Editor’s note: This story is largely based on the transcript of a conference call on Tuesday between Entergy officials and financial analysts from investment firms and banks.
Thomson Reuters transcript of Feb. 2 conference call between Entergy officials and financial analysts.
Wayne Leonard, chairman of the board and CEO of Entergy, announced Tuesday that the corporation had put a company executive on administrative leave in the wake of revelations that Vermont Yankee is
leaking the radioactive isotope tritium and has underground pipes carrying radioactive materials.
The public relations executive, Jay Thayer, testified in a hearing in May 2009 that he didn’t think Vermont Yankee had any such pipes.
Thayer, according to Leonard, has issued a public apology and made clear that he “failed to provide full and complete information.” Rutland Herald reporter Susan Smallheer reported today that state officials confirmed the identity of the executive as Jay Thayer.
Entergy Chairman Leonard made the announcement in a conference call with nuclear industry analysts Tuesday in response to Gov. James Douglas’ official statement on Jan. 27.
Douglas had called for answers and actions from the corporate nuclear energy giant and owner of Vermont Yankee regarding the misstatements about the underground piping and the recent discovery of tritium leaks from the reactor in Vernon. Douglas called for Entergy to make changes in management in order to restore the public’s trust.
In testimony before the House Natural Resources Committee today David O’Brien said reassigning Thayer was a token shakeup in management and he suggested that the administration wants Entergy to hire a Vermont-based official or “president” who would have decision-making authority to deal with issues on the ground in the state.
In a Thomson Reuters news service transcript of Tuesday’s conference call—with representatives from Deutsche Bank, Columbia Management, Glenrock Associates, Bank of America, First New York and Goldman Sachs—Leonard acknowledged that he has launched a “comprehensive internal investigation by an independent council” to get to the bottom of the “inconsistencies” (in officials’ earlier statements regarding the existence of the pipes). He said he had made a “personal commitment to not only resolve the known inconsistencies, but also to seek out and find any and all discrepancies or less-than-clear information supplied by anyone in this process and correct the record.”
Leonard said a report from a state contractor issued on Dec. 22, 2008 “indicated there were no underground pipes carrying radioactive nucleides. At the same time, the report referenced 14 pages of documentation provided by Entergy that clearly indicated there were such pipes.”
A month later, Leonard said the company “submitted a response to a discovery request that indicated no such pipes existed now or in the past. That response was not accurate. It has been corrected and re-filed.”
He told the financial analysts that Entergy’s internal investigation is “drawing to a close” and suggested it could be complete in two weeks.
“We remain unwavering in our belief that Vermont Yankee should continue operations for at least another 20 years beyond March 2012,” Leonard said.
Leonard went on to say that the tritium leak has not impacted drinking water well samples. He said that over the weekend, tritium levels exceeded the threshold level requiring regulatory reporting. “The existence of such low levels does not present a risk to public health or safety,” Leonard said. “We continue to believe Vermont Yankee represents a vital source of clean, economical power that is safe, secure, and reliable.”
In the conference call, Leonard referred to Yankee as a “model plant.” He deemed it “among the elite in operating performance.”
“We remain unwavering in our belief that Vermont Yankee should continue operations for at least another 20 years beyond March 2012,” Leonard said. “For that to happen, the plant has to be safe. And we will resolve questions related to that issue in the coming weeks.”
Nor is the plant profitable at this point, Leonard said. Currently, he said, Yankee is not covering its “cost of capital,” and he told investors he didn’t expect the plant to make money for the next two years. Yankee’s license to operate expires in 2012.
Leonard said shutting the plant down would not “make much of a difference in the bottom line” for Entergy.
Profits, he said, are contingent on a new Purchase Power Agreement with two Vermont utilities (Central Vermont Public Service and Green Mountain Power). Leonard said Enexus —a spinoff company formed by Entergy that hopes to purchase Vermont Yankee— submitted a letter to the Vermont Public Service Board of its “notice of intent” to file a proposed power purchase agreement.
“The letter outlined the terms of the expected offer, whereby Vermont Yankee will offer the two Vermont utilities the opportunity to exchange their 55 percent interest in the existing 10-year value-sharing arrangement for a new 115-megawatt, 20-year power purchase agreement,” Leonard said.
Based on the recently approved wholesale price forecast from the Department of Public Service, the Purchase Power Agreement, Leonard said, would be “below market,” and provide a benefit of $500 million. Add in the 650 “high quality” jobs, state and local revenues and total economic benefits and the plant could generate as much as $1 billion for the state of Vermont, Leonard said.
“Despite the current turmoil, which I clearly acknowledge was of our own making and should never have happened,” Leonard said, “when all is said and done, the results of an independent and thorough investigation, and corrective actions that will be put in place, should comfort the Legislature and the Vermont Public Service Board to look beyond our missteps and focus on what is in the long-term best interests of the citizens of Vermont.”
Entergy has been looking to shift ownership of Vermont Yankee to the spinoff company, Enexus Energy Corporation, which as of last spring, Thayer told lawmakers, is taking on $3.5 billion in debt to purchase six nuclear power plants.
Leonard said Tuesday that the spinoff is a top priority of the company.
In his remarks at the conclusion of the call, Leonard said 2009 was the safest year in Entergy’s history, and the “best year ever for output from our collective nuclear fleet.” He singled out Yankee as the one of four plants in the “fleet” that are “on record runs.”
Leonard said the corporation had set a new “zero accident” safety target.
“Zero accidents seems like an ideal to some, but at Entergy it is our annual goal,” he said.
He went on to say that shareholder returns have been “stunningly below our expectations.”
Leonard cited taxes, additional refueling outages as substantial costs and said on a pretax basis, Entergy Nuclear’s earnings increased by “approximately $70 million versus the fourth quarter of 2008, or nearly 30 percent, quarter over quarter.”
