Entergy, Vermont Electric Cooperative complete negotiations on power contract, $49 per mwh

first_imgBrad Ferland, President of the Vermont Energy Partnership, responded today to the announcement of the proposed power purchase agreement between Vermont Yankee and Vermont Electric Co-op: ‘This is a great deal ‘ and we need more like it.  At 4.9 cents/kilowatt hour it saves ratepayers a considerable amount of money, while helping to ensure jobs and other sizable economic benefits stay in Vermont.  We encourage other Vermont utilities and Vermont Yankee’s owner to finalize similar agreements in the very near future.’ “Entergy implied that there was an agreement with VEC. Although negotiations to purchase power from Vermont Yankee have ended, at the present time there is no agreement to purchase power from Entergy beyond March, 2012.”‘VEC has been negotiating with Entergy, which has offered VEC a 20-year contract that is below market; however there is presently no agreement,’ said CEO Dave Hallquist. ‘To be clear, entering into a contract with Entergy would be contingent on two additional factors: approval by VEC’s twelve member board of directors and support by the state of Vermont for the continued operation of Vermont Yankee beyond March of 2012,’ continued Hallquist.The VEC board of directors will evaluate a potential deal on April 26, 2011 at their monthly meeting to be held at VEC headquarters in Johnson, Vermont. ‘This is a serious and controversial issue for VEC directors who are weighing the benefits of a favorably priced energy contract against concerns about the safety of VY and Entergy’s relationship with the state of Vermont’, stated Hallquist. ‘If Entergy does not gain approval by the State of Vermont to operate, there will not be a deal.’VEC is a member-owned cooperative represented by a board of directors that is democratically elected by VEC’s members. With more than 37,000 retail meters, VEC is Vermont’s third largest electric distribution utility serving consumers in 74 towns in northern Vermont. 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.Governor Shumlin issued the following statement:‘Today’s announcement that Entergy Louisiana was unable to sell Vermont Yankee is further evidence that this aging plant should be shut down on schedule in 2012. It is not surprising that Entergy could not find a buyer for Vermont Yankee. The plant and its operators have had numerous issues ‘ cooling tower collapses, a transformer fire, leaked tritium, and misinformation about the underground piping ‘ and I have no confidence in the continued operation of the plant or in its owners.’In a reponse March 31 to the Entergy released statement of a deal between it and VEC, the Vermont Electric Cooperative issued its own statement saying that the proposed deal still needed approval from its board and the state of Vermont: Entergy Corporation (NYSE: ETR) today 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. Entergy also stated that it will not sell the plant.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 Corporation is an integrated energy company engaged primarily in electric power production and retail distribution operations. Entergy owns and operates power plants with approximately 30,000 megawatts of electric generating capacity, and it is the second-largest nuclear generator in the United States. Entergy delivers electricity to 2.7 million utility customers in Arkansas, Louisiana, Mississippi and Texas. Entergy has annual revenues of more than $11 billion and approximately 15,000 employees.New Orleans, La. ‘ Entergy Corporation. 3.30.2011last_img