UPDATED: Entergy to sell Vermont Yankee to NorthStar

Vermont Yankee
Vermont Yankee reactor. Photo by Mike Faher/VTDigger
VERNON – Entergy has agreed to sell Vermont Yankee to a cleanup contractor, paving the way for decommissioning and site restoration to be completed by 2030 – 45 years sooner than had been planned.

The sale of the shut-down Vernon nuclear plant and all of its assets — including the decommissioning trust fund, which held $574.9 million at last report — to New York-based NorthStar Group Services Inc. is expected to close by the end of 2018, administrators said Tuesday. The deal is subject to approval by the Vermont Public Service Board and the federal Nuclear Regulatory Commission.

Also on Tuesday, Entergy announced that the plant’s spent nuclear fuel may be moved into sealed dry casks by the end of 2018, two years sooner than expected. That will hasten additional layoffs.

But officials emphasized that the shortened schedules for fuel transfer and decommissioning mean that redevelopment of much of the Vermont Yankee site won’t have to be postponed for generations.

Bill Mohl, the president of Entergy Wholesale Commodities, said in a statement that “by accelerating decommissioning, we are fulfilling a commitment we made in 2013 to decommission Vermont Yankee as soon as reasonably possible.”

“Decommissioning and site restoration, drawing on NorthStar’s expertise, will provide economic development for the region,” Mohl said.

NorthStar CEO Scott State underscored that point. While land used for fuel storage will remain off-limits until the federal government removes the radioactive material, Scott said his company’s decommissioning work will ensure that “a majority of Vermont Yankee can be redeveloped to promote business for the region.”

Citing economic reasons, and after a long struggle with state officials and anti-nuclear activists, Entergy stopped power production at Vermont Yankee on Dec. 29, 2014. The plant had operated on the banks of the Connecticut River for 42 years.

And it was expected to be a long-term presence there: Rather than pursuing immediate decommissioning, Entergy opted for SAFSTOR, a period of dormancy under which radiological cleanup and site restoration can take up to 60 years.

Some have protested that the SAFSTOR timeline is too long. Vermont officials have lobbied the NRC to eliminate the SAFSTOR program, and U.S. Rep. Peter Welch, D-Vt., has raised questions about the impact of delayed decommissioning on a community like Vernon.

But the NRC has endorsed SAFTOR, and federal projections have shown that it could be 2075 before Vermont Yankee is fully decommissioned.

That’s about to change dramatically, if all goes as Entergy plans in a deal that has been in the works for years. Before agreeing to sell Vermont Yankee to NorthStar, Mohl said, “we went through and evaluated a number of different entities to perform this work.”

“Obviously, this is something that is a very significant transaction,” Mohl said in an interview after Tuesday’s announcement. “We made sure to do our homework.”

By selling the plant and arranging for a faster cleanup, Entergy will be getting out from under the long-term financial uncertainties associated with putting off decommissioning until the 2060s and 2070s.

NorthStar, presumably, plans to turn a profit on the job. “They’re able to minimize the range of (financial) risk,” Mohl said of NorthStar. “They believe that they can make this a profitable business.”

NorthStar, which specializes in projects like demolition, hazardous materials abatement and soil and mold remediation, initially is giving Entergy a “nominal cash consideration” to gain ownership of Vermont Yankee. Mohl said that amount is $1,000.

Also, Entergy is getting a promissory note equal to “the amount owed at the time of closing under a credit facility to finance Vermont Yankee’s dry fuel storage costs,” the company’s announcement said. That number could be significant: Entergy has taken out a $143 million line of credit to cover the transfer of spent fuel to so-called “dry” storage.

Likely of much more interest to locals is NorthStar’s accelerated cleanup schedule for Vermont Yankee. The company is agreeing to start decontamination and dismantlement by 2021 and to complete decommissioning and site restoration nine years later, Entergy administrators said.