Editor’s note: This story is largely based on a transcript of a conference call on Tuesday between Entergy officials and financial analysts from investment firms and banks.
Wayne Leonard, chairman of the board and CEO of Entergy, announced Tuesday that the corporation had put a company executive on administrative leave in the wake of revelations that Vermont Yankee is
leaking the radioactive isotope tritium and has underground pipes carrying radioactive materials.
The public relations executive, Jay Thayer, testified in a hearing in May 2009 that he didn’t think Vermont Yankee had any such pipes.
Thayer, according to Leonard, has issued a public apology and made clear that he “failed to provide full and complete information.” Rutland Herald reporter Susan Smallheer reported today that state officials confirmed the identity of the executive as Jay Thayer.
Entergy Chairman Leonard made the announcement in a conference call with nuclear industry analysts Tuesday in response to Gov. James Douglas’ official statement on Jan. 27.
Douglas had called for answers and actions from the corporate nuclear energy giant and owner of Vermont Yankee regarding the misstatements about the underground piping and the recent discovery of tritium leaks from the reactor in Vernon. Douglas called for Entergy to make changes in management in order to restore the public’s trust.
In testimony before the House Natural Resources Committee today David O’Brien said reassigning Thayer was a token shakeup in management and he suggested that the administration wants Entergy to hire a Vermont-based official or “president” who would have decision-making authority to deal with issues on the ground in the state.
In a Thomson Reuters news service transcript of Tuesday’s conference call—with representatives from Deutsche Bank, Columbia Management, Glenrock Associates, Bank of America, First New York and Goldman Sachs—Leonard acknowledged that he has launched a “comprehensive internal investigation by an independent council” to get to the bottom of the “inconsistencies” (in officials’ earlier statements regarding the existence of the pipes). He said he had made a “personal commitment to not only resolve the known inconsistencies, but also to seek out and find any and all discrepancies or less-than-clear information supplied by anyone in this process and correct the record.”
Leonard said a report from a state contractor issued on Dec. 22, 2008 “indicated there were no underground pipes carrying radioactive nucleides. At the same time, the report referenced 14 pages of documentation provided by Entergy that clearly indicated there were such pipes.”
A month later, Leonard said the company “submitted a response to a discovery request that indicated no such pipes existed now or in the past. That response was not accurate. It has been corrected and re-filed.”
He told the financial analysts that Entergy’s internal investigation is “drawing to a close” and suggested it could be complete in two weeks.
Leonard went on to say that the tritium leak has not impacted drinking water well samples. He said that over the weekend, tritium levels exceeded the threshold level requiring regulatory reporting. “The existence of such low levels does not present a risk to public health or safety,” Leonard said. “We continue to believe Vermont Yankee represents a vital source of clean, economical power that is safe, secure, and reliable.”
In the conference call, Leonard referred to Yankee as a “model plant.” He deemed it “among the elite in operating performance.”
“We remain unwavering in our belief that Vermont Yankee should continue operations for at least another 20 years beyond March 2012,” Leonard said. “For that to happen, the plant has to be safe. And we will resolve questions related to that issue in the coming weeks.”
Nor is the plant profitable at this point, Leonard said. Currently, he said, Yankee is not covering its “cost of capital,” and he told investors he didn’t expect the plant to make money for the next two years. Yankee’s license to operate expires in 2012.
Leonard said shutting the plant down would not “make much of a difference in the bottom line” for Entergy.
Profits, he said, are contingent on a new Purchase Power Agreement with two Vermont utilities (Central Vermont Public Service and Green Mountain Power). Leonard said Enexus —a spinoff company formed by Entergy that hopes to purchase Vermont Yankee— submitted a letter to the Vermont Public Service Board of its “notice of intent” to file a proposed power purchase agreement.
“The letter outlined the terms of the expected offer, whereby Vermont Yankee will offer the two Vermont utilities the opportunity to exchange their 55 percent interest in the existing 10-year value-sharing arrangement for a new 115-megawatt, 20-year power purchase agreement,” Leonard said.
Based on the recently approved wholesale price forecast from the Department of Public Service, the Purchase Power Agreement, Leonard said, would be “below market,” and provide a benefit of $500 million. Add in the 650 “high quality” jobs, state and local revenues and total economic benefits and the plant could generate as much as $1 billion for the state of Vermont, Leonard said.
“Despite the current turmoil, which I clearly acknowledge was of our own making and should never have happened,” Leonard said, “when all is said and done, the results of an independent and thorough investigation, and corrective actions that will be put in place, should comfort the Legislature and the Vermont Public Service Board to look beyond our missteps and focus on what is in the long-term best interests of the citizens of Vermont.”
Entergy has been looking to shift ownership of Vermont Yankee to the spinoff company, Enexus Energy Corporation, which as of last spring, Thayer told lawmakers, is taking on $3.5 billion in debt to purchase six nuclear power plants.
Leonard said Tuesday that the spinoff is a top priority of the company.
In his remarks at the conclusion of the call, Leonard said 2009 was the safest year in Entergy’s history, and the “best year ever for output from our collective nuclear fleet.” He singled out Yankee as the one of four plants in the “fleet” that are “on record runs.”
Leonard said the corporation had set a new “zero accident” safety target.
“Zero accidents seems like an ideal to some, but at Entergy it is our annual goal,” he said.
He went on to say that shareholder returns have been “stunningly below our expectations.”
Leonard cited taxes, additional refueling outages as substantial costs and said on a pretax basis, Entergy Nuclear’s earnings increased by “approximately $70 million versus the fourth quarter of 2008, or nearly 30 percent, quarter over quarter.”
