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By Susan Smallheer STAFF WRITER - Published: November 27, 2009

MONTPELIER – The Public Service Board has dozens more questions for Entergy Corp. and the Department of Public Service about the proposed spin-off of the Vermont Yankee nuclear plant and five other reactors into a new company.

The board has been reviewing the proposed creation of Enexus for close to two years, but the worldwide financial crisis, which started about a year ago, has repeatedly delayed the project.

In October, Entergy announced changes it had made in the financial underpinnings of the deal, in order to win the support of Vermont regulators, as well as regulators in New York state, where two other Entergy-owned reactors are located.

"Full and candid responses to these information requests will assist the Board in fulfilling its independent statutory responsibilities under Title 30," the board wrote to Entergy on Nov. 20. The board said it also needs the additional information to determine whether a new round of hearings needs to be held.

On Oct. 8, Entergy filed with the Public Service Board a memorandum of understanding between the company and the Department of Public Service. Proposed changes in that document essentially won the department's support of the spin-off.

The new agreement has attracted the attention of the Vermont Legislature, and some legislative committees plan on holding hearings on the proposed changes.

The board noted that since technical hearings in the Enexus case ended in July 2008, "there have been substantial changes in the economic and financial environment, as well as in the market for independent power."

"In addition, the petitioners have made significant changes to the proposed transactions since the technical hearing," the Nov. 20 memorandum stated.

The board also had a specific request of the department: "Please also address concerns of the public about the advisability of transferring an aging Vermont nuclear plant to a company with a 'junk bond' credit rating that seeks a 20-year extension of the CPG (certificate of public good)," the board asked the department, which acts as the public advocate before the board.

Sarah Hofmann, director of public advocacy for the Department of Public Service, said Wednesday that the board would have its answers by next week.

Alex Schott, spokesman for Entergy in New Orleans, said that the company would comply with the requests.

"We continue to work through the process in Vermont and are responding to information requests. At this point, we cannot predict the timing of a Vermont Public Service Board decision," Schott wrote in an e-mail Wednesday.

susan.smallheer@rutlandherald.com








READER COMMENTS


Often in a spin off like this there's an immediate profit to the corporation spinning part of itself off. The debt saddled on the spun off entity is profit in their pocket. Has anyone done the financial projection to show what the expected bonus, plus increased value of personal stock holdings, and value of stock options, that could result from this spin off going through would add to the personal fortune of Entergy's CEO and the members of the Board of Directors? Will this take some very rich men and make them fabulously rich men? If so, we should allow, even encourage it. This is the American way, is it not?

We are not being taken for suckers. Their glory reflects on us. If we do not allow the wealthiest to proceed on matters like this, they will require welfare, like their brothers and sisters on Wall Street, and cost us even more.

But seriously, why does none of our newspaper reporting explore the consequences for the personal fortunes of the men trying to pull this one over on us? Shouldn't it be the very center of the story? No doubt it is for them.
-- Posted by Whit Blauvelt on Sun, Nov 29, 2009, 11:22 am EST

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Mr Fair Tax.

300 megawatt electric generating stations do not buy natural gas at retail residential rates. Gas is bought directly at high pressure from interstate gas transmission systems. The best access to the North American gas transmission system would be from the north. The best location for such a generating station would be in the northwestern part of the state, which is also where the greatest concentration of electric load exists.

Vermont's share of VY is under 300 megawatts. And a 300 megawatt combined cycle natural gas fired generating station is a small one.

And no, it would not be "imported" Canadian gas. There is an extensive cross border gas transmission system and while the gas might be transported through a portion of Canada, it would be US based gas.

The present wholesale cost of natural gas is around $5 per million BTU, plus transportation. It is obvious that you are not aware of present conditions in the wholesale natural gas markets. Due to new exploration and drilling techniques, particularly in shale formations, the US reserves of natural gas have expanded by 35% in the last 2 years alone. Any responsible financial paper, such as the Wall Street Journal and the Financial Times, accept that gas and oil prices are now decoupled.

The estimated gas reserves would fuel gas consumption at present usage rates for over 100 years. Combined cycle gas fired generation can achieve thermal efficiencies as high as 58%, and more if part of a cogeneration system that allows useful recovery of thermal heat.
-- Posted by Ray Makul on Fri, Nov 27, 2009, 7:16 pm EST

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Between 1999 and 2008 the national annaul average residential natural gas price more than doubled, from $6.99 per thousand cubic feet (Mcf) to $13.68 per Mcf. The national average price of natural gas is on ly part of the story though, as prices in individual states can differ greatly. These differences are often related to a market's proximity to the producing areas, the number of pipelines in the state, average consumption per residence receiving service, and the transportation charges associated with them, as well as state regulations and degrees of competition.

For example, based on 2008 data, residential consumers along the Atlantic Coast tend to pay the most, with prices ranging from $15 to more than $20 per Mcf. By contrast, states in the rest of the country benefit from either indigenous production or the presence of major trunk lines traversing the state. The availability of relatively abundant supplies results in prices between $10 and $15 per Mcf.

Vermont's natural gas prices are and will be among the highest.

As for taxi cabs, somebody call one for Ray. He's had too much to drink if he thinks "green" natural gas can replace Vermont Yankee! Check his bar napkin. Did he note on it just where that natural gas power generating plant is going to be sited and how fast it's going to be built?
-- Posted by For the Fair Tax on Fri, Nov 27, 2009, 5:32 pm EST

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Robert... where did you come to the conclusion that there is a majority in Vermont that want Yanlee closed down?? prove that statement!
-- Posted by bruce meyer on Fri, Nov 27, 2009, 4:16 pm EST

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On two separate occassions the legislature has voted to hold the parent company, Entergy, responsible for the liability of this aged plant. On two occassions the governor deprived Vermont of this option with his veto.

Now, his Dep't of Pub. Service is declaring that we have to allow this scheme, so that we can get the committment and resources that we need to eventually close the plant.

This process has shown government operating at its worst. The Administration should have addressed the concerns of the majority of Vermonters and allowed the decommissioning bill(s) to become law. Had they done so there would have been no need for the DPS to be leveraged into this spin-off deal.
-- Posted by Robert Stannard on Fri, Nov 27, 2009, 7:23 am EST

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Decades ago, and perhaps still true today, the New York City taxicab industry was organized so that each taxi cab was its own individual corporation, with the primary asset of each corporation being the taxi cab itself, and nothing more. The cabs were insured for the minimum liability limit permitted by law.

If a cab got into an accident, or otherwise got into a situation where the liabilities of the individual corporation exceeded the assets of that corporation, the corporation owners merely declared that individual cab corporation bankrupt, and walked away from the liabilities.

It should be obvious what is going on here. An aging nuclear plant going into uncharted territory of a plant so old, running at 20% higher than its original specified power capacity. Entergy wants to set itself up so that, if the their nuclear plant financial liabilities exceed the plants' value, its bankruptcy court time and Vermonters are left holding the bag.

We don't need the headache of Entergy and its schemes. This should only be permitted if there is a strong cross liability provision making Entergy itself responsible for the liabilities of its nuclear spin off. And the small amount of capacity that VY provides to Vermont could be easily replaced with high efficiency, green natural gas generation. Domestic natural gas reserves are growing rapidly. We now have a 100 year supply.
-- Posted by Ray Makul on Fri, Nov 27, 2009, 6:31 am EST

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