PHOENIX, Ariz. — Orano USA and Waste Control Specialists (WCS) are just weeks from formalizing their partnership to license, build, and operate a facility for centralized interim storage of spent nuclear reactor fuel, new WCS CEO Scott State said Monday.
The joint venture, announced last week, will be called Interim Storage Partners. Its first job will be to official request the U.S. Nuclear Regulatory Commission resume its technical review of the license application Waste Control Specialists filed in April 2016 for its planned facility. The timing will depend on approval for the partnership from the executive boards at Orano (formerly AREVA) and private equity firm J.F. Lehman, which bought Waste Control Specialists in January.
“I believe Orano’s got this in front of executive committee in the next week or two, and so we’re formalizing and finalizing the joint venture documentation,” State, who became WCS chief executive after the buyout, told RadWaste Monitor on the sidelines of the Waste Management Symposia here. “Upon all of that getting done we would expect to get the process moving forward again on the licensing.”
Lehman has already signed off on the agreement, State said.
Dallas-based Waste Control Specialists plans an addition to its 14,900-acre waste disposal complex in Andrews County, Texas: an independent spent fuel storage installation with maximum capacity for 40,000 metric tons of used fuel now held at nuclear plants around the country.
The NRC halted its license review in April 2017, at the company’s request ahead of its-then pending sale from holding company Valhi Inc. to low-level radioactive waste disposal rival EnergySolutions, of Salt Lake City. The Department of Justice had by that time sued to halt the deal on antitrust grounds, and a federal judge in June ruled in favor of the federal government.
Lehman swooped in just a few months later to buy WCS from holding company Valhi Inc. The parties have not released a dollar figure for the purchase price, but the new owner assumed all of Waste Control Specialists’ third-party indebtedness and other liabilities, along with all financial assurance obligations. The waste management company had $1.071 billion in long-term debt, according to a January filing with the U.S. Securities and Exchange Commission.
State said Lehman’s interest was driven by nuclear decommissioning specialist NorthStar Group Services. Lehman in 2017 became controlling shareholder in NorthStar, where State also serves as CEO. NorthStar had been considering the acquisition even before the EnergySolutions deal was blocked, eyeing a dedicated location to send contaminated material from its nuclear cleanup work.
“It was always of interest just from the NorthStar perspective as the back-end piece of our overall decommissioning business,” State said. “We wanted cost certainty associated with our decommissioning projects, and having disposal capacity in a committed way with our shareholder just made sense.”
The new owner has made limited changes at the top of Waste Control Specialists’ management team: State serves as CEO and chief nuclear officer and former Veolia executive David Carlson as president and chief operating officer. Former WCS President and CEO Rod Baltzer remains a consultant at least through July.
Waste Control Specialists lost tens of millions of dollars in recent years, primarily due to struggles in bringing in sufficient amounts of waste volume, according to its former owner. State, though, noted the company earned a profit for 2017.
Lehman does not anticipate layoffs or drastic changes to WCS’ business model – transport and permanent disposal of federal and commercial waste – State said: “Our objectives for the business are driven toward efficient operations, ease of access to customers for disposal, and growing the revenue base of the business.”
The new management has not said how long it might take to secure NRC licensing and then begin operating the spent fuel storage site. But it already has its eye on other waste types that could give business a boost.
While the West Texas facility already receives significant amounts of Class B and C low-level radioactive wastes, the new management hopes to expand its business for Class A waste – the least hazardous and most plentiful form – from nuclear power operations and decommissioning. EnergySolutions today holds roughly 90 percent of the business for disposal of this waste, State said.
There are additional opportunities for disposal of additional federal waste sources, including depleted uranium, he added. Waste Control Specialists has also received a small amount of grouted low-activity radioactive waste from the Hanford Site in Washington state, the first batch in a test treatment program run by Perma-Fix Environmental Services that could lead to significantly larger waste amounts.
Price flexibility will be central to spurring business, the CEO said. The Texas Commission on Environmental Quality, WCS’ state regulator, is considering a rulemaking requested by the company that would reduce select charges for disposal of radioactive waste on its property. Waste Control Specialists operates the facility for disposal of waste from members of the Texas Low-Level Radioactive Waste Disposal Compact, which are only Texas and Vermont. Other states pay more to ship their LLRW to the site.
“The structure of pricing is geared around compact and out-of-compact waste. We can’t charge an out-of-compact generator less than the maximum amount that we would charge an in-compact generator, so we’ve made application to lower the maximum pricing for in-compact generators,” State said. “That should result in more attractive pricing within the marketplace for all of the out-of-compact generators, which is essentially everyone but Vermont and Texas.”
The rulemaking has been posted in the Texas Register, and will be submitted to the TCEQ commissioners “at a later date,” agency spokesman Brian McGovern said by email.
NorthStar hopes to close its acquisition of the retired Vermont Yankee nuclear power plant by the end of this year, pending state and federal regulatory approval. It will then take on responsibility for decommissioning, site restoration, and spent fuel management of the facility. The company says it can complete decommissioning as early as 2026 at a cost of roughly $811 million. It will keep some portion of the site’s dedicated decommissioning trust fund, plus liability payments from the Energy Department for failing to meet its legal mandate to take possession of all spent fuel from U.S. nuclear plants.
NorthStar has already contracted Orano to conduct reactor components removal and transport at Vermont Yankee, and the waste will go to the WCS facility.
NorthStar and Orano have also partnered as Accelerated Decommissioning Partners for future acquisitions and cleanups of additional nuclear power plants as they close. That waste would also go to Waste Control Specialists, though no deals have yet been announced.
Orano USA executives last year, when the company was still AREVA Nuclear Materials prior to its parent company’s restructuring, cited ongoing talks for Accelerated Decommissioning Partners to buy Entergy’s Pilgrim Nuclear Power Station in Massachusetts and Palisades Power Plant in Michigan, both of which are due to close in the next few years.
“I would say that we have an interest in most, if not all, of the currently closed plants, as well as those that have announced they would be shutting down early,” State said.
