By John Stang
The owner and prospective buyer of the retired Vermont Yankee nuclear power plant have agreed to a set of financial assurance and site-cleanup terms that should help the sale pass the state’s regulatory review.
All but one of the parties authorized to intervene in the Vermont Public Utility Commission (PUC) process signed on to the settlement agreement and memorandum of understanding filed late on March 2.
The two documents, which cover the same material, call for more than $200 million to be set aside or guaranteed if the project runs into financial trouble. They also establish how pristine the site should be after decommissioning and cleanup are complete.
“The Parties hereto agree that the approval of the Proposed Transaction, if all terms and conditions described in this MOU are met, will promote the general good of the State of Vermont. The Parties shall jointly request that the PUC issue an Order approving the terms and conditions of this MOU, incorporating certain of them as terms and conditions of the Order,” the participating parties stated in the MOU.
“We are very proud about meeting a comprehensive settlement with all parties. … We believe the MOU should be approved,” said Mike Twomey, vice president for external affairs at plant owner Entergy, in a telephone interview.
NorthStar Group Services, the New York City-based nuclear decommissioning provider that plans to buy the shuttered power plant, declined to comment beyond a joint press release with Entergy
“We now consider ourselves allies and partners with NorthStar and will do our best to help them achieve a state-of-the-art, best-practices, and environmentally responsible decommissioning, as free of nuclear pollution as it can possibly be made,” said Raymond Shadis, a board member for the nongovernmental New England Coalition, in a press release.
Along with the Brattleboro, Vt.-based environmental group, other parties to the MOU are Entergy; NorthStar; the Vermont Department of Public Services, Agency of Natural Resources, Department of Health, and the Attorney General’s Office; town of Vernon Planning and Economic Development Commission; Windham Regional Commission; Abenaki Nation of Missisquoi; and the Elnu Abenaki Tribe.
The lone holdout was the Boston-based Conservation Law Foundation.
“In a rush to secure a possible – and by no means certain – quick clean-up of the site, the settlement excludes reasonable protection for Vermont communities,” Sandra Levine, a senior attorney with the environmental group, said in a prepared statement. “The deal Entergy and NorthStar proposed leaves Vermonters vulnerable to picking up the tab if something goes wrong.”
Entergy closed the single-reactor plant in the town of Vernon in December 2014 after more than four decades of operation, and wants to sell the site to NorthStar for decommissioning, site restoration, and spent fuel management. NorthStar says it can complete decommissioning as early as 2026 at a cost of about $811 million, but other parties have worried about its financial capacity and the state of the site when work is complete.
The Public Utility Commission must approve the sale, along with the U.S. Nuclear Regulatory Commission.
The memorandum and the settlement agreement call for decommissioning to begin no later than 2021 and to finish by 2030, noting the potential for work to start as early at 2019 and end by 2026. This work covers tearing down the reactor and related infrastructure, plus removing all the contaminated and noncontaminated debris above ground and to a depth of 4 feet beneath the surface.
NorthStar would be required to manage used fuel from the reactor on-site until the U.S. Energy Department meets its legal mandate to remove the waste.
Among the long list of financial and cleanup terms in the memorandum of understanding intended to address concerns raised by government and nongovernmental entities:
- NorthStar’s financial assurance package will include the decommissioning and site restoration trusts, both transferred from Entergy; $400 million in performance bonds or corresponding assurance for subcontracted operations; and a $140 million support agreement payable to the Vermont Yankee Decommissioning Trust.
- NorthStar is to increase the money in its 2017 support agreement filed with the Nuclear Regulatory Commission from $125 million to $140 million. The money is to be available to the state of Vermont for site restoration. Only the Vermont PUC can approve any changes in the money in this fund.
- When the sale is complete, NorthStar will place $30 million in an escrow fund, where the money will be set aside as a rainy-day cushion, being one of the financial assurances sought by the state. Over time, NorthStar is to add another $25 million.
- NorthStar’s biggest subcontractor for the project — Orano USA (formerly AREVA Nuclear Materials) — is also supposed to set aside another $25 million in a guaranty fund — another pool cache of financial assurance money.
- NorthStar will provide $30 million in insurance to be available for site restoration in case of unexpected conditions after the sale is completed. Entergy will also contribute roughly $30 million to the site restoration fund.
- Entergy has agreed to a potential contribution of $40 million of U.S. Department of Energy litigation proceeds expected in 2023, only if specific decommissioning milestones are not met. That money is not to be used until other appropriate funds are exhausted. Ultimately, NorthStar would have to pay the money back to Entergy.
The agreed-upon site restoration standards include:
- All cleanup work at Vermont Yankee will meet applicable environmental and health rules, “to the extent such standards and regulations do not conflict with the standards identified in this MOU.”
- A dose limit of 15 millirem per year from all pathways with a maximum of 5 millirem per year from liquids.
- The site must ultimately reach Vermont environmental standards under a schedule created with consultation with the state and town of Vernon.
- Plans must be set up for groundwater sampling of nonradiological contamination, plus for the use of concrete and other off-site materials to be used as fill at the site.
- All above-ground structures are to be removed by the end of decommissioning — except the spent fuel dry storage facility, security facilities, the switchyard, administrative buildings, and the site’s railroad spur. All underground structures must be removed down to at least 4 feet below the ground’s surface, with studies conducted on the infrastructure below that level. Any material with asbestos must be taken out.
Entergy and NorthStar hope to secure PUC approval by July 31. If that does not happen, any party is authorized to withdraw from the memorandum of understanding.
The companies aim to close the deal by the end of 2018. Intervening parties in the MOU and settlement agreement talks will have input during the prefiled testimony and public hearing portions of Vermont PUC’s review process.
On Wednesday, the Vermont PUC set the schedule for much of the rest of its review. All parties have until today to submit prefiled testimony to the commission by today. Requests for admission, requests for production, and deposition notices would be filed by March 14. Responses to the requests for admission and production would be filed by March 21.
Depositions would be taken from March 26 to March 30.
Parties not signing on to the memorandum of understanding would submit prefiled testimony by April 10. The Conservation Law Foundation is in this category.
The PUC’s second and last public hearing on the deal is scheduled for April 12. The commission has a deadline of April 24 to submit its questions on the memorandum and prefiled testimony. The parties signing the memorandum would answer the Vermont PUC’s questions by May 4. Other parties would respond by May 9.
The evidentiary hearings would be held from May 10 through May 15, with May 16 available if needed.
Meanwhile, NorthStar and the town of Vernon on Tuesday signed their own agreement to cover their relationship during decommissioning and cleanup.
The terms include NorthStar reimbursing the tiny town for its legal expenses related to the state regulatory process, up to $150,000; making tax payments to Vernon at a steady rate through decommissioning; and repairing any damage to a road serving the Vermont Yankee site. Other agreed-upon terms include keeping some non-nuclear buildings and other infrastructure intact for future redevelopment by the town, helping Vernon develop access to the Connecticut River, and considering local businesses when calling for subcontract bids.
