BRATTLEBORO—The Energy Daily Network, a subscription-only online newsletter that covers the energy industry, reported last week that Exelon Corp. and NRG Energy Inc., have expressed an interest in buying the Vermont Yankee nuclear power plant in Vernon.
In a story written by Energy Daily reporter Jeff Beattie, Entergy Nuclear, the current owner, is “apparently fed up with the troublesome investment — and the difficult political environment it faces in the state” and “has begun shopping its Vermont Yankee nuclear power plant to potential buyers.”
The nuclear plant’s current 40-year operating license expires in March 2012, and Entergy has applied to the U.S. Nuclear Regulatory Commission for a 20-year extension.
Michael Burns, spokesperson for Entergy Louisiana, declined to comment on the Energy Daily report, saying that corporate policy states “we do not comment on market rumors or speculation.”
But, he added, as part of Entergy’s ongoing business point of view, the company would consider buying or selling any asset, whichever option “creates the most value.”
“We constantly look to add value for the shareholders,” Burns said, adding that Entergy’s position on VY remains that the plant is “a highly valuable asset” and a clean, reliable source of power for Vermont and New England, making it an attractive asset in general.
Officials at the Vermont Department of Public Service and the NRC say they have received no information as yet from Entergy that it wants to sell VY. Both agencies would have to be notified if a sale is taking place.
NRC Public Affairs Officer Scott Burnell said Entergy had not approached his agency about selling the plant.
He said the NRC would need to grant Entergy a license transfer and vet the prospective buyer before a VY sale could go through. Any potential buyer would have to prove to the NRC that it has the resources to safely operate and, ultimately, decommission a nuclear plant.
NRC Public Affairs Officer Diane Screnci added that the NRC gives “equal weight” to a prospective buyer’s technical and financial abilities before sanctioning any sales.
Is it even possible?
Stephen Wark, deputy commissioner of the state Department of Public Service, said that Entergy has not filed any documents with the Vermont Public Service Board.
“If they were to sell the plant, they would have to notify the PSB,” said Wark. “They’d open a docket and go from there.”
Ray Shadis, a technical consultant with the New England Coalition on Nuclear Pollution, said the antinuclear group has sent a letter to the Public Service Board asking it to look into what would happen if a sale took place.
“Entergy is being evasive,” said Shadis. “If it isn’t going to be Entergy running the plant, they need to tell the PSB, or else everything that Entergy had told the PSB and all the commitments they have made to the PSB are worthless. They need to stand up and say they’re selling the plant.”
Neither Exelon nor NRG would comment on the report.
Chicago-based Exelon is the nation’s largest nuclear operator, with 10 power plants and 17 reactors in Illinois, Pennsylvania and New Jersey. NRG, a Princeton, N.J.-based independent power producer, owns a 44-percent share of the South Texas Project in Bay City, Texas, one of two nuclear plants in that state.
“It’s natural for people to be curious,” said Exelon spokesperson Paul Elsberg, declining to comment further per company policy.
Elsberg said Exelon has been increasing power generation capacity at current facilities through “uprates,” a series of equipment improvements and upgrades. Last year, the company launched a transmission company to expand its network through ownership of power lines and poles.
Also on Exelon’s “radar” said Elsberg, is “Smart Grid” technology that will help deliver electricity more efficiently to local communities.
Entergy bought Vermont Yankee from a consortium of New England electric utility companies for $180 million in 2002. According to the town of Vernon’s most recent grand list, the current assessed value of the plant is $290 million, according to Vernon lister Phyllis Newton. That figure also includes a tax stabilization agreement with the town that is set to expire in 2012.
Some observers believe a sale of Vermont Yankee is highly improbable.
“Anyone that buys this plant is taking a high risk,” said Paul Blanch, a 40-year nuclear industry veteran who is working with the New England Coalition.
“You have a license that expires in 1½ years, and you have a lot of unresolved issues involving buried pipes and electrical cables,” Blanch continued. “I don’t see any way that the plant will be sold unless its re-licensed, and I don’t see any way the plant will be relicensed if all those unresolved issues are not dealt with.”
The Vermont Senate earlier this year voted 26-4 against allowing the Public Service Board to issue a Certificate of Public Good, required for Entergy to operate the plant for an additional 20 years past the March 2012 expiration of its current license.
A reversal of that vote seems unlikely, said state Rep. Sarah Edwards, P-Brattleboro, who serves on the House Natural Resources and Energy Committee as well as the Vermont State Nuclear Advisory Panel.
“I don’t see the House wanting to take this up next year, and I don’t think the composition of the Legislature is going to change that much to change the outcome of another vote,” Edwards said.
There also seems to be a question of whether there is enough time to transfer ownership of the plant before the operating license expires.
Wark cited the recent sale of Verizon’s landline business in Vermont to FairPoint Communications as an example of how complicated the ownership transfer process can become.
“That docket is still open, and it has been more than 18 months,” said Wark, adding that at minimum, it “would take months” for the PSB to deal with a VY sale. Wark also said he would not offer specifics regarding the process until a formal docket is opened.
“Unless there is some special process to expedite this, I don’t see how this can be done quickly,” said Edwards. “Entergy has said that their ‘drop dead’ date for approval from the state is April 2011. In eight months, they not only need the Legislature to reverse its vote, they have to get the NRC and PSB to approve the sale, get the PSB to issue a certificate of public good and get the NRC to approve relicensing the plant. There’s no way you can do all that in eight months.”
Ultimately, Shadis said, it will be the PSB that will have to answer some of the biggest questions relating to a possible sale.
“The PSB has the power to address this,” he said. “A new owner may not be subject to all the committments and agreements that Entergy made. All this looks like it could be Entergy’s escape hatch from Vermont.”