Entergy Corporation announced Entergy Nuclear Vermont Yankee, LLC has completed negotiations on a 20-year agreement to sell power from the Vermont Yankee nuclear plant to customers of Vermont Electric Cooperative, Inc., the third-largest electric distribution utility in Vermont.
The agreement is subject to approval by VEC’s board of directors, and is contingent on the plant running after March 2012.
“Entergy continues to seek successful resolution related to the long-term future of Vermont Yankee to benefit all stakeholders, including the approximately 650 men and women who work at the plant,” said Richard Smith, president of Entergy Wholesale Commodities. “Securing agreements with the local electric companies to sell power from the plant at affordable prices is one of the efforts that has been under way for some time.”
Entergy Nuclear Vermont Yankee will provide around-the-clock energy and capacity beginning in March 2012 to the Vermont Electric Cooperative, which serves approximately 34,000 people in 74 towns throughout northern Vermont. The power price for the first year of the contract is fixed and will be $49 per megawatt hour, which is below the current market.
In subsequent years, pricing will be determined annually based on a predetermined formula designed to protect VEC from high market prices while also giving its members the opportunity to benefit from low market prices.
On March 21, the Nuclear Regulatory Commission renewed Vermont Yankee’s operating license for an additional 20-year term. “Our nuclear team’s achievement of the operating license renewal marks the culmination of an extensive safety and environmental review by the NRC that spanned more than five years,” Smith said. “Vermont Yankee has an outstanding operational track record. In the last five years, Vermont Yankee’s capacity factor has been above 94 percent, operating with two breaker-to-breaker runs and only one trip over about a four-and-one-half-year period.”
In the first 30 years of the plant’s life before Entergy acquired it in 2002, the average capacity factor was below 78 percent and the plant never had a breaker-to-breaker run. In addition, Vermont Yankee has been evaluated in the “excellence” category as compared to its peers since Entergy acquired the plant.
Entergy also stated that the previously announced process to explore the sale of the 605-megawatt plant has concluded without a sale.
“Although we received interest from a number of companies, the conclusion of the sale process, without a sale, was driven primarily by the uncertain political environment in Vermont,” Smith said. “The plant’s strong operating performance was attractive to potential buyers; the political uncertainty was not.”
Entergy noted that ending the sale process is not related to the recent nuclear events in the aftermath of Japan’s catastrophic earthquake and tsunami. In addition, Entergy will evaluate on an ongoing basis any future opportunity for the plant should conditions change, consistent with its dynamic point-of-view based business strategy, just as it does for any business or asset.