Would-be buyer gets a jump on Vermont Yankee cleanup work

Scott State
NorthStar Group Services CEO Scott State explained his company’s work in testimony with the Public Utility Commission. File photo by Randolph T. Holhut/The Commons
VERNON — It will take awhile for state and federal regulators to decide whether NorthStar Group Services can buy Vermont Yankee.

In the meantime, the New York company isn’t just waiting around.

New documents show that NorthStar has begun performing engineering and design work at Vermont Yankee under a separate “pre-closing” contract with plant owner Entergy. NorthStar contractor AREVA also has started similar work.

Entergy says these preliminary projects will prove valuable no matter who ends up decommissioning Vermont Yankee. But if NorthStar does get the job, the company expects to reap big benefits from getting a head start.

“Should the (sale) proceed, the pre-closing work will provide approximately $12 million in savings for the decommissioning,” NorthStar Chief Executive Officer Scott State wrote in testimony filed with the Vermont Public Utility Commission.

The utility commission and the federal Nuclear Regulatory Commission are considering whether NorthStar can buy and decommission Vermont Yankee, where power production stopped at the end of 2014.

NorthStar says it can clean up most of the site by 2030 at the latest, providing redevelopment opportunities decades sooner than Entergy had been planning.

But some have questioned the company’s ability to follow through, and it will fall to state and federal officials to weigh such concerns.

Vermont Yankee
Vermont Yankee spent fuel pad. Photo courtesy of Vermont Yankee
NorthStar and Entergy are hoping the NRC review concludes by the end of this year, and they’ve asked for the state to rule on the matter sometime in the first quarter of 2018. A recently revised schedule shows that the Public Utility Commission’s review has been extended by several months.

But in response to a discovery question submitted by the Brattleboro anti-nuclear group New England Coalition, State detailed the extent to which his company already is involved with the Vermont Yankee property.

NorthStar’s “pre-closing” contract includes engineering work to support decommissioning; designing special tools needed to take apart the plant’s reactor; and buying “long lead time” materials for plant cleanup, State wrote.

The contract also includes upgrading a rail spur that’s outside Vermont Yankee’s protected area, though those plans “have not been finalized at this time,” State wrote.

He added that the company has two employees at Vermont Yankee full time: Daniel Jordan, a health physics and waste operations director, and Mitchell Walker, a general superintendent.

NorthStar also has engaged Massachusetts-based environmental consultant Haley & Aldrich Inc. “to evaluate the site with respect to (Vermont Agency of Natural Resources) regulations,” State said.

Additionally, AREVA Nuclear Materials is involved in pre-closing work.

The Washington, D.C.-based company is NorthStar’s proposed contractor for segmenting Vermont Yankee’s reactor. But even before the plant sale is finalized, State said AREVA is “performing detailed engineering analysis” associated with reactor work and is procuring casks that would transport low-level radioactive waste from Vernon to Texas.

Joe Lynch, Entergy’s senior government affairs manager for decommissioning, said the pre-closing contract with NorthStar is “separate from the proposed sale transaction.”

“This work being done by NorthStar and its subcontractor AREVA will advance decontamination and dismantlement of the site, regardless of when those activities take place,” Lynch said.

Joe Lynch
Joe Lynch, government affairs manager for Entergy Vermont Yankee. File photo by Randolph T. Holhut/The Commons
However, if NorthStar is able to purchase Vermont Yankee, “performance of the work before the closing will expedite the schedule and significantly reduce the costs that will be paid from the decommissioning trust fund,” Lynch said.

In an interview, State said it’s a simple matter of laying groundwork for an accelerated decommissioning job.

NorthStar and Entergy want the sale to close by the end of 2018. If NorthStar weren’t working at the site this year and next, “we would have 18 months of doing this (preliminary) work and not other work,” State said.

The $12 million in projected savings due to pre-closing work, he said, “is really driven by how quickly we can start decommissioning.”

State said, however, that NorthStar is performing “a fairly limited amount of that work” in 2017. The bulk of the pre-closing project is scheduled for next year.

By that time, Entergy and NorthStar are hoping to have a better idea of whether the sale will be approved. If at that point there is still “a high degree of risk or uncertainty … that’s where this will get tricky,” State said.

The tight timing of NorthStar’s plans is emphasized by another of State’s recent discovery filings with Vermont’s utility commission.

In response to a Vermont Public Service Department question about “escalation clauses” in decommissioning contracts, State said the recently inked NorthStar-AREVA contract “does escalate certain costs of the contract if the AREVA work does not begin in 2018 as currently scheduled.”

He also said NorthStar’s contract with Texas-based Waste Control Specialists — which is supposed to dispose of Vermont Yankee’s low-level radioactive material — allows for different rates if the plant’s decommissioning schedule changes.

“Thus, delayed delivery of waste could mean that higher rates apply — for example, if waste is received in 2022 instead of 2021,” State wrote.

In a follow-up interview, State said such contractual provisions underscore the importance of getting the Vermont Yankee deal done by the end of next year.

“Everything on this project has been costed to an expected start date,” State said. “If we defer starting the project on time, the whole project becomes more costly.”

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  • Peter Chick

    I do not know of a single time a potential buyer profited by starting work on a property before closing. How is this allowed?