Vermont Yankee finally sold to Entergy
The deal had more than its share of up and down moments, but the sale of the Vermont Yankee Nuclear power plant to Entergy Nuclear for $180 million was finally completed on July 31.
Considering that just two years ago they had agreed to sell the plant to AmerGen Energy Corp for $23.5 million, Yankee’s owners were well pleased with how things finally turned out.
Vermont Yankee, located in Vernon, is Entergy’s 10th nuclear purchase, and the fifth in the Northeast. Entergy Nuclear is headquartered in Jackson, MS, and is now the second largest nuclear power plant operator in the US. Entergy was the successful bidder for the plant in an auction conducted in 2001 by JP Morgan.
Of the $180 million, $100 million will be used to pay off the plant’s mortgage and debts. Of the remaining funds $40 million will be returned to the owners of Vermont Yankee. Central Vermont Public Service will get $14 million, and will return half of that to its shareholders and use the rest to reduce corporation debt. Green Mountain Power Corp will receive $7 million as its share of the sale, which will all go to pay down debt, according to company officials.
“I am very pleased to put our facilities in the capable hands of Entergy, while gaining substantial benefits for consumers,” Vermont Yankee Chairman Robert Young said in a prepared statement at the time of the sale. “The sale will save consumers an estimated $263 million to $383 million over the remaining 10 years of the plant’s operating license, and will reduce their exposure to the financial risks of decommissioning and operating the plant.”
The Federal Energy Regulatory Commission approved the sale or, February 1, 2002, and the Nuclear Regulatory Commission okayed the transfer of the operating license for the plant on May 17. But among the issues that threatened to derail the sale was how any excess decommissioning funds would be handled.
The original purchase agreement called for Entergy to receive half of any excess funds remaining in the plant’s decommissioning fund when the plant is fully shut down and dismantled, with the other half returned to utilities for the benefit of ratepayers in the states that purchase power from Vermont Yankee. In approving the sale, however, the Public Service Board stipulated that Vermont ratepayers would receive 100 per
the Maine Public Advocate’s Office also began questioning the final sale revisions.
But Vermont Yankee representatives seemed to take it all in stride, and the sale went on as planned.
“The sale transition process went very smoothly,” said Vermont Yankee spokesman Rob Williams after the sale. “We are now part of a 10-plant fleet and we arc already seeing the advantage in terms of shared resources, bulk purchases, best practices and other economies of scale. With all the new changes and opportunities that came from the sale, there is also a lot that remains unchanged.”
The plant’s previous owner, Vermont Yankee Nuclear Power Corporation, was, a consortium of utilities composed of Central Vermont Public Service Corp. (35 percent); Green Mountain Power Corp. (19 percent); New England Power Company (22.5 percent); Connecticut Light and Power Co (9.5 – percent); Central Maine Power Co (4.0 percent); Public Service Company of New Hampshire (4.0 percent); Cambridge Electric Light Co (2.5 percent) and Western Massachusetts Electric Co (2.5 percent).
The sale of the plant included a 10-year power contract with these utilities. The two Vermont companies – CVPS and GMP – will immediately start paying lower power costs for power from the nuclear plant, going from 5.5 cents per kilowatt hour to 4.5 cents.
But the power companies said that their decrease in the cost of power would not mean a decrease in what they charged customers. The PSB, requiring that the two utilities review their rates before the board in April 2003.
Three employees remained with VYNPC to implement power contracts, and Entergys Jay Thayer – as Entergy site vice president – replaced retiring VY CEO Ross Barkhurst, who staved on until the sale was completed. Other than those changes, the top management team and all 700 employees are remaining in the same jobs as before the sale, Williams said.
“For Vermont Yankee employees, the sale closing day was one of the happiest of our careers,” Williams said. “We had been involved in the sale process since 1997, including a year-long review of the Entergy bid. by the PSB. We maintained our focus on operating the plant safely throughout the process without distraction.”
Vermont Yankee first began operation in 1972, and produces 540-megawatts, supplying about a third of Vermont’s electric energy needs.
Robert Smith is a freelance writer from Bellows Falls. He conducted the May 2002 Q&A featuring Yankee President Ross Barkhurst.
Copyright Boutin-McQuiston, Inc. Sep 01, 2002
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