×

Updated: Under pressure, Vermont Yankee to close by end of 2014



Last modified: Wednesday, September 18, 2013
Vermont Yankee — the nuclear power plant just over the border from Franklin County that has been under siege by anti-nuclear foes for years — will shut down by the end of next year, ending a nasty legal battle over the future of the four-decade-old plant, Entergy Corp. announced Tuesday.

The Vermont Yankee Nuclear Power Station is expected to cease power production after its current fuel cycle and move to safe shutdown in the fourth quarter of 2014, the company said. The station will remain under the oversight of the Nuclear Regulatory Commission throughout the decommissioning process.

The New Orleans-based company has been battling with the state since 2010, when the Vermont Senate voted against a measure that would have authorized a state board to grant Vermont Yankee a permit to operate for an additional 20 years. Lawmakers were concerned about the plant’s safety, age and misstatements by plant management about components at the reactor.

“This was an agonizing decision and an extremely tough call for us,” Leo Denault, Entergy’s chairman and chief executive officer, said in a statement released by the company. “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.”

According to a Vermont Yankee, there were a variety of factors that pushed Entergy to close the plant:

* A natural gas market that has undergone a transformational shift in supply due to the impacts of shale gas, resulting in sustained low natural gas prices and wholesale energy prices.

* A high cost structure for this single unit plant. Since 2002, the company has invested more than $400 million in the safe and reliable operation of the facility. In addition, the financial impact of cumulative regulation is especially challenging to a small plant in these market conditions.

* Wholesale market design flaws that continue to result in artificially low energy and capacity prices in the region, and do not provide adequate compensation to merchant nuclear plants for the fuel diversity benefits they provide.

* The company noted that the estimated operational earnings contribution from Vermont Yankee was expected to be around breakeven in 2013, and generally declining over the next few years.

Vermont Yankee opened in 1972 in Vernon, Vt. In the past, the plant has provided as much as a third of the state’s electrical supply. Currently, nearly all of its power is shipped to electric companies in neighboring states.

After being granted the federal license it also needed for continued operation, Entergy sued the state and won a first round in federal court in Brattleboro.

The state appealed but largely lost earlier this month. Attorney General Bill Sorrell has said the ruling worked out well in one respect: The court overruled a part of the lower-court decision saying the state had violated the U.S. Constitution by trying to demand cut-rate power from Vermont Yankee if it were allowed to continue operating.

The company employs about 630 people, a staffing level that will gradually be reduced as the plant moves through the stages of decommissioning.