Montpelier, we have a problem…

Great diary (4.00 / 1)

So does this explain why they want to just leave everything the way it is until 2067?

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by: Jack McCullough @ Sun Nov 02, 2008 at 17:15:40 PM UTC

The Gift that keeps on giving... (4.00 / 2)

Actually the picture is much worse, which is why Entergy is proposing the 60-year euphemism of SAFESTOR.

The six-year rate of interest on the fund has been less than 4% per year.  Decommissioning costs are growing at more than 3% per year.  On top of that, when ENVY shuts down, whether it is 2012 or 2032, they immediately begin to tap into the Decommissioning Fund and withdraw more than $100 Million to put the plant in SAFESTOR.

Thus with only a 1% gain overall in the fund growth as compared against the cost escalation, it will be more than 100 years before there is actually enough money in the fund to fully dismantle Vermont Yankee's carcass.

Thank you Jim Douglas for the gift that keeps on giving for 100 years or more.

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by: Maggie Gundersen @ Sun Nov 02, 2008 at 18:13:10 PM UTC

[ Parent ]

Yes. (0.00 / 0)

Douglas has said many times that he is "confident that the fund will be fully funded when decommissioning is required".  He doesn't state when, and it seems to one of the primary arguments for extending the license: 'we don't have enough money to dismantle it'.

Why would Entergy continue to sock money away when they know they can mothball the plant until such time as the capital that is already in there will grow to fully fund decommissioning?

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by: Gilean82 @ Sun Nov 02, 2008 at 18:16:06 PM UTC

The Funeral (0.00 / 0)

Check out the banner on Evacuationplans.org.  It says,"Entergy says Vermont doesn't dare kill them, because we can't afford the funeral !"    

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by: Schrodinger's Cat @ Sun Nov 02, 2008 at 18:25:35 PM UTC

[ Parent ]

Win-Win for Entergy (4.00 / 2)

Why would Entergy continue to sock money away when they know they can mothball the plant until such time as the capital that is already in there will grow to fully fund decommissioning?

In the white papers I authored last year alerting our state leaders to the issues to the decommissioning fund, I noted that the people of Connecticut paid dearly for the decommissioning of Connecticut Yankee.

2.3. For an example of site-specific problems, let's look at the decommissioning and dismantling of the Connecticut Yankee Nuclear Power Plant, which was located on the Connecticut River in Haddam, Connecticut.  
2.3.1. The Utilities that owned Connecticut Yankee had originally set aside a Decommissioning Fund of $410 Million for decommissioning Connecticut Yankee, a process that began in 1998.  (Hartford Current, November 12, 2005 http://www.courant.com/news/lo...
2.3.2. The cost of decommissioning CY climbed to more than $831 Million due to Strontium 90 (Sr 90) that had contaminated the water table surrounding the plant and was discovered well after the decommissioning process began.  
• Sr 90, with a 29-year half-life, remains in the environment for 300 years.  
• It is entirely manmade, and is a "bone seeker" in the human body.  
• Obviously, the extreme problems at Connecticut Yankee were not reflected in the "generic" estimate, as they were unknown to the owners prior to shutdown.  
• These incredible costs have been passed on to Connecticut's ratepayers, even though Connecticut Yankee's parent companies made considerable profit during its operational years.

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by: Maggie Gundersen @ Sun Nov 02, 2008 at 18:33:41 PM UTC

[ Parent ]

Propped up plants (4.00 / 2)

These old plants are propped up at the Federal level with regulatory,financial incentives and tax allowances.And it seems at times a helping hand from the NRC.Removing Douglas is a good start as he has proven over and over to favor Entergy's interests.With a new governor the relationship between Entergy and Vermont would take a turn for the better but even then its an uphill  

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by: BP @ Sun Nov 02, 2008 at 20:47:20 PM UTC

Here's the thing... (4.00 / 1)

I've posted about this before, but it was some time ago: this is a fund that Entergy has set up, but it's not the only money they've got.  If they're failing to fund it fully, then we should mandate that they take money from some of their other sources in order to make sure it is funded fully.  This crap about needing to wait until the fund has enough money in it is basically a big, long, con.  

They have the money.  It's just not in their fund.

