Editor’s note: This oped is by James Marc Leas of South Burlington.
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 issued a warning: We just didn’t notice it.
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.”
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.
