Entergy to fight the state on use of decommissioning fund
Entergy, the owner of the shuttered plant in Vernon, wants an exemption to use money set aside in a special fund for decommissioning to pay for guarding spent nuclear fuel.
But the state says this clashes with federal regulations and could delay decommissioning. On Friday, the state sent a letter to the Nuclear Regulatory Commission calling for a hearing to review Entergy’s decommissioning plans.
Vermont is likely the first state to challenge a plant owner’s request to use money from a trust fund to pay for spent fuel management, according to the NRC.
But that opposition could come at a cost, Entergy says. The company also plans to use the fund for any legal expenses associated with fighting the state.
“By the state taking its actions and causing us to litigate, you know to defend the litigation, that is a decommissioning expense,” said Marty Cohn, an Entergy Vermont Yankee spokesman. “The monies for decommissioning come out of the nuclear decommissioning trust fund.”
At issue is how certain withdrawals from the so-called decommissioning trust fund affect the timeline for decommissioning. Only when the fund reaches the estimated $1.2 billion cost of decommissioning will the company seek to begin tearing down the plant. Taking money out of the fund now will slow its growth, thus delaying the start date for decommissioning.
During a ceremonial news conference in December 2013, the state and Entergy reached a hallmark accord that placed conditions on the plant’s decommissioning, as well as settling all pending litigation. What was not decided, however, was how the money in the decommissioning trust fund should be spent. At the time — and more than a year later — the two “agree to disagree.”
Now, the state feels it is on solid legal ground in its opposition to Entergy’s use of the fund, though there is little legal precedent in the state’s favor; the Nuclear Regulatory Commission has only denied one such request when a South Texas Project nuclear power plant sought money to dispose a steam generator, according to NRC officials.
“The fact that Vermont would like to see decommissioning done in an environmentally sensitive way and to be done expeditiously, its not like Vermonters are crazy. It’s fundamental good sense,” said Attorney General Bill Sorrell.
Sorrell said the state only takes legal action when it is important to health and safety, and he is not deterred by Entergy’s use of the fund to pay for legal expenses.
“We might as well just step back and not enforce our laws and sit on the side lines. I don’t think Vermonters want that,” he said.
When the plant was generating electricity, Entergy Vermont Yankee, a subsidiary of the Louisiana-based company that owns transmission, distribution and generation across the country, used its own money to load spent fuel into 13 dry casks. Earlier this year, the company secured a $145 million loan to pay for some of the cost of spent fuel management.
But another $225 million is needed to guard the fuel while it sits on site indefinitely. Entergy says this is a legitimate expense. The only reason the company is applying for the exception is because federal regulations have not caught up to current realities of nuclear power plants going offline.
“What the NRC is doing is they are beginning a process of developing regulations for a decommissioning plant. It just hasn’t occurred yet. For those regulations not covered yet, you have to apply for exemptions,” said Cohn, of Entergy.
The state disagrees, strongly. And its letter to the NRC say such a request violates a 2002 agreement the company reached with the state and current federal regulations.
“That’s why they need permission from the NRC,” Sorrell said. “If spent fuel management was a baseline standard decommissioning cost there wouldn’t be a provision that they have to ask for permission to use for this purpose. I’m sure they wish the law otherwise.”
Experts say not using the fund for spent fuel management could knock decades off the decommissioning process. But according to Joseph Lynch, government affairs manager for Entergy, the company has not modeled the timeline for decommissioning without drawing down money from the fund for spent fuel management activities.
As part of its agreement with the state, the company will begin decommissioning 120 days after the fund reaches the amount needed to cover the entire cost of decommissioning. The federal government allows nuclear power plants 60 years to decommission.
“This has no basis in physics,” said Arnie Gundersen, a Burlington-based nuclear engineer and safety advocate for Fairewinds Energy Education, of the 60-year window. “It allows the utilities free rein to raid the fund rather than rapidly decommission the plant.”
If Entergy used its own money to pay for spent fuel management, he said the plant could be decommissioned by 2032, at least three decades earlier than Entergy’s estimate 2073.
With a one year grant from the Lintilhac Foundation, Gundersen has modeled the growth of the decommissioning trust fund, accounting for the fund’s interest growth, projected expenses and decommissioning costs inflation. He said this is perhaps the first such model in the country.
Aside from hastening the decommissioning process, Gundersen said the state has “skin in the game.”
The state says Vermont ratepayers are entitled to 55 percent of any remaining money in the fund after decommissioning, citing a Master Trust Agreement reached in 2002 when Entergy purchased the plant. The state also say Entergy has never made a payment into the fund.
Entergy, on the other hand, says the Federal Energy Regulatory Commission, or FERC, has the authority to disperse any excess funds, not the state, according to a Jan. 7 letter the company sent to the NRC.
The state and Entergy dropped all litigation in 2013 after years of disputes, but the legal saga now continues before federal regulators, which may set precedent for decommissioning power plants across the nation.
“We’re really quite early in the game. In these next 10 to 20 years there’s going to be any number of plants decommissioning,” Sorrell said.