By John Stang
Holtec International and Massachusetts signed an agreement Tuesday under which the commonwealth will drop its objections to the already-completed federal license transfer and sale of the retired Pilgrim Nuclear Power Station.
The deal calls for the New Jersey energy technology company to provide additional financial assurances for complete decommissioning of the single-reactor facility on Cape Cod, while Massachusetts will withdraw challenges filed with the U.S. Nuclear Regulatory Commission and in federal court.
“Since the beginning of this proposed transfer, we have prioritized the health, safety and other important interests of our residents, and took steps to ensure that the local community and environment are protected,” Massachusetts Attorney General Maura Healey said in a press release Wednesday. “This agreement provides critical protections, includes compliance measures stricter than federal requirements, and secures the funds necessary to safely and properly clean up this site.”
The August 2019 acquisition of Pilgrim from owner Entergy is part of Holtec’s broader business strategy to buy shuttered nuclear power plants from their operators. Holtec assumes all responsibility for cleanup and management of spent nuclear fuel on-site, but also ownership of the decommissioning trust fund for each reactor. In this case, that fund is worth nearly $1 billion.
In August 2018, Holtec announced plans to buy Pilgrim and the Palisades Power Plant in Michigan from Entergy. The companies in November 2018 applied for transfer of Pilgrim’s federal operations and spent-fuel storage licenses, which the Nuclear Regulatory Commission had to approve the move for the deal to advance. The Massachusetts facility shut down on May 31, 2019, after 47 years of operations. Less than three months afterward, NRC staff approved the license transfer and Entergy completed the sale to Holtec.
At that point the federal agency still had not ruled on February 2019 petitions to intervene in the license transfer application from the commonwealth and the local advocacy group Pilgrim Watch. The petitioners questioned whether the trust fund held enough money to decommission the reactor and whether adequate environmental reviews have been done for the project. Massachusetts also had concerns about the long-term management of the plant’s spent nuclear fuel on-site, according to a press release from the Attorney General’s Office.
If the intervention petitions had been successful, Massachusetts and Pilgrim Watch could have argued their contentions in a hearing before the Nuclear Regulatory Commission. The commissioners theoretically could have then rescinded the license transfer.
The NRC commissioners had been scheduled to vote June 4 on the intervention petitions from Massachusetts and Pilgrim Watch. But they instead authorized a stay of the decision while the parties continued late-stage negotiations on the settlement agreement.
The deal was the result of months of talks, including daily sessions in recent weeks. It specifically involves the commonwealth of Massachusetts and Holtec subsidiaries Holtec Pilgrim LLC and Holtec Decommissioning International LLC. The actual decommissioning will be carried out by Comprehensive Decommissioning International, a Holtec joint venture with Canadian engineering corporation SNC-Lavalin.
As part of the agreement, the commonwealth will withdraw its petition before the Nuclear Regulatory Commission, along with September 2019 and January 2020 lawsuits in the U.S. Court of Appeals for the District of Columbia Circuit that challenged the NRC’s approval of the license transfer application. The deal gives Massachusetts the right to participate in future NRC rulemaking and other federal regulatory activities regarding decommissioning of nuclear power plants.
Meanwhile, Holtec will withdrew some administrative challenges to the commonwealth’s conditions on issuing a water permit for the plant.
Under the agreement, Holtec must keep the decommissioning trust fund dip above $193.3 million until most of the decommissioning and site restoration is completed, which is scheduled for 2027. If the trust dips under that amount, the company will have 30 days to replenish funding.
As of Dec. 31, 2019, that trust fund held $979 million. In 2018, Holtec estimated roughly $1.1 billion would be needed to cover decommissioning, site restoration, and management of the site’s spent nuclear fuel.
The first job involves transferring all spent fuel to dry storage on the property, which Holtec expects to complete in early 2022. Comprehensive Decommissioning International has also begun to remove smaller buildings in prepararation for subsequent decommissioning operations, including dismantlement and demolition of the reactor building. It has also begun identifying known and potentially unknown hazards at the site.
After decommissioning and site restoration are done, Holtec will be required to keep $38.4 million in the trust fund until the spent fuel is removed from the property. That amount may be adjusted both up or down, depending on future cost estimates, according to the settlement agreement. Holtec hopes eventually ship that used fuel to an interim storage site it wants to build this decade in New Mexico.
Holtec also must obtain $30 million in pollution liability insurance. The company is also required to provide monthly reports to the state on cleanup progress and its financial situation at Pilgrim.
Holtec will have to conduct an initial assessment on the site’s contamination, including oil and polychlorinated biphenyls. The property must be cleaned to a level that the land can be used by the public. The radiological cleanup standard in the agreement is 10 millirem, compared to the federal cleanup standard of 25 millirem, according to a Holtec press release.
“When we announced our acquisition of the facility, I had stated that we looked forward to engaging state and local government officials in Massachusetts on site restoration standards and effective coordination during the decommissioning process. By finalizing this agreement it shows that we were true to our word and fulfilled our commitment,” Holtec President and CEO Kris Singh said in a company press release. “The path to returning the site to a decontaminated state, which allows us to spawn new economic activity on the property that is beneficial to both the community and our company, has been made clearer in this agreement.”
Pilgrim Watch was not part of this agreement, and has not withdrawn its petition to intervene with the NRC. The organization will review the settlement agreement “with a fine-tooth comb” before deciding how to proceed, Director Mary Lampert said by email.
