan, VEC had been "agnostic" about where it bought its power.
It's core tenet was to provide the cheapest power possible to some of the poorest towns in Vermont.
Even though Entergy has offered a very favorable price to VEC, said Hollquist, the board of directors has been struggling over the past two days about whether it should approve the deal and send it to its shareholders at VEC's annual meeting in May.
On Tuesday, the board decided to postpone its decision until the end of April, he said.
"There is a lot of fear about what is happening in Japan right now," said Hollquist, especially considering the Fukushima boiling water reactors are the same model as the reactor at Yankee.
The board is also considering Entergy's uneven track record in Vermont and how it has worked with the state in the past, he said.
Just as concerning for the board is the storage of spent fuel at Yankee, both in the plant's spent fuel pool and in the dry casks located just outside of the containment building.
But Brad Ferland, president of the Vermont Energy Partnership, stated in a press release that the offer to VEC "is a great deal -- and we need more like it. We encourage other Vermont utilities and Vermont Yankee's owner to finalize similar agreements in the very near future."
VTEP is a group of more than 90 business, labor and community leaders committed to finding clean, affordable and reliable electricity solutions. Entergy is one of its members.
VTEP was not alone in urging CVPS and GMP to reach a similar deal. William Driscoll, president of Associated Industries of Vermont, stated in a press release that a better deal that was offered to VEC "is simply not realistic."
"Failure to secure similar power agreements with other Vermont utilities ... will lead to higher electric rates for Vermont employers and residents " he stated.
Driscoll also stated the deal is "a dramatic illustration of how much Vermont stands to lose" if Gov. Peter Shumlin and the state's legislative leadership of blocking the Public Service Board from doing its job and making a decision on allowing the plant to operate for another 20 years.
In a statement, Shumlin said Entergy's failure to find a buyer "is further evidence that this aging plant should be shut down on schedule in 2012."
"It is not surprising that Entergy could not find a buyer for Vermont Yankee," he stated. "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."
But Driscoll noted in his press release that Vermont's industrial ratepayers are facing electricity costs approximately 24 percent higher than in the other states against which they compete.
"Our economy cannot afford to lose Vermont Yankee," he stated.
In its press release, Entergy pointed out that in the last five years, Yankee's capacity factor has been above 94 percent, operating with two uninterrupted runs between refueling outages and experiencing only one automatic shutdown over about a four-and-a-half-year period.
The press release did state, however, that Entergy would leave the door open to any potential purchase offers "should conditions change, consistent with its dynamic point-of-view based business strategy, just as it does for any business or asset."
Bob Audette can be reached at 802-254-2311 ext. 160, or email@example.com.
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