Entergy Corporation has announced that it plans to permanently shut down its single-unit Vermont Yankee boiling water reactor in the fourth quarter of 2014.
The decision was driven by a combination of factors, including sustained low power prices (due to the impacts of shale gas), the high costs of operating the single-unit plant and wholesale electricity market design flaws for Vermont Yankee.
"Wholesale market design flaws that continue to result in artificially low energy and capacity prices in the region, do not provide adequate compensation to merchant nuclear plants for the fuel diversity benefits they provide," a statement said.
Entergy also noted that the financial impact of cumulative regulation is "especially challenging" to a small plant in current market conditions.
The utility, which operates 12 reactors in the United States, said that it invested over $400 million in Vermont Yankee since it acquired the plant in 2002.
It said that Vermont Yankee was expected to be running at around breakeven in 2013, and generally declining over the next few years. Within two years after shut-down Entergy said it expects cash flow to increase by a total of between $150 and $200 million through 2017, compared to Vermont Yankee's continued operation.
The 605-megawatt Vermont Yankee BWR, which started operating in 1972, is set to cease electricity production in the fourth quarter of 2014, despite being granted an licence to operate until 2032 by the US Nuclear Regulatory Commission.
Making the decision now "allows time to duly and properly plan for a safe and orderly shutdown and prepare filings with the NRC regarding shutdown and decommissioning," Entergy said.
The utility will now establish a decommissioning planning organization responsible for planning and executing the safe and efficient decommissioning of Vermont Yankee.
As of 31 July 2013, there was $582 million in the Vermont Yankee decommissioning trust (plus a $40 million guarantee by Entergy to satisfy NRC requirements following a 2009 review). This amount exceeds the $566 million NRC minimum for decommissioning financial assurance. However Entergy said that filings with the NRC for planned shutdown activities will determine whether any other financial assurance may be required. The filings will specifically address funding for spent fuel management, which will be required until the federal government takes possession of the fuel and removes it from the site, per its current obligations.
Commenting on the future of nuclear power, Entergy chairman and chief executive officer Leo Denault said that Entergy "remains committed to nuclear" as an important long-term component of its generating portfolio.
Photo: Vermont Yankee (Source Entergy)