Entergy's spinoff scheme is a warning
to Vermonters
By JAMES MARC LEAS
The above picture of Vermont Yankee shows the very
small and inadequate containment, which is just the yellow
1 inch thick steel shell seen at the top that extends
around the reactor and the water filled torus. The concrete
surrounding and the removable blocks above the top of
the reactor merely provide radiation shielding, not containment.
Also the picture shows the spent fuel pool next to to
the right side and along the top of the reactor. The thin
metal roof is all that protects the public from radiation
released in the event of an accident that drains the pool.
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If the owner of Vermont Yankee, Entergy Corp, issued a warning
about Vermont Yankee, would that warning have credibility?
Of course it would. With the company long touting its safety,
a shift to issuing a warning about Vermont Yankee would get
attention.
Well, Entergy has been issuing a warning -- but we've just
not noticed it as a warning.
At the legislative hearing on Dec. 2, Sen. Bill Carris, D-Rutland,
questioned Entergy's Vice President, Jay Thayer, asking, "I
don't think we understand the ‘Why?'" But Mr. Thayer
provided legislators with no satisfactory answer as to why
Entergy was making such efforts to spinoff Vermont Yankee
and five others of its aging nuclear power plants.
There is a good reason, one found in Entergy's own recent
history with another of its spinoffs. That history may be
even closer to the mark than the analogy frequently made with
Verizon's sale to Fairpoint and its subsequent bankruptcy.
In light of Entergy's actual experience with this other spinoff,
its efforts to spin off Vermont Yankee can best be understood
as a serious warning.
Entergy is the company that saved hundreds of millions of
dollars by letting its New Orleans subsidiary go bankrupt
after Katrina.
Here is a Standard and Poor's reference from 2005 for this
important piece of recent history:
"Holders of the facility mortgage bonds issued by Entergy
New Orleans Inc. have become the latest direct casualties
of Hurricane Katrina. The bankrupt subsidiary of Entergy Inc.
defaulted on those bonds on Oct. 17 [2005]. All other credits
issued by Entergy New Orleans were considered to be in default
when the utility filed for court protection in September [2005]
after suffering as much as $475 million in storm damage. Entergy
New Orleans' parent company is expected to maintain its solvency
during the reorganization and recovery process."
http://fc.standardandpoors.com/htdocs/newsletters/fii.pdf
The advantage to the parent company of having separate ownership
of a risky asset was clearly demonstrated. Entergy let its
New Orleans spinoff go bankrupt and walked away, not just
from the $475 million repair job but also from the holders
of those facility mortgage bonds and other creditors. Entergy
also walked away from the people it served in New Orleans
at a time when they had special needs. That is the kind of
foresight Entergy had in New Orleans. This history also demonstrates
the level of responsibility Entergy feels for the people it
serves.
Vermont Yankee is very unlikely to be severely damaged in
a hurricane. But Vermont Yankee and Entergy's five other aging
nuclear plants are all subject to other expensive risks that
could cause severe damage to the plant and to people far beyond.
In view of its history with its New Orleans spinoff, nothing
could demonstrate Entergy's own lack of confidence in the
reliability of Vermont Yankee more than Entergy's strenuous
effort to spin it off, along with the five other aging nuclear
plants it owns.
Why should Vermonters have more confidence in Vermont Yankee
than its current owner itself demonstrates?
The prudent course for the legislature would be to take account
of the warning Entergy is issuing. The legislature has a way
to kindly help Entergy reduce some of its risk from Vermont
Yankee without letting Entergy unload that risk onto Vermonters
with a spinoff: by not voting to permit extension of the certificate
of public good past 2012.
In my view, the spinoff is an issue that overshadows the
debate about carbon footprint vs. radiation footprint or number
of jobs with the plant operating vs. the number of jobs for
decomissioning, or whether GMP and CVPS should keep buying
electricity from Vermont Yankee or from the spot market where
electricity is now costing about 25 percent less.
If Entergy is seeking to unload Vermont Yankee, Entergy's
own recent history tells Vermont to take that as a serious
warning. And there is no more credible source for that warning
than Entergy itself.
James Marc Leas writes from South Burlington.
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