The disclosure comes in newly filed documents seeking state approval for Entergy’s proposed sale of the shut-down Vernon plant to NorthStar Group Services Inc. The companies want to close the deal by the end of 2018, and they’re asking the Vermont Public Service Board to rule by March 31 of that year.
The joint filings include new financial data, including NorthStar’s estimate that the cost of radiological decommissioning, site restoration and long-term spent fuel management will reach $811.5 million.
They also show that Vermont Yankee’s site restoration standards will be a critical part of the upcoming permit process. NorthStar Chief Executive Officer Scott State says that, if Vermont doesn’t approve the standards his company is proposing, the sale may not make economic sense.
“All we’re really saying is that the deal was struck based on these assumptions, and if those assumptions are not correct, then the deal we struck is not closable,” State said in an interview Monday.
Entergy stopped power production at Vermont Yankee two years ago and had been preparing the plant for a process dubbed SAFSTOR, an extended period of dormancy that would have given the company until 2075 to finish decommissioning and site restoration.
New documents filed with the Public Service Board show that Entergy’s schedule actually is shorter than that: Current plans say the company would expect to start cleanup in 2053 and finish in 2060.
But such schedules will be irrelevant if the sale to NorthStar receives state and federal approval. In announcing the tentative deal last month, Entergy said NorthStar and three partners had committed to starting decommissioning in 2021 and completing cleanup work — with the exception of a spent fuel storage facility — by 2030.
The state petition submitted Friday by NorthStar and Entergy says cleanup could begin two years earlier than that and could end as soon as 2026.
That’s not because there’s been any changes in plans, State said. Instead, it’s based on the fact that NorthStar could undertake substantial advance planning work if state and federal approvals for the Vermont Yankee purchase appear to be on schedule.Mike Twomey, external affairs vice president for Entergy Wholesale Commodities, said the project’s deadlines under proposed NorthStar ownership — 2021 and 2030 — haven’t changed. “We’re going to focus on the commitments … the promises,” Twomey said Monday. “Then, if (NorthStar) beats those, great.”
Earlier this month State traveled to Brattleboro to tout his company’s demolition and decommissioning experience, as well as the experience of the proposed partners in the Vermont Yankee job — Kansas City-based engineering company Burns & McDonnell; Paris-based nuclear specialist AREVA; and Dallas-based Waste Control Specialists.
NorthStar’s Public Service Board testimony includes detailed descriptions of each company’s credentials. State says that expertise — combined with NorthStar’s short-term more efficient work plan — will allow his company to get the job done decades earlier and for less money than Entergy could.
But the plan works, State contends, only if NorthStar buys Vermont Yankee outright.
“Owning the VY Station allows us to perform the planning, work and oversight directly,” State’s testimony says. “By contrast, the decommissioning operations contractor role, which has been often used in the nuclear industry for plant decommissionings to date, does not fit with NorthStar’s business model.”
NorthStar’s plan calls for $811.5 million in Vermont Yankee spending between 2019 and 2052.
That extended schedule is necessary because, even after most of Vermont Yankee is cleaned up, spent nuclear fuel will remain on site in sealed casks. The U.S. Department of Energy currently expects to have all that fuel moved out of Vernon by 2052, and NorthStar would be responsible for maintaining and securing the radioactive material until then.
Spent fuel management is expected to cost $287.8 million, State’s testimony says.
Aside from fuel maintenance costs, plant cleanup is broken down into two separate budgetary items. Radiological decommissioning necessary to terminate Vermont Yankee’s Nuclear Regulatory Commission license will cost $511.1 million, and site restoration will cost $12.6 million, according to NorthStar’s estimates.
NorthStar is committing to a “pay-item disbursement schedule” that sets aside a specific dollar amount for each aspect of the decommissioning job. Any additional costs would come out of the company’s pocket, not Vermont Yankee’s decommissioning trust fund or site restoration fund.
“This payment method aligns NorthStar’s incentives with the goal of successful on-time, on-budget completion,” State’s testimony says.
Other key aspects of NorthStar’s financial plans include:
• The company expects that Vermont Yankee’s decommissioning and site restoration trusts will contain a combined $538 million when the sale closes. NorthStar wants to be able to access those accounts simultaneously during plant cleanup.
• There are many moving parts that will cause the decommissioning trust fund to fluctuate. In addition to regular withdrawals by the plant’s owner, administrators say the fund would gain income from investment proceeds and will be reimbursed with spent fuel costs recovered from the federal government.
Nevertheless, NorthStar is projecting that $17 million will be left over in the trust funds when Vermont Yankee cleanup is finished. A little over half of that would be returned to Vermont.
• NorthStar has significant financial motivation to start and finish the cleanup on time. Documents say the company will obtain a $25 million contingent letter of credit payable to a “secondary decommissioning completion trust” if it doesn’t meet its deadlines.
• Also, NorthStar Group Services is offering a $125 million “support agreement” available for the Vermont Yankee job “in the unlikely event that the (performance) bonds are unavailable or inadequate.”While state regulators will scrutinize NorthStar’s financial plans, there’s also much debate expected regarding site restoration — the cleanup that goes beyond NRC-mandated decommissioning.
Site restoration involves state oversight, but there’s been no comprehensive agreement between the state and Entergy regarding restoration standards at Vermont Yankee.
NorthStar now is proposing standards that, according to State’s testimony, “are fully protective of the environment and public health and, indeed, more restrictive than the NRC’s radiological dose limit.”
The federal limit is 25 millirems of radiological dose per year from air, soil and water, documents say. NorthStar says it is offering a 15 millirem standard at Vermont Yankee.
Additionally, the company says it will remove underground structures down to 4 feet below the surface and remove all material that contains asbestos regardless of depth.
In contrast to a previous agreement between the state and Entergy, NorthStar also wants to use some of Vermont Yankee’s “clean” concrete as fill at the site. That’s been done at other plants including Yankee Rowe and Connecticut Yankee, NorthStar says.
“We’re simply looking for some smart way to deal with a lot of material that we would ship off-site,” State said. “It’s something that we think just makes sense.”
NorthStar is asking the Public Service Board to approve its restoration proposals — and to do so at the same time as the board approves the Vermont Yankee sale.
“NorthStar needs to know, in advance of closing on this transaction, the site restoration standards that will be applied to determine whether it can satisfy those standards within the schedule and budget to which it will be committing itself,” State’s testimony says.
Vermont Public Service Commissioner Chris Recchia on Monday said he had not had time to thoroughly review NorthStar’s proposals.
He applauded the company’s 15 millirem radiological dose standard, saying that is “the best that has ever been done, and we appreciate that.” But he could not yet endorse other parts of the plan, including excavation and concrete reuse.
“We have a lot more review to do. … We’re evaluating all those other aspects,” Recchia said. “We would expect any applicant to engage with us fully on what the appropriate site restoration standards are.”