Will Entergy cut bait?

What should we make of this?  

‘Digger is reporting that Entergy’s poor economic outlook might portend the closing of Vermont Yankee.  This, according to UBS Securities of Switzerland.  

They suggest there are strong indications that Entergy might consider resolving some cash-flow issues by closing both Yankee and another relic of happier times, NY Fitzpatrick.

On the face of it, this looks like good news; and the sooner the better.

But then there is that small matter of a decommissioning fund that is significantly inadequate to handle the thirty-year job of reclaiming Yankee from its toxic past.

“Entergy guidance clearly illustrates no cash generation from nukes”

If Entergy is hemorrhaging cash with little prospect of improvement on the nuclear horizon (something that comes as no surprise to readers of GMD); and if the company was prepared to drag the State of Vermont through multiple appeals only to pull the plug all by itself; that same perversity will undoubtedly see Entergy move heaven and earth in order to slide out from under its decommissioning obligations.

Soon dawns the certain knowledge that nuclear energy is anything but cheap and clean.

As if that isn’t enough provocative news on the nuclear front, ‘Digger carries another related story about Vermont and New York teaming up to ask the NRC to take a closer look at spent fuel storage at facilities on their soil.  

This request has been made in light of a 2011 court decision which effectively negated the long-standing rule allowing on-site storage of spent fuel, pending further investigation related to the findings from Fukushima.

The NRC wasted no time in extending VY’s operating license in the immediate wake of Fukushima.  Now that undo haste is coming back to haunt them.

‘Just another nail in the coffin of Entergy’s future commitment to Vermont Yankee.

About Sue Prent

Artist/Writer/Activist living in St. Albans, Vermont with my husband since 1983. I was born in Chicago; moved to Montreal in 1969; lived there and in Berlin, W. Germany until we finally settled in St. Albans.

9 thoughts on “Will Entergy cut bait?

  1. The Invisible Hand of the Free Market has spoken.

    These costs are astronomical, no one has publicly discussed these huge obligations, and the NRC’s solution to the problem seems to be to extend the licenses so no one does think about it.  But that shit is going to hit the fan soon, this is the first shot.

    America has a long standing tradition of shifting corporate fiscal obligations to the taxpayers.  I am sure the Free Hand will make that happen.

  2. Comrade – Your cynicism is premature, at best.  The reason both utilities and the NRC have been avoiding discussion of decommissioning is that the rules and obligations are clearly stated in federal law.  There’s no playing state PUCs against federal regulators.  The law actually doesn’t care if the utility has to liquidate other assets to pay — they’re stuck for whatever it costs, and it’s not up to them to decide what needs to be done.  There’s very little wiggle room; this law was written in the 70’s, when we actually wrote effective environmental legislation. I agree with you that the NRC is in the pocket of the utilities, but neither one could stand up in federal court against the plain wording of the decommissioning laws.

    The biggest issue is the utility equivalent of a “bank run”…if decommissioning VT Yankee costs 3 times as much as they had banked, will other states rush to decommission their nuclear plants before the money runs out?…causing a “run on the utility”?  It pays for us to be first, as the utilities will try to go to bankruptcy to avoid the other payments (they can’t, but they can pay their executives huge bonuses while screwing the shareholders…)

  3. Milk the plant for all it’s worth.  Move the decommissioning problems from engineering and operations to the accountants, the lawyers and especially the PR department.    

    Rest assured that part of the poverty plea will be aimed at the Vermont legislature and Vermont’s “anti-business environment”, coupled with some nuisance lawsuits that will allow Entergy to avoid their day of reckoning, and pour as much as they can back on the taxpayers.  Victimology and manipulation.

    My bet is that for years Entergy has been unloading as many of their questionable assets into the decommissioning fund as they can get away with.  The intent all along has been to obfuscate, slow-walk, plead poverty, lobby Congress for clean-up funds, and muck and muddy up the works.  

    Corporations aren’t people, but they are organized around the human characteristics of greed, self-absorption, remorselessness, and duplicity – institutionalized sociopathy.

  4. [..]Entergy management style to be risk-taking and aggressive, “They are used to a pliant NRC and used to bullying their way past concerned citizens and regulators wherever they do business, but that just doesn’t work in New England with its speak-up democratic traditions,” he said, “Bucking public sensibilities here costs money, lots of money, pure-and-simple.”

    “Whichever way it plays out in federal court” said Ned Childs, NEC President, ” This may be the last big ticket financial decision that Entergy may ever make for an operating Vermont Yankee plant. Vermont Yankee hasn’t met its allocated maintenance costs, meaning it hasn’t turned a profit for the last three years. One more unanticipated large expense such as a new steam dryer, or modifications resulting from a Fukushima accident inquest, is likely to sink the ship.


