[Logo of Entergy] [Logo of Vermont Yankee]
Date: August 15, 2001
For Immediate
Release:
Contacts: Entergy Nuclear Vermont Yankee
Carl Crawford Rob Williams
(News Media) (802) 258-4181
(601) 368-5658 office rob.williams@vynpc.com
(888) 432-5493 pager
ccrawfo@entergy.com
Nancy Morovich JPMorgan
(Investor Relations) Paul Dabbar
(504) 576-5506 (212) 622-2287
nmorovi@entergy.com
Entergy Will Buy Vermont Yankee for $180 Million
NEW ORLEANS - Entergy Corporation (NYSE: ETR) and the
Vermont Yankee Nuclear Power Corporation have reached an
agreement to sell the Vermont Yankee nuclear power plant in
Vernon, VT, to Entergy for $180 million.
Vermont Yankee will become Entergy's 10th nuclear unit and
its fifth in the Northeast. Entergy Nuclear has operated five
nuclear units in Arkansas, Mississippi and Louisiana for more than
20 years and began buying its properties in the Northeast in 1999.
The $180 million in cash represents $145 million for the
plant and related assets, and $35 million for nuclear fuel.
"We expect to realize significant operating efficiencies
since Vermont Yankee is a sister plant to our Pilgrim plant in
Plymouth, Mass., and our FitzPatrick plant in Oswego County,
N.Y.," said Wayne Leonard, Chief Executive Officer of Entergy.
All three are boiling water reactors designed by General Electric
and, as a result, many resources such as inventories and spare
parts, best safety practices, group purchasing, specialized
technical skills, manpower, key management and financing can be
shared.
Ross Barkhurst, President and Chief Executive Officer of
Vermont Yankee, said, "We are pleased to be selling this
outstanding nuclear plant to a national leader in nuclear plant
operations with a strong track record of safe operations. We are
very pleased that the auction process run by JPMorgan has been so
successful. We were able to execute the auction on a timely basis
with a process which garnered significant interest and clearly
maximized the value of the plant."
In addition to $180 million, Entergy will retain the plant's
450 employees at their same salary and comparable benefits.
Entergy will also 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 U.S. Nuclear
Regulatory Commission. No decommissioning top-off or any other
financing by Vermont Yankee Nuclear Power Corporation is
anticipated with the transaction.
For the benefit of power consumers of the Vermont Yankee
owner-utilities, 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 license, at average annual prices ranging from $39 to
$45 a megawatt-hour.
The agreement includes a "low market adjuster" that protects
Vermont Yankee owner-utilities and their power consumers in case
power market prices drop significantly. If a prior year's average
market price of power is more than five percent below the annual
agreement price for the current year, the agreement price would
drop to 105 percent of the previous year's average market price.
The Vermont Yankee Nuclear Power Corporation is owned by 12
New England utilities. The largest shareholder is Central
Vermont Public Service Corp. in Rutland, VT, 31.3 percent, and
the others are New England Power Co., 22.5 percent; Green
Mountain Power Corp., 17.9 percent; Connecticut Light and Power
Co., 9.5 percent; Central Maine Power Co. and Public Service
Company of New Hampshire, 4 percent each; Burlington Electric
Department, 3.6 percent; Cambridge Electric Light and Western
Massachusetts Electric Co., 2.5 percent each; Vermont Electric
Cooperative, Inc., 1 percent, and Washington Electric Cooperative
Inc. and Village of Lyndonville Electric Department, 0.6 percent
each.
Entergy Nuclear Chief Executive Officer Jerry Yelverton said
the power purchase agreement benefits Entergy as well as New
England. "New England power consumers will have a reliable source
of electricity with built-in price stability. That reduces our
risk and allows us to focus our time and attention on increasing
the plant's capacity factor, achieving cost synergies with other
plants, and maintaining the highest level of safe operations."
