Feds sue proposed Vermont Yankee disposal company

VERNON — The U.S. Department of Justice has filed an antitrust lawsuit to block a merger involving one of the key players in the proposed sale of Vermont Yankee.

Federal officials say Salt Lake City-based EnergySolutions should not be allowed to acquire Texas-based Waste Control Specialists because the deal would create a “near monopoly” in the business of low-level radioactive waste disposal.

Vermont Yankee
Vermont Yankee’s reactor. File photo
Waste Control Specialists, also called WCS, is slated to become a partner in Vermont Yankee decommissioning under a sale agreement announced Nov. 8.

The Vermont Yankee sale is not scheduled to close until the end of 2018 and must clear state and federal regulatory hurdles, so it’s not clear what impact — if any — the federal government’s dispute with WCS might have on the deal. But it is an issue the Nuclear Regulatory Commission could consider.

“It is certainly possible that we will have questions related to the EnergySolutions’ proposed takeover of WCS as we review the (Vermont Yankee) license transfer application,” NRC spokesman Neil Sheehan said Thursday.

A spokesman for Vermont Yankee owner Entergy declined to comment on the Justice Department’s suit.

After stopping power production at Vermont Yankee in December 2014, Entergy began preparing the Vernon plant for SAFSTOR — a program that allows up to 60 years for decommissioning.

But Entergy last week disclosed a tentative sale agreement with New York-based NorthStar Group Services Inc. That company would take ownership of Vermont Yankee and finish decommissioning by the end of 2030.

NorthStar would be working with three partners in Vernon — AREVA, Burns & McDonnell and Waste Control Specialists. WCS’ role is important because the company would be “responsible for waste management, packaging, transportation and disposal,” according to the sale announcement.

WCS appears to be uniquely positioned to handle that job, since it already operates a low-level radioactive waste disposal site in Andrews, Texas.

A nuclear plant’s spent fuel does not qualify as low-level waste. But that label does apply to many other types of materials including soil, debris, protective clothing, tools and even large equipment such as steam generators and filters.

Nuclear power plants generate most of the low-level radioactive waste in the U.S., federal officials say.

EnergySolutions and WCS are major players in the low-level waste disposal industry, and both have connections with Vermont Yankee. In addition to WCS’ proposed role in decommissioning, EnergySolutions has been disposing of tainted groundwater from the Vernon plant this year.

Also, both companies are playing a role in the decommissioning of the Zion nuclear plant in Illinois — a job seen as a model for Vermont Yankee cleanup.

About a year ago, Valhi Inc., the parent company of Waste Control Specialists, announced its intention to sell WCS to Rockwell Holdco Inc., the parent company of EnergySolutions. At the time, an executive said the deal would “expand the range of services” for customers.

But the Justice Department now wants to stop that $367 million deal, saying it could squelch competition and drive up radioactive waste disposal costs.

In a complaint against EnergySolutions and WCS filed Wednesday in U.S. District Court for the Delaware District, the department says the acquisition “would combine the only two licensed commercial low-level radioactive waste disposal facilities for 36 states” as well as Puerto Rico and the District of Columbia.

Vermont is one of those states.

“By eliminating the most significant disposal competitor (EnergySolutions) has faced since it began operations, the proposed acquisition would lead to higher prices, lower quality service and less innovation in the commercial (low-level waste) disposal industry,” Justice officials wrote in the suit.

The lack of competition “would have wide-ranging effects throughout the United States” given the prominence of nuclear energy generation, the suit says. Officials note that nuclear plants account for 20 percent of U.S. power production and are “a key component in policy efforts to achieve air quality and carbon emissions goals.”

“Moreover, the proposed transaction would create a near-monopoly for the disposal of commercially generated (low-level waste) in the relevant states at a time when utilities are preparing to bid out nuclear reactor decommissioning projects worth billions of dollars,” government officials wrote.

In response, EnergySolutions and Valhi issued a joint statement pledging to “vigorously defend” the proposed sale of WCS.

The companies say there are actually “numerous disposal sites” operated by competitors of WCS and EnergySolutions. The innovations and better prices that the federal government attributes to competition between those two companies “are in fact evidence of other competitors in the marketplace,” the statement says.

EnergySolutions and Valhi also say the WCS sale will be economically beneficial for those who are trying to get rid of radioactive waste.

“Through merging the two companies, the new entity will realize significant cost synergies through a decrease in management, selling and administration expenses,” EnergySolutions and Valhi say. “Those savings, in turn, can be passed on to utilities and consumers of nuclear electricity. In addition, this merger will save costs on nuclear decommissioning.”

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Mike Faher

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  • John Greenberg

    Two points of clarification:

    1) At VY, spent fuel is classified as high-level waste. EVERYTHING else, including the reactor vessel, the control rods, and ALL the other components are classified as “low-level” waste, along with anything else that has been radiologically contaminated.

    2) Vermont is part of a low-level waste compact with Texas. The WCS site must accept all of our low-level waste. While there is no indication of any desire to do so, WCS is not required to accept waste from non-compact states.