State reaches deal with Yankee
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By DANIEL BARLOW Vermont Press Bureau - Published: October 9, 2009
MONTPELIER — The Vermont Department of Public Service reached a deal Thursday with the owners of the Vermont Yankee nuclear power plant to spin off the facility to a new company called Enexus.
The eight-page memorandum of understanding between the Public Service Department, Entergy Vermont Nuclear and Enexus comes at a time when regulators in Vermont and New York are considering the corporate spin-off deal.
State officials who negotiated the deal said the agreement provides key financial guarantees that the new company, which would also operate five other Entergy nuclear power plants, can safely and effectively operate Vermont Yankee.
Thursday's announcement of a deal, which was filed midafternoon with the Vermont Public Service Board, is a change in position for the department, which previously recommended the deal not be approved.
Department Commissioner David O'Brien said new guarantees in the deal, including Enexus' access to $100 million in revolving credit from Entergy, made the deal more attractive.
"This represents taking a step forward with the assurances to Vermont," O'Brien said during an interview at the Department's Montpelier offices. "It is not hypothetical … it is real. These are real assurances backed by real money."
The agreement, which is expected to make the deal more palatable to the Public Service Board, comes at a time when the future of Vermont Yankee is in doubt. The plant's license to operate expires in 2012 and lawmakers and state regulators will soon consider Entergy's petition to extend the license for an additional 20 years.
The Democratic leaders of the Vermont Legislature have said if there is no power-purchase agreement with the state utilities — a deal that would lay out the price at which Vermont Yankee sells power to the state — by Nov. 1, then they would not vote on relicensing in the 2010 legislative session.
Public Service Department officials said Thursday their understanding is that those talks between Entergy and the utilities "have stalled." In the past, Entergy has repeatedly stated a deal was on its way, only for that deadline to pass.
Jay Thayer, vice president of Entergy Vermont Yankee, disagreed that talks are stalled, saying Thursday the company is back at the table with the utilities. He said it is not fair to put deadlines on such complicated negotiations.
"We've taken a lot of input from the utilities and there have been several offers on the table," Thayer said.
Thayer said the agreement with the Public Service Department is "another step in the process" to spin off Vermont Yankee and five other nuclear facilities, explaining that the mission and focus of the parent company has changed over the years.
"The Department had some very specific concerns they wanted addressed and we listened," Thayer said, adding that he hopes the New York Public Service Commission, the regulators in that state, would approve the spin-off deal late this year.
Senate President Pro Tem Peter Shumlin, D-Windham, who lives in the same county as Vermont Yankee, said "no one has proven to me that this scheme to spin off the plant to a highly-leveraged Wall Street company is in the best interests of Vermonters."
"Time and time again this administration has shown that it is more interested in codling the shareholders of Entergy Louisiana than they are in protecting the wallets of Vermonters," he said.
Among the new provisions in the deal between the state of Vermont, Entergy and Enexus are:
Access to the $100 million for Enexus from Entergy, funding that is not now available to Entergy Vermont Yankee.
Ability to use a $60 million line of credit, replacing a similar amount guaranteed by the parent company, which can also now be used to decommission the facility.
Requiring Enexus to take out a $50 million line of credit to operate the facility if its credit rating falls further than one notch below investment grade.
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