3 Min Read
NEW YORK (Reuters) - A utility in Vermont rejected a contract to buy power from Entergy Corp's embattled Vermont Yankee nuclear power plant on Tuesday.
The board of directors at the Vermont Electric Cooperative, the third biggest power distribution company in the state, voted nine to one to reject a 20-year offer from Entergy to buy power from the 39-year old nuclear plant at below market prices.
The plant will shut by March 21, 2012 unless the state allows it to continue to operate longer or the company wins a court battle to prevent the state from shutting the plant.
When Entergy bought the reactor in 2002 from a group of New England utilities, the company agreed to seek permission from state regulators if it sought to operate the plant beyond March 21, 2012.
Vermont is the only state in the nation with the authority to block a license renewal.
But in a complaint filed last week, Entergy argued the Vermont General Assembly in 2006 passed a law that breached the 2002 agreement, excusing the requirement that the company seek state approval to operate the plant for another 20 years.
In March, the U.S. Nuclear Regulatory Commission approved a 20-year extension of the reactor's original 40-year operating license following a long renewal process begun in 2006.
Entergy said in March it negotiated a 20-year agreement to sell power to the Vermont Electric Co-op but the co-op's board rejected that agreement on Tuesday.
"Unfortunately there are no easy energy choices," said Dave Hallquist, CEO of the Vermont Electric Co-op. "However, (the co-op's) power supply is secure and stable through 2016. We will continue to seek competitively priced, long-term contracts that meet our members' needs beyond 2016."
Although the co-op was the third largest power distributor in Vermont, it only served about 34,000 people in 74 towns in the northern part of the state.
The agreement with Entergy would have saved the co-op about $375,000 in the first year of the deal, according to local papers.
Larry Smith, Entergy's spokesman at Vermont Yankee said, "We are disappointed that the (Vermont Electric Co-op) Board did not approve the agreement. Vermont Yankee is an important resource for the New England region, producing clean, reliable electricity. This agreement would have provided (the co-op's) customers with access to that resource at attractive rates."
Smith could not comment on the complaint the company filed last week.
Reporting by Scott DiSavino; Editing by Alden Bentley