Vermont Yankee could be decommissioned within 10-15 years, Shumlin says

The state and Entergy have reached an agreement that will ensure that decommissioning of the state’s lone nuclear power plant could begin in the next 10 to 15 years.

An accord between Entergy and the administration was announced during a news conference Monday in Montpelier. The agreement sets a decommissioning goal for the 2020s, sooner than required by the Nuclear Regulatory Commission’s 60-year permissible timeframe.

“I’m pleased to announce that we have come to an agreement that really will emphasize the areas that unite us – all good news for Vermonters – and help to set the stage for the areas of concern that are shared not only by Entergy, but the folks at Windham County and the people across Vermont,” Gov. Peter Shumlin said.

Bill Mohl, president of Entergy Wholesale Commodities, did not attend the news conference but issued a statement in a news release.

“This agreement makes clear that Vermonters need not be concerned that Entergy VY will delay decommissioning and related activities longer than necessary once we determine that the decommissioning trust fund has adequate money to complete these tasks,” Mohl said.

Entergy, the Louisiana-based company that operates Vermont Yankee, announced in August it would close the 41-year-old Vernon plant in 2014 for financial reasons — just days after a federal court ruled the Vermont Legislature could not block the relicensure of the aging nuclear plant for a 20-year period after its presumptive shutdown date of March 21, 2012.

After the August announcement, Entergy resubmitted its application for a certificate of public good and asked the Public Service Board for a license to operate through 2014. Recently, Shumlin administration asked the board to halt relicensing proceedings for its final year of operation until a compromise was reached.

Now, the state has agreed to settle all federal pending litigation with Entergy and decide on a “path” toward decommissioning the plant. All the conditions of Monday’s agreement are contingent on the board’s issuing a certificate of public good by March 31, 2014.

Shumlin said Entergy will conduct a cost study within the next year to determine how much money is needed for decommissioning.

The Nuclear Regulatory Commission allows Entergy to keep spent fuel stored at the plant for up to 60 years.

The new agreement between the state and Entergy defines a path for decommissioning that begins 120 days after the company has adequate funds in its Nuclear Decommissioning Trust.

Vermont Yankee has 3,879 fuel rod assemblies submerged in a spent fuel pool that was originally designed to hold about 350. Once spent fuel rods are cooled, they can be transferred into long-term cement “dry casks.” Vermont Yankee will need 58 casks in all. Right now, the facility has 13. Each cask costs about $1 million.

Under the agreement, Entergy will have to move all its spent fuel stored in onsite pools to dry cask storage. Shumlin said this process is expected to take about seven years.

The cost to decommission the plant is estimated at $800 million to $1 billion, though Shumlin emphasized that only rough estimates exist. Entergy officials say they have less than $600 million in the decommissioning fund.

The agreement did not determine how much of the money will be removed from the fund for decommissioning, however, Department of Public Service Commissioner Chris Recchia said.

“We’ve reserved our right to challenge those, Entergy has reserved its right to seek those expenditures from there,” Recchia said.

Entergy has agreed to perform the site-cost analysis two years sooner than required by the Nuclear Regulatory Commission, which will move the process forward, Shumlin said.

Video: AG Bill Sorrell and Entergy’s Mike Twomey speak.

SITE RESTORATION

The state is unsure what will happen to the Entergy-owned site after decommissioning.

“I think we have to be realistic with Vermonters about the site. While the transmission lines and infrastructure is an asset, once the site is cleared of the plant, it’s hard to envision a use for energy before the plant is removed,” Shumlin said.

Site restoration was one of the areas of disagreement between the state and Entergy, Recchia said.

Guy Page is communication director for Vermont Energy Partnership that represents 90 energy producers, including Entergy. He said the agreement is good for taxpayers and Vermont Yankee’s reputation as a “corporate citizen.” However, he said the onus is on lawmakers to find a replacement for Vermont Yankee.

“To say the least, there is a long hard fight to replace the affordability, the carbon – low carbon and reliability of that one power source,” he said.

Renewable Energy Vermont (REV), a renewable energy trade association, supported the inclusion of $5.2 million from Entergy for the Clean Energy Development Fund, which they said has already supported a broad array of renewable energy technologies.

“Today’s announcement is good news for the Vermont economy,” said Thomas Hughes, the chair of REV, in a news release Monday. “Investing in the CEDF means more clean energy jobs, more energy security, and keeping more energy dollars in-state.”

REGIONAL DEVELOPMENT

Entergy will also make payments to the state for regional development and close the $12.5 million hole in lost taxes from the plant’s closure.

