Vermont Yankee Offers Rates It Wants To Charge
12/18/09 5:50PM By Bob Kinzel  Download MP3
After months of delay, Vermont Yankee has released the rate that it wants to be paid for future power contracts.
The rate is 50 percent higher than the current contract and is comparable to the cost of power from Hydro Quebec. The proposed deal also includes some controversial elements.
VPR's Bob Kinzel reports.
(Kinzel) Vermont Yankee filed its proposed rates with the Public Service Board because it was unable to reach an agreement on a new contract with the state's two largest utilities.
The utilities are holding out for a better rate because the short term spot market price of electricity is low because of the recession.
Here's the deal Vermont Yankee is offering:
The power will cost 6.1 cents a kilowatt hour for the next 20 years with an annual inflation adjustment provision. Under the current contract, that cost is roughly 4 cents.
Entergy Vice President Jay Thayer says the rate also reflects several hundred million dollars in revenue sharing fees that the plant expects to receive over the course of the contract:
(Thayer) "We really want to talk about all the benefits of Vermont Yankee, the jobs, the tax revenues, the benefit to Windham County, the environmental aspects of Vermont Yankee's electricity as opposed to carbon-based sources. There are a lot of benefits to talk about here and we seemed to have gotten stuck on just a couple."
(Kinzel) Entergy wants to spin off its older northeastern nuclear plants into a new company known as Enexus. Thayer says the contract offer is based on the Public Service Board giving its approval to the spin off. If that doesn't happen, Thayer says the offer is off the table.
(Thayer) "We fully expect that transaction to go forward, both in the approvals in New York and the approvals pending in Vermont. We plan our case around being successful on those approvals and that company being stood up and taking shape and being able to back up this offer."
(Kinzel) The plant's license can't be extended beyond 2012 unless the Legislature gives its approval to the plan.
Senate President Peter Shumlin says he has strong concerns about the new rate proposal.
(Shumlin) "It requires our utilities to pay more than 50 percent more than what they're currently paying for power. That's a tremendous burden for all Vermonters in their pocketbooks. Second, it does nothing to address the shortfall in the decommissioning fund. And I will not allow Vermonters to be stuck with any part of the decommissioning bill."
(Kinzel) And Shumlin says linking the contract to the Enexus corporate spin off deal is a big mistake.
(Shumlin) "This offer is contingent upon us partnering with Enexus, a highly leveraged company that's going to have $4.7 billion worth of debt in six old nuclear power plants as assets. I don't believe you'll find Republicans or Democrats in the Legislature or Progressives, any stripe, who are going to want to partner with Enexus and give up Entergy a well financed company."
(Kinzel) The Legislature is expected to hold hearings on the proposed Vermont Yankee rate contract in January.
For VPR News I'm Bob Kinzel in Montpelier