Will Entergy Get an Offer On Vermont Yankee? Three Myths Dispelled

Right after the election, Entergy announced Vermont Yankee was on the market. The local response was completely predictable: "Nobody in their right mind would buy that plant!" I disagree. I think someone will buy it.

I need to point out that I have no insider information on this. I only know what I read in the paper.

Myth One: Nobody will offer for that old rustbucket.

In the eighties and early 90s, it became clear that a company that owned only one nuclear plant could not run it well. Some nuclear plants in this situation were closed (Rancho Seco, Trojan). Most nuclear plants were purchased by big companies. Today, a company owns more than one nuclear plant, or it owns no nuclear plants at all.

In other words, the only companies that might offer for Vermont Yankee are companies that already own nuclear plants. These companies know how to judge a nuclear plant, and they know that Vermont Yankee is a good one:

• Green rating from NRC
• Recent power runs of more than 500 days each
• Good relationships with the on-site union
• Industry-wide award for innovative inspection equipment
• Caught and repaired its tritium leak much faster than many other plants which had similar leaks.

Anyone who owns a nuclear plant would like Vermont Yankee.

Myth Two: Vermont Yankee doesn't have a license to operate past 2012, so nobody will want it.

A buyer can make a contingent offer. We made a contingent offer on a house at one point. Buying our new house was contingent on selling our old house for a certain sum by a certain date. Such offers are very common in all sorts of contracts. Our house offer was accepted, and the next phase of the purchase was called clearing the contingencies. Then we closed on the house. We owned it.

You can do this with a power plant, too. "We offer you this much, contingent on having license renewal approved."

Can the new utility clear the contingencies? Or will it be an offer with no closure? Nobody can completely predict the outcome of contingent offers, or they wouldn't need to be contingent. But I think the purchasing utility will sweeten the deal for the legislature and clear the contingencies. Perhaps the new utility will supply more money for the Clean Energy Development Fund. Perhaps it will make a one-time tax payment or cut a really good deal for a power purchase agreement.

In any case, there will be a new set of money on the table, and Vermont has a $112 million budget shortfall next year. I think a new utility can finalize the deal. However, nobody really knows about a contingent deal until it is near closing. That's why I headed this post "Will Entergy get an offer" rather than "Will Entergy sell the plant." I feel confident Entergy will get an offer.

Myth Three: The shortfall in the Decommissioning Fund means nobody will buy the plant

The decommissioning fund contains about $350 million, and decommissioning is estimated to cost about $800 million. This isn't actually a killer. If the plant operates for another 20 years, it will be easy to fill the fund completely with money from electricity sales.

Some opponents take the position that the customers buying nuclear electricity should not have to pay for decommissioning. They believe that decommissioning money needs to fall like a golden rain from heaven, or be some sort of charge against Entergy stock in the future. That is a very unrealistic view of finance. Luckily, neither golden rain nor charges against stock will be necessary. Nuclear power plants can provide the cheapest power on the market and still put a few mills per kWh away for decommissioning.

I don't know how the deal will be structured, but I know it is possible.The status of the decommissioning fund will not deter a buyer who plans to operate the plant for another twenty years.

In short, I predict that Entergy will receive an offer on Vermont Yankee.

Currency image and golden eagle dollar image from Wikimedia Commons.

Entergy Awards and Steam Dryer Inspections

Steam Dryer Inspection Completed with New Robotic Tool

The steam dryer inspection has been completed. The steam dryer is doing well and in good shape. On the other hand, the rhetoric in the press looks like this: World Comes to An End. New Crack Discovered in VY Steam Dryer.

Vermont Yankee recently put into service an award-winning steam dryer inspection tool. This tool is unique to Vermont Yankee. As the NEI press release about the Vermont Yankee award stated:

Entergy Nuclear employees at Vermont Yankee are recipients of the Maintenance Process Award for developing innovative tooling for the inspection of a boiling water reactor steam dryer.

The tool has led to better inspection of the steam dryer (of course) and a lot of negative publicity for the plant (of course). The video below describes the new tool and the award.

