ENTERGY'S TRACK RECORD

BACKGROUND

In 1999, Entergy, a Louisiana based utility, bought the Pilgrim reactor in Massachusetts for $25 million. Entergy is committed to becoming a mega-generating combine through deregulation of the electric utility market in the US. It is focusing its attention on Northeast nukes. It has acquired 5 nukes in the Northeast. Entergy operates 4 other nukes including Arkansas Nuclear 1 & 2, Grand Gulf (Mississippi), River Bend 3 (Louisiana), Waterford 3(Louisiana). Entergy is also decommissioning 4 reactors. In addition, the corporation owns coal fired and gas plants.

Entergy has acquired three operating nuclear reactors in New York State including Fitzpatrick, Indian Point 1, 2 & 3. (IP 1 is shuttered, but not decommissioned) It now owns 11 reactors including 5 in the Northeast: Vermont Yankee, Pilgrim, Fitzpatick, and Indian Point 1, 2,and 3. Entergy also recently contracted to manage the Cooper reactor in Nebraska and bought Palasades. It announced its intention to "spin off" its nuclear division in the Northeast and Midwest as a seperate limited liability corporation called Spin-co. Since acquiring its aging fleet of Northeast reactors, it has repeatedly been embroiled in conflict with states and reactor communities alike.

IS ENTERGY A GOOD NUCLEAR NEIGHBOR?

In 1999 Entergy had the distinction of having rolling blackouts in four states. Entergy cut power to over half a million customers in July 1999 in a four state region. At least nine power stations, owned and maintained by Entergy, had equipment failures causing numerous outages. The New Orleans based corporation’s transmission and distribution systems couldn’t handle the electric demand of the July ’99 heat wave.
In 2005 Entergy agreed to pay the state of Louisiana between $85 million and $95 million to settle a dozen rate cases, some dating back to 1993, and separate from its problems with the 1999 heat wave. But the Commission's outside counsel disagreed with the proposed deal, arguing that a $132 million one-time refund is more fair. Economists and lawyers hired by the PSC argued that Entergy should have made improvements to its two nuclear power plants in 2001. They contended that because Entergy did not, the utility was forced to buy electricity on the open market at far higher prices, which were then passed along to the consumer. Entergy presented testimony of a specialist to support its claim, but the expert conceded that Entergy could have completed part of an upgrade at one of its plants. Based on this concession, PSC proposed that Entergy pay $15 million on this issue as part of the $85 million to $95 million package to settle all 12 cases.

In 1997 the Texas Public Utility Commission fined Entergy $9 million for “poor electric reliability” ongoing for nearly a decade. The PUC penalized Entergy with a rate reduction. In the PUC Final Order, the Commissioners state “…evidence revealed a lack of effective and prudent maintenance policies, uneven spending in the area of operations and maintenance, cuts in experienced personnel, and consequent deterioration in the quality of service.”

In harsh winter weather, volunteer firemen were pressed into service to disconnect Entergy’s live wires because the company lacked personnel to do the work during storms. Entergy, through tapped conversations during the storms, was found to have insufficient numbers of personnel and made initially inadequate efforts to repair the damage. Cities affected by the ice storm had to use their own employees for repairs, including the handling of live wires. Culpable in this was the lack of maintenance to maintain poles and cut back vegetation.

COST CUTTING = JOB CUTTING

Many maintain the cuts were too extensive and resulted in a loss of many years of worker experience that could not be compensated by contract workers who lack knowledge of the system. The forced departures included 66 linemen employees with an average of 18 years experience each. Entergy lacked adequate controls over contract workers and did not have in place an effective system to measure contract workers productivity and effectiveness.

The Commission found “pockets of unreliability” with rural customers experiencing more outages of greater duration and repeatedly lower-quality service. Services in some sectors were so unreliable that it sustained 41.3 hours of outage in one year. The company maintains a list of “politically sensitive” accounts which may lead to certain customers receiving preferential treatment.

FIRINGS U.S. STYLE

Entergy maintains that its cost-cutting measures are directed toward unnecessary fat and inefficiency and that permanent employees were replaced with contract workers. The rolling blackouts and Entergy’s inadequate response to storms raises serious questions about Entergy’s bottom line: profit or safety. These are especially in conflict in nuclear power operation. Now Entergy is transporting it’s cost cutting zeal to the North.
BARGAIN BASEMENT DEALS IN THE NUCLEAR SHELL GAME
Entergy bought the Pilgrim reactor in Massachusetts, for less that 1/5 of its book value and the agreement transfers decommissioning funds to the purchaser. These bargain basement deals enable existing nuclear corporations to rid themselves of their nuclear liabilities, and purchasers to have a financial jump-start into a new generation of nukes on grandfathered sites. The Pilgrim deal allows Entergy, the purchaser, to lay off ½ of its workforce.

Under the agreement, Entergy Nuclear Inc. would buy Pilgrim from Boston Edison for $80 million. Entergy got a bargain, industry analysts say. Of its total bid of $80 million, $67 million was for nuclear fuel. This meant that in effect Entergy paid only $13 million for a plant whose book value is about $700 million. Entergy gets a $466 million trust fund to offset the cost of decommissioning. Pilgrim had a book value of $700 million, cost $238 million to build in 1972. Decommissioning is estimated to cost an $615 million. Entergy will pay the difference between the balance in the decommissioning fund and what it costs to actually shut and dismantle the reactor.

In 2002 Entergy acquired the Vermont Yankee reactor after undercutting AmerGen’s low bid proposal to buy the reactor. It also acquired Vermont Yankee’s decommissioning trust fund. Decommissioning funds are collected from ratepayers and investment income. Because previously, utilities were state regulated, they were immune from taxes on decommissioning funds or the interest earned. Original utilities were committed to returning profits in the fund to the ratepayers; Entergy however, is not. Through a deal worked out with the Vermont Public Service Board, Entergy will return monies to the ratepayers of Vermont, but other states’ ratepayers are not protected. There can be a lot of money in decommissioning - Yankee Rowe, the smallest commercial reactor, cost $37 million to build and will cost at least $600 million to clean up.

THE WILL OF THE PEOPLE

In recent polls over 60% of the American people want energy production in the 21st Century to focus on alternatives, not on subsiding the nuclear industry and its bad debts. These aging and embrittled nukes should shut down now.

NEW NUKES

Entergy is committed to a second generation of nukes on old sites. Entergy believes that the federal government should subsidize this second generation with a federal incentive program providing up to 80 percent loan guarantees, much like FHA guarantees on homeowner loans, for the first few plants, reducing the interest rate on the debt to build a new plant. It is attempting to relicense its aging fleet of acquired nukes in the Northeast as the first step in its committment to new nukes.

RELICENSING NO DONE DEAL

States as well as public interest groups question whether Entergy's nukes should be relicensed. Legislators in Vermont took back the power to decide whether another 20 years of nuclear power is in the best interests of the state. The Massachusetts Attorney General has taken NRC to court over the reicensing of Vermont Yankee and the Pilgrim reactor on the basis of these reactor's vulnerability to terrorism. The NY Attorney General and the Govenor of NY have both rejected the relicensing of the Indian Point reactors and intervened in the NRC hearing on relicensing. Public interest groups such as New England Coalition, Riverkeeper, CAN, FUSE and other have also intervened in relicensing proceedings.