YANKEE REACHES DEAL ON FUEL STORAGE

Yankee reaches deal on fuel storage

By Nancy Remsen
Free Press Staff Writer

MONTPELIER -- Legislative leaders and representatives of the Vermont Yankee nuclear power plant stood side-by-side Thursday at the Statehouse to announce a deal that helps the plant cope with its growing stash of used-fuel assemblies and helps the state encourage development of renewable energy projects.

Three House negotiators spent weeks in backroom talks with the company to come up with the agreement. It calls for the Legislature to pass a bill allowing Entergy Nuclear, owners of the Vernon nuclear reactor, to seek permission from state regulators for outside storage of radioactive fuel rods held in an indoor pool.

In exchange, Entergy would sign a memorandum of understanding with the state promising to pay $2.5 million a year, beginning in 2006 and continuing until 2012 when its license to operate expires. The company would be bound to make the payments only if state regulators grant it permission to store used fuel rods in dry casks outside the plant and if it receives federal approval to increase its power generation by 20 percent.

The money would be put in a newly created Clean Energy Development Fund, along with $2 million a year Entergy previously agreed to pay the state in a deal over its power increase. The deal has no effect on electric rates.

"This whole thing demonstrates an effective partnership between the state and Entergy to meet future energy needs, knowing that at some point Vermont Yankee is going to close," explained Rep. Robert Dostis, D-Waterbury, who was the Legislature's chief negotiator.

Many people cheered the deal. For some it ended worries that Entergy might close the plant if asked to pay too much. For others it assured financial support for power projects that don't rely on fossil fuels.

The Douglas administration hadn't been keen about lawmakers' pushing Entergy for money in exchange for giving the new owners of the nuclear plant permission to pursue outside storage. Thursday, though, the administration praised the agreement.

"We hoped all along the company and the Legislature would get to the place where they are today," said David O'Brien, commissioner of the Department of Public Service. Utilities had been wary, too, but Kerrick Johnson, a spokesman for Central Vermont Public Service, breathed easier Thursday.

"We have always been concerned about the risk to our customers about losing power," Johnson said. Premature closing of the plant wouldn't have darkened homes, but it would have increased electric bills. "This significantly lessens that risk," he said.

William Driscoll, vice president of Associated Industries of Vermont, said he still didn't agree with asking Entergy to pay more, but was relieved that "legislative leadership has stepped back from the brink and won't be driving Entergy from the state."

By contrast, Mark Sinclair, vice president of Clean Energy Group, suggested the owners of Vermont Yankee got the better end of the bargain. "There should be a lot more money on the table for the burden of Vermont becoming a nuclear waste dump for Entergy."

Entergy's need Entergy found itself in a dilemma after buying the Vermont Yankee plant in 2002. It planned to upgrade the plant to increase its power output but the change meant it would run out of space for used fuel rods. Since the plant opened in 1972, all its used-fuel assemblies have been stored in a pool now nearly full.

Development of a national, long-term storage site for used nuclear fuel remains stalled. Meanwhile, a new technology called dry casks, has allowed plants in other states to store their highly radioactive rods outside of pools.

To pursue outdoor storage, Entergy needed legislative approval. The company made its request this year.

Company officials argued they already promised Vermonters low electric rates through 2012 plus pay the state $2 million a year. They shouldn't be asked to pay more.

Some lawmakers countered that if the plant won federal approval to generate more power, profits would soar. The company ought to share some of this with its host state.

House Speaker Gaye Symington, D-Jericho, said talks between House negotiators and the company had been characterized by some as a game of chicken, but that wasn't the case. "Each of us listened really hard to what others in this conversation needed."

Kenneth Theobalds, director of governmental affairs for Entergy Nuclear Northeast, also discounted reports the company threatened to close the plant.

"At no time did we ever or would we ever threaten about the future of this site." Theobalds said. He had warned that asking for too much "would damage the financial plans for this site."

Theobalds praised the deal as "reasonable, fair and equitable."
Clean energy For Andy Perchlik, executive director of Renewable Energy Vermont, the clean energy fund is the biggest benefit of the deal.

"We think that is a smart move," Perchlik said, noting that a dozen other states have similar funds to promote new energy projects and technologies.

The new fund meshes with the goals of a renewable energy bill passed by both the House and Senate. It uses a carrot and stick approach to get the state's utilities to invest in renewable energy projects in Vermont. The new fund could help jump-start some of these efforts.

Perchlik offered an example of how the fund might be used. Schools that burn wood chips to heat their buildings might be helped to switch to a wood gasification technology that would produce both heat and electricity.

"It is great to have a clean energy fund finally," agreed Sinclair at the Clean Energy Group; "but $2.5 million a year isn't giving us a meaningful opportunity to build in-state clean, renewable energy that will replace Vermont Yankee."

Contact Nancy Remsen at 229-9141 or nremsen@bfp.burlingtonfreepress .com