The utility places a $100 million bet despite a hostile political environment
The future of the Vermont Yankee nuclear reactor got a bit brighter this week as its owner and operator the Entergy Corp. (NYSE:ETR) announced its board of directors had approved the fabrication of fuel and the refueling of the Vermont Yankee reactor in October.
The refueling will cost as much as $100 million of which about two-thirds is the cost of the fuel and the rest labor and supplies. About 800 workers will be brought in over the course of the month long outage as part of the refueling process.
The new fuel will replace about one-third of the reactor core and is good for about 50 months of use before it will also have to be changed out. In effect, Energy is betting that it can beat the reaper in Vermont and continue to earn revenue from the sale of electricity in Vermont.
Opposition from State of Vermont
Entergy received a 20-year license extension for the reactor from the U.S. Nuclear Regulatory Commission in March 2011, but the state of Vermont has refused to issue a certificate of public good to allow it to continue to operate beyond March 2012.
The company filed in U.S. District Court for a preliminary injunction against the State of Vermont. However, U.S. District Court Judge J. Garvan Murtha denied the claim, saying there was no immediate irreparable harm, and scheduled a trial on the merits of the case for September.
If Entergy loses in court, it could lose not only its investment in the replacement fuel, but also all future earnings for the remainder of the new 20-year license extension.
Over to you New York
There may be a second reason why Entergy is betting the ranch, so to speak, in Vermont. It is to send a message to neighboring New York which has been contending against two 20-year license extensions for the reactors at Entergy's Indian Point power station.
The unstated message which comes across the border from Vermont to New York is that Energy is putting its money behind its drive to keep the Vermont Yankee reactor open and can be expected to do the same with Indian Point.
The NRC staff has already determined the twin reactors there, which supply 2,100 MW of power to the New York City region, are safe. However, the State of New York and several environmental groups with close ties to Gov. Andrew Cuomo, have filed contentions against relicensing. These legal motions will be resolved as part of hearings conducted by the Atomic Safety and Licensing Board.
High stakes in granola country
The decision to refuel Vermont Yankee is a high stakes play because once the company orders it, the fuel cannot be used in other nuclear reactors. It is engineered for the specific configuration and operation of Vermont Yankee. See Margaret Harding's technical notes at her blog Four Factor Consulting.
Vermont's Governor Peter Schumlin wants to shut down the reactor and made that outcome a central plant of his successful electoral campaign in 2010. Driven by the state’s “green” politics, his work was made easier by miscommunication by Entergy over the issue of leaks of radioactive tritium from underground pipes.
Despite a considerable political uproar over the issue of tritium leaks, William Sorrell, Vermont's attorney general, has decided not to file charges against Entergy Corp.
In January 2010, Entergy said it discovered a tritium leak at Vermont Yankee. The company stopped the leak in March 2010. Previously, plant managers told a state legislative committee, under oath, there were no leaks from underground pipes.
Sorrell said July 6 that his office conducted an investigation, but lacked enough evidence to prove perjury in court.
"Clearly, Vermont Yankee personnel repeatedly failed to meet a minimally acceptable standard of credibility and trustworthiness, but proving that perjury took place is another matter entirely, We lack the smoking gun necessary to prove the crime and it would be unethical and irresponsible for us to press criminal charges when we do not have the evidence to meet our heavy burden of proof."
The company took disciplinary action against the employees involved in the case. According to press reports at the time, some Entergy employees either lost their jobs or faced other internal personnel actions affecting their careers.
The incident left a visible dent in Energy's credibility which continues to affect public sentiment. What it will not do is affect the NRC's licensing authority for the reactor. The issue is now joined in federal court. We'll have to wait for the trial in September to see how that turns out.
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