Entergy vows to sue over cleanup fund

Thursday, April 16
BRATTLEBORO -- No way, we won't pay.
In fact, if you try to force us through legislation, said a top executive from Entergy Nuclear Vermont Yankee, we will file a lawsuit.
The Vermont Legislature has been debating a bill that would require Entergy to fully fund Yankee's decommissioning trust prior to receive approval from the state for continued operation past 2012.
"I don't want it to sound like a threat because it's not a threat, but Vermont Yankee does not make the kind of revenue that would allow this kind of payment," Jay Thayer, Yankee's site vice president, told members of the Senate Finance Committee Tuesday.
The decommissioning bill, which was recently approved by Vermont's House of Representatives, requires that Entergy pay $229 million into the cleanup fund between now and 2012.
Yankee is scheduled to shut down in 2012, but Entergy has applied to the Nuclear Regulatory Commission to extend its license to 2032.
In addition to NRC approval, Entergy also must receive a certificate of public good from the Public Service Board and approval from the state Legislature.
Supporters of the legislation are concerned about recent fluctuations in the stock market and how they have affected the fund, which is invested by a number of Wall Street Firms in a variety stocks.
The fund was put at $359 million by Entergy representatives yesterday, which Thayer said is enough to guarantee the site will be cleaned up adequately, whether Yankee closes in 2012 or 2032. If Yankee does close in 2012 however, the plant would be mothballed, or put into SAFSTOR as the NRC calls it, to allow the fund to grow to the estimated $1 billion necessary to decommission it.
"If the plant closes in 2012, (Yankee) would remain in SAFSTOR for a period of time most likely, in a 15- to 20-year time frame," said Thayer.
Thayer said if Entergy is forced to sue the state in court, it could mean a shutdown of the plant before 2012. He also told the committee that Yankee simply does not make enough money to make contributions to the fund.
A spokeswoman for Gov. James Douglas said the governor has not yet decided how he will respond if the bill makes it to his desk.
"This bill is similar to the others that Governor Douglas has vetoed," said his spokeswoman Dennise Casey. "The Governor has made his concerns about the bill known but has not said how he will act on this legislation as it is still in the works and we do not yet know what the final bill will look like."
Casey said among Douglas' concerns with the legislation is that it might result in higher electric rates for already struggling families and businesses.
"And the bill breaks an agreement made between the previous administration and Vermont Yankee and sends a message to other companies that a deal is not really a deal if the Legislature changes its mind," said Casey.
When Entergy bought the plant in 2002 from a consortium of power utilities, it was not required to fund the trust, which was built up over the years by a surcharge on electric bills.
The surcharge is no longer applied to ratepayers.
A year ago March, the trust fund had accumulated $427 million, but sank to $347 million after the crash on Wall Street.
At the end of February, the decommissioning fund was reported to be at $347 million and by the end of March had grown by $12 million, according to the Vermont Department of Public Service.
Entergy has maintained that despite the economic downturn, the fund will eventually be able to cover the costs of cleanup.
The NRC has said it has policies in place that allow it to go after nuclear power plant operators if decommissioning funds drop below levels necessary, whether or not the plant is spun off into a subsidiary.
A representative of the anti-nuclear group Citizen Awareness Group said the tactics being employed by Entergy executives are nothing more than bullying, threats and blackmail.
"It's a sign of desperation," said Bob Stannard.
Entergy's biggest fear, he said is not the cost to fully fund the trust, but is that the legislation could cause a cascading effect around the country, encouraging other states to do the same.
One reason for the bill in the Legislature is that state lawmakers and residents are concerned about Entergy's plans to possibly spin off Vermont Yankee and five other reactors into a separate holding company -- Enexus -- independent of Entergy, which would raise about $4.5 billion for the parent company to retire debt and reward shareholders.
The spin-off would leave Yankee and the other plants with no assets besides a letter of guarantee and profits from the power they produce. That plan was recently put on hold due to the uncertainty on Wall Street.
Sen. Ann Cummings, D-Washington, asked Thayer if he could present an organizational chart to the Legislature to show where Enexus would be in relation to Entergy, but Thayer told the committee he did not have such a chart ready.
"He told the committee it was really complicated and that they haven't been able to get it done," said Stannard, who listened in on the committee meeting. "If this corporate giant can't pull together an organizational chart of its structure, how can we trust it running a nuclear power plant?"
One local legislator said Entergy's lawsuit would not affect the Legislature's deliberations.
"We don't base our decisions on whether or not there will be lawsuits," said Sarah Edwards, P-Brattleboro, a member of the Vermont State Nuclear Advisory Panel. "I am more concerned that this facility and its infrastructure could sit as is, unused, unproductive and contaminated for 60 years."
Sarah Hofmann, public advocate for the Department of Public Service told the Legislature that forcing Entergy to fund the trust could be considered a breach of a memorandum of understanding between Entergy and the Public Service Board. Such a breach could mean a loss of a power purchase agreement negotiated between the state and Entergy, which would result in increased costs of $355 million from 2009 to 2012 for state ratepayers, she said.
A revenue sharing agreement between the state and Entergy would also be in jeopardy, she said, and the state might also be responsible for "hefty legal fees" if it ends up in court.
Though DPS is concerned about the status of the decommissioning fund, said Hofmann, the department feels the legislation would cause more problems than it would solve.
"No developer will believe that the Public Service Board (MOU) is worth the paper it is printed upon, and that is bad for Vermont's energy future in all respects and directly bleeds over into the business climate of Vermont," she said.
"The legislation would put us as owners and operators of this plant in an untenable position," stated Rob Williams, spokesman for Yankee, in an e-mail to the media. "As Jay testified yesterday, Vermont Yankee does not make the type of revenue that would allow it to make such payments. If it became law, we would consider it our obligation to our employees and the Vermont electric consumers to investigate all legal remedies regarding the fairness of such legislation."
Operating costs and revenues are considered proprietary information and are not made available to the public.
Bob Audette can be reached at [email protected], or 802-254-2311, ext. 273.