The U.S. Nuclear Regulatory Commission has approved the transfer of Vermont Yankee’s license to a New York company, setting the stage for an accelerated decommissioning project that could clean up most of the Vernon site in less than a decade.
The sale of the idled nuclear plant from Entergy to NorthStar is not yet a done deal: The Vermont Public Utility Commission still must rule on the matter before the deal can close.
But the NRC’s approval is a major step forward in NorthStar’s effort to close a deal that was first announced nearly two years ago.
“Based on its review, the NRC confirmed that NorthStar met the regulatory, legal, technical and financial requirements necessary to qualify them as a licensee,” federal officials wrote in announcing their decision Friday. “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.”
NorthStar Chief Executive Officer Scott State said the federal decision “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.”
And Mike Twomey, external affairs vice president for Entergy Wholesale Commodities, noted that the NRC also has approved — in a separate decision — NorthStar’s plan for funding long-term management of Vermont Yankee’s spent nuclear fuel.
“We are encouraged by the NRC’s acceptance of this transaction model,” Twomey said. “The proposed sale of Vermont Yankee to NorthStar, if also approved by the Vermont Public Utility Commission, would accelerate Vermont Yankee’s decommissioning by decades — a positive outcome for the town of Vernon, Windham County, the state of Vermont and other stakeholders.”
Entergy stopped power production at Vermont Yankee at the end of 2014 after more than 42 years of operation. The company initially prepared the plant for SAFSTOR, a federally sanctioned period of dormancy under which decommissioning can take up to 60 years.
But in November 2016, Entergy announced plans to sell Vermont Yankee and its decommissioning trust fund, which is expected to contain more than $500 million when NorthStar’s work would begin next year. NorthStar has promised an accelerated decommissioning project that would allow the majority of the site to be cleaned up by 2030 or as early as 2026.
The transaction — which would be the first of its kind in the United States — initially attracted strong opposition from Vermont officials and some interest groups who questioned NorthStar’s ability and wherewithal to do the job as promised. While NorthStar has been involved in smaller reactor decommissioning projects, the company has not taken the lead on a nuclear project of this size and scope
But many skeptics changed their tune with the announcement of a memorandum of understanding in March of this year. The deal included new financial and environmental commitments from NorthStar and Entergy, and its signers included several state agencies and former critics like the New England Coalition.
The NRC’s approval on Friday caps a 20-month federal permitting process that included two requests for additional information from regulators. In the second such request, issued earlier this year, NRC staffers said they were not yet convinced NorthStar’s financial plans were “adequate to provide reasonable assurance that sufficient funds will be available” for decommissioning.
In response, NorthStar sweetened its Vermont Yankee offer with financial, administrative and regulatory tweaks. That was enough for the NRC to sign off on the deal in a series of documents made public Friday.
In evaluating the merits of NorthStar’s decommissioning plans, the NRC considered the company’s qualifications as well as the expected contributions of key contractors on the job, including Orano USA, which will dismantle Vermont Yankee’s reactor, and Waste Control Specialists, which will dispose of the plant’s low-level radioactive waste in Texas.
NorthStar “will have the technically qualified resources and experience to support the safe maintenance and decommissioning of the VY site,” the NRC decision says.
In reviewing the financials of the Vermont Yankee deal, NRC spokesman Neil Sheehan said officials took note of a $30 million escrow account for the Vermont Yankee job — an account that eventually will grow to $55 million via contributions from NorthStar.
Officials also considered the availability of a $140 million parent company support agreement, meant as backup decommissioning money for the project. And the NRC is endorsing NorthStar’s “revolving credit” plan whereby only $20 million of the plant’s decommissioning trust fund will be tied up in spent fuel management at any given time.
“Based on this review, the NRC staff finds that the companies have provided reasonable assurance that NorthStar has or can obtain the funds necessary to cover the estimated costs for decommissioning Vermont Yankee and its independent spent fuel storage installation,” Sheehan said.
The NRC included a few conditions on its approval of the Vermont Yankee transfer, including a requirement that NorthStar provide “satisfactory documentary evidence that they have obtained the appropriate amount of insurance required of a licensee.”
NorthStar also is prohibited from taking any action to “void, cancel or modify” the $140 million support agreement for the Yankee project without prior consent from the NRC.
State said NorthStar “appreciates the NRC’s careful review of the initial license transfer application and the supplemental information we provided during the process.” He added that the NRC’s decision is “consistent with the terms” of the memorandum of understanding that NorthStar and Entergy signed with state officials and other interested parties in March.
The extended length of the state and federal reviews had jeopardized the goal — stated often by both Entergy and NorthStar — of completing the Vermont Yankee sale by the end of 2018. But Entergy has said the sale agreement allows the two companies to continue working toward closing the deal until June 30, 2019, and both companies on Friday expressed optimism that a resolution is imminent.
“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,” State said.
Friday’s announcement won applause from Vernon selectmen Chairman Josh Unruh, who said it “bodes well that the NRC has given their approval, and I think the PUC won’t be far behind.”
“It supports our hope of redeveloping that site and regaining our tax base,” Unruh said. “This is getting us that much closer to the end goal of redevelopment and regaining some, if not all, of what we lost.”
But even after the memorandum of understanding was issued earlier this year, not everyone thought the Vermont Yankee sale is a good idea. The Conservation Law Foundation declined to sign the agreement, raising financial, liability and transparency concerns.
Sandra Levine, a senior attorney with the law foundation, said Friday the NRC “was absolutely correct” to require additional financial guarantees before approving the NorthStar license transfer.
“This is a major cleanup of a contaminated nuclear site that poses pollution risks for generations to come,” Levine said. “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.”