Entergy issues $40M guarantee for decom fund
BRATTLEBORO -- Entergy, which owns and operates Vermont Yankee nuclear power plant in Vernon, told the Nuclear Regulatory Commission that it has executed a parent company guarantee of $40 million to ensure the site's clean-up fund meets NRC requirements.
The guarantee was offered on Dec. 31, 2009, said Neil Sheehan, spokesman for the NRC.
"We are still awaiting written documentation on this," said Sheehan. "We will conduct independent verification to ensure it was properly carried out and meets our requirements."
Entergy will be working with the NRC to make sure its expectations concerning the decommissioning fund are met, said Rob Williams, spokesman for Yankee.
"The goal of the guarantee we have implemented is to be responsive to NRC's request for further financial assurance to ensure the adequacy of the decommissioning fund," he said.
The NRC requested the parental guarantee due to a shortfall in the decommissioning fund, which lost $84 million after the stock market crash.
In Sept. 2007, there was $431 million in the fund but by Feb. 2008, the fund had dropped to $347 million. Since then, the fund has rebounded to $428 million, but the setback means it is still short according to formulas used by the NRC to determine adequacy.
The NRC's projection is based on the funds necessary to conduct a seven-year dismantlement of the plant, called DECON, starting in 2012. The NRC requires that $513 million be in the decommissioning fund at the midpoint of a DECON process.
According to Entergy, the assumed continued growth between 2012 and 2015 brings the fund value up to $473 million at that time.
Entergy has applied to the Nuclear Regulatory Commission to extend the operating license of Yankee for another 20 years, from 2012 to 2032. In addition to NRC approval, Entergy must also receive a certificate of public good from the Public Service Board and the OK from the Vermont Legislature.
More than likely, if the plant is closed in 2012, it will be placed into what is known as SAFSTOR until the fund has grown to the amount needed for cleaning up the site.
Vermonters should not breath a sigh of relief with the issuance of the guarantee, said a vocal critic of Entergy's management of the plant.
The NRC standard doesn't take into account the standard that Entergy agreed to when it purchased the plant in 2002, said Arnie Gundersen.
"Entergy does not guarantee any shortfall beyond the NRC estimate from its formula," he said.
The NRC only requires the site be returned to a brownfield, but Entergy's obligation is to fund the complete dismantling of the site and return it to a green field site, according to the sales agreement.
"The NRC formula doesn't take that into account," said Gundersen.
The cost to return the site to a green field could approach $1 billion or more.
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