The sale is subject to the approval of the Public Service
Board of Vermont, the U.S. Nuclear Regulatory Commission, the
Federal Energy Regulatory Commission and other regulatory
authorities. After their approvals, a closing is targeted for the
spring of 2002.
Vermont Yankee is the largest power generator in Vermont,
producing about 30 percent of the power used by Vermont consumers.
With a 510-megawatt capacity, the unit can produce enough power to
supply about 500,000 homes.
The plant has been an excellent performer with an average
capacity factor of 89 percent over the past 10 years, the second
highest of all boiling water power reactors in the nation.
"The men and women of Vermont Yankee have worked hard
fulfilling our commitment to a high standard of operations," said
Barkhurst, Vermont Yankee's president. "Entergy's purchase is a
clear indication that our hard work is valued by a nuclear
industry leader. Our employees' culture of excellence will be
welcomed by Entergy's successful national operation."
Yelverton, Entergy Nuclear's CEO, said Entergy will be
committed to high environmental standards and close, supportive
relations with local communities, as the current Vermont Yankee
owners have been.
Vermont Yankee Chairman Robert Young said, "This agreement
preserves the economic benefits that Vermont Yankee provides the
state and the region and the price stability inherent in the
purchase power agreement helps protect New England's electric
consumers from the volatility of the electricity market. We look
forward to bringing this agreement before our regulators for a
thorough review in the coming months."
The plant 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.
In addition to the three boiling water reactors mentioned,
Entergy also owns and operates the Indian Point 3 unit, purchased
from the New York Power Authority last November, and is preparing
to close the purchase of the Indian Point 2 plant from Con Edison
this fall. Both are Westinghouse pressurized water reactors and
located on the same site in north Westchester County, N.Y.
The nuclear businesses of Entergy Corporation are
headquartered in Jackson, Miss. As a global energy company,
Entergy, based in New Orleans, is the third largest power
generator in the nation with more than 30,000 megawatts of
generating capacity, about $9 billion in annual revenue and over
2.6 million customers in Arkansas, Mississippi, Louisiana and
Texas.
Entergy Nuclear South operates five nuclear units from its
regional office in Jackson, Miss. Its newly acquired units are
managed from its Entergy Nuclear Northeast regional office in
White Plains, N.Y. Entergy Nuclear also manages decommissioning
activities and furnishes license renewal engineering services to
the U.S. nuclear power industry.
JPMorgan 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 U.S., including Millstone, Nine
Mile Point, Indian Point 3 and James A. Fitzpatrick.
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Entergy's on-line address is www.entergy-nuclear.com
Vermont Yankee's on-line address is www.vermontyankee.com
The following constitutes a "Safe Harbor" statement under the
Private Securities Litigation Reform Act of 1995: Investors are
cautioned that forward-looking statements contained herein with
respect to the revenues, earnings, performance, strategies,
prospects and other aspects of the business of Entergy
Corporation, Entergy Arkansas, Inc., Entergy Gulf States, Inc.,
Entergy Louisiana, Inc., Entergy Mississippi, Inc., Entergy New
Orleans, Inc., and System Energy Resources, Inc. and their
affiliated companies may involve risks and uncertainties. A
number of factors could cause actual results or outcomes to
differ materially from those indicated by such forward-looking
statements. These factors include, but are not limited to, risks
and uncertainties relating to: the effects of weather, the
performance of generating units and transmission systems, the
possession of nuclear materials, fuel and purchased power prices
and availability, the effects of regulatory decisions and changes
in law, litigation, capital spending requirements, the onset of
competition, including the ability to recover net regulatory
assets and other potential stranded costs, the effects of recent
developments in the California electricity market on the utility
industry nationally, advances in technology, changes in
accounting standards, corporate restructuring and changes in
capital structure, the success of new business ventures, changes
in the markets for electricity and other energy-related
commodities, changes in interest rates and in financial and
foreign currency markets generally, the economic climate and
growth in Entergy's service territories, changes in corporate
strategies, and other factors.