Big nuclear generators square up to fight over Vermont Yankee

15 December 2000

UNITED STATES: The price for the 540MWe Vermont Yankee nuclear plant is going up: in mid November AmerGen, the joint venture of British Energy and Exelon, more than doubled its offer for the BWR. The offer went from about $10 million to $23.7 million in cash, plus an added packaged of incentives that bring the total price to about $93.8 million. And the price could go higher yet: two other US companies - Entergy Nuclear of New Orleans, Louisiana, and Dominion Energy of Richmond, Virginia - have asked Vermont regulators for an opportunity to offer new, higher bids.

The new offer from AmerGen is about $50 million more than it would have paid under a deal struck with the plant's 13 owners in November 1999. The latest proposal was submitted to the Vermont Public Service Board, the state regulatory agency, which had indicated it would have rejected AmerGen's initial bid.

William Sherman, an engineer with the state nuclear energy department, characterised AmerGen's new offer as worth "a dollar for a dollar" on the value of the plant, versus "20 cents on the dollar" in the initial offer. Last June, the state engineering department estimated the plant's worth at between $55 million and $95 million.

As regards the two companies that want to enter the bidding, Entergy Nuclear said it wanted to make an "improved offer" that "would be in the best interest of the ratepayers of Vermont and would help in establishing, without question, the fair market value" of the plant. Dominion said that it, too, would like to offer a higher bid if state regulators decide to conduct a formal auction process.

If either Entergy Nuclear or Dominion win the battle, it would be the second time AmerGen has been forced to withdraw from an agreement to buy a nuclear reactor by a state agency. In July 1999, AmerGen had agreed to buy a majority stake in the Nine Mile Point station in New York, but New York regulators would not allow the deal and Entergy Nuclear eventually won in a bidding auction.

If Entergy buys Vermont Yankee, it would own five operating nuclear plants in the US Northeast as well as others in the southern US. Entergy recently purchased Indian Point 2 and 3 and FitzPatrick in New York (see NEI, December 2000, p2), and it purchased the Pilgrim nuclear station in Massachusetts in 1999.

Dominion bought the Millstone nuclear station in August 2000 and is exploring the purchase of other nuclear plants in the US northeast.

AmerGen currently owns three operating nuclear power plants in the US.




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