VERNON — Federal regulators approved the sale of the Vermont Yankee nuclear power plant to NorthStar Group Services Inc., but required the two companies to set aside an additional $30 million in funding for the plant's demolition and decontamination of the Vernon nuclear reactor.
The decision, released Friday afternoon by the Nuclear Regulatory Commission, includes a requirement that Entergy and NorthStar add $30 million more in guarantees to cover what the NRC believes will be a funding shortfall.
NRC spokesman Neil Sheehan said Friday that Entergy will set aside an additional $20 million, and NorthStar $10 million into an escrow account, which NRC staff want in order to cover a projected gap in NorthStar's finances due to a gap in reimbursements from the federal Department of Energy for the handling of the high-level radioactive fuel.
"We went back and forth with Entergy and NorthStar whether they would have enough to decommission the plant," said Sheehan, who said NRC analysts believed there might be a gap.
"They agreed to bridge that gap and agreedto put up anadditional $30 million," he said.
He said one NRC financial scenario showed the decommissioning trust fund dropping to $488 million, which would be below what NorthStar needs to demolish and decontaminate Vermont Yankee. Last December, Entergy had estimated it would cost $569 million to demolish and decontaminate the plant.
The NRC decision now sets the stage for the Vermont Public Utility Commission to rule on the license transfer to NorthStar, a New York City industrial demolition company.
The decision comes almost two years after Entergy and NorthStar announced the plan, which will result in the clean up of the Vernon site about 60 years earlier than under Entergy's original plans.
When Entergy Nuclear shut down Vermont Yankee in December 2014 because of declining energy prices, it said it would put the plant into cold storage for decades, so that the plant's decommissioning trust fund could grow and reach the required $1.2 billion.
According to the NRC decision, NorthStar had answered its questions about the company's financial ability to pay for the earlier cleanup, which is expected to cost about $600 million and take about a decade to complete.
The decommissioning, demolition and cleanup was described by state regulators last month as the largest construction project in the history of the state.
The decision was largely expected, ever since NorthStar and Entergy Nuclear had sweetened the deal in the spring with additional financial assurances, which satisfied the concerns of all opponents, with the exception of the Conservation Law Foundation.
Earlier in the year, NorthStar and Entergy had added $180 million in cash and guarantees to the deal. Despite those sweeteners, NRC officials pushed for additional assurances this summer.
In addition to approving the license transfer to NorthStar, the NRC gave approval to a plan for NorthStar to use $20 million out of Yankee's decommissioning trust fund toward the costs of handling of the high-level radioactive waste, which is currently stored in large concrete and steel canisters at the Yankee site.
"The NRC confirmed that NorthStar met the regulatory, legal, technical and financial requirements necessary to qualify them as a licensee," the NRC said in a statement Friday afternoon "The NRC also determined that the transfer is consistent with law and NRC regulations, and that the transfer can be conducted without endangering the health and safety of the public and will not be inimical to the common defense and security."
Scott State, the chief executive officer for NorthStar, said in a prepared statement the company was happy with the decision.
"The NRC's approval of the application to transfer Vermont Yankee licenses to NorthStar affirms our team's technical and financial qualifications to hold the Vermont Yankee licenses and comply with related NRC requirements. This is an important regulatory milestone in our team's efforts to safely restore the Vermont Yankee site to conditions suitable for productive economic use decades sooner than originally anticipated," he said.
"NorthStar appreciates the NRC's careful review of the initial license transfer application and the supplemental information we provided during the process. We are pleased that the NRC's decision is consistent with the terms of the memorandum of understanding reached after extensive negotiation among NorthStar, Entergy, the State of Vermont's Department of Public Service, Agency of Natural Resources, Department of Health, and Attorney General, as well as other important stakeholders, including the Town of Vernon, the Windham Regional Planning Commission, the New England Coalition, and the Elnu and Missisquoi Abenaki Tribes," the NorthStar statement read.
"We hope that the NRC's positive action will enable the Vermont PUC to complete its independent review under state law and issue NorthStar a certificate of public good so that we can close our transaction with Entergy this year and move forward with this important project."
At Entergy, Michael Twomey, vice president of external affairs for Entergy wholesale commodities, said the sale and license transfer now hinged on Vermont regulators.
"Both of these decisions are significant milestones toward the timely decommissioning of Vermont Yankee. We are encouraged by the NRC's acceptance of this transaction model," Twomey said in a statement.
"The proposed sale of Vermont Yankee to NorthStar, if also approved by the Vermont Public Utility Commission, which accelerate Vermont Yankee's decommissioning by decades - a positive outcome for the town of Vernon, Windham County, the state of Vermont and other stakeholders," Twomey said, adding that the sale was expected to close by Dec. 31.
Josh Unruh, chairman of the Vernon Select Board who works at the Reformer, said State had called him Friday morning with the news, which he said would make many people in Vernon happy who were working hard to help the town make the transition after Yankee shut down in 2014, putting hundreds of people out of work.
Vernon officials want to be able to reuse the Vermont Yankee site for development, Unruh said, citing in particular the company's large office building and its on-site septic system.
"Obviously, this is very good news for the town of Vernon," he said. "We've been cautiously optimistic."
Unruh said he hoped the Vermont PUC would issue its ruling quickly, and that the sale could be finalized by the end of the year.
The Conservation Law Foundation said the NRC approved transfer was "absolutely correct to require these additional guarantees" from NorthStar and Entergy.
"This is a major clean-up of a contaminated nuclear site that poses pollution risks for generations to come. It is not a project that should be done on the cheap, and it should not leave Vermonters on the hook to pay for cleanup efforts. The Nuclear Regulatory Commission clearly recognized the weakness of the proposal that Entergy presented to Vermont regulators," said Sandra Levine, CLF's senior staff attorney.
Contact Susan Smallheer at email@example.com or 802 254-2311, ext. 154.