NorthStar is partnering with three other companies to tackle the job:

• Paris-based AREVA, which has 10,000 employees worldwide, touts extensive experience in all aspects of nuclear power generation. Entergy said AREVA will be responsible for reactor work and spent fuel management support at Yankee.

• Burns & McDonnell, a Kansas City company that describes itself as “a full-service engineering, architecture, construction, environmental and consulting solutions firm,” will handle engineering and regulatory support in Vernon.

• Dallas-based Waste Control Specialists, which operates a radioactive waste disposal site in Texas, will be in charge of Vermont Yankee’s “waste management, packaging, transportation and disposal,” Entergy said.

Waste Control Specialists is among the entities that have applied to the NRC to build a new interim storage facility – also in Texas – that could hold spent nuclear fuel.

Regardless of the speed of decommissioning, the presence of spent fuel is a major obstacle to reusing the Vermont Yankee site. No one is sure how long spent fuel will remain there, and that’s one reason the recent permitting process for a second spent fuel pad at Vermont Yankee was so contentious.

Current federal plans call for Vermont Yankee fuel removal to start in 2026 and end in 2052. But the federal government does not yet have a long-term storage site for any spent nuclear fuel, leaving some to wonder whether shuttered plants like Yankee will be saddled with the material for much longer.

Entergy said NorthStar will maintain Vermont Yankee’s spent fuel storage facility until the Department of Energy eventually removes the material; then, the company will pursue NRC license termination and full site restoration.

Crews have begun building a second pad for fuel storage at Vermont Yankee, since the current pad cannot hold all the spent fuel that now is housed in a cooling pool inside the reactor building. Florida-based Holtec International is handling all aspects of that fuel transfer, and that’s where the other part of Tuesday’s announcement comes in.

Entergy, which had promised to move all fuel into sealed casks by the end of 2020, now says Holtec has applied for NRC approval finish the job by the end of 2018. That’s faster than the normal cooling period for some of the plants’ nuclear fuel, but officials say Holtec will argue that technology exists to do the job more quickly.

“We have worked with Holtec, and they now have the capability with their cask design to actually transfer that fuel sooner,” Mohl said. “We’ve spent a lot of time looking at this, and it’s very safe to do so. It’s prudent to move that fuel from the fuel pool to the pad.”

But if the NRC approves the faster fuel-transfer schedule, there will be implications for remaining Vermont Yankee employees.

Yankee has periodically shed staff, and the last major layoff happened in May. A plant that once employed more than 600 now has fewer than 100 workers, and only a handful of those will be needed once all fuel is inside dry casks.

It’s not clear whether NorthStar would keep any current employees after its purchase of Vermont Yankee. Mohl said he expects that NorthStar would want to retain some of the plant staff’s expertise, and he said those employees who lose their jobs will have opportunities to find positions at other Entergy facilities.

Regardless of the new owner’s plans, the culmination of the Vermont Yankee sale – assuming all regulatory hurdles are cleared – will mark the official end of Entergy’s 14-year role as a major employer in Windham County.

It’s also a continuation of Entergy’s oft-stated intention to shrink its Wholesale Commodities operation. Entergy also has announced plans to close its Pilgrim nuclear plant in Massachusetts in 2019, and the company is seeking to sell its FitzPatrick plant in upstate New York to Exelon Corp.

Mohl said the sale of Vermont Yankee to NorthStar has no connection to either the Pilgrim or FitzPatrick deals. But he noted that the deal “enables us to manage financial risk and reduce our company’s merchant power footprint.”

Vermont Yankee
Work began a few months ago on a $143 million project to transfer all of the Vermont Yankee plant’s radioactive spent fuel into more stable storage in sealed casks. Photo courtesy of Entergy
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  • Bob zepliff

    This may be a good thing. Or maybe not!,,,!,,,,,,!!!
    North Star is doing this to make money.
    Enter guy is doing this to shed responsibility , liability.
    How does north star see a way of making money when enterdgy does not??
    Does North Star have enough assists to Fully complete decommission gist things go wrong?
    Should they be bonded to that level?
    Should energy be bonded to ensure North Star completes full decomishioning?
    pSB. Make sure you fully protect Vermont

  • There is no mention in the article of how this accelerated decommissioning will be paid for.

