Millstone for sale

30 September 1999

Northeast Utilities (NEU) is planning to auction its Millstone nuclear units before the end of the year. The companies likely to be interested in purchasing the Millstone plants include AmerGen, Duke Energy, Entergy and Dominion Resources.

“To be a successful nuclear operator in the coming deregulated environment, it would be necessary to buy and run several additional nuclear facilities to take advantage of economies of scale,” said Bruce Kenyon, president of NEU’s Generation Group.

Under Connecticut’s electricity deregulation law, NEU must divest its nuclear assets by 1 January 2001. It will therefore also sell its 36% share of the Seabrook station in New Hampshire. Millstone consists of three units; unit 1, a 660 MWe BWR, is being decommissioned, but the two younger PWR units, with a combined capacity of 2023 MWe, were recently restarted following lengthy shutdowns for safety modifications.

• In a separate development Northeast Utilities has agreed to pay a record fine of $10 million for breaching environmental and regulatory laws. Two subsidiary companies pleaded guilty to 25 felony counts of making false statements to nuclear regulators and committing environmental violations at Millstone. The false statements referred to the qualifications of candidates hoping to become licenced plant operators. Six of seven candidates for licences at Millstone unit 1 failed their Nuclear Regulatory Commission exams in 1996.

“We have no excuses,” said NEU vice-president Mary Jo Keating, “we did not live up to our obligations as a good corporate citizen. It has been a painful process for Northeast Utilities.” • A report, Nuclear Update: A Buyer’s Market for Nuclear Plants produced by Moody’s Investor Service, forecasts that nuclear plants will continue to sell at substantial discounts to book value. This is because of the specialised skills needed to operate them, the unresolved issue of spent fuel disposal, concerns over decommissioning funding, and uncertainty over future regulatory policy. The report also said nuclear plants bought modestly can give buyers a marginal cost advantage over most other types of power plants because of the low cost of nuclear fuel.



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