Troubles At Yankee Affecting Industry Elsewhere

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(Host) The troubles at Vermont Yankee are beginning to affect the nuclear power industry elsewhere in the country.

Today, New York regulators raised concerns about Entergy’s record in Vermont.  

As VPR’s John Dillon reports, the questions came as New York considered Entergy’s plan to spin off some of its reactors into a new company.

(Dillon) Entergy faces a criminal investigation for misleading regulators about leaking underground pipes at Vermont Yankee.

The Vermont investigation came up during a hearing in Albany. Entergy owns three nuclear plants in New York that it wants to spin off – along with Vermont Yankee – into a new corporation.

New York utility commissioner Robert Curry said the company’s record in Vermont raises a warning flag.

(Curry) "It seems to be sort of a question of what did you know and when did you know it? And that’s a question addressed to Entergy. We should carefully look and investigate the management integrity issue as it’s playing out in Vermont and the extent to which it extends it to the management cadre that deals with the much larger New York component of the fleet. This issue really transcends the transaction being proposed and requires our full attention at this point."

(Dillon) The new spin off corporation – called Enexus – would end up about $3 billion in debt.

But John Stewart, the commission’s director of rates and services, pointed out that Vermont Yankee may not be available to contribute any revenue to the new company.

Stewart noted that the Vermont Senate last week rejected Entergy’s request to operate Yankee after its license expires in 2012.

(Stewart) "Given this fact …we would require as any recommendation that Vermont Yankee not be included in the proposed transaction."

(Dillon) The spin off still requires the approval of regulators in New York and Vermont.

Stewart said the New York commission staff recommended against the deal because it leaves the company too saddled with debt. He said that financial rating agencies would probably lower the Enexus bond rating. A low bond rating indicates higher risk to lenders — so it would cost Enexus more to borrow money.

(Stewart) "Enexus has a very risky business profile. Petitioner’s long term financial viability does not meet our target; and, in fact, puts the company in jeopardy of an unacceptable decline in its bond rating to the single B category."

(Dillon) Entergy had tried to bolster its case by promising to reduce the new company’s debt by $500 million. The New York commission staff said that move did not go far enough, and that the deal was not in the public interest.

The commission will meet again in late March.

For VPR News, I’m John Dillon in Montpelier.

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