Musician, Web Designer, Photographer

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by: JulieWaters @ Sun Nov 02, 2008 at 21:59:44 PM UTC

present v. future (4.00 / 1)

Our money into ENVY as profits is tangible.  Their payments back into the fund at some future date are illusory .  We are being asked to believe that they will stand behind a contract after the money has stopped flowing in as profits.  Q. What assets does an LLC have to pay for decommissioning after the profits dry up?  A.  Only what is in the Fund.  There are no deep pockets to fall back on.

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by: Schrodinger's Cat @ Sun Nov 02, 2008 at 22:40:07 PM UTC

[ Parent ]

Except... (0.00 / 0)

Surely they'd just pass along the cost of whatever capital they were required to raise onto rate payers?  

As much as I hate to admit it, Douglas is correct in that regard.  He's just doing it to save his own hide from saying electric costs went up, not because he thinks Entergy is going to act altruistically and spend money they don't have to.

It's a no win situation.

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by: Gilean82 @ Mon Nov 03, 2008 at 00:43:46 AM UTC

[ Parent ]

Rates are subject to regulation as well and... (0.00 / 0)

...it shouldn't be Vermont's responsibility to cover the costs of Entergy just because they purchased a nuclear power plant that they couldn't afford to maintain.

Musician, Web Designer, Photographer

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by: JulieWaters @ Mon Nov 03, 2008 at 01:05:53 AM UTC

[ Parent ]

There's at least 2 flaws with that argument (0.00 / 0)

"Surely they'd just pass along the cost of whatever capital they were required to raise onto rate payers?"

1) Entergy Yankee will charge what the market will bear, and if the market will allow Entergy Yankee to pass on the costs of appropriate decommissioning fund deposits ... then yes ... Entergy Yankee will merely pass on the costs. But if the market won't allow that, then Entergy will end up taking smaller net profits.

That's how it really works. (As a side issue the same thing can be said of corporations and taxes ... they only pass on the tax increases when the market will bear the added costs. Otherwise they take fewer net profits.)

2) I'm a Washington Electric Coop member. Over the years we've divested ourselves of Entergy Yankee and spent a lot of time and effort developing long term, low(er) cost forms of generation such as the methane fired generators at the Coventry garbage dump.

Why should I be threatened with eating the future costs associated with ostensibly giving Entergy Yankee customers a break in their price?


It's over at http://ramabahama.net ... only it's still under construction (but so is the rest of my life)

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by: Rama Schneider @ Mon Nov 03, 2008 at 09:59:23 AM UTC

[ Parent ]

one word: LLC (0.00 / 0)

Rama,
You said

1) Entergy Yankee will charge what the market will bear, and if the market will allow Entergy Yankee to pass on the costs of appropriate decommissioning fund deposits ... then yes ... Entergy Yankee will merely pass on the costs. But if the market won't allow that, then Entergy will end up taking smaller net profits.

I agree that Entergy will charge what the market will bear, but if they are not forced to set aside the decommissioning funds, then they will drop that money down to the bottom line as profits.  Since deregulation, Entergy is not a utility, and therefore not subject to laws that would protect our state by forcing them to put aside money for the fund.

2) I'm a Washington Electric Coop member. Over the years we've divested ourselves of Entergy Yankee and spent a lot of time and effort developing long term, low(er) cost forms of generation such as the methane fired generators at the Coventry garbage dump.

Why should I be threatened with eating the future costs associated with ostensibly giving Entergy Yankee customers a break in their price?

1.  I'm a Burlington Electric Customer.  BED also divested of Vermont Yankee, but Entergy is claiming that the utilities who first built VY are responsible for the clean-up, which brings it back to all of us.

2.  Finally, Vermonters are not giving "Entergy Yankee customers a break in their price".  As a "merchant plant" (see below - the Emperor has no clothes), ENVY will charge what the market will bear, but Jim Douglas is not insisting that they accurately include the cost of decommissioning Yankee, dismantling it and cleaning up the site.  So customers are not being given a price break, rather Entergy is being given a cost break, which increases its profits.