Steam Dryer Inspections at Vermont Yankee

In July, Entergy reported the results of using their new tool to inspect the steam dryer. I have uploaded their official report to the NRC and you can read it here. During this inspection, various indications within the dryer were assessed in importance. Some were uprated, more were downrated. (During inspections, results are called "indications" until one can assess whether they are cracks, some other type of flaw, or a bit of corrosion product sticking to the metal.) One crack was considered to have grown. The use of a new steam dryer inspection tool led to better results, and much reclassification of indications and cracks.

The bottom line was quite clear. On the last page of the inspection report, the conclusion states:

The VY Steam Dryer inspection has been extensive and the results show that the dryer is in good condition...The improved inspection tooling provided higher quality footage of the dryer and provided a high level of confidence that the dryer is in good condition.

The improved inspection tooling at VY is the envy of other power plants. It had clearer results and led to a more accurate inspection of the steam dryer.

The Reaction to the Inspection

If you read some of the local papers, you would never know that VY has a new inspection tool, or that the conclusion of the inspection was that the steam dryer was in good shape.

The Time Argus described the indications and so forth fairly well, including good information on what a stream dryer is, and what it does. However, the short article ended with an ominous mention of pieces of the steam dryer falling into the reactor at other (un-named) power plants at (un-specified) times in the past. The article did not mention the new inspection tool.

Maybe the Times Argus didn't realize that a new inspection method is likely to give new and better results. Maybe they didn't notice the innovation-inspection award. Maybe they didn't understand that industry-wide innovation awards are a big deal, in every industry, and should probably be mentioned in articles that directly pertain to the subject of the award.

Entergy is setting the standard and getting awards for inspection methods, but the local papers haven't noticed.

Industry Awards

There is a constant drumbeat of comments that Entergy lies, Entergy doesn't care about maintenance, etc. I want to point out that last year, Entergy people at VY won the Maintenance Process award for their Steam Dryer Inspection tooling. This year, Entergy won the top industry award, the Best of the Best Award, for an innovative reactor head vessel inspection tool. From the May 2010 NEI press release about that award:

SAN FRANCISCO, May 19, 2010—Entergy Nuclear employees at the Palisades nuclear power station in western Michigan have been honored with the B. Ralph Sylvia Best of the Best Award for developing an innovative device that improves the inspection of reactor vessel heads.

My conclusion: Entergy is doing a great job building innovative inspection tools that are the model for the industry. It is about time they were given some credit.

Carnival Time Again!

The Twelfth Carnival of Nuclear Energy is posted at Idaho Samizdat, and Dan Yurman did a terrific job of choosing posts and describing them succinctly. Cheryl Rofer of Phronesisaical tackles the New York Times estimate of the amount of plutonium at Hanford, while Rod Adams of Atomic Insights encourages the New York Times to use some fact-checkers next time they estimate the cost of solar power. Barry Brook of Brave New Climate points out that if Climate Change is the Inconvenient Truth, than the inconvenient solution (inconvenient for people who have spent their life campaigning against nuclear power) is staring us in the face. It's nuclear.

Join the fun at the Carnival!

Addendum: Meanwhile, Green Mountain Daily Views with Great Alarm

The Green Mountain Daily (GMD) viewed the inspection results with great alarm. My friend Howard Shaffer attempted to explain what a steam dryer does, and his comments received the odd comment that it was good that he was no longer making threats against people. I think (not sure) that this "making threats" business comes from Shaffer pointing out that an earlier GMD post about me and Rod Adams could be considered libel. On the other hand, maybe something else Shaffer said was considered to be a threat. I can't keep up with the people at GMD. Everything that happens at the plant is a threat, and things Howard says or I say are threats. They live in a rather scary world over there.

Here's how Howard Shaffer answered these comments. He was very gentlemanly in his response. He was accused of "personal threats" and changed it to "personal attacks" when he answered.

I reread my earlier comments. I don't feel quoting someone or pointing out where their facts are wrong are personal attacks. For example, Mrs. Gundersen said at a public meeting at Vermont Law School that she believes the entire nuclear power industry should be shut down. I disagree with her on this national policy, but that is not a personal attack. It does give me insight into the actions her company takes, and those of her Chief Engineer.