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Entergy won't face fine for federal violation

NRC says Entergy prematurely withdrew $282,000 from VY’s decommissioning trust fund, but won’t be fined due to confusion about federal rules

VERNON—Entergy violated federal regulations last year by withdrawing $282,000 from Vermont Yankee’s trust fund months before the company was authorized to do so, a new inspection report says.

But the company won’t face any penalties. That’s because the Nuclear Regulatory Commission is admitting that the federal rule in question is confusing and likely should be changed.

“We acknowledge that there were some issues associated with the clarity of NRC regulatory guidance in this area,” commission spokesman Neil Sheehan said. “We have a rule-making process under way that will seek, among other things, to provide greater clarity when it comes to decommissioning regulations.”

Entergy has taken actions to avoid similar regulatory snafus at its other plants. But spokesman Marty Cohn also maintains that Vermont Yankee “continues to follow applicable regulations and appropriate guidance and industry practices related to the use of the decommissioning trust fund.”

Vermont Yankee stopped power production in December 2014, and the plant’s decommissioning trust fund is a sensitive, divisive subject. That’s because state and local officials want to see the Vernon site restored for reuse as soon as possible, but the job is allowed to take up to 60 years under a federal program called SAFSTOR.

State officials even worry that Entergy might run out of money before finishing the job, though the company is projecting a surplus.

The timing of Vermont Yankee decommissioning work depends in part on the growth of the trust fund. Entergy says decommissioning is expected to cost $1.24 billion, and the fund at last report held $583.2 million.

Entergy has been spending from the trust fund since shutdown, and that’s where the NRC’s alleged violation comes into play. In an inspection report issued May 4, the NRC says Entergy committed a “Severity Level IV” violation by withdrawing $282,000 from the fund on Feb. 4, 2015, for “operational spent-fuel management planning activities.”

Use of the trust fund for expensive, long-term spent-fuel management is a sore spot for Vermont officials, who unsuccessfully sued the NRC because the agency issued regulatory exemptions allowing such use.

The NRC’s spent-fuel exemptions weren’t issued, however, until June 17, 2015 — more than four months after the trust-fund withdrawal that has come under federal scrutiny. So the NRC has concluded that Entergy’s withdrawal was premature and a violation of its rules.

Operators of decommissioning plants are allowed to use some trust-fund cash for planning. But the NRC makes the distinction that “spent-fuel management planning is an activity not directly related to decommissioning planning,” Sheehan said.

Vermont Yankee administrators took a different view of the same rule. On the day the NRC inspection report was issued, Cohn cited specific federal regulatory language that seems to back up the company’s case:

“The [NRC] staff recognizes that during planning for decommissioning, it is necessary to consider activities leading to license termination and the storage of spent fuel; therefore, the staff’s interpretation of the appropriate use of these planning funds will permit planning for all issues related to the decommissioning of the facility.”

The NRC’s inspection report cites that very same language, as well another regulation that federal officials acknowledge is “seemingly in contrast” with it. So they’ve decided they won’t fine Entergy for the February 2015 withdrawal.

“In consideration of the circumstances of this case, the NRC has determined that it is appropriate to exercise enforcement discretion ... to refrain from issuing an enforcement action for this violation,” officials wrote in the inspection summary.

In addition to the uncertainty about regulatory language, Sheehan also noted that Entergy’s violation is “of very low safety significance — one example being the small amount this (withdrawal) represents in the context of a nearly $600 million decommissioning trust fund.”

Cohn underscored that point. “The amount of spent-fuel management planning costs that [Vermont Yankee] reimbursed from the trust fund, approximately $282,000, represented about 1.5 percent of the amount allowed to be used for decommissioning planning — and less than 0.05 percent of the total trust fund balance at the time,” he said.

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Originally published in The Commons issue #356 (Wednesday, May 11, 2016). This story appeared on page A1.

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