State officially says Vermont Yankee can stay open through end of year

Three months after Entergy (NYSE:ETR) and the State of Vermont announced agreement to retire the Vermont Yankee nuclear plant, the state has formally made good on its commitment to let the plant run through Dec. 31 of this year.

In December 2013 the state had agreed to support Entergy’s Certificate of Public Good (CPG) and allow the plant to run through the end of 2014. The state also agreed to settle all outstanding legal claims.

On March 28, the Vermont Public Service Board formally agreed to issue that certificate to Entergy Nuclear Vermont Yankee (ENVY). The 600-MW plant is located in Vernon, Vt., and Vermont has been seeking to shutter the plant since prior to its last certificate expiring in the first quarter of 2012.

The Nuclear Regulatory Commission (NRC) had issued a 20-year license extension allowing the plant to stay open until 2032. Entergy had also prevailed in federal court by winning orders basically saying that NRC, not the state, has final say over nuclear safety issues.

In the fourth quarter of 2013, Entergy said it had concluded that it didn’t make economic sense to continue to run its smallest nuclear plant long-term.

The Vermont Public Service Board order stipulates that Entergy will continue to own and control the plant site after Dec. 31, 2014, “solely for the purpose of decommissioning.”

A big part of the deal includes Entergy’s agreement to promptly decommission the site.

As part of the settlement announced in December, Entergy has agreed to pay the state $10m over five years to promote economic development in Windham County. Entergy will also make various other payments, including various financial assurances for site restoration and a $5.2m contribution to a Clean Energy Development fund.

In 2002, the Board approved the sale of the plant to Entergy and issued a CPG authorizing Entergy to own and operate Vermont Yankee until March 21, 2012.

Vermont board still miffed at Entergy

Although Vermont is ending its prolonged legal battles with Entergy, the tone of the March 28 suggests all is not forgotten.

“If Entergy VY were planning to operate the VY Station for another twenty years as originally requested, its track record may well have led us to find that ownership and operation would not promote the general good,” Vermont board said.

“However, for economic reasons, Entergy VY has now decided to cease operations. The MOU [memorandum of understanding] reflects this decision. While its decision to cease operations by the end of next year does not excuse Entergy VY’s past bad conduct, the decision does alter the perspective from which we contemplate that conduct, given that we are no longer assessing the legal and regulatory implications of granting an operating license for the long term.”

In light of that, agreeing to let the plant run through the end of the year “is reasonable and in the best interests of the State,” the board said.

Any lingering issues about Vermont Yankee cooling water discharges into the Connecticut River will be addressed through the National Pollutant Discharge Emissions System permitting (NPDES) process.

“We find this to be an acceptable — if imperfect — outcome, particularly since the remaining operating period and potential to impact the fish population is of limited duration,” the board said.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.