Nuclear power plant operator sued in Vermont

The two largest distribution utilities in Vermont sued Entergy Corp. (NYSE: ETR) on Jan. 10, 2012 in Vermont Superior Court, seeking to recover costs resulting from cooling tower failures in 2007 and 2008 at the 605 MW Vermont Yankee nuclear power plant.

A joint release from Central Vermont Public Service and Green Mountain Power said the companies are seeking compensatory damages of $6.6 million to cover increased power costs and lost capacity payments resulting from the tower failures, plus interest and all legal costs.

"This case arises out of Entergy's breach of its contractual obligation to use ‘Good Utility Practice' in its management and operation of the Vermont Yankee Nuclear Station," Central Vermont Public Service and Green Mountain Power said in a joint statement.  "Entergy's failure to implement and exercise sound practices with respect to the maintenance, repair and improvements of the facility's cooling towers caused tower failures in August 2007 and July 2008.  The failures resulted in significantly reduced power output, which in turn deprived us of power due to us and our customers at specified, below-market prices."

A tower failure on Aug. 21, 2007 caused the plant to reduce output by 65 percent for 11 days.  A subsequent Nuclear Regulatory Commission (NRC) investigation blamed the failure on over-tightened bolts and salt and fungal degradation that went undetected by Entergy.  The NRC found the failure to find the problem was the result of Entergy's reliance on "remote" inspections, rather than direct, hands-on inspections.

In the second tower failure in July 2008, the plant reduced output for 12 days. This failure was caused by failed pipe supports within the tower.  In both cases, CVPS and GMP contend that Entergy's failure to use "Good Utility Practice" led directly to the failures.

The companies have requested a trial by jury.

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