Entergy Nuclear bids against AmerGen for Vermont Yankee plant
Entergy Nuclear, a unit of New Orleans-based Entergy Corp., Friday offered $50 million for the 540 Mw Vermont Yankee nuclear plant, which it said topped an earlier bid from AmerGen Energy Co. LLC, a partnership of Exelon Corp. and British Energy PLC. Last year, AmerGen increased its initial bid to $93.8 million from $23.7 million but included a clause reducing its value by $90,000 a day until closing, Entergy said.
Entergy Nuclear, a unit of New Orleans-based Entergy Corp., Friday offered $50 million for the 540 Mw Vermont Yankee nuclear plant, which it said topped an earlier bid from AmerGen Energy Co. LLC, a partnership of Exelon Corp. and British Energy PLC.
Last year, AmerGen increased its initial bid to $93.8 million from $23.7 million but included a clause reducing its value by $90,000/day until closing, Entergy said. AmerGen upped its offer after a state oversight agency expressed concern the initial bid was not in line with prices paid for other reactors in the Northeast.
"If the AmerGen transaction is closed as planned after a refueling outage in April, the Entergy offer would likely be as much as double the current AmerGen deal in total value,'' said Entergy. As part of its bid, Entergy also offered to give each eligible plant employee a $1,000 bonus.
In addition, Entergy Nuclear said it will make a second improved proposal if the 13 utility owners of the Vermont Yankee plant, near Brattleboro, Vt., select Entergy as the preferred buyer to enter into an exclusive 60-day negotiating period. Such a selection would save the owners considerable costs in auction fees, Entergy said.
Entergy Nuclear CEO Jerry Yelverton said the transaction is not contingent on obtaining financing, additional corporate approvals, or performance of additional due diligence.
Further, he said, a sale to Entergy will help stabilize Vermont power rates, because Entergy would sell much of the plant's output to plant owners at below-market forecast prices through 2012. If the future market price of power in Vermont drops below the agreed-to set price, the price would then be reduced to the approximate level of the market price, Entergy said
The 29-year-old Vermont Yankee plant's current license expires in March 2012. A purchase of Vermont Yankee would be Entergy's fifth in the Northeast. The company purchased the Pilgrim nuclear station from Boston Edison in 1999, and the Indian Point 3 and FitzPatrick nuclear plants from the New York Power Authority Nov. 21.
Entergy agreed on Nov. 9 to purchase the Indian Point 1 and 2 plants from Consolidated Edison Co. of New York and expects to close that transaction in mid- 2001. Indian Point 1 has been closed and in safe storage for two decades.
Vermont Yankee is operated by Vermont Yankee Nuclear Corp. for a consortium of New England utilities, including Central Vermont Public Service Corp., 31.3%; New England Power Co. 20.0%; Green Mountain Power Co.,17.9%; Connecticut Light Power Corp., 9.5%; Central Maine Power Co., 4%; Public Service Co. of New Hampshire, 4.%; Burlington Electric Department, 3.6%; Montaup Electric Co., 2.5%; Cambridge Electric Light Co. 2.5%; Western Massachusetts Electric Co., 2.5%; Vermont Electric Cooperative Inc. 1%; Washington Electric Cooperative Inc., 0.6%; Lyndonville Electric Department, 0.6%.