    Decommissioning costs have been estimated to be as high as $1.25 billion. There is about $600 million in the decommissioning fund or about half of what will be needed to cover estimated cost.

    We’re about eight years into a bull stock market with ever increasing worry about a major correction coming. Interest rates are expected to increase driving down current and future bond values. The US is sitting on $20 billion of national debt, an amount very likely to increase under a Hillary Clinton presidency. World wide economic growth is shaky at best. Opportunities for substantial growth of the decommission fund don’t look promising.

    So how will this accelerated decommissioning program be paid for……along with the profit that Northstar expects to make?

    • Jan van Eck

      Make that 20 Trillion of national debt, not billion, Peter. The number is now so staggeringly huge that it will never be paid. The holders of US Certificates are holding pieces of paper with no intrinsic value.

      These Entergy guys are a lot smarter than people give them credit for. The bail out for a sum certain. That is the smart move. The unforeseen liabilities down the road now become somebody else’s problems. Probably yours.

      • Jan and Ron…….What’s a few trillion these days. Apparently nothing more than a typo to those in Washington.

        Thanks for the editing.

    • Phil Ronco

      Peter, I believe that you meant that the national debt is $20 trillion, not $20 billion. It will be interesting to see how all of this will play out in terms of why anyone would want to buy this, given that less than half of the required funds are on hand. It could be much less if the estimated cost is too low. If somehow this albatross is transferred to the federal government, they could pay for it the same way that they pay for everything else…just run the printing presses and print more money.

    • Moshe Braner

      Good questions, Peter! As I said when they closed that plant with only half the needed money int he fund, it will NEVER be decommissioned without the taxpayers footing the bill, not even if you wait the 60 years, since money does not make money. It used to, back in the days of “growth”, but that was last century. It really was a pyramid scheme based on the liquidation of the planet’s nonrenewable mineral resources.

    • John Greenberg

      Peter Yankowski has repeatedly told us that we should have confidence in every judgment of the NRC.

      Radiological decommissioning is 100% regulated by the NRC, and that includes overseeing the adequacy of the decommissioning fund and the financial stability of the licensee. States are preempted from any attempt at independent regulation (though they can and do participate in the NRC’s regulatory process).

      So I, for one, find it fascinating that he would now appear here questioning the NRC’s judgment without so much as a whisper about the NRC’s regulatory infallibility.

  • Willem jewett

    Entergy closed because the power market was not profitable and because of a pile of deferred maintenance.

  • Craig Gilborn

    VY stopped operating in 2014 and a contract will not take effect until 2018. The time frame for decommissioning reflects little “acceleration” but deferrals with exits along the way, a little like Vermont’s touted “high speed railroad” but far more serious.

  • A comment and a question …

    The comment: “Citing economic reasons, and after a long struggle with state officials and anti-nuclear activists, Entergy stopped power production … ” is a lot like writing “Citing economic reasons, and after many sunrises and sunsetst, Entergy …”. Entergy closed due to financial reasons only, and the inference I quoted above is at a minimum extremely misleading.

    The question: When NorthStart creates a child corporation to handle the dismantling of Entergy’s Vermont based Yankee plant, and that corporation declares bankruptcy because NorthStar’s child corporation can’t fulfill the promised mission; how many tax dollars are going to be needed to fix the mess?

  • Gavin Gregory

    There’s no new technology to allow the hotter fuel to go in casks prematurely. They just pencil whipped the calcs on the old casks to save time. Don’t worry, the NRC will rubber stamp this cask exemption and that’ll set precedent for all the other plants too.