Payments to the state include:

• $5.2 million for the Clean Energy Development Fund, half of which goes to Windham County;
• $10 million for economic development in Windham County, payable at $2 million per year for five years;
• $5 million for transitional payments to the Tax Department in 2015 in addition to revenues from the generation tax;
• and payments to a newly created Site Restoration Trust through initial payments totaling $25 million plus an additional parent guaranty to accumulate over time.

Patricia Powden, executive director of the Brattleboro Development Credit Corp., said Entergy’s $10 million economic development payment is a good deal for the area.

“These resources exceed anything we’ve seen ever,” Powden said. “This is a great opportunity for us.”

The Southeastern Vermont Economic Development Strategies (SeVEDS) and Brattleboro Development Credit Corp. issued a joint statement partly supporting the decision:

“We are encouraged by today’s announcement and believe this is a positive step forward in the effort to not-only revitalize the regional economy, but to help with the loss of over 650 highly paid jobs and the impacts those job losses have on the lives of the VY employee families. While we remain concerned about the overall impact the closure of Vermont Yankee will have on the regional economy, today’s announcement is a very positive step which accelerates the path forward,” the statement said.

The Connecticut River Watershed Council, an environmental advocacy group aiming to protect the Connecticut River, is unhappy with the agreement.

“CRWC is not satisfied that the thermal pollution continues just because there is only one year left for the plant operation. Entergy has fought tooth and nail to hide behind their flawed science and cherry-picked modeling results in order not to have to stop discharging thermal pollution to the river,” the statement said.

For years, scientists and advocates have said the discharges have elevated the temperature of the river and harmed the ecosystem.

The agreement requires Entergy’s Vermont Yankee to operate in accordance with its existing National Pollution Discharge Elimination System (NPDES) permit and amend their permit after the plant closes.

Video: Question and answer session.

Editor’s note: This article was updated at 8:04 p.m. Monday.

Comments

  1. Mike Kerin :

    If Governor Douglas has not vetoed the bill to insure that Entergy fully fund the decommissioning fund this would not have been a problem.

    http://www.vpr.net/news_detail/80444/douglas-vetoes-vermont-yankee-decommissioning-bill/

    Do not take my word for it read the above link.

  2. Townsend Peters :

    Let’s see: Entergy is operating today in violation of past agreements and, according to the State of Vermont, has violated those agreements in many other ways.

    But somehow Entergy can be relied on to honor this new piece of paper.

    As Neville Chamberlain once said, we have “peace on our time.”

    Keep your powder dry.

    • Howard Shaffer :

      Can you list the conditions that Entergy violated and why?

      As I understand it, if parties agree through a contract or MOU, the assumption is that both parties will act legally through the life of the contract. Example: The legislature acted illegally when the Senate voted to block the PSB from releasing the CPG. Who says its illegal? Vermont admitted it today when the AG agreed not appeal to the US Supreme court.
      When conditions change, agreements can’t be kept. The US Govt, changed its plan on used fuel, so the fuel has no place to go now but on the site.

      • Townsend Peters :

        VY is operating beyond March 2012 without a certificate of public good from the Public Service Board, despite its own agreement to obtain a certificate before continuing operation and numerous PSB orders requiring it to do so. Nothing about the Senate vote changed that requirement.

        As for other allegations by the State of Vermont, you are already aware of them as an apologist for the plant.

        I do appreciate one aspect of your comment: “When conditions change, agreements can’t be kept.” Thank you for helping to demonstrate that Entergy will only honor a piece of paper as long as it feels the circumstances suit.

        • Howard Shaffer :

          My mistake. I didn’t state the obvious. When conditions change, by outside forces or parties over which the singers have no control, ie a higher level of government.

  3. Pete Novick :

    To put this emerging deal into perspective, VY employs about 650 people at an average salary/wage of $100K, which is a $65M annual payroll. Assuming Entergy reduces the workforce by 2/3 by December 2014, Windham County loses about $43M in annual payroll.

    According to the article, Entergy has agreed to make payments to Vermont of about $45M, with some payments spread over a number of years.

    Entergy was probably well aware back in July 2002 that the provisions of the MOU their company had just signed with Vermont were probably unenforceable – a belief confirmed in federal district court ten years later when the court ruled that the Atomic Energy Act preempted two Vermont laws.

