BRATTLEBORO -- In response to a series of questions issued by the Vermont Public Service Board, Michael Twomey, vice president of utility strategy for Entergy Services, said a proposed agreement between the state and Entergy strengthens its case for receiving a certificate of public good allowing Vermont Yankee nuclear power plant to continue operating until Dec. 31.

Twomey mentioned the prior relationship between the state and Entergy, which was adversarial at best and antagonistic at times, but didn't dwell on past interactions.

"Whatever might be argued about Entergy VY's past conduct, Governor Shumlin, the Attorney General (and state agencies) now recognize ... that Entergy can be a fair partner to the State going forward and is a company with whom these State representatives believe they can work constructively going forward."

The newly negotiated agreement calls for $10 million in economic assistance to Windham County, the release of more than $5 million in escrowed funds into Vermont's Clean Energy Development Fund, and the seeding of a site restoration fund with $25 million contributed over the next four years.

"Equally important," stated Twomey, "the (memorandum of understanding), if approved by the Board, will avoid the uncertainty and substantial costs that the State, Entergy VY, other parties to this proceeding, and the local community ... would all face from the continued litigation and likely appeals of the difficult and contentious issues in this proceeding."

The PSB had been reviewing Entergy's application for a certificate of public good for operation of the power plant from 2012 to 2032. However, the PSB's review was put on hold pending the resolution of a lawsuit filed against the state by Entergy. That suit was resolved in favor of Entergy by a district court judge in January 2012 and later affirmed by an appeals court in August 2013. But on Aug. 27, 2013, Entergy announced it would be closing Yankee at the end of 2014, due to the plant's financial viability in an energy market depressed by the low cost of natural gas. Now the PSB is considering whether to issue a CPG for operation through Dec. 31.

In addition to the economic development assistance and the site restoration fund, Entergy has also agreed to drop its petition to recoup more than $5 million it has spent in federal court. It has also agreed to not file a complaint with the Vermont Supreme Court over a generating tax instituted by the Vermont Legislature in May 2012. Entergy's petition contesting the tax in federal court was recently denied by both a district court and an appeals court.

Twomey agreed with an opinion issued by Chris Recchia, the commissioner of the Vermont Department of Public Service, that the Public Service Board still has the authority to issue a certificate of public good for expanded storage of spent nuclear fuel at the site in Vernon.

"To accomplish full decommissioning, all of the (spent nuclear fuel) in the spent fuel pool will have to be moved to dry storage," testified Twomey. "The existing (spent fuel storage facility), the construction of which the Board authorized ... does not have sufficient capacity to hold of the needed casks. As a result, Entergy VY will need to construct a second (storage) pad. As it has announced, Entergy VY intends to apply in summer 2014 for a CPG authorizing construction of that second (facility)."

The federal courts made it quite clear, noted Twomey, that while the Vermont Legislature has no role in authorizing expanded storage, the board still retains authority over non pre-empted factors, such as aesthetics or the environment, but not radiological safety, which is under the purview of the Nuclear Regulatory Commission.

Twomey also reaffirmed that a site restoration study that is due to be complete within the next year is being conducted to provide a more detailed cost estimate and will not itself determine site restoration standards.

"(The study) will provide information to facilitate further discussion and determination of the appropriate standards," stated Twomey.

Also of benefit to the state, noted Twomey, is the fact Entergy has agreed to begin decommissioning as soon as the trust fund achieves the necessary level to complete the job. Currently, the decommissioning fund rests at approximately $606 million. Entergy believes it could cost up to $825 million to fully decommission the site, which includes the cost of moving fuel out of the reactor building and into dry casks.

While not a matter within the board's jurisdiction, stated Twomey, "Entergy VY commits to make appropriate filings with the NCR to obtain authority to begin radiological decommissioning within 120 days after it has made a reasonable determination that funds in the decommissioning trusts are adequate ... As a result, Vermont does not face the prospect of an unnecessarily extended and delayed SAFSTOR period that prevents timely re-use of the site."

Under NRC regulations, Entergy can take up to 60 years to clean up the site.

Entergy has also agreed to prepare a site restoration study and "work in good faith" with state agencies to establish "standards necessary to support use of the property without limitation ... including that ENVY shall not employ rubblization (demolition of above-grade decontaminated structures into rubble that is buried at the site) and addressing removal of structures and radiological exposure levels."

Bob Audette can be reached at raudette@reformer.com, or at 802-254-2311, ext. 160. Follow Bob on Twitter @audette.reformer.