Solange De Santis
VERNON, Vermont – Entergy Corp. affiliates (NYSE: ETR) and NorthStar Group Services Inc. announced today they have signed a settlement agreement and Memorandum of Understanding (MOU) with State of Vermont agencies and other interested parties on terms for approval of the proposed sale this year of Entergy Nuclear Vermont Yankee, the entity that owns the Vermont Yankee Nuclear Power Station located in Vernon, Vermont.
The agreement and MOU are significant milestones in the approval of the proposed transaction. If the transaction is approved by the Vermont Public Utility Commission (PUC), it will accelerate the decommissioning of Vermont Yankee by decades and facilitate the eventual economic redevelopment of the site.
The Vermont agencies signing the agreement, in whole or in part, are: the Department of Public Service (DPS), the Agency of Natural Resources (ANR), the Department of Health, and the Attorney General’s Office. The following parties have also signed the agreement: the Town of Vernon Planning and Economic Development Commission, the Windham Regional Commission, the Abenaki Nation of Missisquoi and the Elnu Abenaki Tribe, and the New England Coalition on Nuclear Pollution (NEC). The parties have submitted an MOU to the PUC based on the settlement agreement that reflects: (1) increased financial assurances beyond those included in the original proposal filed by Entergy and NorthStar with the PUC in December 2016 and (2) the establishment of site restoration standards to which NorthStar will adhere as it completes the decommissioning of the site.
The Vermont PUC approval of the MOU and an order approving the proposed transaction are pre-conditions to closing of the proposed transaction between Entergy and NorthStar. The companies anticipate requesting that the PUC issue its decision by July 31, 2018. The proposed transaction is also subject to Nuclear Regulatory Commission (NRC) approval. As part of the settlement, the State of Vermont and NEC have agreed to submit a notice of anticipated withdrawal of their pending requests for hearing in the NRC proceeding. If all regulatory approvals are obtained, the companies anticipate that the transaction will close by December 31, 2018. Copies of the MOU and the settlement agreement can be accessed at www.vydecommissioning.com. Key provisions of the MOU and the settlement agreement include:
The original application reflected a number of forms of financial assurance in support of the decommissioning and restoration of the Vermont Yankee site. As part of the MOU and settlement agreement, NorthStar has agreed to provide additional financial assurance, as follows:
As part of the MOU and settlement agreement, Entergy has agreed to provide financial assurance in support of the transaction as follows:
The terms of the MOU and settlement agreement, including the financial assurance terms discussed above, are consistent with Entergy’s previous disclosures on its Entergy Wholesale Commodities business cash flow. The company continues to see neutral to positive cash flow from its merchant business to its parent from 2017 to 2022.
Site Restoration Standards
The parties have agreed to detailed site restoration standards that are fully protective of the environment as well as fully protective of the health and safety of workers and the public. The standards to which NorthStar will adhere include the following key terms:
Under Entergy’s original schedule, as outlined in its Post Shutdown Decommissioning Activities Report filed with the NRC in December 2014, Entergy expected to initiate decontamination and dismantlement of the Vermont Yankee site in 2068, with projected completion of both decommissioning and site restoration by 2075. Under the proposed transaction, NorthStar has committed to initiate decontamination and dismantlement by 2021 (and potentially as early as 2019) and to complete decommissioning and restoration of the Vermont Yankee site, with the exception of the ISFSI and other structures identified above, by 2030 (and potentially as early as 2026).
About Vermont Yankee, NorthStar and Entergy
The Vermont Yankee Nuclear Power Station, a single unit boiling water reactor, began commercial operation in 1972. Entergy purchased the plant in 2002 from the Vermont Yankee Nuclear Power Corp. It permanently ceased operations on December 29, 2014. At full power, Vermont Yankee supplied nearly one-third of all electricity consumed in Vermont. More information is available at www.entergy.com and www.vydecommissioning.com.
NorthStar, based in New York, is the world leader in facility decommissioning with turnkey capabilities to complete license termination and site restoration. Key partners include Orano (formerly AREVA), Burns & McDonnell and Waste Control Specialists (WCS). WCS is the nation’s only licensed disposal facility for Class A, B and C low-level radioactive waste at its state of the art facility in Andrews County, Texas. NorthStar and WCS are portfolio companies of leading mid-market private equity firm JF Lehman & Company.
Entergy Corporation is an integrated energy company engaged primarily in electric power production and retail distribution operations. Entergy owns and operates power plants with approximately 30,000 megawatts of electric generating capacity, including nearly 9,000 megawatts of nuclear power. Entergy delivers electricity to 2.9 million utility customers in Arkansas, Louisiana, Mississippi and Texas. Entergy has annual revenues of approximately $11 billion and more than 13,000 employees.
Cautionary Note Regarding Forward-Looking Statements
In this news release, and from time to time, Entergy Corporation makes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, among other things, Entergy’s plans and expectations with respect to the Vermont Yankee Nuclear Power Station and Entergy’s merchant generation business, and other statements of Entergy’s plans, beliefs or expectations included in this news release. Except to the extent required by the federal securities laws, Entergy undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Forward-looking statements are subject to a number of risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied in such forward-looking statements, including (a) those factors discussed elsewhere in this news release and in Entergy’s most recent Annual Report on Form 10-K, any subsequent Quarterly Reports on Form 10-Q and Entergy’s other reports and filings made under the Securities Exchange Act of 1934; (b) uncertainties associated with (1) rate proceedings, formula rate plans and other cost recovery mechanisms, including the risk that costs may not be recoverable to the extent anticipated by the utilities and (2) implementation of the ratemaking effects of changes in law; (c) uncertainties associated with efforts to remediate the effects of major storms and recover related restoration costs; (d) nuclear plant relicensing, operating and regulatory costs and risks, including any changes resulting from the nuclear crisis in Japan following its catastrophic earthquake and tsunami; (e) changes in decommissioning trust fund values or earnings or in the timing or cost of decommissioning Entergy’s nuclear plant sites; (f) legislative and regulatory actions and risks and uncertainties associated with claims or litigation by or against Entergy and its subsidiaries; (g) risks and uncertainties associated with strategic transactions that Entergy or its subsidiaries may undertake, including the risk that any such transaction may not be completed as and when expected and the risk that the anticipated benefits of the transaction may not be realized; (h) effects of changes in federal, state or local laws and regulations and other governmental actions or policies, including changes in monetary, fiscal, tax, environmental or energy policies; and (i) the effects of technological changes and changes in commodity markets, capital markets or economic conditions, during the periods covered by the forward-looking statements.