    Here’s a link to the MOU…

    http://psb.vermont.gov/sites/psb/files/docket/7440VT_Yankee_Relicensing/Supplemental/DPS_exh_UV_3.pdf

    …and here’s a link to Judge Murtha’s opinion, (Entergy Nuclear Vt. Yankee, LLC v. Shumlin, 838 F. Supp. 2d 183 (D. Vt. 2012)
    https://www.casetext.com/case/entergy-nuclear-vt-yankee-llc-v-shumlin/

    Keep in mind that the term ‘decommissioning’ as used by the NRC refers to the general process of post-operation activities. Per the NRC, there are three decommissioning options: DECON, SAFSTOR and ENTOMB.

    Quoting from the article, “[t]he state is unsure what will happen to the Entergy-owned site after decommissioning. Also unclear is in what state the site would be left after decommissioning.”

    Transferring fuel to dry cask storage sure looks like the start of SAFSTOR to me.

    As for Entergy agreeing to perform the site-cost analysis two years sooner than required by the NRC, that is but one requirement of the Post-Shutdown Decommissioning Activities Report, (PSDAR) Entergy is required to submit to the NRC. Here are the PSDAR requirements:
    The PSDAR include:

    • A description and schedule for the planned decommissioning activities;
    • An estimate of the expected costs; and
    • A discussion that provides the means for concluding that the environmental impacts associated with the decommissioning activities will be bounded by appropriately issued environmental impact statements (EISs).

    Here’s the link to the NRC’s decommissioning process:

    http://www.nrc.gov/about-nrc/regulatory/decommissioning/process.html

    Note, the NRC does not approve the PSDAR, but does notice it in the Federal Register and does hold hearings for public comment.

    So, let’s wait for the PSDAR, and five will get you ten, Governor Shumlin is off by about 25-30 years before the site is decontaminated.

    If you find yourself in a lifeboat with the devil, you can either row or steer, but the devil may make not be inclined to give you a choice.

  4. Jim Barrett :

    Let’s see, VTY has provided some of the best jobs in Vermont and the governor had a personal death wish for them….shut down. Now the wonderful governor is trying to justify why this company should pay the mater extortionist of the century..Shumlin and Sorrell… ! Every week money is being extracted from private companies by this bunch in Montpelier because the state has run out of money from taxes. Why VTY should give one cent to anyone in that area of the state for economic development is beyond men when SHUMLIN was the one who wanted them out of here.

  5. Bob Stannard :

    Guy Page says that the state must find an alternative to VY. I believe that Vermont’s utilities did so over a year ago.

    Howard Shaffer says the legislature acted illegally when the Senate voted to not allow VY to continue to operate past it’s scheduled date of March 21, 2012. They did not. They operated under the law that was in place at the time of the vote; a law that Entergy once supported and then reneged on.

    • Howard Shaffer :

      The law that allowed the vote was illegal.

  6. Bob Stannard :

    The Shumlin Administration should be commended for negotiating an extremely good deal with a company not noted for keeping its end of a bargain. The work now is to hold Entergy to its commitments.

  7. Moshe Braner :

    “Vermonters need not be concerned that Entergy VY will delay decommissioning and related activities longer than necessary once we determine that the decommissioning trust fund has adequate money to complete these tasks”

    - and what happens if the fund does not have adequate money, which I gather is the actual current situation?

  8. Pete Novick :

    On December 29, 2008, Entergy (ETR) common stock closed at $84.69, and today, December 24, 2013, it closed at $62.73.
    Had you held the stock for this five year period, you would have lost about 25% of your investment, less dividends.

    Over the same five year period the S&P 500 index doubled in value from 931 to 1,833, meaning a $10,000 investment would now be worth about $20,000.

    Here’s a link to Entergy’s income statement:

    http://finance.yahoo.com/q/is?s=ETR+Income+Statement&annual

    Note that revenue declined more than 10% from 2010 to 2012.

    Here’s the latest Morningstar snapshot of ETR’s corporate debt:

    http://quicktake.morningstar.com/stocknet/bonds.aspx?symbol=etr

    The take-away here is that ETR’s debt to equity ratio is well above industry average.

    And finally, here’s a snapshot of ETR’s cash flow.

    http://www.nasdaq.com/symbol/etr/financials?query=cash-flow

    First note the precipitous decline in net income between 2009 and 2012, and then note the cash flow trends.

    Anyway, this not-so-random walk through the financial forest should give you pause. ETR is not, relative to its peers, in a healthy financial position. A shrinking top line is a red flag, especially in capital intensive industries and affects the company’s ability to issue new debt at favorable interest rates.

    Entergy’s house isn’t burning down yet, but if I lived in it, I would be checking the smoke detectors more frequently.

    Happy Holidays!

  9. Keith Stern :

    VY should be made into a museum. People would pay to tour a nuclear plant and it would be a very good draw for the area.

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