The sale is subject to the approval of the Vermont Public Service Board (VPSB), the US Nuclear Regulatory Commission (NRC), the Federal Energy Regulatory Commission, and other regulatory authorities. After their approvals, closing is targeted for the spring of 2002.
Earlier this year VPSB had rejected rival bids from AmerGen and Entergy. Initially AmerGen offered $23.8 million for the 546MWe BWR unit. Entergy bid $50 million in January this year, and AmerGen responded by raising the bid again with an offer valued at $51.5 million.
Ross Barkhurst, President and Chief Executive Officer of Vermont Yankee, said: “We are very pleased that the auction process run by JP Morgan has been so successful. We were able to execute the auction on a timely basis with a process which garnered significant interest and clearly maximised the value of the plant.” The price per kW is about 20 times greater than that paid for the Pilgrim plant in adjacent Massachusetts in 1999.
JP Morgan acted as exclusive financial advisor to Vermont Yankee on the sale and has been advisor on the sale of 11 of the last 13 nuclear units sold in the US. The $180 million in cash represents $145 million for the plant and related assets, and $35 million for nuclear fuel. Entergy will retain the plant’s 450 employees at their same salary and comparable benefits.
Wayne Leonard, Chief Executive Officer of Entergy said: “We expect to realise significant operating efficiencies since Vermont Yankee is a sister plant to our Pilgrim and James A FitzPatrick plants.” All three are boiling water reactors designed by General Electric.
The deal includes a power purchase agreement requiring Entergy to sell all the plant’s power to present Vermont Yankee sponsors through 2012, the remaining years of the plant’s operating licence, at average annual prices ranging from 3.9 to 4.5 cents/kWh. Entergy expect to raise the reactor’s capacity by 10% and hope to increase its operating licence by 20 years.
Entergy will receive nuclear fuel and all materials and spare parts inventory as well as the plant, switchyard, and related real estate in nearby Brattleboro. Entergy will also assume decommissioning liability for the plant and the plant’s decommissioning trust fund, which is required by the NRC. No decommissioning top-off or any other financing by Vermont Yankee Nuclear Power Corporation is anticipated with the transaction.
Vermont Yankee and related assets will be transferred to Entergy Nuclear Vermont Yankee LLC, an Entergy subsidiary, and will become part of the Entergy Nuclear Northeast fleet. The plant will become Entergy’s 10th nuclear unit and its fifth in the Northeast.