The Nuclear Regulatory Commission on this week approved the license transfer application for the Vermont Yankee nuclear power plant, putting the retired facility one step closer to being sold.
The next and last major step in the regulatory process is approval from the Vermont Public Utility Commission, which site owner Entergy and prospective buyer NorthStar Group Services hope to secure within a matter of weeks. They aim to close the deal by the end of 2018.
“The NRC’s approval of the application to transfer Vermont Yankee licenses to NorthStar affirms our team’s technical and financial qualifications to hold the Vermont Yankee licenses and comply with related NRC requirements,” NorthStar CEO Scott State said in a prepared statement. “This is an important regulatory milestone in our team’s efforts to safely restore the Vermont Yankee site to conditions suitable for productive economic use decades sooner than originally anticipated.”
The NRC order was issued Thursday and made public Friday. In the document, NRC staff said it had determined that two NorthStar subsidiaries that will manage the site “are qualified to be the holders of the licenses, and that the direct and indirect transfer of the licenses, as described in the application, is otherwise consistent with applicable provisions of law, regulations, and orders issued by the Commission pursuant thereto,” subject to certain conditions.
The transfer covers licenses for both Vermont Yankee’s boiling water reactor and its spent fuel storage pad, which now holds nearly 4,000 bundles of fuel used in the reactor over more than four decades of operations. The sale must be completed before the licenses are actually transferred, an NRC spokesman noted Friday.
The single-reactor facility in the town of Vernon closed in December 2014, and New Orleans-based Entergy announced plans nearly two years later to sell the property to NorthStar. Their application was filed with the NRC in February 2017.
Once the $1,000 sale is sealed, the New York City-based demolition specialist would take over responsibility for decommissioning, site restoration, and spent fuel management at Vermont Yankee. NorthStar would be the owner of Entergy Nuclear Vermont Yankee, under the new name NorthStar Vermont Yankee.
NorthStar says it can complete decommissioning and site restoration as early as 2026, and no later than 2030. That would be decades earlier than Entergy’s prior schedule, which stretched into the 2070s.
The companies had projected the cost of decommissioning at $495 million, along with $3.5 million for the eventual decommissioning of the fuel storage pad, according to the NRC spokesman. Decommissioning is due to begin next year, at which time Entergy and NorthStar anticipated the trust that funds decommissioning would hold $513 million. But they said in a June 2018 document filed with the NRC that the balance could be roughly $488 million “without considering future contributions and growth.” To address any potential shortfall, the companies agreed to establish a $30 million escrow fund to cover radiological decommissioning and site restoration costs if necessary.
Entergy and NorthStar have asked the Vermont Public Utility Commission (VPUC) to rule on the sale within four weeks of the NRC decision, though the state panel has not committed to that timeline.
The companies in March reached a settlement with several state agencies and other organizations that had been authorized to intervene in the VPUC deliberation. The agreed-upon memorandum of understanding features a long list of increased financial and site restoration assurances for decommissioning, including: NorthStar establishing an escrow account that would grow to $55 million; Entergy pledging to raise the balance of the site restoration trust to $60 million; and the parties agreeing the property would be released with a radiological dose limit of 15 millirem per year, encompassing all radiation pathways.
The only dissenter among the intervening groups was the Boston-based Conservation Law Foundation.
“We hope that the NRC’s positive action will enable the Vermont PUC to complete its independent review under state law and issue NorthStar a Certificate of Public Good so that we can close our transaction with Entergy this year and move forward with this important project,” State said.
The NRC order will become null and void if the license transfer is not completed within one year.
Among the conditions set on NRC approval: Before the sale closes, NorthStar must provide the agency with proof that it has sufficient insurance for the property; NorthStar’s subsidiaries at Vermont Yankee cannot take any steps to undermine the $140 million support agreement for funding at the site, one of the components of the memorandum of understanding, without prior approval from the NRC’s director for the Office of Nuclear Reactor Regulation; and NorthStar must secure a $4.3 million performance bond if it cannot reach agreement with the Department of Energy on reimbursement for spent fuel management costs by Jan. 1, 2022.
The Energy Department has paid billions of dollars to nuclear utilities for failing to meet its legal mandate to begin removing spent fuel from power plants by Jan. 31, 1998.
The NRC on Thursday also approved NorthStar’s request for an exemption to federal rules so it can use $20 million from the facility’s decommissioning trust fund for “irradiated fuel management activities.”
Staff at the Nuclear Regulatory Commission on Wednesday issued a finding of no significant impact (FONSI) for any potential environmental effects from the exemption.
NorthStar Group Services filed the request on May 25 on behalf of Entergy Nuclear Vermont Yankee.
Federal regulations allow for withdrawals from decommissioning trusts for “legitimate” operations covered by the official definition of decommissioning, which does not include irradiated fuel management. NorthStar needs the exemption for the envisioned work, including security and environmental monitoring of the dry storage pad for the plant’s spent fuel.
“Both of these decisions are significant milestones toward the timely decommissioning of Vermont Yankee,” Michael Twomey, Entergy Wholesale Commodities vice president for external affairs, said in a statement. “We are encouraged by the NRC’s acceptance of this transaction model.”
Entergy will need NRC approval for similar deals to sell two other nuclear power plants to energy technology company Holtec International: the Pilgrim Nuclear Power Station in Massachusetts, due to close in 2019, and the Palisades Power Plant, scheduled for closure.
Holtec and power company Exelon have already filed a license transfer application for the Oyster Creek Nuclear Generating Station in New Jersey, which shut down last month. They hope for a decision by May 1, 2019.
