In 2010, Howard Shaffer and I debated two nuclear opponents on the subject of whether Vermont Yankee should keep operating. One of the opponents was a very accomplished debater. He stuck to his talking point. He constantly re-iterated: A deal is a deal. In his view, Vermont Yankee had a "deal" to operate for 40 years, end of story.
He was wrong. The actual Vermont Yankee deal means that Entergy will send a $17 million dollar check to Green Mountain Power. This is revenue sharing for the plant's operation past 2012. Operation past 2012 and revenue sharing were part of the state's agreement with Vermont Yankee.
The Vermont Yankee deal was signed in the Memorandum of Understanding by which Entergy bought the plant in 2002. This agreement included financial arrangements for Vermont Yankee if it operated after 2012.
The Revenue Sharing Agreement
According to the Memorandum, if Vermont Yankee sold power at prices greater that $61 MWh (6.1 cents per kWh) after 2012, then Entergy had to split the "excess" payments with the utilities from whom Entergy had bought the plant. This revenue sharing was planned to last for ten years, through 2022. The price of 6.1 cents per kWh is sometimes called the "strike price." It is the price at which the revenue sharing part of the deal kicks in.
Last week, Entergy wrote a letter to Green Mountain Power saying that Entergy would pay almost $18 million dollars in revenue sharing to the utilities. This sum was for revenue sharing for March 2013 through March 2014. Terri Hallenbeck of Burlington Free Press broke the story: VY has parting present for GMP: $17M
What Will Happen to the Money?
According to the Green Mountain Power spokesperson Dorothy Schnure:“It’s great news for our customers...All the money we are entitled to will go to ratepayers.”
Some of us (like me) don't believe Schnure. Seventeen million dollars is a sizable amount of money for a company with annual revenues of $240 million. More importantly, Green Mountain Power doesn't have a good track record about sharing windfall money.
Last time Green Mountain Power had a windfall, it was supposed to repay ratepayers for a loan. Specifically, Green Mountain Power was supposed to refund $21 million dollars to ratepayers in the case of a utility merger. Instead, Green Mountain Power kept the $21 million as a revolving fund. People can borrow from the fund for weatherization projects.
The AARP objected, saying that Green Mountain Power had broken its agreement, and that seniors in Vermont could use some actual money (not loans) in order to offset higher energy expenses. The AARP was right, but the AARP lost . A quote from the Vermont Digger article on the AARP appeal: (Schnure) said, however, that the (Public Service Board, PSB) board had already gone to great lengths in its opinion to explain fully its reasons for denying AARP’s request that money go directly to ratepayers.
I doubt that the ratepayers will get Entergy's $17 million from Green Mountain Power, either. I think the utility will probably find some other way to use the money themselves, or have Efficiency Vermont use it. Green Mountain Power probably won't give it back to ratepayers, who would just spend it in dribs and drabs on whatever the ratepayers want to spend it on! How silly! (Okay, I know, sarcasm alert.)
But that is just my opinion. I'm a blogger. I have opinions. Onwards to some facts.
First: the Revenue Sharing Agreement was worth something to the state of Vermont. The opponents of Vermont Yankee often claimed that grid prices would remain low for many years, and the revenue sharing agreement was worthless to Vermont.
They were wrong. I doubt if they will apologize.
Second: This is the end or close to the end for such payments. There may be another payment to Vermont utilities if local grid prices remain high between now and the end of the year. But after that payment, there will be no more of these windfalls from Entergy to Vermont utilities. As Hallenbeck described this payment: it was a "parting present" from VY to Green Mountain Power.
We can thank Entergy for the gift. We can thank Entergy for living up to their obligations, once again.
We can thank Governor Shumlin and his supporters for the fact that this is a "parting" gift. (If we want to thank them, which I don't.)
"A deal is a deal" statements at the debate. See Howard Shaffer's December 2010 article at ANS Nuclear Cafe: Vermont's Nuclear Debate, Continued.
Green Mountain Power will get most of this money, but some smaller utilities may also receive checks. The Department of Public Service will do the calculations, as described in the Hallenbeck article.
Obsessive readers of my blog may remember that Hallenbeck is the reporter who asked Governor Shumlin why he thought his memory of discussions about decommissioning was more important than what the state signed about decommissioning in the Memorandum of Understanding. In reply, Shumlin asked her if she was "working for Entergy today." You can hear the exchange in my 2011 blog post: In Vermont, Our Word is Our Bond, So We Don't Honor Contracts.
Green Mountain Power is a wholly-owned subsidiary of Gaz Metro of Canada.