NRC denies union's request to intervene in license transfer


Wednesday, August 27
BRATTLEBORO -- Neither a group of environmental organizations nor a labor union have grounds to contest Entergy's plan to spin off six of its nuclear reactors into a new company, stated the Nuclear Regulatory Commission, in a ruling issued Aug. 22.

Because they have no standing, wrote the NRC, their petition to intervene in the license transfer of nuclear power plants in Vernon, Oswego and Buchanan, N.Y., Plymouth, Mass., and Covert Township, Mich., was denied.

Entergy Nuclear, which owns and operates the five sites, has applied to the NRC to move the power plants into a new company called Enexus. The five plants are called merchant plants because they sell electricity to the power market directly and have rates that are not regulated by the states they are located in.

The spin-off is meant to raise $4.5 billion for Entergy and its stockholders by leveraging the assets of six reactors at the five sites.

While the NRC has OK'd the transfer, the federal Securities and Exchange Commission has yet to sign off on the deal.

In addition, Vermont's Public Service Board must agree to the transfer in the case of Vermont Yankee nuclear power plant in Vernon. In New York State, the attorney general there has indicated it feels the transfer of Indian Point's two active reactors is not in the best interest of the Empire State's ratepayers.

Of concern for many regulators is the fact that plants such as Yankee will have a debt load but no assets besides a $700 million letter of credit from parent company Entergy.

The $700 million is meant to be shared by the five sites for operating expenses in case of an unplanned long-term shutdown at any one of the six reactors.

Entergy has responded that because of the increase in value of the power plants -- due to the increased cost of electricity to consumers -- the transfer is a good deal for both stockholders and ratepayers.

Entergy bought Vermont Yankee in 2002 for $180 million. It is now worth nearly $1 billion.

Union Locals 369 and 590, which represent workers at Pilgrim nuclear power station in Plymouth, had contested the license transfer on the grounds that it would "adversely affect Pilgrim and its employees." The unions were also concerned the debt-to-asset ration would harm the power plants' "fiscal responsibilities and liabilities."

Other organizations that were also petitioning to intervene included the Westchester Citizen's Awareness Network, the Rockland County conservation Association and the Sierra Club.

To be recognized as an intervenor, a petitioner "must demonstrate that its interest may be affected by the proceeding." But that's not enough to be awarded status as an intervenor.

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Petitioners must also show that "at least one of its members may be affected by the (NRC's) approval."

Because the transfer might have a negative impact on safety operations at Pilgrim, argued the union, it could have a "corresponding and adverse impact upon the surrounding community."

A risk to the reputation of Pilgrim would constitute a "threatened injury to (the union's) members."

But, wrote the NRC, "the Local's claim suffers from multiple flaws." The petition doesn't state how union members would be "aggrieved" by the transfer.

"(The union) seems to assume that living or working near or around a reactor justifies standing in and of itself," wrote the NRC. "It does not. Absent an 'obvious'' potential for harm, it is a petitioner's burden to show how harm will or may occur."

But, wrote the NRC, "the indirect transfer creates no obvious source of actual or potential harm. It is largely a bookkeeping transaction."

The union's contention that the transfer might affect safety at the plant "is both cursory and factually unsupported," wrote the NRC, and damage to Pilgrim's reputation "does not constitute a threatened injury to the interests of the Local's members."

The other organizations in the petitioners group also failed to show they had standing in the license transfer, wrote the NRC. The groups had claimed because of their proximity to the plant, they should be granted intervenor status.

"Their specified proximities fall far outside any that we have ruled would justify standing in indirect (or even direct) license transfer adjudications."

The transfer does not involve a change in ownership or a change in the facility or its operations, wrote the NRC.

"We can see no obvious potential for offsite consequences," it wrote.

Even though the NRC has denied the petition, the union and the citizen organizations can contest the ruling in federal court if they decide to do so.

Bob Audette can be reached at or 802-254-2311, ext. 273.


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