3.  Since Entergy and ENVY both are LLC's, that means that to pierce the corporate veil and have parent company Entergy clean up its own mess at Yankee would take a lengthy court battle.  Right now without Enexus, the new shell corp Entergy would like to create for its aging nukes, there are several Limited Liability Corporations between ENVY and parent Entergy.  Parent Entergy is currently trying to wash its corporate hands of any responsibility for its aging nukes, leaving the clean-up with the LLC ENVY, which has no assests from which to extract money.  ENVY's only asset is the plant itself and its woefully depleted fund, which with the requisite clean-up, leaves Vermont with the mess.

My question to you is when Vermont is left with the messy carcass of Vermont Yankee it its mothballed state euphemistically called SAFESTOR, who will clean it up?

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by: Maggie Gundersen @ Mon Nov 03, 2008 at 12:21:47 PM UTC

[ Parent ]

I'm in 100% agreement with you, Maggie (0.00 / 0)

I was referring specifically to the concept raised by Gilean82 above.

As you have said often and eloquently: if we don't insist that Entergy bears the full responsibility for their clean up costs, we as taxpayers are going to be saddled with a huge bill.

And I believe Entergy would not hesitate a second to dump that cost on us.

It's over at http://ramabahama.net ... only it's still under construction (but so is the rest of my life)

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by: Rama Schneider @ Mon Nov 03, 2008 at 15:13:54 PM UTC

[ Parent ]

thanks Rama (0.00 / 0)

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by: Maggie Gundersen @ Tue Nov 04, 2008 at 01:55:26 AM UTC

[ Parent ]

Even if Entergy passes it on (0.00 / 0)

Even if Entergy passes on the costs 100% (which I doubt they can do, see other posts) isn't it a much better policy to recover the full costs (including decomissioning) NOW, from the folks who are buying the power output of the plant?  Especially since at least half of those funds will come from out of state, while the costs of an underfunded cleanup will be fully borne by Vermont.

Douglas is "right" only in the current Republican worldview, where dumping costs onto others/future taxpayers to rake in corporate profits is not only accepted, but something to be actively promoted.

Not putting the decomissioning money aside now is nothing more than a massive subsidy of Entergy and the beneficiaries of artificially low power rates.

In any case, the price we pay for Vermont Yankee power will surely be increased substantially when the current contract runs out in 2012.  By keeping Vermont dependent on Vermont Yankee power, Douglas puts us in a very disadvantageous negotiating position.  Which is no accident.

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by: CarbonCopy @ Mon Nov 03, 2008 at 16:48:08 PM UTC

[ Parent ]

Fund rebates ? (4.00 / 1)

I don't remember exactly but I think a large part of the decommissioning fund was in place at the time of purchase and passed to Entergy as part of the deal .
Here is something from a CVPS press release touting the advantages of Entergy's ownership we were to enjoy !

-Decommissioning risk mitigation. The deal puts all risk for an increase in decommissioning costs on Entergy, without any top-off of the decommissioning fund by the sellers or Vermont consumers.
-Possible decommissioning fund rebates. If the plant life is extended and the decommissioning fund grows beyond what is ultimately needed as a result of the longer time period, the surplus will be shared with ratepayers.

http://www.cvps.com/AboutUs/ne...

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by: BP @ Mon Nov 03, 2008 at 17:40:46 PM UTC

[ Parent ]

Rebates not exactly likely (4.00 / 1)

Perhaps Maggie can shed more light on this issue - but I never believed any of that propaganda at the time of the sale.  From the numbers I've ever seen, the fund was well short of the projected costs for a long time.  Any projection otherwise depended on the rate of return on the current balance far exceeding the rate of inflation of the decommissioning costs.  

And how is this fund actually being held?  If it is in any way under the control of Entergy, it is at risk of being raided sometime between now and when it is needed.  I remember Entergy being verrrry interested in getting access to the decommissioning fund when the sale was being negotiated.

As far as I know, Entergy has added $0 to the fund since the purchase.

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by: CarbonCopy @ Mon Nov 03, 2008 at 22:25:39 PM UTC

[ Parent ]

Definitely no rebates... (0.00 / 0)

I will try to answer your questions.  First, let me say that I was not active in any of the sale proceedings, nor was my husband Arnie.  I have however reviewed testimony from DPS.

