Originally published in The Commons issue #394 (Wednesday, February 8, 2017). This story appeared on page A4.
VERNON—Entergy has spent nearly $125 million from Vermont Yankee’s decommissioning trust fund in the two years since the Vernon plant shut down.
Overall, with other expenses and investment income factored in, the nuclear plant’s trust fund has decreased by about 15 percent during that time — from $664.56 million to $561.6 million.
While those are big numbers, Entergy says its decommissioning spending remains under budget. Joe Lynch, government affairs senior manager for Entergy Wholesale Commodities, attributed that in part to personnel management and strict adherence to decommissioning work schedules.
“Our projects have all come in at or ahead of schedule,” Lynch said.
Entergy stopped power production at Vermont Yankee at the end of 2014. Most of the funding for the plant’s eventual cleanup will come from the decommissioning trust fund, an account created by past contributions from electric ratepayers in Vermont.
While Entergy never has paid into the fund, the company has control of the account and can make decommissioning-related withdrawals under the watch of the federal Nuclear Regulatory Commission.
Vermont officials have made various attempts to intervene in trust-fund matters, arguing that some of Entergy’s withdrawals — for property taxes and insurance, for instance — are improper. But the NRC has for the most part disagreed, ruling against the state’s petitions.
Also, a federal court last year dismissed a state lawsuit related to Vermont Yankee trust-fund use.
Entergy has proposed selling Vermont Yankee to a New York-based decommissioning company, NorthStar Group Services Inc., by the end of 2018. If that sale happens, NorthStar will take control of the plant’s trust fund.
Until then, however, Entergy is continuing to make regular withdrawals from the fund for decommissioning-related work and day-to-day expenses at Vermont Yankee.
Recent updates submitted to the Vermont Nuclear Decommissioning Citizens Advisory Panel show that Entergy withdrew $66.9 million from the trust fund in 2016. The fund decreased by an additional $4.6 million last year due to other expenses — mostly taxes.
On the plus side, investment income contributed $37.7 million to the fund in 2016.
When comparable numbers from 2015 are added in, Entergy’s withdrawals over two years have totaled $124.9 million; fund expenses have reached $20.6 million; and investment income has brought $42.7 million into the account.
The bulk of that income rolled in last year. “Clearly, 2016 was a better year for the market,” Lynch said.
Entergy’s spending has outpaced those earnings. But Lynch recently told VNDCAP members that “we’re not spending money faster than we had in our original estimate. In fact, we’re beating that two years in a row, which is obviously very good for the project.”
In an interview, Lynch said lower-than-expected personnel costs have been a positive factor for the project’s bottom line.
He said Vermont Yankee staffing levels are “slightly under what we had projected” at this point. He also pointed out that plant security staffers — who now make up the majority of staff on site — are no longer Entergy employees.
“We have contracted out the security services,” Lynch said. “And we’ve saved some money in doing so.”
Otherwise, he attributed decommissioning savings to efficiencies. Lynch said Entergy is using local labor when possible and is competitively bidding decommissioning-related work.
Entergy also has continued to close down and dismantle portions of the plant that are no longer needed. Lynch said administrators currently are considering the removal of other such structures including a construction office building that dates to the mid-1980s.
“It provides an opportunity to eliminate a fire-protection system that requires us to heat the building,” he said. “It’s not occupied.”
Notably, Vermont Yankee administrators maintain that an ongoing water intrusion problem in the lower levels of the plant’s turbine building hasn’t broken the plant’s budget. Lynch said Entergy had expected to deal with water issues, while also acknowledging that “we are spending money on water management earlier than anticipated.”
He also noted that neither the decommissioning trust fund nor the plant’s decommissioning cost estimate is a “static number.”
The trust fund fluctuates constantly due to the interplay of withdrawals and market-related gains. And Lynch said Entergy’s original cost estimate for decommissioning and site restoration at Vermont Yankee — $1.24 billion — is often cited but can be misleading.
For one thing, that cost estimate didn’t rely completely on the decommissioning trust fund. Entergy, for example, is funding a $143 million fuel-storage project via a line of credit.
Also, Lynch said Entergy’s site work in 2015 and 2016 has reduced the work ultimately needed to clean up the Vermont Yankee property. “We’ve made progress toward license termination over the past few years,” Lynch said.
If state and federal officials give their OK, the bulk of that job will fall to NorthStar starting in 2019.
One key provision of that deal is that there must be at least $513.5 million in the Vermont Yankee decommissioning trust fund when the sale closes. If market earnings don’t keep the fund at that level, it will be up to Entergy to make up the difference.
“There could be some top-off provided by Entergy,” NorthStar CEO Scott State said during a recent NRC meeting.
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