Changing Hands?

Vermont’s Yankee nuclear plant may be on its way to changing hands. Entergy Corp. has positioned itself to execute a possible sale of the plant in the midst of the troubles it’s facing. Combined with a depressed power market fueled by low natural gas prices, the Vermont plant is getting older. By some standards in fact, the plant is becoming ancient. The 39 year old plant is commissioned through March 2012, yet Entergy is hoping to extend its license for another 20 years before selling it off.

The plant is facing other issues as well. Last year the plant’s groundwater tests showed an increase in a radioactive material known as tritium—which can lead to cancer. Despite the levels being deemed innocuous after further testing, the plant’s ownership has fallen out of fashion with State and even Federal officials. Vermont, unlike most other states, has the ability to block proposed extensions of a nuclear plant operating there. It seems like the time is now for Entergy to get out.

It’s not all bad for the plant, though. The Yankee plant is responsible for producing about 1/3 of the state’s power, which bodes well for a potential buyer. Secondly, the state’s objection to the plant seems more with the current ownership, especially after their mishandling of the tritium leak, not with the plant itself. Is Vermont equipped to suffer a loss of a third of its power production and 650 jobs? I’m not sure, and I’m willing to say that in this economy, such a move is unlikely.

Wall Street Journal Analyst Naureen Malik deemed the possible sale a win-win situation, and I’m inclined to agree. The plant, who sells power a market price not a regulated one, could benefit immensely from a change in ownership. A new owner with a new focus would help to secure the plant’s jobs and power output, and would also be more likely to have a license extension granted.


Sources: The Wall Street Journal, Entergy Corp.