Douglas vetoes decommissioning fund
By LOUIS PORTER Vermont Press Bureau | May 08,2008
MONTPELIER — Gov. James Douglas rejected a bill Wednesday that would have required the owners of Vermont Yankee nuclear plant put up money or guarantees to ensure there would be enough money to dismantle the plant when it stops operating.
Under the bill, S.373, enough money or other financial guarantees would have to be put in a trust fund for decommissioning before the plant could be included in a corporate restructuring. Supporters of the bill worry that the proposed restructuring will mean the cost of decommissioning the plant will not be paid by Entergy, the company that now owns the Vernon facility.
There is about $425 million in the decommissioning fund and it would cost nearly $900 million to dismantle the plant, according to the administration.
Entergy officials have said that if the fund does not grow fast enough to cover the cost by the time the site stops making power — perhaps as soon as 2012 when the current operating license expires — they will mothball the plant until the fund catches up to the cost. There is a federal 60-year limit on that "Safestor" procedure.
Douglas and business leaders who opposed the bill — including the Vermont Chamber of Commerce, utilities and IBM — said forcing Entergy to put financial guarantees up front would cost the company more.
That, in turn, could mean the owners of the plant could demand more money for the power from Vermont Yankee — which supplies a third of Vermont's electricity — if the plant gains a new operating license.
"It is important for Vermont families and small businesses," Douglas said. Forcing the company to give financial guarantees that it will fill out the decommissioning fund will not raise rates before 2012 — there are signed contracts between now and then. But it would if the plant was given another operating license.
"It is naïve to think that an extra obligation an operator will incur will not be reflected in that if it goes forward," Douglas said. "We have got a clean, reliable, emission free source of electricity. We should embrace it as long as it is safe and we are satisfied it can be reliable in the future."
The rating agency Standard & Poors said in April that the bill, if successful, would not damage Entergy's bond rating.
Rep. Tony Klein, D-East Montpelier, a lead supporter of the bill said it included nothing that would have changed power rates. The Legislature — which through a quirk in Vermont law has a hand in re-licensing — and state regulators will make sure a new license will include a cost of power that will economically benefit the residents of the state.
"I believe they would make sure it would be in Vermont's economic benefit for it to go forward," Klein said. "It is this governor and this administration protecting corporate and business interests with no regard for future generations of Vermonters who may very well be on the hook for dismantling this plant eventually," Klein said.
But Rob Williams, a spokesman for Entergy, agreed with Douglas.
"Today's action by the governor was in the best interests of Vermonters. Decommissioning costs are the responsibility of Vermont Yankee, not Vermont utilities or the consumers they serve," Williams said. "That will not change with the corporate restructuring."
Associated Industries of Vermont and other business groups opposed the bill. "The governor and the bipartisan group of legislators who opposed S.373 chose to stand up for Vermont's ratepayers and the economic and energy future of our state," said William Driscoll, vice president of Associated Industries of Vermont.
Douglas also objected to the bill because the Public Service Board is now examining the proposed corporate restructuring.
"It is the PSB that hears all the evidence, sifts through the technical data and the law and makes a decision on generating facilities," Douglas said. "There are a lot of people in other parts of the country who would be thrilled at the rates Vermonters are paying."
Douglas said he is not prepared to call for building another nuclear plant in Vermont, despite the benefits of having Vermont Yankee.
"Let's hope and pray the Public Service Board has the good judgment to require Entergy to keep its promise to Vermonters before they spin us off to a debt-ridden Wall Street dream," said Senate President Pro Tem Peter Shumlin, D-Windham. "This may well be remembered as one of the worst decisions Jim Douglas made in his six years of governor. He just voted to protect the deep pockets of a Louisiana company and he threw overboard the Vermonters who elected him."
Douglas also took a shot at lawmakers for deciding not to hold a veto session on the bill.
"It seems surprising that something many of them feel so passionately about they were ready to abandon," he said.
But, as the governor acknowledged, the administration has criticized lawmakers in the past for incurring the cost of special veto sessions.
"It was a waste of time and money and so would another one be," Douglas said.
Shumlin said that criticism shows a lack of consistency.
"If we have veto sessions he says they are a waste of time and if we don't he says we are wasting our time," Shumlin said.