1.  William Sherman, the former state nuclear engineer for the Department of Public Service, testified under oath in 2001 that if contributions to the fund continued for the final 10-years, as they had during previous years, there would be enough money to fully decommission Vermont Yankee beginning in 2012.

2.  The Fund is being held in trust accounts by three banks, however, a significant fraction of the portfolio is being held as stock not bonds.  Most trust accounts are held as bonds, because bonds are safer and less volatile. Hence the wild fluctuations in interest rates in the decommissioning fund accounts and the recent loss of more than $40 Million dollars to the fund balance since the banking debacle and Wall Street meltdown.

3. Correct, Entergy has added absolutely nothing to the fund.

Finally as way of clarification, Arnie and I moved to Vermont in 2001, two weeks prior to 9-11.  We were not involved in the sale case in any way shape or form.

This summer immediately after Arnie was appointed by Senate President Pro Tem Peter Shumlin to the Entergy Nuclear Vermont Yankee Oversight Panel, Arnie was slammed publicly by Commissioner O'Brien, DPS Public Spokesperson Steve Wark, and Republican Representative Joe Krawczyk from Bennington.  Krawczyk accused Arnie of being involved in the sale case, which I thought was ironic.  Krawczyk was a member of the House Natural Resources Committee, and in that role heard Arnie testify during spring 2008 regarding the proposed Comprehensive Vertical Audit (CVA).  

Arnie was asked about his credentials at that time and thus his CV was submitted to the committee.  In typical friend of Douglas fashion, Mr. Krawczyk wrote numerous letters to newspapers and blogs across the state accusing Arnie of all types of shenanigans.  Mr. Krawczyk knew these to be bold faced lies and yet continued to perpetuate them.

There are other rebate issues, in addition to the one you mentioned, which also opens the door for another discussion.  What is the unique financial benefit to both CVPS and Green Mountain Power in keeping ENVY running for an additional 20-years?  Since it is complicated, let's hold that thought for a separate additional later post.

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by: Maggie Gundersen @ Tue Nov 04, 2008 at 00:50:30 AM UTC

[ Parent ]

The Emperor has no clothes (0.00 / 0)

When Entergy bought Vermont Yankee, it became what is called a "merchant plant", which means it doesn't have ratepayers, is not owned by a utility, and it sells the power it makes directly to the electric power grid (in this case the New England power grid) at whatever rate the Grid wants to pay for the power.  Currently Entergy sells 55% of its power directly into the New England power grid and since it is not owned by utilities anymore, it does not have any ratepayers who pay for that power.  As a "merchant plant"(so named because it brings its electricity to market, like a "merchant going to the farmers' market for example), the lower its costs are (like the decommissioning fund), the higher its profits.  

So while more than half (55%) of ENVY's power leaves Vermont, the full cost of decommissioning is borne by Vermonters. Vermonters get only 45% of ENVY's power AND all the risk, the waste, and the excess cost of decommissioning.

When VY was owned by Vermont's utilities there were assets to tap that the state could have owned to pay for dismantlement.  ENVY is a LLC --- MEANING THAT THE ONLY ASSESTS ARE THE PLANT ITSELF.  Thus, there are no extra and no hidden funds to dismantle the plant.

Entergy either tops up the fund out of its $150 Million per year profit or Vermonters are stuck with the mega-liability of ENVY's carcass on the banks of the CT river for anywhere from 60 more than 100 years.  And, that's another story for another post.

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by: Maggie Gundersen @ Mon Nov 03, 2008 at 02:31:41 AM UTC

Right, but here's what I don't get (0.00 / 0)

Why is this even an issue?  Entergy should just pay for the decommissioning, or sell it to someone else who wants to pay for it.  This, to me, is an incredibly simple issues.

Musician, Web Designer, Photographer

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by: JulieWaters @ Mon Nov 03, 2008 at 11:09:39 AM UTC

[ Parent ]

Follow the money... (0.00 / 0)

Julie

I agree that it should be simple.
See my response above to Rama "one word: LLC".

There are no laws requiring Entergy to do anything.

Entergy is an LLC.  It's charter is to make money for its CEO and its stockholders.  It is facing lawsuits by Attorneys General in several states due to its ruthless methods of doing business at the expense of its aging nukes and in some states, like Louisana, where it is still a "utility", at the expense of its ratepayers.

