Business & Economy

Vermont Yankee owner: ‘Expect workforce reductions’

Vermont Yankee cooling tower collapse, 2007
Vermont Yankee cooling tower collapse, 2007

Entergy Corp., which owns the Vermont Yankee nuclear plant, is preparing to cut back its labor force in an effort to reorganize the company.

“We do expect workforce reductions to be one result of this initiative,” national spokesman Chanel Lagarde said in a statement Thursday. “We don’t have final specifics at this time regarding who or how many employees will be affected. We remain focused on all our key stakeholders throughout this process, and we will deal fairly and communicate openly and honestly.”

A source inside the Vernon plant says managers are telling workers that the company could lay off 10 percent of the facility’s roughly 650 workers.

This news comes shortly after Entergy announced that it anticipates decreased earnings in the second quarter of 2013, dropping from $2.11 a share last year to an estimated $1 per share. Representatives of the Louisiana-based company said in a news release that the decrease is due to “substantially higher income tax expense.”

Mark Cooper, a senior economics fellow at Vermont Law School, published a paper Wednesday titled, “Renaissance in Reverse: Competition Pushes Aging U.S. Nuclear Reactors to the Brink of Economic Abandonment.” Cooper drew from the Wall Street reports of Moody’s, UBS and Credit Suisse for his analysis.

“Economic reality has slammed the door on nuclear power,” Cooper concluded. “In the near-term old reactors are uneconomic because lower cost alternatives have squeezed their cash margins to the point where they no longer cover the cost of nuclear operation … In the long term new reactors are uneconomic because there are numerous low-carbon alternatives that are less costly and less risk (sic).”

In 2013, the fair 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 tenuously positioned plant.”

An internal document provided to VTDigger about “Entergy’s Human Capital Management initiative” shows that Entergy employees are essentially being asked to reapply for their jobs.

“We are staffing our new organization using a selection process to help us match employees’ knowledge, skills and abilities with future jobs in the organization,” the document says.

The document contains almost 18 pages of questions and answers and doesn’t cite an exact number of layoffs or where they might occur. But the document does indicate that layoffs are coming.

“Will layoffs occur as a result of HCM?” one question asks.

“Yes. As a result of the redesign of the organization, some jobs will be eliminated.”

Rob Williams, spokesman for Vermont Yankee, referred questions about layoffs to Lagarde, who would not add to the prepared statement.

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Andrew Stein

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  • Moshe Braner

    We should get more money from Entergy into the insufficient decommissioning fund before they go “poof”.

  • Peter Liston

    Meanwhile Entergy CEO J. Wayne Leonard makes $19.51 million per year (Forbes).

  • Mike Kerin

    Moshe and Peter both make good points. My point is, how many people will be hurt when there are not enough there to keep the plant running safely?

    I know , safety is up to the NRC and I am not allowed to mention it.

    • John Greenberg

      Correction: Safety IS up to the NRC, as you say, but you most certainly ARE allowed to mention it.

      Citizens are not preempted, and in fact, neither are state officials. States may not REGULATE nuclear safety, but they are certainly free to discuss safety issues. DPS is a regular intervenor in NRC proceedings concerning VY, for example and has been for decades.

  • david klein

    Is the bottom line safety or profit? I really want to know.-

  • Bud Haas

    Love this line:
    ” We remain focused on all our key stakeholders throughout this process, and we will deal fairly and communicate openly and honestly.”

  • Bob Stannard

    Do any of you recall the battle that we fought in the State House over whether or not the legislature should allow the plant to continue to operate beyond its expiration date?

    I do, because I was there and what I saw was Entergy using its employees as a shield, which they could hide behind. They’ve been trotting out their faithful employees not only in the building, but with letters to the editor with the employees falling on the sword of support for this company.

    And what reward do these faithful employee receive for their hard work? 10% of them get laid off. Nice. Real nice.

    I always said that the employees were exploited pawns in this game. This great story by Andrew Stein now proves it to be true.

