Entergy spent down 10 percent of Vermont Yankee trust fund in 2015

VERNON – Entergy spent $58 million from the Vermont Yankee decommissioning trust fund in the first year after the Vernon nuclear plant’s shutdown, the company disclosed this week.

Overall, with investment income and trust administrative expenses figured in, the fund decreased by about $69 million in 2015 – from $664.56 million to $595.4 million at year’s end.

Administrators said the new figures show that Entergy is in compliance with the federal Nuclear Regulatory Commission and is on track financially in the early stages of Vermont Yankee’s decommissioning.

“The good news is, we’re still well above the NRC required minimum balance for the trust,” said Joe Lynch, Entergy Vermont Yankee’s government affairs manager. “And we are under budget, overall.”

Entergy stopped producing power at Vermont Yankee in December 2014 and is preparing the site for a period of extended dormancy called SAFSTOR. Decommissioning can take up to 60 years under the program, though the actual schedule depends in part on the growth of the plant’s trust fund.

Entergy has estimated that decommissioning Vermont Yankee will cost $1.24 billion. The trust fund contained a little over half that sum when the plant shut down, and Entergy in early 2015 began spending fund money on a variety of operational expenses including salaries and utilities.

The trust fund has been the subject of much debate. Vermont officials have challenged several of Entergy’s proposed fund uses, and they are particularly upset that the NRC decided to allow the company to withdraw money for long-term management of Yankee’s spent nuclear fuel. The state has filed a lawsuit and a hotly contested petition seeking to block that use.

But the NRC says its reviews show that there will be enough money both for decommissioning and for spent fuel management at Vermont Yankee. Those reviews are ongoing: Earlier this month, the commission’s staff issued a memo saying Entergy Vermont Yankee and a long list of other plant owners had provided “decommissioning funding assurance” in their most-recent reports.

It can be difficult to draw conclusions from short-term changes in Vermont Yankee’s decommissioning trust, given market fluctuations and monthly withdrawals that factor into the bottom line. But Entergy’s new numbers provide a clearer picture of trust fund spending at post-shutdown Vermont Yankee: Spokesman Marty Cohn said the company withdrew $58 million in 2015, while trust expenses (mostly taxes) further decreased the fund by $16 million and investment income increased it by $5 million.

Lynch said that investment return is in line with expectations. “The trust is very conservatively invested, so we wouldn’t expect to see huge swings” in the fund’s value, he said.

Overall, Entergy administrators continue to say their post-shutdown Vermont Yankee spending has been lower than anticipated. While Lynch didn’t have an updated budget number this week, Vermont Yankee Site Vice President Chris Wamser said in November that decommissioning work was about $5 million under budget.

As Lynch reviewed 2015 plant statistics in preparation for the latest episode of “SAFSTOR Matters,” Vermont Yankee’s local television show, he said there are several factors driving the below-budget trend.

First, he said an on-site committee is “rigorously” reviewing every decommissioning cost proposed at the plant and is seeking competitive bidding for that work. At the same time, Lynch said Entergy is committed to hiring local contractors and vendors.

“We are very focused on using local labor and local companies where possible, and frankly, by doing that, we save a lot of money,” Lynch said.

He also said Vermont Yankee’s payroll has been below budget because the plant’s workforce has been lower than expected. Staffing was cut from 550 just before shutdown to 316 in January 2015, and that number has dropped to 282 as of this week. “People have left on their own that we didn’t anticipate, so therefore those costs (have been reduced),” Lynch said.

Vermont Yankee is planning to further reduce its workforce to about 150 in May due to NRC-approved emergency changes at the plant.

Finally, Lynch said Entergy has continued “draining and laying up” systems that are no longer needed at the plant. There are about 50 such systems; by the end of 2015, Lynch said, 35 of those had been shut down.

Such changes are important financially because, unlike when the plant was operating, Vermont Yankee now gets electric bills from Green Mountain Power. Lynch said those bills during 2015 had been exceeding $100,000 per month, and Entergy has enlisted Efficiency Vermont to try to find additional ways to cut utility costs.

“I know we’ve been making a very focused effort to get these (unused) buildings “cold and dark,’ and that’s reduced our electric bill,” Lynch said. “Anytime we can use (Efficiency Vermont’s) expertise … it always helps.”

Mike Faher

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  • Obviously Louisiana Entergy and the NRC both are way ahead of our time when it comes to physics and economics. Taking advantage of the newest advances in string theory and the addition of multiple dimensions (beyond our currently recognizable three physical and one time dimension), these two entities are now advancing a cutting edge theory of financial investment where negative growth (ie decreasing value) given enough time will lead to a point usually associated with postive growth (aka increasing value).

    Think of it! With the simple addition of an investment dimension there is no longer any constraint on withdrawals from Louisiana Entergy’s decommissioning fund.

    It works like this: the investment dimension is shaped like a roll of toilet paper, and the surface of this dimension is the inside of the tube. Make a mark at any two arbitrary locations on this surface, and then draw a line from one point to the other. It doesn’t matter which direction you draw the line – it will follow the inside of the roll and end up at the desired end point!

    It is too bad mere mortals like you and I cannot see the shape of this dimension, but obviously the monetary genius’ at Louisiana Entergy and the NRC can. Simply put it doesn’t matter whether Entergy increases the account balance or decreases the account balance: the line from today’s decommissioning fund balance to the desired end can obviously be reached either way.

    Amazing.

    • victor ialeggo

      Yes, so often the conclusions and predictions of modern science are indeed counter-intuitive.
      A more appropriate simile, however, might be the large predatory bird that flies in ever-decreasing circles until it flies up its own anus and disappears. With your wallet. Leaving you with a warm, radioactive glow of discontent.

  • Moshe Braner

    “Entergy has estimated that decommissioning Vermont Yankee will cost $1.24 billion. The trust fund contained a little over half that sum when the plant shut down”

    – Great start, uh?

    “Decommissioning can take up to 60 years under the program, though the actual schedule depends in part on the growth of the plant’s trust fund.”

    – My prediction: full decommissioning will NEVER happen. The fund may be conservatively invested, but their investment growth in 2015 is reported above at $5 million – less than one percent. Does anybody believe this rate exceeds the price inflation rate of the decommissioning costs?

  • Eric Davis

    What is the asset allocation in the decommissioning fund? What are the assumptions about long-term rate of return? Is there any outside review of the asset allocation and assumptions about return? Does Entergy manage the fund itself or contract it out to investment advisors? If the latter, who are the advisors and what fees are they charging the fund?

    • Bob zeliff

      Those are the questions that must be asked.
      It is disappointing that we don’t already know
      I wonder what it will take to get those answers.
      Come on Digger. Get them for us

  • Megs Keir

    The fox is in the henhouse. The hens are disappearing and so are the eggs, the nest eggs, that is.

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