A few days ago we reported news of a negative financial outlook for Entergy Nuclear, and its possible implications for future operation of Vermont Yankee. There was much more on the subject in Sunday’s edition of the Mitchell Family Organ, available in print at your local library or online here for subscribers.
Reporter Susan Smallheer interviewed UBS analyst Julien Dumoulin-Smith, who issued the report on Entergy’s tight finances, and he added some important information.
First, the reason for Entergy’s cash crunch is that the newly-abundant supply of natural gas is hitting the nuclear industry hard.
Natural gas is clearly overtaking coal, and nuclear is the next wave of potential victims.
This trend has the greatest impact on smaller reactors like Vermont Yankee.
Next question: If Dumoulin-Smith’s analysis is correct, and Entergy could actually ease its cash crunch by closing VY, why is it fighting so hard to keep the plant open? He provides two reasons, neither of which have anything to do with providing safe, clean, reliable blah blah blah, or any commitment to the great people of Vermont.
First and foremost, Entergy is looking beyond VY to a pending battle over the Indian Point reactor in New York state. “It’s really all about Indian Point,” he told Smallheer, who elaborated:
New York environmental officials have been battling with Entergy over the environmental effects of Indian Point’s water withdrawals from the Hudson River, with state officials saying cooling towers were needed to mitigate the environmental impacts of such large water withdrawals.
Apparently Entergy fears that if Vermont wins its bid to close Yankee, it could set a precedent in the battle with New York over Indian Point. Dumoulin-Smith said “the nuclear industry as a whole [is] closely watching the Vermont regulatory fight.”
Nice to know that Yankee is nothing more than a pawn in a game that doesn’t involve Vermont at all.
Second, Dumoulin-Smith says that even though operating Yankee is a financial drain, it’s not as big a drain as closing and decommissioning would be.
One more little nine-figure detail: his analysis didn’t take into account the impending necessity of replacing Vermont Yankee’s aging condenser, which carries a $100-million price tag. And makes continuing operation even more of a drag on Entergy’s bottom line.
But with far bigger stakes at risk, Entergy is willing to go all-out in its legal battle with Vermont, even through its actual interest in VY is limited or nonexistent.
Oh by the way, the official response? Entergy spokesflack Robert Williams fired up his Bumph-O-Mat, which barfed out the following:
“Our nuclear units are important sources of clean, reliable power, and we remain fully focused on the safe operation of the plants,” he said. “As a matter of policy, Entergy does not comment on the financial performance of individual plants.”
And he refused to answer any of Smallheer’s questions, natch. Nice to have such a public-spirited corporation Managing Our Nuclear Future.