He sees 900.
State said his company, New York-based NorthStar Group Services, has broken down the massive cleanup project into more than 900 elements – each with its own strict budget and schedule – as part of a proposal to purchase the Vernon nuclear plant from Entergy.
In his first local presentation since the proposed sale was announced last month, State cited careful financial planning as one reason why he believes NorthStar can do the job far faster and more efficiently than Entergy can.
In a presentation Thursday night to the Vermont Nuclear Decommissioning Citizens Advisory Panel, NorthStar’s chief executive officer also touted the experience of his company and three proposed partners.
“We believe that it’s really a nuclear decommissioning dream team that we’ve been able to put together here,” he said.
Nearly two years after ending power production at Vermont Yankee, Entergy on Nov. 8 announced plans to sell its Entergy Nuclear Vermont Yankee corporation to NorthStar by the end of 2018. The sale includes all Vermont Yankee assets including the plant’s decommissioning trust fund, which stood at $562.9 million at the end of October.
Under the federally sanctioned SAFSTOR program, Entergy had until 2075 to finish Vermont Yankee decommissioning. NorthStar is promising to have decommissioning and site restoration done by the end of 2030, potentially freeing up the land for redevelopment much earlier.
The sale is contingent on several regulatory approvals. First, an Entergy contractor must get federal Nuclear Regulatory Commission approval to transfer all of Vermont Yankee’s spent fuel into sealed casks by 2018 – two years earlier than had been initially proposed.
The NRC also must approve the Vermont Yankee sale and license transfer to NorthStar. Entergy expects to file that application with the NRC in February.
“There are really two fundamental questions that the Nuclear Regulatory Commission is going to ask,” said Mike Twomey, external affairs vice president for Entergy Wholesale Commodities. “No. 1, is NorthStar and the NorthStar team technically qualified to do the work. And No. 2, are they financially capable of doing the work.”
Additionally, the Vermont Public Service Board must approve the deal. Twomey said Entergy will file its application with the state sometime this month.
Vermont Public Service Department Commissioner Chris Recchia won’t personally have much to do with the state’s review, since he will be leaving his post next month when Gov.-elect Phil Scott takes office.
Nevertheless, Recchia pledged that state officials will take a hard look at the Vermont Yankee sale to ask, “is this in the public interest?”
“We will make sure that (NorthStar) is able to do the work that they say they can do and has the backing to complete it once started,” Recchia said.
Entergy administrators say they’re confident that a sale is the right move. At Thursday’s advisory panel meeting in Brattleboro, Twomey said the power company is not in the decommissioning business and doesn’t want to be.
He cited several risks involved in managing a SAFSTOR decommissioning project stretched over a half-century or more. “There’s uncertainty on cost increases, on trust fund performance … on changes in law, changes in regulation,” Twomey said.
Twomey contends NorthStar has the expertise, workforce, equipment and industry connections to get decommissioning done faster and for far less than Entergy’s $1.24 billion cost estimate.
Proposing a Vermont Yankee sale “was not a difficult decision for us once we were familiar with the technical capability, the financial capability, the experience, the expertise, the track record, the business acumen of this group,” Twomey said.
State introduced NorthStar to the advisory panel by boiling the decommissioning job down to its most basic level: “We take things apart, and Vermont Yankee needs to be taken apart.”
NorthStar, he said, is the biggest demolition and abatement company in the world. “We typically employ anywhere from 3,500 to 5,000 people at any given time, doing exactly these types of projects around the United States and several foreign countries,” State said.
He acknowledged that NorthStar has never tackled a job like Vermont Yankee – in other words, taking ownership of a commercial nuclear plant and taking responsibility for decommissioning. But State said the company has nuclear experience with smaller reactors used for research purposes.
“The difference is scale,” he said. “And in terms of scale, we’ve decommissioned dozens if not hundreds of large fossil (fuel) plants – much larger than Vermont Yankee.”
State also extolled the experience of NorthStar’s partners on the Vermont Yankee deal. Those include Kansas City-based engineering company Burns & McDonnell and Paris-based AREVA, which State described as “the largest nuclear services company in the world.”
Dallas-based Waste Control Specialists is a major player as well, with State saying that company’s Texas disposal facility for low-level radioactive waste is a “critical” part of the Yankee project.
Waste Control Specialists, also known as WCS, currently is a defendant in a U.S. Department of Justice antitrust lawsuit over its proposed acquisition by another disposal company. But State on Thursday expressed no concerns, saying the merger of WCS already has been worked into NorthStar’s plans and is an “absolute non-issue.”
State spent a fair portion of Thursday’s meeting detailing NorthStar’s financial planning. He said the company is taking a “guaranteed fixed-payment” approach.
By that, he means that NorthStar has determined what each portion of the decommissioning job will cost. Even if the work ends up costing more than estimated, State pledged that the company won’t take any extra money from Vermont Yankee’s trust fund – thus ensuring that the fund is not overdrawn.
State also promised that NorthStar would not delay decommissioning in the event of a cost overrun.
“There are specific requirements in our agreement with Entergy associated with the 2030 (completion) date,” he said. “There are significant financial penalties if we don’t achieve those requirements, and we have no intention of looking for opportunities to delay this in any way.”
Asked how NorthStar plans to turn a profit within such a system, State said the company has built its estimated cleanup costs and a “contingency factor” into projected trust fund spending.
“The way we make a profit on this project is, we do the work within our estimated cost. And the contingency factor that we carry becomes our profit,” State said. “So if we have to use all our contingency, we don’t make any money on this job.”
What’s still unclear is how much money NorthStar expects to make, as well as the decommissioning job’s total estimated cost. Entergy has said the sale to NorthStar is contingent on there being “a contractually agreed minimum level of funding” in the trust fund, but Twomey on Thursday declined to reveal that number.
“I think that probably falls into the confidential nature of the contract between us and NorthStar,” Twomey said.
Also unclear is the standard for site restoration at Vermont Yankee. Beyond radiological cleanup, NorthStar also will have to remove large amounts of non-radiological waste from the Vernon site.
The exact nature of site restoration may be a point of conflict, with State mentioning the possibility of leaving some “clean” material on site as fill.
Twomey did not offer a specific site restoration proposal at Thursday’s meeting. “NorthStar will propose certain standards,” he said. “Those will be subject to review and comment and deliberation by the Public Service Board.”
The site restoration debate plays into reuse of the Vermont Yankee property. Though that will be somewhat hindered by the long-term presence of spent nuclear fuel, State said he envisions a solar array as one potential development after most of the site is cleared.
“We think potentially that the highest and best use is going to be something like a solar energy facility,” State said. “We’ve got probably 100 acres you could use on the site. You’ve got a switchyard, a (property) that’s relatively level.”
Entergy already has had discussions with Vernon officials about future use of some portions of Vermont Yankee property. On Thursday, Windham Regional Commission Executive Director Chris Campany urged NorthStar to continue such talks outside the formality of the state’s Public Service Board proceedings.
“I really hope you guys are going to come back to this panel, or you’re going to come back to the town, and have conversations about, ‘What do you want? What is in the best public interest?’” Campany said.