VERNON, Vt. — If Entergy Corp. is allowed to transfer ownership of the Vermont Yankee nuclear power plant to a firm specializing in decommissioning and dismantling energy facilities, both companies are set to benefit, according to documents filed with the Vermont Public Service Board Friday.
Entergy would recoup the tens of millions of dollars it has spent and plans to spend on decommissioning the facility, while the potential buyer, NorthStar Group Services Inc., could make a multi-million-dollar profit if all goes according to its plan, the documents show.
Last month, Entergy Corp., which is based in Louisiana, announced it had reached a purchase and sales agreement with the New York-based company to sell Vermont Yankee and transfer its U.S. Nuclear Regulatory Commission licenses to NorthStar.
The sale, if approved by the Vermont Public Service Board and the federal commission, could accelerate the decommissioning and site restoration of the former nuclear power plant by decades, the Nov. 8 news release from Entergy said.
Vermont Yankee, which went online in 1972, shut down permanently in December 2014. That same month, a post-shutdown decommissioning report filed with the Nuclear Regulatory Commission said site restoration of the 125-acre property abutting the Connecticut River might not be possible until between 2073 and 2075.
Entergy officials said in the November news release that NorthStar would complete decommissioning and restoration of the site by 2030, per the agreement. This would allow most of the property to be open to development at that time, with the exception of the two independent spent fuel storage installation pads, the news release said.
Documents filed Friday say those tasks could be finished as early as 2026 under NorthStar’s plan.
However, NorthStar would continue to operate and maintain the independent spent fuel storage installation pads until the U.S Department of Energy fulfills its contract to remove all of the spent nuclear fuel from Vermont Yankee, which company officials anticipate won’t be until 2052, the documents say.
On Friday, Entergy and NorthStar submitted a joint petition to the Vermont Public Service Board, asking it to sign off on the sale by March 31, 2018.
Vermont Yankee and NorthStar officials said they plan to submit an application to the Nuclear Regulatory Commission in February 2017, asking that agency approve the sale by Dec. 31 of that year, according to the Vermont petition.
As part of the sale, NorthStar would acquire 100 percent ownership in Entergy Vermont Yankee, which it would rename NorthStar Vermont Yankee LLC, the petition said.
It would also be able to make withdrawals from Vermont Yankee’s Nuclear Decommissioning Trust Fund and its Site Restoration Trust to fund the decommissioning, dismantling and site restoration of the property, according to the petition.
NorthStar CEO Scott E. State said in prefiled testimony included with the petition that during the entire duration of the project, it would cost the company $511,124,040 for the decommissioning work needed for the license termination, $287,802,112 for spent nuclear fuel management and $12,598,000 for site restoration.
The duration of the project would be until the U.S. Department of Energy removes the spent fuel, he said.
In the meantime, Entergy is required by the agreement to have a minimum of $538,149,956 in the Nuclear Decommissioning Trust Fund and the Site Restoration Trust for NorthStar to begin decommissioning and site restoration activities, possibly as early as 2019, and no later than 2021, State said.
Entergy is also required to have all spent nuclear fuel transferred to the storage pads by the time NorthStar purchases the site, he said.
That action will leave about 2 percent of residual radioactivity in the facility for decontamination and disposal by NorthStar, while the remaining 98 percent will be contained to the storage pads, he said.
At the time of the sale, NorthStar will issue a note of up to $145 million to Vermont Yankee Asset Retirement Management LLC, which would be a subsidiary formed by Entergy Vermont Yankee for the purposes of the sale, according to the petition.
The payment would be equal to the amount of credit Vermont Yankee has incurred to fund the construction of the second dry cask fuel storage pad and transfer the remaining spent nuclear fuel to it, the petition said.
State said Entergy Vermont Yankee will continue to cover those expenses with credit rather than withdrawals from the Nuclear Decommissioning Trust, through late 2018.
NorthStar expects to recover the amount of the note from the U.S. Department of Energy as damages for the federal agency’s partial breach of the contract requiring it to remove spent fuel from Vermont Yankee, he said.
According to the petition, the focus of the transfer of Vermont Yankee to NorthStar is speeding up the decommissioning and site restoration processes by decades.
NorthStar, which is in the business of decommissioning and dismantling former energy facilities, plans to do so by doing the radiological decommissioning and site restoration at the same time, the petition said.
Its employees would handle the dismantling, removal, and packaging of all systems, structures and the reactor at Vermont Yankee, State said.
The company would engage AREVA Nuclear Materials LLC, a French firm, to cut up the nuclear reactor pressure vessel, he said.
NorthStar has a contract with Waste Control Specialists LLC to accept low-level radioactive waste from projects at its disposal site in Texas, he said.
In addition, NorthStar will partner with Burns & McDonnell to assist with engineering and termination of the U.S. Nuclear Regulatory Commission license, he said.
The approach will allow NorthStar to do the decommissioning work more efficiently and at a lesser cost than Entergy Vermont Yankee’s proposal, State said.
Another important factor to keeping costs down is for NorthStar to own Vermont Yankee because in order for its business model to be successful, it has to have control over the project and workflow, he said.
At a meeting of the Vermont Nuclear Decommissioning Citizens Advisory Panel last month, State said that NorthStar will be able to decommission the nuclear power plant for $574 million, less than half of the $1.24 billion Entergy Vermont Yankee estimated it would cost for it to do the work.
In addition, Entergy officials said they were interested in selling Vermont Yankee to NorthStar because Entergy isn’t in the business of decommissioning nuclear power plants, but running them.
State Rep. David L. Deen, D-Westminster, asked State and other NorthStar representatives at the meeting why the company is interested in purchasing a nuclear power plant that isn’t producing any revenue and adds liability to the company.
“We’re not buying the plant. We’re buying the company that owns the plant,” State said.
The company’s profit model is based on recovering the cost of doing the work from the Nuclear Decommissioning Trust and pocketing the unspent contingency, he said.
“Contingency is factored into each work element we do,” he said. “If we do the job within the expected cost and the contingency isn’t needed, it becomes profit.”
In his testimony filed Friday, State said that NorthStar expects $17 million will remain in the decommissioning and site restoration trust funds at the end of the process. Of that amount, 45 percent would be kept by NorthStar, he said, and 55 percent would be returned to the customers of the Vermont utility companies that formerly owned Vermont Yankee under the Vermont Yankee Nuclear Power Corp.