First-of-Its-Kind Deal

  • FILE - In this June 19, 2013 file photo, the Vermont Yankee Nuclear Power Station sits along the banks of the Connecticut River in Vernon, Vt. Its owner, Entergy Corp., said it is closing the plant for economic reasons, and is expected to be disconnect from the regional power grid. (AP Photo/Toby Talbot, File) ap — Toby Talbot

Associated Press
Published: 11/13/2016 12:57:46 AM
Modified: 11/13/2016 12:57:55 AM

Montpelier — For sale: Biggest industrial waste site in Vermont, with materials that will remain dangerous for tens of thousands of years. No prospect of resuming its previous money-making activity. Estimated cleanup cost: $1.24 billion.

Sound enticing? In the case of the closed Vermont Yankee nuclear plant, a New York-based company thinks so.

The company that operated Vermont Yankee — a subsidiary of New Orleans-based energy giant Entergy — for the last 12 years of its life until it closed at the end of 2014, announced last week that NorthStar Group Services Inc. would buy the old reactor in a deal expected to close by late 2018.

NorthStar has worked on decommissioning projects before, but has never bought a plant only to dismantle it and restore the site, the company’s CEO, Scott State, said. Similarly, two other plants have had their licenses transferred after shutdown, said Neil Sheehan, a spokesman for the federal Nuclear Regulatory Commission, but neither was the permanent sale of a closed plant that had operated for decades. That would make the Vermont Yankee deal the first of its kind in the United States.

For the public, both Entergy and NorthStar are pushing for a quicker cleanup as the chief selling point. Entergy had estimated it could take until the 2060s to get the decommissioning fund to grow to sufficient levels, then until 2075 to do the work of dismantling the plant and restoring the site. NorthStar says it can get the old reactor dismantled and most of the site restored for other uses by 2030.

NorthStar’s State described what’s in it for his company: It’s the plant’s decommissioning fund, set aside like a retirement fund during Vermont Yankee’s first 30 years of operation. It currently stands at about $575 million. State said NorthStar, working with three other companies, can get the work done “well inside the trust fund balance.”

One big chunk of savings will come from removing a layer of oversight, State said. Entergy’s $817 million estimate for dismantling Vermont Yankee was to pay for its own oversight of a specialized general contractor to do the work; NorthStar will have three corporate partners but will be in something closer to a do-it-yourself role.

That $817 million figure is well less than the $1.24 billion overall estimate for managing Vermont Yankee’s demise. Plant spokesman Martin Cohn noted much of the balance is money that will be paid to manage the plant’s highly radioactive spent nuclear fuel, which nuclear plant owners can then recoup from the U.S. Department of Energy.

Any money left over in the decommissioning fund would not be pure profit to NorthStar. When Vermont Yankee’s previous owners, a group of New England utilities, sold the plant to Entergy in 2002, state regulators’ approval came with conditions. One said any money left over after decommissioning would be split, with Vermont ratepayers recouping 55 percent.

And whether there will be any money left in the fund is still a question. “Our formula right now shows that the decommissioning fund is significantly short of what would be needed to complete that work,” the NRC’s Sheehan said. “They’re going to have to show us how the numbers work” before the NRC approves the ownership transfer from Entergy to NorthStar, he said. The plan also would need state regulators’ approval.

Some Vermonters are likely to be skeptical, including state Sen. Mark MacDonald, D-Williamstown, and a member of a state panel tracking decommissioning issues. When the Nuclear Decommissioning Citizens Advisory Panel meets Thursday evening at the middle school in Brattleboro, MacDonald said he would have some questions ready.

“Yankee says they can’t clean the place up for 60 years because there’s not enough money in the fund,” he said. “Now they’re going to sell it to someone else who can clean it up in 10 years. Show us the hat and show us the rabbit.”

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