Entergy Nuclear: New Names, Same Games
by Michael Steinberg
Sunday, Aug. 24, 2008 at 6:13 PM
New Orleans-based Entergy Corporation has been adding some names to its nuclear power division, but the continues to play the same dubious money making games.
New Orleans-based Entergy is shuffling the deck in its nuclear power game. The changes will affect its “Northern Fleet,” old northern nukes it bought up on the cheap—as nuke plants go— mostly at the beginning of this decade.
These acquisitions made Entergy the nation’s second largest nuke plant owner and operator. Now Entergy is planning to “spin off” these nukes in a new venture that the company says will lead to a bright future for itself and nuclear power in the US.
Critics, however, say the move is really about limiting Entergy’s liability for the cost of permanently shutting down these problematic aging nukes, and padding its bottom line.
The Northern Fleet consists of two reactors at Indian Point, 35 miles north of midtown Manhattan; and one each at Vermont Yankee in southern Vermont, Pilgrim on Cape Cod in Massachusetts, Fitzpatrick in upstate New York, and Palisades in Michigan.
Entergy announced it plans last November. A new company that was initially called SpinCo., then NewCo, would be taking over the fleet. Last April Entergy spit out a press release giving it a permanent name, Enexus, an “independent, publicly traded nuclear power company it plans to spin off later this year.”
After the spin off Enexus will own the Northern Fleet jointly (50-50) with EquaGen LLC (Limited Liability Corporation, with the emphasis on limited). EquaGen will be owned by Entergy.
The US Nuclear Regulatory Commission (NRC) recently approved this deal. But final approval must come from the SEC and affected state utility commissions. Entergy wants this approval by the end of September.
Though Entergy claims Enexus will be independent, Richard Smith, its current president, will become Enexus’ president and CEO. EquaGen’s CEO will be Michael Kasner, who will keep his job as Entergy’s chief nuclear officer as well. EquaGen’s HQ will be in Jackson, MS, which is already Entergy’s nuke HQ.
Both executives are among Entergy’s largest stockholders. Entergy’s revenues last year were over $11 billion, with profits of $1.3 billion, much of them generated by its nuclear operations.
Top government officials and concerned citizens in states that will be affected by Entergy’s nuclear wheeling and dealing certainly have some.
Andrew Cuomo, New York’s Attorney General, said in the New York Times last month, “Entergy’s plan is ill-conceived on a number of levels. It could ultimately cost taxpayers hundreds of millions of dollars, does nothing to guarantee adequate decontamination of the site, and does not anticipate a future without Indian Point.”
New York State currently has a deal with Entergy to get up to $72 million a year, through 2014, in revenue sharing from operations at the Indian Point nukes. But now Entergy claims that under the spin off deal, that agreement will become null and void.
Officials and concerned citizens in Massachusetts and Vermont also have serious problems with Entergy’s spin off. “The purpose is to shield the parent company,” Deb Katz, executive director of the Northeast’s Citizens Awareness Network, said in the August 21 Boston Globe, “and make as much money as they can. They keep trying to cushion themselves.”
Same As It Ever Was
Entergy’s April press release claimed, “EquaGen stands for a company focused on providing world-class safety, operations, security and productivity.”
But its parent company’s track record in this regard, including recently, makes the above words ring hollow.
This past July, Entergy discovered problems in two of Vermont Yankee’s cooling towers. One had sprung a leak. In a subsequent inspection, it was found that another cooling tower, which totally collapsed in August ’07 and had to be rebuilt, had broken brackets that were supposed to be supporting pipes at the top of the tower.
On July 17 the Boston Globe reported that the NRC “turned down Vermont Yankee’s plan to use some money from its decommissioning fund for management of the plant’s waste, and says the plant has been overestimating the fund’s likely earnings.”
Decommissioning is the process of permanently shutting down a nuclear plant and disposing of its infrastructure and radioactive waste. Last year outrage grew in Vermont after it became known that there wasn’t enough money set aside to cover the costs of Vermont Yankee’s decommissioning. There was $400 million too little, to be specific. In addition, it came out that Entergy hasn’t been adding anything to the decommissioning fund since it took over VY in 2002.
On the contrary, there is evidence that instead it’s been taking big bucks out of the fund.
In response, the Vermont legislature passed a bill requiring Entergy to make sure there was enough money in the fund to cover its decommissioning costs before it sold VY and the rest of the Northern Fleet. Entergy said the shortfall would be made up by returns in investment of the funds by the time it was ready to shut down VY. And then Vermont Governor Jim Douglas vetoed the bill.
Also in July the Vermont Department of Health reported that VY had released 30% more radiation into the air than the year before. On August 3 the Associated Press reported, “The plant boosted its power output by 20 percent in 2006.” Plant critics blamed the radiation increase on that power boost.
The AP also reported, “Vermont lawmakers are investigating whether the state Health Department broke the law by changing its methods for measuring radiation emitted by Vermont Yankee—lowering the safety limit in the process without getting the approval of a legislative committee.”
State Senator Mark McDonald, as reported in the Vermont newspaper Times Argus, “said that without the change in calculating exposure Vermont Yankee likely wouldn’t have been allowed to boost power by 20%, since it was already close to the state’s rate [limit].”
The health department changed its standards upon the recommendation of the notoriously pro-nuke Oak Ridge Associated Universities, which carried out a study for the department at its request. Entergy paid for the study.
And on August 6, Hiroshima Day, New York’s Journal News reported that “trace amounts” of radioactive strontium-90 had been found “in monitoring wells outside Indian Point—for the second time in little more than a year.” Entergy officials claimed it was “improbable” the leaks were from Indian Point, blaming them on fallout from Cold War weapons tests.
The Journal News also reported, “Entergy has been working to stop leaks from a spent fuel pool [which holds high level nuclear waste] that has sent water with strontium-90 and tritium [radioactive hydrogen] into the Hudson River.”
That same day Reuters reported that Entergy’s Palisades nuke plant in Michigan was “shut down after excessive unidentified leakage” consisting of “about four gallons a minute for short periods” that had begun in July.
Then on August 13 the AP reported, “Another deadline will pass Thursday without a new emergency siren system going into service around Indian Point nuclear power plant.”
Plant owner Entergy Nuclear pledged in January that the state-of-the-art, 172-siren system would be completed by that self-imposed deadline.”
Entergy has been missing such deadlines for years. The sirens are essential warning devices in case of a nuclear emergency.
“World-class safety, operations, security?” Only in Entergy’s world of spin.
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