Decommissioning money earmarked elsewhere?

If relicensing fails, Entergy will use some of fund for other use... 

If Vermont Yankee is closed in 2012, Entergy will need to withdraw $157 million from the plant's decommissioning fund to pay the costs for spent fuel handling through 2017, according to a document submitted to the Nuclear Regulatory Commission. The document, dated April 24, was in response to four questions asked of Entergy by the NRC about the company's decommissioning fund growth assumptions.

How Entergy would pay that money back shouldn't be of concern to anyone, according to the answers because "(a) resolution is expected in the very near future of Entergy's request for a renewed operating license, which will allow an additional 20 years of growth of the trust funds ..."

"This is a smoke screen to try to force Vermont to relicense Vermont Yankee until 2032," said Arnie Gundersen, a former industry insider turned nuclear-power critic who produced a review of the decommissioning fund that concluded Entergy's calculations had growth rates that were too liberal.

If Yankee receives a license extension, said Rob Williams, spokesman for Yankee, "That will allow an 20 additional years of growth and during that time fuel storage will be part of normal operating Advertisement expenses." "If the license renewal is denied and we shut down in 2012 and the fund is not sufficient at that point, we could defer some decommissioning activities," said Williams. "They're playing hard ball," said Sen. Ann Cummings, D-Washington, the chairwoman of the Senate Finance Committee. "Our decision about continued operation of our nuclear power plant should not be based on whether it needs to continue to operate to fully fund its decommissioning trust fund," said Rep. Sarah Edwards, P-Brattleboro.

Entergy has applied to the NRC for a 20-year license extension on its power plant in Vernon. The NRC has found no environmental or safety reasons that would prohibit the license extension and intends to issue its decision in November.

Meanwhile, the state Legislature and Vermont's Public Service Board is doing its own review of the plant and a proposed license transfer that would create a new holding company, separate from Entergy, to manage Yankee and five other nuclear reactors. Either the Legislature or the PSB could prevent Yankee from operating past 2012, according to an agreement signed between the state and Entergy when it bought the plant in 2002.

One concern of state legislators and the PSB is what financial obligation Entergy has toward its proposed subsidiary, especially when it comes to any potential shortfalls in the decommissioning fund."They were very clear from the beginning that they have no further obligation," said Cummings. "They have no intention of topping (the fund) off. The plant will sit there until there's enough money to decommission it or the people from Vermont get fed up with it and pay for it."

The proposed license transfer brings into question who would be responsible for any decommissioning fund shortfalls, which the lawmakers have addressed with legislation that would require Entergy to obligate itself to cover those costs, said Edwards. "We need to make sure that the citizens of Vermont are not held hostage by a nonperforming fund and the Governor puts his signature to this legislation," she said.

During hearings in Montpelier last week, said Senate President Pro Tem Peter Shumlin, D-Windham, Entergy representatives made it clear that the worry over the decommissioning fund is misplaced because if the plant is relicensed the fund will grow sufficiently to clean up the site. If the plant is closed, it will be placed into storage until there is enough money.

"If you don't allow continued operation you are going to have to pay to take it away or be stuck with it on the banks of the Connecticut River for 60 years," he said. The governor has the opportunity to sign legislation that takes care of the issue before Entergy realizes a $4.5 billion profit from the license transfer, said Shumlin.

When Entergy bought Vermont Yankee, which is a merchant plant not regulated by Vermont and selling energy directly to the market, there was an agreement, said Neil Sheehan, spokesman for the NRC, that "if costs came up short they would have to make up the shortfall." The same goes for Entergy's proposed holding company, he said. "Our view is that if a subsidiary would not be able to come up with decommissioning costs, we would go after the parent company."

While it is possible the NRC would put pressure on Entergy to make up for the shortfall, said Shumlin, Entergy representatives indicated the issue might end up in a legal fight. The license transfer makes it more likely ratepayers would fund any shortfalls, he said. "If this spinoff happens, it is clear to Entergy that Entergy Louisiana would not be responsible for further decommissioning costs. It would be the responsibility of the new owners."

As to whether the $157 million taken from the fund for spent fuel handling would be returned to the fund once Entergy settles a suit it has against the U.S. Department of Energy, Cummings said Entergy representatives told her they plan to do so. "But I haven't seen it in writing," she said.

The Department of Energy had promised to remove spent fuel from all of the United States' nuclear reactors and store it in a federal repository in Nevada starting in 1998. Because of delays in opening the repository, nuclear power plant operators have had to pay for spent fuel storage and are suing the DOE for recompensation. "The Department of Public Service strongly encouraged Entergy to sue the DOE and pursue recovery of funds for the management of high-level waste," said Stephen Wark, spokesman for the DPS.

The department will be watching closely the discussion over the $157 million that might be needed to handle spent fuel from 2012 to 2017, he said. "We have the expectation the money for managing the spent fuel will be recovered from DOE and will be returned to the decommissioning fund,"said Wark.

The decision on whether any money recouped from the federal government for waste storage costs would be returned to the decommissioning fund would be made once the suit is settled, he said. "It will be a business decision taken at that time as to whether that would be added into the fund." Sheehan said as far as the NRC is concerned, that business decision has already been made. "They couldn't just walk off with that money," he said.

"It seems impossible to get a straight answer to the question of who pays what when if there's not enough money whenever the plant shuts down to decommission it," said Shumlin. "If that doesn't give reason for the governor to sign this bill so that Vermont ratepayers and taxpayers and businesses don't get stuck with the decommissioning costs, I don't know what will."