  • Wayne Andrews

    if 65 employees getting the pink slip is such a harsh measure to the liberals out there just what do suppose the impact would be if a closure results in 650 pink slips?

    • Wayne,

      Much worse, because the 650 are highly-paid (and paying various taxes), and spend much of their money for goods and services in the local economy (sales taxes) which keeps at least 1000-1500 OTHER people employed (and paying taxes) in various businesses that provide goods and services to VY workers and the VY plant.

      IBM just laid of about 400 plus highly-paid people which will have a similar multiplier effect as would VY.

      All this per Economics 101.

  • jim buttkowski

    Wayne, why does one have to be a liberal to think of this as a “harsh measure?” The real point here is financial stability… this is a nuclear plant after all…people like to think that an operator of a Nuke plant is financially sound. It all comes down to money…no one wants to see 650 or even 65 people lose their jobs.. but we do want to see the owner operator of the this Nuke plant act resposibly, honestly, and safely

  • Jim Barrett

    Ask Shumlin how much stock he owns that is in direct competition with VTY? Ask Shumlin how he justifies using millions in tax payers monies to shut down a great company without revealing his PERSONAL INVESTMENTS! The media is asleep at the wheel and those in the know understand what is going on……a complete attack on a private company that is not justified and the worst part of this scam is the media knows it and won’t report on it because they are in bed with Shumlin!

    • Fred Woogmaster

      If you KNOW of the ‘personal’ investments you refer to, please state them or provide a reference; otherwise your comment is of no value.

    • John Greenberg

      “Ask Shumlin how he justifies using millions in tax payers monies to shut down a great company …”

      Three points: 1) Entergy sued Vermont (actually at least 3 times now), not the other way around.

      2) The State of Vermont has not spent millions to defend itself. In all of the suits combined, it may, by now have spent $1 million, though I rather doubt the figure’s that high yet. The most time consuming of the cases cost about $400,000 in the lower court, where Entergy, on the other hand, spent $4.5 million.

      3) The preemption and tax cases are being handled by the AG’s office. If you really must aim worthless, undocumented, irresponsible comments about conflict of interest at someone, they should be directed to Bill Sorrell, not Peter Shumlin.

    • Bob Stannard

      To John Greenberg: Let’s not confuse Mr. Barrett with facts.

      Mr. Barrett, you are sounding borderline delusional here. You may recall that the Senate vote to not allow the continued operation of the VY plant was an overwhelmingly bipartisan vote. Even Senator Randy Brock voted against VY.

      Why? Because the executives of this company lied to Vermonters and allowed this plant to leak radiation into the ground. The members of the Vermont Senate realized that Entergy was not a trustworthy partner. There was a time when Entergy enjoyed good relations with Vermont, but that time has long since past. And the reason it has passed is because of their own actions. They have no one to blame but themselves.

      And Mr. Greenberg is correct; it is Entergy who is suing Vermont; not the other way around.

    • Bob Stannard

      Mr. Barrett, perhaps you should read this brief article on the Cooper report:

      • Peter Liston

        “including competition from lower-cost energy sources, falling demand, safety retrofit expenses, costly repairs, and rising operating costs” AND PLUMMETING STOCK VALUE … and still the company executives are paying themselves 8 figure salaries.

        They’re shoveling money out of the company while it falls apart around them.

    • Bob Stannard

      Also, Mr. Barrett, Gov. Shumlin has not used one dime of taxpayer dollars shutting down this company. This company opted to sue Vermont (not the other way around).

      They sued us over a bipartisan vote that reflected a loss of faith with Entergy. Even Sen. Randy Brock voted against them (he has since changed his position, but knew what he was doing at the time of the vote).

      Entergy’s problems are the direct results of Entergy’s actions.