Check out evacuationplans.org.  Lawrence Auclair has done an incredible job of documenting much of the case against ENVY's current management.  You will see that the bricks and mortar facility itself has significant issues due to lack of financial investment in its "aging" infrastructure.  We've seen the result in failing cooling towers and transformer fires.  It is disturbing to think about reactor embrittlement and pipe wear causing leaks that no one can see or anticipate until it is too late.

For another viewpoint and set of insights, take a look at Fake Rob's irreverent view of Vermont Yankee issues.  He is quite critical and his October 31 post, Eye of Newt is quite telling of ENVY's symptomatic issues.  http://www.fakerobwilliams.blo...

The issues we are facing with ENVY are also being faced at its other aging nukes like Pilgrim and Indian Point, which is why Entergy had hoped to spin them all off into Enexus and further distance itself from any financial liabilities.  

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by: Maggie Gundersen @ Mon Nov 03, 2008 at 12:41:02 PM UTC

[ Parent ]

Courting Entergy (4.00 / 1)

Where does all this go ultimately but to court ?By all I mean the de-commissioning ,the license renewal and the vertical study.
Entergy can fight a war of legal attrition as the tobacco industry did,using up a state's legal resources on experts to testify against their experts for a half life .
The tobacco companies only started losing when state attorney's general pooled their collective  clout in the court room.

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by: BP @ Mon Nov 03, 2008 at 13:58:04 PM UTC

BREAKING: Dennett finds Attorney General Sorrell is complicit in helping Yankee break law (0.00 / 1)

Candidate for Attorney General Charlotte Dennett attended the Public Health Department's hearing on procedure relating to Vermont Yankee last Thursday, Oct. 30 in an attempt to better understand why and under what authority the Health Dept. has called off procedurally mandated public hearings on changes in the methods used by the
department to measure radiation emissions from VT Yankee.   The following is from a press release sent to every media outlet in Vermont, last Friday Oct. 31, after the hearing. Local Fox News showed up at Dennett headquarters Friday and interviewed Dennett but the interview never ran.  This press release is from the Dennett campaign.  Sorrell's office has refused comment, although the release is 4 days old and has been faxed to his office.  

FOR IMMEDIATE RELEASE
FROM: CHARLOTTE DENNETT FOR ATTORNEY GENERAL
Date: October 31, 2008

SUBJECT: DENNETT CHARGES THAT SORRELL ADVISED HEALTH DEPARTMENT TO AVOID PUBLIC HEARINGS ON RE-CALCULATIONS FOR EMISSIONS FROM VERMONT YANKEE

New formula disguises increased harmful radiation levels

Yesterday, at a hearing on Vermont Yankee radiation levels, Dennett, candidate for Attorney General, discovered that Attorney General Sorrell's office helped the health department avoid public hearings after the department changed the rules for measuring radiation levels at Vermont Yankee.  Behind closed doors, the Health Department changed the formula for measuring radiation. Under the new formula, higher radiation emissions that would have previously been illegally high, fell under legal limits. "Sorrell's office essentially advised the health department on how to break the law," says Dennett, "By law, public hearings must be held whenever a state agency is contemplating changing a procedural rule."   Dennett has delivered a request for information, under Vermont's public record law, to the Health Department.

At the hearing, Health Dept. Chief William Irwin was asked by a legislator:  "How was the decision made to violate Vermont's administrative procedures laws?"  Irwin replied that the Commissioner of Health and "legal counsel" had advised him.  Dennett subsequently asked Assistant Attorney General Dixie Henry if legal counsel meant the Attorney General's office.  Henry told Dennett "yes."  Confirmation of this verbal exchange may be obtained from the Charlotte Dennett campaign at 617-412-9438.

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by: newenglandboy @ Mon Nov 03, 2008 at 17:38:30 PM UTC

Sticking us (0.00 / 0)

When Douglas gets in after tomorrow for yet another term, he is really going to stick it to us with this Yankee thing.  Douglas will have fun doing it too.  

When you wake up each morning look around you.  It might be the last time you get to do it.  

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by: Watercloset @ Tue Nov 04, 2008 at 04:38:14 AM UTC