Entergy 's Shady Deals For its Northern Nukes Draw Fire : NOLA Indymedia

Last week New York Attorney General Andrew Cuomo fired off a letter to the state’s Public Service Commission (PSC) opposing a proposal by New Orleans-based Entergy Corporation to transfer the operating licenses of the Indian Point (IP) nuclear power station to a murky entity that doesn’t yet exist.

Indian Point’s two operating nuclear reactors are located 35 miles north of midtown Manhattan. A third reactor is permanently shut down, but its spent fuel pool is full of highly radioactive waste. Entergy bought the Indian Point nukes on the cheap, as nuclear plants go, early in this century.

Last November Entergy announced a plan to “spin off” what it calls its Northern Fleet, old nukes it bought at firesale prices at the turn of the century. Entergy said it would retain a 50% share of the new entity, which it tentatively named SpinCo.

But evidence has been mounting that the new company, a limited liability corporation, would allow Entergy to distance itself from future mammoth costs required for the old nukes, such as their eventual shutdown, dismantlement and cleanup. And what to do with the spent fuel and who will pay for its disposition are other questions hanging fire.

Last year’s revelations that there isn’t enough money in a fund set aside to pay for such costs at the Vermont Yankee (VY) nuke plant, another member of Entergy’s Northern Fleet, caused outrage amongst that state’s citizens, as well as some elected officials.

Entergy hasn't contributed anything to this fund since it bought VY in 2002 for $180 million. It's now said to be worth $1 billion.

Many still remember how Entergy left its subsidiary Entergy New Orleans to fend for itself after the Katrina disaster, forcing it to declare bankruptcy. Entergy New Orleans was eventually bailed out by a federal grant, i.e. the taxpayers, not by its parent company.

Cuomo’s latest move added more fuel to the flames of controversy.

Late last year the New York Attorney General threw down when he declared at a December 3 press conference, “I believe Indian Point should be shut down, and it should be shut down now.” The occasion for the press conference was to announce that New York state had filed legal papers in effect opposing Entergy’s request of the Nuclear Regulatory Commission (NRC) for permission to run Indian Point’s two operating reactors for an extra 20 years.

Cuomo cited unsafe conditions at IP, its poor operating and maintenance record, its vulnerability to attack, and its unresolved spent fuel pool problems as reasons for his opposition.

And then, on April 11, in his letter to the PSC, Cuomo stated that transferring Indian Point’s license to SpinCo “would relieve Entergy ‘of financial incentive to scrupulously and appropriately manage, operate, remediate and decommission Indian Point,’“ according to Reuters.

Cuomo also blasted another part of Entergy’s proposal, to allow SpinCo IP to borrow $6.5 billion. He stated that taking on such debt “with lack of access to the parent company’s financial resources would force it to rely on ‘riskier resources,’ Reuters reported.

“Neither the reorganization nor the borrowing is in the public interest,” Cuomo stated in his letter, according to Reuters. For the SpinCo deal to gain approval from the New York PSC, the commission must declare that Entergy’s proposal is in the public’s interest.

A similar battle is being waged by Massachusetts Attorney General Martha Coakley against Entergy’s scheme to seek 20 year license extensions at its VY and Pilgrim nukes. Pilgrim is located on Massachusetts’ Cape Cod.

The NRC must approve Entergy’s applications for these license extensions. The Attorney General’s office is calling for the process to be suspended until its contentions about dangerous conditions at the two nukes spent fuel pools are examined and resolved by the NRC.

The AG’s contentions are based on two studies, according to the Burlington Reformer of Vermont.

One, carried out by Dr. Jan Brea for Consulting in the Public Interest, found the following: If 10% of the radioactive material in the spent fuel pools was released, that would cause an estimated $105-117 billion in damage by Pilgrim, and $$87-165 billion by VY. If 100% escaped, damages caused would come to $$342-488 billion by Pilgrim, and $364-578 billion by VY, as well as “at least 8000 cases of latent cancer.”

The second study, conducted by the National Academy of Scientists, concluded, “Potential vulnerability to terrorist attacks are plant-design specific. Therefore specific vulnerabilities can be understood only by examining the characteristics of spent fuel storage at each plant.”

The same April 10 edition of the Reformer also reported on a public meeting of the Vermont Public Safety Board (PSB) to discuss Entergy’s plan to transfer VY’s license to SpinCo, already renamed NewCo. As in New York, the PSB has to certify that doing this would be “in the best interest of Vermonters” in order for the deal to go down, according to the Reformer.

“Both the Vermont Legislature and the Public Safety Board have the ability to stop Vermont Yankee’s continued operation,” the newspaper reported.

Opposition to the plan from the public was heavy. “Significant liability needs to be left in New Orleans [i.e. at Entergy’s HQ],” said Eesha Williams.

“Vermont Yankee is a time bomb,” remarked David Sicken, citing Entergy’s desire to remove itself from financial accountability for VY accidents or its spent fuel pool.

“The whole reason this is happening is so money can be transferred from here to Louisiana,” said Gary Sachs.

Deb Katz of the western Massachusetts anti-nuke group Citizens Awareness Network said the whole NewCo proposal was a “shell game.”

And Gary Sachs asserted, “A limited liability structure is an effective mechanism for transferring profits up the chain while creating a shield for the parent company in case an unanticipated cost occurs.”

The meeting happened not long after VY was forced to cut power by more than half on April 1, after plant operators found that water was leaking from it into the Connecticut River. The plant returned to full power on April 3, even though Entergy “failed to find the source of the leak,” according to the Boston Globe.

Entergy’s Pilgrim nuke had to cut power to 20% on April 7. It was back to full power on April 11.