Utilities Side with Yankee on Decommissioning Fund

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(Host) Vermont’s two largest electric utilities want state regulators to remove a condition they imposed earlier this month on the sale of Vermont Yankee. The two utilities are major owners of the Vermont nuclear plant. They hope to sell the reactor next month to Entergy Nuclear of Jackson, Mississippi. But the companies are worried that a recent regulatory order could kill the deal.

VPR’s John Dillon has more.

(Dillon) Central Vermont Public Service Corporation and Green Mountain Power want to sell the 30-year old reactor by the end of the month. The deal is worth $180 million and was the subject of months of hearings before the Public Service Board, the three-person panel that oversees the state’s utilities. The sale was set to close at the end of the month.

The Board said the sale would be good for ratepayers. But the regulators told Entergy it must return to ratepayers any money that’s left over from a fund that’s set aside to dismantle the plant. Entergy’s challenged that part of the order. The Vermont utilities have now sided with Entergy in its motion.

CVPS spokesman Steve Costello says the deal may be in trouble if the Board’s doesn’t change its mind:

(Costello) “We’re very concerned about the condition placed on Entergy as we’re concerned that it could result in the loss of a very valuable deal. We concur with the Board in its analysis where they made repeated references throughout the order that the proposed sale is in the best interests of the state. And we are concerned about the potential loss of that agreement and those benefits to our customers.”

(Dillon) There’s $300 million in the decommissioning fund now. It’s expected to grow substantially over the next decade. Entergy wants to keep half of anything that remains once the plant is decommissioned.

Critics have said that would amount to a multi-million dollar windfall for Entergy. The Public Service Board said that it doesn’t make sense for there to be a profit motive in the decommissioning plan. The Board was concerned that if Entergy got to keep half of the fund, it might try to cut costs and compromise safety. But Entergy argues that there’s enough federal regulation on decommissioning to prevent any safety shortcuts.

Entergy could walk away from the deal if it doesn’t like the Board’s order. According to spokeswoman Jill Smith, the company won’t confront that issue until the Board rules on its request to change its order:

(Smith) “We’re considering all the options involved in the situation. There’s no guarantee either way. And that’s not a question we’re even prepared to answer. We’re not at that point yet.”

(Dillon) The company also raised a new legal argument. It told the Public Service Board that Vermont doesn’t have the authority to control the decommissioning fund. The company says the state regulation is pre-empted by federal law.

Jim Dumont represents an anti-nuclear group in the Yankee case. He says that Entergy promised that it wouldn’t raise the federal preemption issue when it tries to renew the plant’s operating license in 2012:

(Dumont) “If they want to make preemption arguments, that’s contrary to what they assured the Board they would do. But I think that’s besides the point, the Board looked at all the factors and said, ‘this is what we’re going to do: If you want the plant, you’ve got to take the good and the bad with it.’ Entergy only wants the good side they don’t want the down side. And I think if the Board stands firm, the public will be protected.”

(Dillon) The Public Service Board hearing on the Entergy case is set for next Tuesday.

For Vermont Public Radio, I’m John Dillon.

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