Entergy Corp. announced on Tuesday that it plans to close and decommission the Vermont Yankee nuclear plant in Vernon for purely financial reasons.
Entergy executives plan to shut down the plant in the fourth quarter of 2014, which is the end of the current operational cycle when the facility would next be scheduled for refueling.
Vermont Yankee is the only nuclear plant that Entergy is currently planning to close.
“This was an agonizing decision and an extremely tough call for us,” said Leo Denault, Entergy’s chairman and chief executive officer. “Vermont Yankee has an immensely talented, dedicated and loyal workforce, and a solid base of support among many in the community. We recognize that closing the plant on this schedule was not the outcome they had hoped for, but we have reluctantly concluded that it is the appropriate action for us to take under the circumstances.”
The company cited three reasons for shutting down the plant:
• The rapid proliferation and low prices of natural gas are negatively affecting the nuclear energy market.
• The cost of maintaining the 41-year-old plant is particularly high. Entergy says it has invested more than $400 million in the plant since 2002.
• Vermont Yankee is a merchant generator selling power on the open market, and executives say the New England wholesale market is flawed, resulting “in artificially low energy and capacity prices in the region.”
Entergy’s decision to close the plant comes less than a month after Entergy announced it was laying off 800 workers nationwide and cutting 30 jobs at Vermont Yankee. The reductions were a direct result of Entergy shares dropping more than 50 perent from the second quarter of 2012 to the second quarter of 2013.
Earlier this year, the fair market value of the Vermont Yankee nuclear plant fell 69 percent, from $517.5 million to $162 million. UBS Securities downgraded Entergy Corp.’s stock from “neutral” to “sell.” The Swiss financial services firm also projected the closure of an Entergy nuclear facility in 2013, saying “Vermont Yankee is the most the most tenuously positioned plant.”
The U.S. Nuclear Regulatory Commission in 2011 granted Vermont Yankee a new federal license to operate the plant for another 20 years. The company was in the process of applying for a state permit to operate for another two decades, but Entergy spokesman Jim Steets says the company will alter its application with Vermont Public Service Board. Entergy, he said, will request to operate until the end of 2014.
This news follows on the heels of a U.S. Court of Appeals decision that barred the Vermont Legislature from shutting down the plant.
Vermont Yankee, which has a Mark 1 General Electric boiling water reactor, began operating on Nov. 30, 1972. The facility has had physical plant problems over the last nine years, including the collapse of a cooling tower, a transmission fire and tritium leaks from underground pipes. Anti-nuclear activists and environmentalists say these kinds of problems are the result of the age of the plant, which they say presents a safety risk to the public.
The company plans to use the “SAFSTOR” method of decommissioning the plant rather than “DECON.” A previous decommissioning report for the plant showed that the DECON method would be cheaper and quicker and the SAFSTOR method takes as long as 60 years. There are, however, variations to both of these decommissioning avenues.
The Nuclear Regulatory Commission will oversee the decommissioning process. The plant would continue to be under tight security and radiation levels would be monitored during decommissioning.