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Feds rule against state in fight over VY trust fund

Decision on Vermont’s objections to Entergy’s use of decommissioning money ends appeal

VERNON—The Nuclear Regulatory Commission has mostly rejected a state complaint about decommissioning spending at Vermont Yankee, thus ending the last such appeal that had been pending before the federal agency.

Nearly a year ago, Vermont officials had demanded a “robust, comprehensive and participatory review” of the ways in which Entergy Vermont Yankee administrators are spending money from the shut-down plant’s decommissioning trust fund.

But the NRC’s ruling, issued Oct. 27, dismisses Vermont’s challenge to federal trust fund supervision. Commissioners said federal regulations are designed to ensure plant owners don’t run out of cash before decommissioning is complete.

“Moreover, our ongoing oversight of Entergy’s compliance with our regulatory structure provides reasonable assurance that sufficient funds will be available to decommission Vermont Yankee in accordance with our regulations,” commissioners wrote.

The NRC did, however, decide to order an environmental assessment associated with Entergy’s use of trust money for long-term management of spent nuclear fuel. That was a relatively small victory for the state.

“While we are disappointed that the Nuclear Regulatory Commission denied our request for a hearing [on trust fund spending], we are glad that they ordered further environmental review,” said Kyle Landis-Marinello, a Vermont assistant attorney general who has been involved in the issue.

A point of contention

Trust fund use has been a constant point of contention between the state and Entergy since the December 2014 shutdown of Vermont Yankee.

The plant is headed into SAFSTOR, a program under which decommissioning — which is expected to cost $1.24 billion — could take up to 60 years. But the actual timing of that work will depend in part on growth of the decommissioning trust fund.

Entergy has been spending from the fund since shutdown, and its levels also fluctuate due to market performance. At a recent meeting of the Vermont Nuclear Decommissioning Citizens Advisory Panel in Vernon, Entergy reported that the fund held $574.9 million at the end of September.

Vermont has raised concerns about Entergy using the trust fund for expenses such as property taxes and insurance payments, as well as for long-term management of spent nuclear fuel stored at the site. Fuel management is a big-ticket item at Vermont Yankee — $225 million — but the NRC has issued a regulatory exemption allowing that money to come from the fund.

State officials have tried various tactics to limit Entergy’s spending, including regulatory filings and a lawsuit. The suit was dismissed last year on procedural grounds.

In November 2015, the state filed a petition requesting that the NRC take a hard look at Entergy’s spending. Officials expressed fears that there could eventually be “a shortfall in the decommissioning fund that prevents the site from being fully decontaminated and restored.”

“Considered together, Entergy’s actions threaten to undermine the radiological decommissioning work that is the very purpose of the fund,” state officials wrote at the time. “Unless the commission intervenes, Entergy will divert hundreds of millions of dollars from their intended purpose.”

Sharp rebukes from staff

Both Entergy and the NRC staff responded with sharp rebukes of Vermont’s arguments, using words like “duplicative,” “impermissible,” “alarmist,” “meritless” and “vague” to describe the state’s position.

In their Oct. 27 ruling, NRC commissioners decided in large part against the state. They said some of Vermont’s contentions were not raised in the correct forum, while also pointing to the efficacy of federal rules for the use of decommissioning trust funds and the ongoing, annual monitoring of those funds.

Commissioners didn't find fault with Entergy’s use of the trust fund for spent fuel management. And, though an arm of the NRC last year required Entergy to disclose certain uses of the trust fund in advance, commissioners declined to order that the company provide any additional details beyond that.

When it comes to trust fund spending, state officials “do not demonstrate that the information that Entergy provides is inadequate,” the ruling says.

The NRC also denied most of the state’s requests for further environmental review.

The commission did order an environmental assessment related to the previous regulatory exemption granted for spending trust fund money on Vermont Yankee’s spent fuel management. But that order doesn’t appear to concern plant administrators.

“Based on our preliminary review, we are pleased with the decision by NRC commissioners in the matters brought forth by the state of Vermont regarding the use of the decommissioning trust fund,” Vermont Yankee spokesman Marty Cohn said.

“We do not see any need to change the way we are cost-effectively utilizing the decommissioning trust fund to safely and efficiently decommission Vermont Yankee,” Cohn added.

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Originally published in The Commons issue #381 (Wednesday, November 2, 2016). This story appeared on page B1.

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