Negotiations between Entergy and state officials are ongoing despite a news report that talks had broken off.
In response to an article in the Times Argus published on Monday that stated negotiations had failed, the Department of Public Service filed a letter to the Public Service Board reiterating that talks related to the shutdown of Vermont Yankee Nuclear Power Plant are ongoing.
Entergy, the Louisiana-based company that operates Vermont Yankee, announced in August it would close the Vernon plant in 2014 for financial reasons — just days after a federal court ruled the Vermont Legislature could not block the relicensure of the aging nuclear plant for a 20-year period after its presumptive shutdown date on March 21, 2012.
After the announcement this summer, Entergy resubmitted its application for a certificate of public good and asked the Public Service Board for a license to operate through 2014.
The Shumlin administration asked the Public Service Board to halt relicensing proceedings for its final year of operation until negotiations are settled. The state had planned to reach an agreement last Friday.
Chris Recchia, commissioner of the Department of Public Service, confirmed that negotiations are underway.
“We are having constructive discussions, we are not – we don’t have an agreement yet, but we are continuing to talk,” Recchia said. “I can say we are working diligently to get this addressed in a way that can feed into the board process.”
Bill Sorrell, the Vermont Attorney General, was also mum about the timeline for the talks, the players in the room and the topics under discussion. He and other state officials are constrained from talking to the press because they have signed what he described as a standard confidentiality agreement with Entergy.
There is much to negotiate. The state and Entergy remain embroiled in litigation and disagreements over a variety of issues, including tax payments, hot water discharges from the plant into the Connecticut River and the impact of the closure of the plant on the Windham County economy.
Chief among the contentious matters that remain outstanding is the plan for decommissioning the plant, which has 530 tons of nuclear waste on site. Entergy wants to mothball the plant for 60 years; the state wants decommissioning to occur on a much faster timeline.
The cost to decommission the plant is estimated at $800 million to $1 billion. Entergy has less than $600 million set aside in a decommissioning fund.
Outside observers who are not involved in the talks speculated on the nature of the negotiations.
Rep Tony Klein, D-East Montpelier, the chair of the House Committee on Natural Resources and Energy, said he hopes the administration will reach an agreement.
“I can assure you that I will be involved in discussions of any direction that we are going to go if we need to go somewhere,” Klein said. “You know, I’m still hopeful that if negotiations are continuing … that hopefully the administration and Entergy can come to a common ground.”
Klein, who is not privy to the negotiations, said several issues will likely be at the heart of the talks.
“I can tell you that I can imagine that it will be settling the lawsuits, releasing the money that Entergy has paid into escrow for the Clean Energy Development Fund and obviously figuring out a way to make sure there’s not a $12 million hole in taxes,” he said.
Arnie Gundersen, a nuclear engineer who has advised the Legislature about the plant in the past, said the state has leverage in the negotiations. He believes the state could impose a tax on Entergy of $20 million a year. This would be feasible, Gundersen says, because the spent nuclear fuel has value.
“I believe we can tax them,” he said. “The industry is now calling, including Entergy, they are now calling nuclear fuel not spent fuel, but used fuel. Well, a used car has value and so does used fuel. Therefore, it should be taxed because it has value.”
He said the Legislature could step in if the department fails to reach an agreement with Entergy.
“Perhaps they [the Legislature] can make a case that a tax is appropriate considering that the whole state is at risk,” Gundersen said.
Gundersen says the stockpile of nuclear fuel that will eventually go into dry cask storage at the site, which is on the banks of the Connecticut River, will be the largest ever released by a nuclear power plant — the equivalent of 700 nuclear bombs. It’s a risk, he says, the state should be compensated for.
At this point, however, there are no plans to introduce a Yankee tax in House Ways and Means, according to Rep. Janet Ancel, D-Calais, who chairs the committee.
Deb Katz, executive director of Citizens’ Awareness Network, said the Public Service Board should place conditions on Entergy’s pending certificate of public good.
“The one thing that the appellate court did was uphold the power of the Public Service Board to determine whether Entergy could operate within the state,” Katz said. “It completely validated them. So that they have power in this situation, and it would be reasonable for them to use it in terms of putting conditions on clean up, and potentially operations, as well.”
Whether Entergy will actually honor future agreements is another matter, in her view.
“Are there commitments that can be made now whether through the Public Service Board or through these negotiations that Entergy will uphold?” Katz said. “I actually don’t know. They could in fact go back to court, but it’s worth trying.”
In light of the fact that Entergy is in financial hot water and Vermont Yankee is a merchant plant that is owned by a limited liability corporation — not a publicly owned utility, Katz said it’s all the more important for the state to do what it can to find common ground with the company.
“This is a very important process in place that has the potential to set an important precedent for states and nuclear corporations to come up with a reasonable process — whether it’s successful or not, it’s imp to try to do it,” she said.
Editor’s note: This story was updated at 6:03 a.m. Dec. 18.
