As tension builds about when the Vermont Legislature will vote to allow or deny a 20-year license extension for the Vermont Yankee nuclear power plant, it's time to look at what's going on between the state of New York and Yankee's owners, Entergy.
Wrapped in with the license extension Entergy wants for the plant is a plan by the company to spin off Yankee and four other of its nuclear properties—Pilgrim in Plymouth, Mass., Indian Point and Fitzpatrick, both in New York State, and Palisades in Michigan—into a new company, Enexus.
Goldman Sachs is advising Entergy about forming Enexus, which would begin life with a debt of $3.5 billion—a fact that has ratepayers and officials in Vermont and New York worried that, especially in a shaky market, the new company would not be able to pay for proper maintenance and especially for the expensive future decommissioning of the plants. (Massachusetts and Michigan do not have laws giving them jurisdiction over the formation of the new company.)
And according to its Securities and Exchange Commission filing, Enexus' instruments will not be investment-grade; that, as noted nuclear industry analyst Dan Scotto of Whitehall Financial Advisors told the Advocate, "after all is said and done, is not helpful."
Enexus cannot come into being unless it's approved by, among other agencies, the New York State Department of Public Service. On January 14, New York State Attorney General Andrew Cuomo sent the New York State Public Service Commission a letter asking it not to approve the spinoff.
New York State has often been at odds with Entergy over its management of the Indian Point plant, which is located very close to New York City, and Cuomo's office has long been leery of the transfer of the New York nuclear plants to Enexus because of fears that the company might use the formation of Enexus to renege on various financial responsibilities.
Cuomo, who from the beginning called the spinoff "ill-conceived," wrote the Public Service Commission that the "transfer of Indian Point and Fitzpatrick to Enexus is not in the public interest and should not be approved." In spite of repeated requests from Entergy to decide on the matter before the end of 2009, the Commission has not issued a decision, but it expects to hand down a finding in February.
