State Senate leader questions Entergy spinoff of Vermont Yankee nuclear plant

Vermont Senate chief questions Entergy spinoff

MONTPELIER, Vt. — The Vermont Yankee nuclear plant’s future as a provider of a third of the state’s electricity could be in jeopardy if the plant’s owner spins it off to a newly created company, the head of the state Senate said Wednesday.

The comments from Senate President Pro Tem Peter Shumlin, a Democrat who represents Vermont Yankee’s home county of Windham, came as lawmakers prepare to debate early next year whether the aging reactor should get a 20-year extension on a license currently set to expire in 2012.

Plant owner Entergy Nuclear’s plan to spin off Vermont Yankee and five other reactors into a newly created company could make it a “tough sell” to get the Legislature — the only one in the country that has given itself the power to vote up or down on a nuclear license extension — to approve the continuance.

“I just got to tell you that it’s my judgment, based upon what I’ve heard about this proposed spinoff, that should it go ahead, it makes the possibility of this legislative chamber voting to continue to operate more difficult,” Shumlin said.

Shumlin criticized the Department of Public Service for reversing itself and deciding to support Entergy’s plan to create a new company that would own Vermont Yankee, three reactors in New York and one each in Massachusetts and Michigan.

Shumlin said Entergy currently owns the reactors debt free — Vermont Yankee, Pilgrim in Massachusetts, two at the Indian Point plant in New York’s Hudson River Valley, the Fitzpatrick plant in Oswego, N.Y., and the Palisades plant in Michigan.

By contrast, he said, the arrangement under a newly created company, called Enexus, would leave that firm owing $3.5 billion in junk bond debt and up to an additional $1.2 billion in short-term operating debt.

Entergy spokesman Robert Williams did not dispute the numbers Shumlin offered. But he said the spinoff deal had been strengthened since the Department of Public Service expressed skepticism about it in July.

“Under Enexus, we’ll be able to remain as part of a fleet of nuclear plants,” Williams said. “And there’s clear value in doing that. What’s more, the plant will have more financial support readily available during our operations than we have presently and also more financial support available during decommissioning.”

Stephen Wark, the department’s deputy commissioner, said the agency decided to support the spinoff after Entergy agreed to provide a $100 million revolving loan fund dedicated to Vermont Yankee for any needed repairs.

The Public Service Board makes the final decision on the deal. It is expected to rule in November. The spinoff proposal also is pending before New York regulators, where a decision is expected this winter.

Shumlin said the Enexus deal would mean Vermont would be trading a financially sound business partner — New Orleans-based Entergy — for a much shakier one. He called for legislative hearings on the deal, but acknowledged that the Legislature has little direct say over whether the transaction should go ahead.

Several other questions are swirling around Vermont Yankee as lawmakers prepare to debate its future.

One concerns the plant’s decommissioning fund and whether it will be adequate to remove Vermont Yankee’s radioactive shell and waste when the plant stops operating. The fund currently has less than half the estimated cost of nearly $1 billion to do the job.

Gov. Jim Douglas twice has vetoed legislation that would have required Entergy to shore up the decommissioning fund.

Also pending is the question of cost of electricity from Vermont Yankee post-2012, if the license extension is approved. Shumlin reiterated that lawmakers need an answer to that question before they vote on the request.

Wark said the Public Service Board could better provide those details. He said he was glad Shumlin was calling for hearings before the 2010 legislative session gets under way.

“It should leave them plenty of time to take up this question (on the plant’s relicensing),” Wark said. “The clock is ticking and Vermonters deserve an answer.”