Vermont Yankee owners won’t offer state’s utilities new power deal

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(Host) The owners of Vermont Yankee have decided not to offer Vermont utilities a new deal on power.

Yankee faced a year-end deadline to come up with a new power contract. But the owners of the nuclear plant said the deal that’s already in place is good enough for now.

VPR’s John Dillon reports:

(Dillon) Entergy Vermont Yankee wants permission to run the plant for another 20 years, after its current license expires in 2012.

How much Entergy will charge for that electricity is important for two reasons. First, it will have a major impact on what many Vermonters pay for power. And second, the cost equation will help regulators and the Vermont legislature decide whether Yankee should keep operating.

So the Vermont Public Service Board wanted Entergy to negotiate a new power contract by the end of this month.

But Yankee failed to deliver a new deal. Company spokesman Rob Williams says the current contract – which calls for the company to share potential profits with two Vermont utilities – is the best it can offer.

(Williams) "We’re saying that that benefit that will go to Vermont ratepayers, that is sufficient to approve our continued operation."

(Dillon) The revenue sharing deal was struck in 2002, when Vermont Yankee was sold to Entergy. The deal says that if power sold on the open market is above a certain price, then Yankee will share the profits with two Vermont utilities, Central Vermont Public Service and Green Mountain Power. The provision only applies if the plant is relicensed.

(Williams) “That revenue sharing, and the benefits of in-state power source that we represent, that combined represents nearly $1 billion in value to ratepayers in Vermont over the license renewal term between 2012 and 2032. That’s about $4,000 per household.”

(Dillon) But James Moore of the Vermont Public Interest Research Group isn’t buying that number.

(Moore) “There’s nothing backing up Entergy’s claim of $4,000 per ratepayer. The fact is the revenue sharing agreement is based on a dozen different variables, including what the market price does in the future. There’s a real question of whether or not Vermont utilities are even legally entitled to the entirety of the revenue sharing agreement. And the portion that they are entitled to, there’s a legal question as to whether Vermont ratepayers will ever see a dime of that money.”

(Dillon) Vermont utilities were also hoping to see a better offer from Vermont Yankee.
Steve Costello is with Central Vermont Public Service.

(Costello) "We’re disappointed. We think that for the Legislature and the Public Service Board to find that the continued operation of the plant is in the state’s best interest we need more value. And certainly, the existing agreement – which was negotiated several years ago – has some potential for tremendous value. But we think they need to do more than that to gain the approval of the Legislature and the Public Service Board."

(Dillon) But it’s not clear if a new deal will be offered. Entergy Vice President Jay Thayer told the Public Service Board in a letter that it’s – quote – "not necessary or reasonable" to require a new power contract in addition to the revenue sharing agreement.

And the company’s business strategy seems to be based in part on charging more for electricity. Yankee power is now sold to Vermont at prices that are below market. But in documents recently filed with the Securities and Exchange Commission, the company said it expects to benefit as the current contracts expire and the company can begin charging higher rates.

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

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