  • Rob Simoneau

    “Tokyo Electric Power Company says the number of early retirees jumped to over 700 in the last fiscal year from about 130 in fiscal 2010, before the plant [Fukushima Daiichi] was hit by a nuclear accident. It says more than 1,200 employees quit in the period from the accident to last month. About 40 percent of early retirees in the last fiscal year were in key positions when they decided to leave the company. TEPCO says it has a sense of crisis that its business, including power generation and affairs related to nuclear accident compensation, could be hampered.” Source NHK

    Again no discussion with regard to the human cost. Please remember radiation poisoning has an incubation of about 4-5 years, especially for children.

    I agree nobody want to see these people lose their jobs but Entergy is playing with our lives and environment. The plant will soon experience a major failure. Decommission Vermont Yankee now. Decommissioning will take at least 10 years. Fukushima Daiichi will take 40 years and the current cost is 140 billion and counting. Source NHK

  • Norma Manning

    Something not being discussed here is that these projected job losses are private sector and not public sector jobs. Can you imagine the impact on both the regional and state economy if we were to lose all 650 jobs at Vermont Yankee this fall? Yes the state ended the fiscal year with $26 million more than expected, but that was with tax increases and before IBM eliminated 400+ high paying private sector jobs. Additionally, we are in danger of losing our Vermont Air Guard base in Burlington. Think domino effect/negative growth.

    • Bob Stannard

      Right Ms. Manning and those jobs will be lost just as soon as Entergy’s CEO determines that this plant is no longer viable, which according to most financial institutions is not very far off.

      But remember, this is a nuclear plant. They can’t just walk away from it There will be many people working for a long time to decommission the plant. Will the jobs be the same? Of course not, but the loss will be reduced somewhat.

    • John Greenberg

      If you’re interested in reading analysis of the impacts of closing VY, considerable testimony on precisely this topic has been presented in the Public Service Board docket (7682) for a new CPG for VY:

      Entergy’s arguments are presented by Richard Heaps. They were rebutted in direct testimony by Thomas E. Kavet and Nicholas O. Rockler and then in surrebuttal testimony by Robert Unsworth (which, for some reason, is not posted on the website above, but is, I’m sure, available from either the PSB or from DPS).

      Long story short, the State witnesses contend that the long-term effects are likely to be quite minor, as they have been at the other New England nuclear plants already closed. Many of these workers will be needed for post-shutdown closure, whether or not decommissioning is immediate or, as Entergy currently contends, it is mothballed until the funds are available to complete decommissioning. Many others — highly paid construction workers, truckers, etc. — will be required to actually decommission the plant. It is also worth noting that with all of the power lines converging on the site and other infrastructure, it is an idea location for a new generating plant (hopefully and almost certainly not nuclear), and is therefore unlikely to out of use for very long.

      Fair disclosure requires that I note that I submitted comments (unofficially) rebutting Mr. Heaps’s nearly identical testimony in comments in the previous CPG Docket, #7440.

    • Rob Simoneau

      “A record number of reactors closed in North America this year – at San Onofre 2 & 3, CA; Crystal River, FL (pictured, left); Kewaunee, WI; and Gentilly-2 (Quebec). Plus there is a growing list of new reactors and other nuclear projects that are non-starters. Canceled are: Duke/Progress Energy’s proposed twin reactor units at Levy County, FL; and plans to ship radioactive waste from the Bruce nuclear site in Canada to Sweden. The Nuclear Regulatory Commission has also informed Duke that license finalization for its proposed new reactors at William States Lee in SC has been postponed by three years, to 2016. And the nuclear market in the U.S. is so bad, the largest nuclear utility in the world, Electricité de France, has announced it is completely withdrawing.” (source Nuclear Watch) It is over for the nuclear industry and has been for a long time. Decommission Vermont Yankee now, before it is too late!

  • Pete Novick

    “In this world there are only two tragedies. One is not getting what one wants, and the other is getting it.”

    – Oscar Wilde, Lady Windermere’s Fan


    “There are two tragedies in life. One is not to get your heart’s desire. The other is to get it.”

    – George Bernard Shaw, Man and Superman