VERNON — Entergy Corp, the Louisiana-based owner of Vermont Yankee, confirmed months-long rumors regarding its intention to sell the 38-year-old nuclear plant but remains tight-lipped regarding details.
Entergy issued a press release Thursday saying a process is under way to explore the potential sale of its 605-megawatt nuclear plant. While no decision has been made to sell the plant, the company expects interest from multiple parties.
The sale process is being conducted confidentially, and no additional details will be released at this time, said Entergy Spokesperson Michael Burns.
Whispers about a possible sale surfaced over the summer to which Entergy had declined comment.
Vermont Yankee sits at the center of regulatory and political whirlwinds.
Entergy continues to push for a federal license extension for VY despite the state legislature's January vote to deny a 20-year extension. VY's current operating license expires March 2012.
Leaking underground pipes, public feelings running the gamut from loyalty to outright hatred, 650 employees' futures, and federal and state processes only scratch the paint of a long-running issue.
The second-largest nuclear generator in the U.S., Entergy Corp, which purchased the plant from the Vermont Yankee Nuclear Corporation in 2002, reaps annual revenues of over $10 billion and employs 15,000 people.
Exploring options
“Our motivation for exploring the sale of the plant is simple – we want to do whatever is in the best interest of our stakeholders, including the approximately 650 men and women who work at the plant,” said J. Wayne Leonard, Entergy's chairman and chief executive officer in the company's press release.
Burns echoed Leonard's quotes almost verbatim.
“We're exploring every option available, and a sale is one of those option with the intent of doing what's best for all stakeholders,” said Burns.
Burns said Entergy specifically cared about VY's employees and their families and would “aggressively negotiate with buyers” to extend employment rights.
VY employs 650 people, approximately 200 of whom live in Vermont.
“We will do everything we can to ensure VY keeps operating and if sale is the best option, so be it,” he said.
He added “Vermont is about to move beyond the rhetoric of determining the economic future for 650 people” but declined to further explain his comment.
Burns highlighted VY's recent “breaker run” of 532 days without “unplanned stoppages” and VY's track record as an “extremely well run facility recognized by experts for its safety and reliability” as appealing qualities for potential owners.
“At the same time, we have been successfully resolving any issues to secure Nuclear Regulatory Commission approval for a license extension at the plant, and we have been in negotiations with the local electric companies to finalize a long-term power purchase agreement to ensure the continued output of clean and reliable energy for Vermont utilities,” Leonard said in the press release.
Burns said the NRC and the Vermont Public Service Board have two separate paths for licensing and a press interview was not the forum to discuss “which takes precedence.”
Transfers happen
In an interview with Reuters, Citigroup Energy Analyst Brian Chin pointed to nuclear operators like Exelon Corp, NextEra Energy Inc. and Constellation Energy Group Inc. as likely bidders.
When The Commons contacted Chin via phone, he declined comment, saying he knew what was “going on with the situation” and that the process is confidential.
“Over the years there has been dozens of license transfers,” said Neil Sheehan, NRC public relations officer.
Seabrook Station in New Hampshire and Millstone Power Station in Connecticut have changed ownership in the last decade, said Sheehan.
He said the NRC's responsibility in the process is to ensure potential owners are fit to operate a nuclear plant safely.
Potential buyers must pass muster with the NRC before the commission would grant a license transfer. According to Sheehan, the transfer review takes between six and nine months depending on the complexity of the transfer.
Broadly speaking, the NRC considers a potential owner's financial and technical feasibility and if the proposed buyer is a U.S. or international entity. The NRC prohibits foreign control of nuclear plants for safety reasons, said Sheehan.
Companies based outside the U.S. must have a U.S. subsidiary to oversee the daily operations. French company Électricité de France (The EDF Group), for example, owns 49.9 percent of Constellation Energy Group's plants, but Constellation controls daily plant operations.
The NRC vets the potential buyer's finances, ensuring it has “the financial wherewithal to safely operate the plant,” including sufficient decommissioning funds, Sheehan said.
The owner-to-be would also need to demonstrate a “proven track record” of safely operating nuclear plants.
Plans to retain employees has an impact on the review as well, Sheehan added.
Sheehan said the NRC prefers that employees familiar with the plant remain with the plant, though upper management often changes post-purchase.
Entergy maintained VY's workforce after it bought the plant from Vermont Yankee Nuclear Power Corp, said Sheehan.
License transfers are considered a “major licensing action” and therefore open to the public. Organizations or individuals able to demonstrate a stake in the issue can file hearing requests, said Sheehan.
How could a potential buyer finalize purchase of the plant before VY's license expires in March 2012? Sheehan said that Entergy could detail its own timeline for the purchase.
“If it comes down to the current license is due to expire and there's a [transfer] review under consideration [with the NRC], then the plant can continue to operate,” said Sheehan.
Sheehan didn't think attempting to sell the plant can help Entergy sidestep the Vermont Senate's February vote to prohibit the state Public Service Board from issuing VY a Certificate of Public Good to operate the plant for another 20 years. He said selling to a new owner does not reset the clock or change the NRC or Vermont's review deadlines.
In a nutshell, Sheehan said, Vermont has its separate review process and the NRC would “not interject.”
Entergy has claimed the legislature's vote overstepped the state's authority and only the NRC can decide the relicensing issue.
Hold on
“It is critically important to remember that changing the owner does not change the dismal facts about the plant,” said State Representative Sara Edwards (P-Brattleboro).
According to Edwards, NRC Chairman Gregory B. Jaczko stated at his most recent visit to Brattleboro that he did not see the NRC preempting Vermont and not likely the NRC would interfere in the state's relicensing process.
“[The plant] is old and it is leaky and it would not pass the design test today. There's only so much repair and replacement you can do,” added Edwards, a member of the Vermont State Nuclear Advisory Panel.
Pointing out Entergy has marked April 2011 as its “drop-dead” date for settling the licensing issue, Edwards said five months is a very short timeframe to sell the troubled plant in the current regulatory environment.
“It's of paramount importance to take care of the 200 Vermont workers. This [issue] is not a piece of cake,” she said.
She said the area could expect a transition period and economic impact if VY closes in 2012, but that Windham County would ultimately pull through.