Vermont Yankee buyer makes financial case
In answer to questions posed by the Nuclear Regulatory Commission, NorthStar Group Services says it has a sound plan to pay for the long-term management of radioactive spent fuel at the idled Vernon plant.
The company also is touting the availability of $125 million in backup funding to cover unexpected expenses. Current plant owner Entergy, NorthStar points out, has pledged far less.
If the change in ownership occurs, "the possibility of up to $40 million in future 'guarantees' from Entergy would be replaced by current access to up to $125 million in funding commitments from NorthStar," administrators wrote in a Dec. 4 response to the NRC.
Federal officials will consider NorthStar's answers as part of regulatory deliberations that will extend into next year.
"We plan to conclude our review of the Vermont Yankee license transfer application by the end of March," NRC spokesman Neil Sheehan said. "That is contingent upon the responses to our request for additional information that were just submitted being satisfactory."
NorthStar, a demolition and cleanup company, wants to buy Vermont Yankee by the end of 2018. The company has promised to decommission and restore most of the property by 2030 and possibly as early as 2026, which is decades faster than Entergy has been planning.
The NRC and the Vermont Public Utility Commission are reviewing the proposed change in ownership.
Both of those reviews are taking longer than Entergy and NorthStar had hoped. The companies asked the NRC to complete its work by year's end, but the federal agency recently said that timeline isn't long enough and issued a series of questions about the NorthStar deal.
The response submitted by Entergy and NorthStar spans more than 250 pages. The packet includes resumes of key figures in the proposed decommissioning project as well as a detailed explanation of NorthStar's role in other, smaller decommissioning projects.
It also contains responses on two key issues: How NorthStar will manage spent fuel, and how it will provide contingency funding for the Vermont Yankee job.
Spent fuel is a long-term liability for whoever owns the plant because the federal government has not met a statutory obligation to develop a national repository for high-level radioactive waste. Nuclear plant owners regularly sue the U.S. Department of Energy to recover spent fuel storage costs.
Maintaining spent fuel is expensive, since the material requires constant monitoring and security. But NorthStar expects to commit no more than $20 million from Vermont Yankee's decommissioning trust fund at any given time to pay for fuel management.
The company plans to continually repay that money with funds recovered through litigation or settlements with the Department of Energy. NorthStar says it is "reasonable and appropriate" to rely on that "reliable source of funds."
To back up that argument, Entergy and NorthStar sent the NRC an audit showing that the federal government has paid more than $6 billion in connection with spent fuel litigation.
Those cases have included two judgments awarded to Entergy Vermont Yankee totaling more than $65 million.
Given the number of such cases, "key issues subject to litigation have been resolved, and in recent years, recoveries for damages have been routine," the companies told the NRC.
They also sent documents showing that permanently shutdown nuclear plants like Vermont Yankee have been able to recover spent fuel costs from the federal government.
In addition to offering spent fuel assurances, NorthStar is defending the adequacy of its financial backup plan - money that would be available if something goes wrong during decommissioning.
Financial concerns have been a key part of the Vermont Yankee sale debate, as some fear that the company could run out of cash before decommissioning is complete.
NorthStar Group Services has offered $125 million in contingency funding via a parent company "support agreement." The company says the terms of that agreement are "substantially identical" to agreements offered in other NRC license transfers involving operating reactors.
NorthStar says its backup funding exceeds Entergy's, and the $125 million also "represents more than 20 percent of the total projected costs of decommissioning" at Vermont Yankee.
Additionally, the support agreement is meant as a backup to NorthStar's spent fuel plan in case there is a delay in recovering money from the Department of Energy.
"This $125 million is projected to cover more than 15 years of (spent fuel) maintenance costs, which provides ample time for any litigation and appeals to be resolved," the companies wrote.
Such assurances aren't likely to convince Vermont officials who doubt NorthStar's financial qualifications to take on the Vermont Yankee job.
In recent filings with the Public Utility Commission, state regulators have continued to question the sufficiency and legitimacy of NorthStar's contingency money.
The state Public Service Department "has concerns about NorthStar's ability to fully fund the $125 million support agreement that is a key component of the financial assurance package as it currently stands," Brian Winn, the department's finance and economics director, said in testimony filed Dec. 1.
Mike Faher reports for the Brattleboro Reformer, VTDigger, and The Commons. He can be contacted at email@example.com.
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