Entergy says it will give its 'best offer'
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By Susan Smallheer Staff Writer - Published: December 16, 2009
Entergy Nuclear plans to take the unusual step of releasing its "best offer" for a new electric power contract from Vermont Yankee to the state's two largest utilities in an effort to show that it is negotiating in good faith.
Despite negotiating for more than a year, Entergy hasn't been able to reach an agreement with the two utilities, both of which said Tuesday they welcomed the move by Entergy.
Jay Thayer, Entergy Nuclear vice president of operations, said Entergy was preparing its filing for state regulators in an effort to show the Legislature and regulators that what it was offering is a "huge public benefit."
Thayer made his statements during a meeting with the Rutland Herald editorial board in Rutland on Tuesday. Thayer said he originally hoped to have that filing ready by Dec. 18, but he didn't know if it would come that soon.
"We're glad that they're going to be filing something with the Public Service Board. It will move the dialogue to the next level and it may help move the conversation forward," said Dotty Schnure, spokeswoman for Green Mountain Power.
Steve Costello, spokesman for Central Vermont Public Service Corp., said the offer Entergy has made to the two utilities wasn't good enough.
"We don't think that any offer they've made thus far provides the kind of value we think will be necessary," Costello said. The two utilities are negotiating jointly with Entergy Nuclear.
Costello said that while the revenue-sharing agreement, which is part of the 2002 Vermont Yankee sales agreement, provided some good value, it wasn't enough.
The lack of a power-purchase agreement looms as a major obstacle to Vermont's approval of a 20-year extension of its operating license. Yankee's license expires in 2012. It has been operating for almost 40 years.
Legislative leaders have said that without a power contract in place that body won't consider relicensing, and while Gov. James Douglas had originally said such a contract was key to Yankee's continued operation, he now says relicensing should be approved even without a signed power contract.
The Vermont Public Service Board has also made no secret of its interest in a power contract beneficial to Vermonters, Thayer said.
"They want to answer the question of 'public good,'" Thayer said, in reference to state utility law.
Vermont Yankee provides about one-third of all the electricity used in the state, which in turn represents about half of the plant's power output, with the balance being sold out of state.
Thayer said the revenue-sharing agreement between Entergy and the two utilities, which dates back to when Entergy bought Vermont Yankee, could net the utilities and its ratepayers "millions and millions" of dollars.
Under the agreement, the utilities get to share in any profit Entergy makes when its Yankee power sells for more than 6.1 cents per kilowatt hour.
Schnure said it wasn't clear what path the Public Service Board would take with Entergy's filing, but she said GMP hoped it would open up a dialogue.
Thayer said Entergy and the utilities were looking at a 20-year agreement, which he said was a "difficult and complex process."
Thayer also spoke about the many topics surrounding Vermont Yankee, including the proposed spin-off of Vermont Yankee and five other Entergy Nuclear reactors into a new company, Enexus.
Thayer said that while Enexus would have $3.5 billion in debt, the six reactors represented a market value of $10 billion. Entergy purchased Vermont Yankee for $180 million in 2002 from its New England utility owners.
Since it purchased Yankee, Entergy has invested close to $300 million in upgrades, Thayer said.
Accompanying Thayer on his media visit was Brad Wright of Jericho, a former Vermont radio and television reporter who worked for CNN in Washington for the past 10 years. His business card states his expertise is in "earned media strategies/crisis communications."
Thayer said there was no crisis, but that he hired Wright to help him meet with northern Vermont media, particularly radio and television reporters.
susan.smallheer@rutlandherald.com
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