Entergy Faces Obstacles To Yankee Sale
11/08/10 7:34AM By John Dillon
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(Host) The Entergy Corporation faces political and financial obstacles as it tries to sell the Vermont Yankee nuclear plant.
Yankee's license expires in 17 months. And it's likely that any buyer would make its purchase contingent on the plant winning a new 20-year license.
As VPR's John Dillon reports, that may be a tall order.
(Dillon) Say you're buying a used car. But the state inspection sticker expires next month. So you offer to buy it only if it passes inspection.
Michael Dworkin is a former chairman of the Vermont Public Service Board who now heads the Institute for Energy and the Environment at Vermont Law School. He says Entergy is like the seller of that used car.
(Dworkin) "I think it's extremely unlikely that anybody would buy a nuclear plant whose license might not be extended without the purchase contingent on extension."
(Dillon) Last winter, Entergy failed to get state approval for the license extension. Lawmakers were unhappy about leaks of radioactive tritium and false statements by top company officials.
Entergy clearly hopes the plant will have value for a new owner who may have a better chance at the Statehouse. But Dworkin cautions that a new owner faces an uphill battle in the Legislature and before the Public Service Board. He says a new power deal between the plant and the state's utilities might help.
(Dworkin) "I can envision a future that has Yankee, but only if it's not just a good deal, but a very, very good deal. And I haven't seen anything that looked like that. And my sense is that Entergy by spinning out the clock ‘til the last round of the game left itself without the time necessary to put together the pieces for a new player."
(Dillon) Entergy says it expects interest from several companies. NextEra Energy Resources owns the Seabrook plant in New Hampshire. The country's largest nuclear operator is Illinois-based Exelon Corporation. Arnie Gundersen, a nuclear engineer who serves on a state oversight panel, thinks Exelon is the most likely interested buyer.
(Gundersen) "The most important piece of the equation is that they're largest fleet. And they also have the most reactors that are similar to Vermont Yankee, basically old boiling water reactors that have also leaked tritium, I might add. So they have experience with this type of reactor."
(Dillon) Entergy paid $180 million for the plant in 2002. The company isn't identifying any prospective buyers. But Mark Cooper, a researcher who conducts economic analysis of energy projects, says the financial outlook is bleak right now.
(Cooper) "With Vermont Yankee you're facing some serious expenditure problems to deal with, their age, the leaks and things like that. The economics of selling that plant are simply not very good."
(Dillon) Cooper is a senior fellow at Vermont Law School's Institute for Energy and the Environment. He says the New England electricity market is down as well. That means other sources of electricity are competitive with Yankee.
(Cooper) "If this was a good investment, they wouldn't be talking about selling it. So it must be a tough investment, and they hope to get someone else who can see more value in it. That's tough to see in the New England market."
(Dillon) But Entergy says the plant is a reliable generator which has a record of running for more than 500 days without shutdown.
For VPR News, I'm John Dillon in Montpelier.