    Steam dryer is full of cracks & Entergy wants to limit the inspections, what does this tell us?

    I cannot find the source but NEC also has said that the condenser will very likely be the tipping point. The cost a few short years ago was $100 million, with copper prices through the roof, the cost could double…triple? Who knows but it’s a crapload of money which I do not believe even Entergy Louisiana, as horses-ass stubborn as they are will replace it. So, yes it’s just a matter of time.

    They are fighting battles on several fronts. Vt will tax them per KW which will be in the many millions.

    They may be forced to use the cooling towers due to new information re river temps. VT does not have to allow temp to rise more than 1 degree plus Entergy’s so-called ‘science’ has been found to be junk pseudo-science based on their infamous faith-based ‘models’ in which the numbers are skewed by ‘extrapolation’, not actual & verifiable info. The current verifiable info has found their numbers, surprise! to be um, ‘off’.

    Cost: many more millions.

    Second circuit federal appellate court in NY will hear arguments shortly, 1/14/13. It’s expected to go to SCOTUS no matter who they rule in favor of.

    Also, about the same time as the 2nd circuit gets the appeal, SCOV on an expedited schedule will hear NEC case asking them to enforce the MOU in which VY is not to operate or store fuel after 3/21/12 by closing the plant unless PSB rules in their favor, late 2013. PSB has stated that Entergy Louisiana is clearly in violation of this legally contracted agreement. I’m cautiously optomistic – really this seems to be the brightest star in the sky.

    These court actions must also be in the millions. The well has to run dry eventually.

  5. Yankee’s financial prospects seen grim

    By Susan Smallheer

    Staff Writer | January 06,2013

    BRATTLEBORO – A financial analyst who follows the nuclear industry said that while financial information on the Vermont Yankee nuclear plant indicates it is not making money for owner Entergy Nuclear, the company may be leery of shutting the 41-year-old reactor down because it would set a dangerous political precedent.

    Julien Dumoulin-Smith of UBS Securities LLC said likewise that Entergy may have calculated that shutting it down would cost more than keeping it running.


  6. While you are correct that the law is quite clear, Entergy actually has many ways in practice of avoiding their decommissioning obligation.

    — SAFSTORE. Park it for 60 years and let the next generation worry about it.  Hope nothing leaks in the meantime.

    — Loot the assets, then declare bankruptcy.  Sure, as you note, the legal responsibility remains but how to collect?

    — A variant on the above, create a shell (like Enexus) to hold the plants and liability. Walk away when the cash flow dries up.  We have the New York Public Service Commission to thank for stopping this one for now.

    — Endless litigation, knowing a corporate-friendly Supreme Court is waiting at the end of the line.

    — Stall and hope to buy a retroactive change in the law (eg, telecom company retroactive immunity to violating wiretap laws).

    I remember Douglas’s veto of the legislation that would have required adequate funding for the decommissioning fund.  I assume Entergy never intends to spend another dime beyond what is already set aside.  Assuming they don’t manage to find a way to sneak that money out.  After all, Entergy actually controls the fund, not the State of Vermont.

    An interesting question comes up in connection with the “bank run” analogy you give.  I wonder how well decommissioning funds for one reactor are shielded from being redirected (especially in a bankruptcy action) to costs at another plant, if that plant is actively being dismantled and VY is still operating or in a SAFSTORE mode?

  7. Entergy and it’s subsidiaries are LLCs.  What’s to stop them from dissolving the partnership, absorbing whatever cash in on hand and abandoning the properties?

    Imagine one day the VY employees simply don’t get a paycheck and no one answers the phones at Entergy’s HQ.

    Who would dare stop them from doing that, Senator Leahy?  The NRC?  And what remedy could there be?  Sue the former partners in civil court?  Well, good luck with that, since they’d already have stashed all their cash in the Cayman Islands and on paper they’d look like paupers.  

    This only works when everyone agrees to play by the rules, and clearly Entergy has no such scruples.

    Who cares what the law says, since when did that make any difference to the obscenely wealthy and the Republican Party leaders? Just look at the impugnity with which the Bush Administration brazenly violated the Constitution and gave promotions to every that did so.

  8. Herein lies the rub: 60 to 100 years? Please. That’s several generations at least. This defies logic. There’s alot that can happen in this time frame & what it really says is ‘leave it to our children & grandchildren’. If the money is not in the bank it never will be, I don’t care what a bunch of bureaucrats & politicians say because they all lie.  

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