NRC “transfer review” would take six to nine months
Editor’s note: This story is by Olga Peters. It first appeared in The Commons, a nonprofit news organization that covers Windham County.
VERNON—Entergy Corporation, the Louisiana-based owner of Vermont Yankee, confirmed months-long rumors regarding its intention to sell the 38-year-old nuclear plant. The company remains tight-lipped about details.
Entergy announced on Thursday that the corporation is exploring the potential sale of its 605-megawatt nuclear plant located on the banks of the Connecticut River.
According to a Nuclear Regulatory Commission spokesman, a “transfer review” of ownership to another company would take six to nine months.
Rep. Sara Edwards, P-Brattleboro, questions whether Entergy could sell the plant within a five-month timeframe. April 2011 is Entergy’s stated deadline for resolving the relicensing issue.
Entergy continues to push for a 20-year federal license extension for VY despite the state Legislature’s February vote to deny continued operation of the plant beyond the originally scheduled license expiration in March 2012.
The Louisiana-based corporation is the second-largest nuclear power generator in the United States. The company reaps annual revenues of more than $10 billion and employs 15,000 people. Entergy purchased the plant from the Vermont Yankee Nuclear Corporation in 2002.
Problems at the plant under Entergy’s ownership – including a transformer fire, the collapse of a cooling tower and the recent discovery of tritium and other radioactive isotopes leaking from the facility into soils – have intensified public and legislative scrutiny of the 38-year-old nuclear power facility. The NRC and Entergy say none of these issues have had an impact on public safety.
Exploring options
“Our motivation for exploring the sale of the plant is simple – we want to do whatever is in the best interest of our stakeholders,” said J. Wayne Leonard, Entergy’s chairman and chief executive officer in the company’s press release.
Entergy says it would “aggressively negotiate with buyers” to extend employment rights.
Entergy spokesman Michael Burns said Entergy is concerned about VY’s employees and their families and would “aggressively negotiate with buyers” to extend employment rights. VY employs 650 people, approximately 200 of whom live in Vermont.
“We will do everything we can to ensure VY keeps operating and if sale is the best option, so be it,” he said.
Burns highlighted VY’s recent “breaker run” of 532 days without “unplanned stoppages” and VY’s track record as an “extremely well run facility recognized by experts for its safety and reliability” as appealing qualities for potential owners.
Leonard said in a statement: “We have been successfully resolving any issues to secure Nuclear Regulatory Commission approval for a license extension at the plant, and we have been in negotiations with the local electric companies to finalize a long-term power purchase agreement to ensure the continued output of clean and reliable energy for Vermont utilities.”
Transfers happen
In an interview with Reuters, Citigroup Energy Analyst Brian Chin pointed to nuclear operators like Exelon Corp, NextEra Energy Inc. and Constellation Energy Group Inc., as likely bidders. The sale price, according to a British business news report, is $2 billion.
Chin told The Commons he knew what was “going on with the situation,” but that the process is confidential.
According to Sheehan, the transfer review takes six to nine months, depending on its complexity.
Neil Sheehan, NRC public relations officer, said a change in ownership isn’t unusual. “Over the years there have been dozens of license transfers,” he said. The NRC’s responsibility is to ensure potential owners are fit to operate a nuclear plant safely, Sheehan said. Seabrook Station in New Hampshire and Millstone Power Station in Connecticut have changed ownership in the last decade.
Potential buyers must pass muster with the NRC before the commission would grant a license transfer. According to Sheehan, the transfer review takes six to nine months, depending on its complexity.
The NRC vets the potential buyer’s finances, ensuring it has “the financial wherewithal to safely operate the plant,” including sufficient decommissioning funds, Sheehan said.
The NRC prohibits foreign control of nuclear plants. Companies based outside the United States must operate a subsidiary stateside to oversee daily operations. French company Électricité de France (The EDF Group), for example, owns 49.9 percent of Constellation Energy Group’s plants, but Constellation controls daily plant operations.
The owner-to-be would also need to demonstrate a “proven track record” of safely operating nuclear plants.
Plans to retain employees have an impact on the review, Sheehan said. The NRC prefers that employees familiar with the plant remain in place, though upper management officials often change post-purchase. Entergy kept VY’s workforce after it bought the plant from Vermont Yankee Nuclear Power Corp, Sheehan said.
License transfers are considered a “major licensing action” and therefore open to the public. Organizations or individuals able to demonstrate a stake in the issue can file hearing requests, Sheehan said.
How could a potential buyer finalize purchase of the plant before VY’s license expires in March 2012? Sheehan said that Entergy could detail its own timeline for the purchase.
“If it comes down to the current license is due to expire and there’s a [transfer] review under consideration [with the NRC], then the plant can continue to operate,” Sheehan said.
Sheehan said a sale wouldn’t reset the clock or change review deadlines for the NRC or the PSB. Nor will it help Entergy sidestep the Vermont Senate’s February vote to prohibit the state Public Service Board from issuing VY a Certificate of Public Good to operate the plant for another 20 years, according to Sheehan.
Entergy has said the Legislature overstepped the state’s authority; it asserts that only the NRC can decide whether the plant should be relicensed.
Five months to sell?
Rep. Sara Edwards, P-Brattleboro, says the plant, no matter who owns it, will continue to have problems.
“It is critically important to remember that changing the owner does not change the dismal facts about the plant,” Edwards said.
“It is critically important to remember that changing the owner does not change the dismal facts about the plant,” Edwards said. “[The plant] is old and it is leaky and it would not pass the design test today. There’s only so much repair and replacement you can do.”
Entergy has marked April 2011 as its “drop-dead” date for settling the licensing issue, Edwards said, and five months is a very short timeframe to sell the troubled plant in the current regulatory environment.
“It’s of paramount importance to take care of the 200 Vermont workers. This [issue] is not a piece of cake,” she said. She said the area could expect a transition period and economic impact if VY closes in 2012, but that Windham County would ultimately pull through.
