Entergy fails to make quarterly payment to state

$625,000 was due April 1; VY owner threatens to hold funds until state issue permit

The Vermont Department of Public Service (DPS) is not convinced that the company that owns the Vermont Yankee nuclear power station will live up to its obligations.

The plant, which is owned by Entergy Corp., is currently operating on an expired state permit while the Vermont Public Service Board (PSB) considers approving a new license for it.

Meanwhile both the state and Entergy have appealed a federal court decision finding a law requiring legislative approval before the plant could get a new license was unconstitutional.

The DPS, which represents ratepayers before the board, has taken the position that the plant can continue to operate under state law while the docket is ongoing, but that it must continue to keep obligations like making payments to the Clean Energy Development Fund.

On April 3, attorneys for Entergy filed a one-page letter with the board stating that it agreed with the department.

The company's statement said it “must comply with the conditions in the existing certificates of public good that the Department lists at pages 7-9 of its cross-motion.” These included payments to the fund, which subsidizes renewable energy resources.

But according to a filing by the department Monday, Entergy has not made its quarterly payment of $625,000, which was due on April 1.

Last week, a spokesman for Entergy told that a story stating the company's filing meant Entergy would continue to make payments to the fund “got it wrong.”

The department's filing states that “it is clear that Entergy is attempting to limit the concessions it made in its April 3 response.”

The department said in its filing that Entergy will likely argue that it does not need to fulfill its obligation to pay into the state fund because the memorandums of understanding that are incorporated into the company's license have expiration dates.

That argument, the DPS claims, doesn't fly. In essence, if the plant is operating on an expired license, the expiration dates on the obligations in the license don't expire either.

“Entergy cannot have it both ways,” its filing states. “While its operations expiration date is suspended, so too are all dates affecting Entergy's obligations under the CPGs (Certificate of Public Good).”

The Clean Energy Development Fund was established in 2005 by the state Legislature. Money raised through agreements with Entergy has funded the programs, which the DPS administers, bringing in about $6 million a year.

Those agreements expired March 21 along with the plant's operating license from the state. A bill pending in the Vermont Senate would replace those funds with a $6 million tax on the plant. Under that proposal, instead of all the money going to the Clean Energy Development Fund, it would be split among the CEDF, the education fund, and a fund that would help Windham County plan for the plant's closure.

In response, also Monday afternoon, Entergy fired back a letter to the board saying it would post the payments with a third-party escrow agent and only pay the money to the state fund if the board makes a ruling that it can continue to operate either temporarily or permanently under a new permit.

In its letter, Entergy said that given the uncertainty with the pending tax bill and whether state law allows the plant to continue operating with its expired license, it would not give the funds to the state immediately.

The letter states that the company would not pay money into the fund if the Legislature passed a bill that would increase the tax to replace the Clean Energy Development Fund money. Entergy attorneys said the company will provide the agreement to the department by Wednesday. It plans to put the $625,000 that was due on April 1 into an escrow account rather than give it directly to the state.

The Public Service Board has yet to rule on whether a provision in Vermont law allows the plant to legally operate during the relicensing proceeding. The plant has continued to operate, although the power it produces is sent out of state since contracts with state utilities expired March 21.

Despite approval from the Nuclear Regulatory Commission and a favorable ruling in Vermont federal district court, the plant's continued operation is still in flux given the pending cases in the Second Circuit Court of Appeals and with the Public Service Board.

Entergy is also asking for more than $4.6 million in attorney's fees for the federal court decision.

Meanwhile, the state's two largest utilities are suing Entergy for $6.6 million over 2007 and 2008 cooling water tower collapses at the plant that forced them to buy power elsewhere.

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