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NRC agrees to investigate Entergy’s finances

Federal agency accepts petition from anti-nuclear groups, which charge that the company’s financial woes could affect safety

It could have been just another protest against the Vermont Yankee nuclear power plant, albeit one that took place on the Connecticut River on a warm, bright, and windy Saturday.

But for two dozen or so kayakers and canoeists who took to the river, and their allies who stood on the river’s shore just off the Fort Hill Branch rail trail, there was good news to celebrate.

According to Deb Katz, the executive director of the Citizens Awareness Network (CAN), the U.S. Nuclear Regulatory Commission had told the antinuclear group that it had accepted its petition filed against Entergy, the owner of Vermont Yankee and several other nuclear plants in the Northeast, that challenges the corporation’s ability to operate the plants safely.

But now, the argument against the continued operation of three of Entergy’s oldest nuclear plants — Vermont Yankee, the Pilgrim plant in Plymouth, Mass., and the James A. Fitzpatrick plant in Scriba, N.Y. — hinges upon financial concerns.

Although the NRC’s Petition Review Board rejected CAN’s request for an immediate shutdown of the reactors, it agreed last week to accept CAN’s petition for the next step in the review process.

In an Aug. 7 letter, NRC Office of Nuclear Reactor Regulation Eric Leeds wrote to CAN that the agency “issued a Request for Additional Information regarding its 10 CFR 50.33 financial qualification review to Vermont Yankee; the licensee’s response is currently under NRC review. If further NRC inquiry determines that Entergy’s financial qualifications pose an immediate danger to the public health and safety and the environment, the NRC will take appropriate action to address the concern.”

“We are aware of the petition, don’t believe it has merit, and [it] will not distract us from our focus on safely and reliably operating our plants,” Entergy communications manager James Sinclair wrote in a prepared statement sent to Vermont media.

NRC regulations require nuclear corporations to be “financially qualified” to operate and maintain nuclear reactors safely. Katz said the NRC will now investigate whether Entergy is in violation of these regulations and will decide whether to grant the petitioners’ request to shut down the reactors to prevent economic strain from compromising nuclear safety.

The petition was filed on March 18 by Citizens Awareness Network (Massachusetts, Vermont, and New York), Alliance for a Green Economy (New York), Pilgrim Watch (Massachusetts), and Vermont Citizens Action Network (Vermont).

“It’s rare that the NRC accepts petitions from citizens groups,” Katz said after the rally. “But Entergy is vulnerable, and the people and the (Vermont) Legislature need to know how vulnerable Entergy is right now.”

How vulnerable? Katz said that based on the analyses by the financial services company UBS, it will incur more than $125 million in losses at Vermont Yankee over the next three years.

Should VY run at full capacity with no unscheduled shutdowns and no major repairs over the next three years, Katz said it will still lose that much money. She contends that decisions such as postponing the replacement of a cracked steam condenser are being based more on financial, rather than safety, concerns.

And Katz said that required retrofits to VY that have become necessary after the Fukushima nuclear disaster in Japan in 2011 will make the plant even less profitable for Entergy.

The costs of Entergy doing business has come to the forefront of conversation since Entergy announced last month it would lay off 30 employees at Vermont Yankee. The cuts are part of an organization-wide reorganization strategy. The company has announced lower earnings for the past two quarters.

Mark Cooper, a senior fellow at Vermont Law School, released a report in July on economic pressures for aging nuclear plants. The report listed Vermont Yankee as one of the nation’s plants likely to close before its current operating license expires.

Cooper also cited reports from financial analysts with UBS estimating that NRC-mandated Fukushima-related facility upgrades could cost between $15 million and $40 million per facility.

Moody’s announced last fall that concerns over the reliability of older nuclear plants were being “masked” by the low price of natural gas and reduced demand for electricity.

VY, Pilgrim, and Fitzpatrick are especially vulnerable as they are all “merchant plants,” Katz said, meaning they sell their power on the open market and do not have long-term contracts or ownership by electric distribution companies. With reduced power demand and low natural gas prices, many electric utilities see nuclear power as too expensive.

“Entergy bet on the wrong horse,” said Katz. “They invested heavily in nuclear and coal, and neither of those fuels can compete with natural gas right now. The nuclear companies are just trying to save their own skins.”

Entergy is waiting for the Vermont Public Service Board to issue a Certificate of Public Good that would allow Vermont Yankee to continue to operate legally. It is also waiting for the resolution of a lawsuit in federal court against the state of Vermont regarding the state’s ability to have a say in the continued operation of the plant.

Vermont Yankee’s original 40-year operating license expired last year. The NRC granted a 20-year extension in 2011.

Saturday’s protest was organized by the SAGE Alliance, a coalition of antinuclear groups, to call attention to Vermont Yankee’s continued discharge of warm water into the Connecticut River. Opponents of the plant contend that the temperature of the river has risen, subsequently drastically reducing the shad population.

Katz said the practice is mainly being done by Entergy as a money-saving measure. She said using the cooling towers, which were designed to reduce the temperature of the river water used to cool the reactor before it’s discharged back into the river, is costly for Entergy.

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Originally published in The Commons issue #216 (Wednesday, August 14, 2013).

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