NRC: No investigation needed for Entergy finances

VERNON — Nine months ago, state officials demanded that the federal government “fully investigate” Vermont Yankee owner Entergy in order to determine whether the company “has sufficient financial capacity” to decommission the Vernon plant.

On Oct. 27, the federal Nuclear Regulatory Commission (NRC) delivered its response, which could be paraphrased this way: Thanks for the suggestion, but we've got this under control.

In a letter to the state, an NRC official reiterated that the agency already has determined that Entergy will have enough cash in its decommissioning trust fund to clean up the Vernon plant and to pay for long-term management of spent nuclear fuel at the site.

William M. Dean, director of the NRC's Nuclear Reactor Regulation Office, also noted that the agency will perform an annual review and will take action if there are financial concerns.

But even while asserting the NRC's regulatory authority, Dean also pledged to continue talking with the state and others who have an interest in the Yankee site's future.

“The NRC understands your interest and concern in the pending decommissioning of VY and looks forward to continuing to work with all parties involved to ensure, first and foremost, the health and safety of the public,” Dean wrote.

Dean was responding to a Jan. 27 letter from a Vermont Chief Assistant Attorney General William Griffin and state Public Service Department Commissioner Chris Recchia. Writing about a month after Vermont Yankee ceased producing power, state officials offered what has become a familiar argument: Entergy's trust-fund spending must be closely monitored and, when necessary, curtailed.

Vermont Yankee is entering SAFSTOR, a period of extended dormancy, while the trust fund grows enough to cover the estimated $1.2 billion decommissioning price tag. Under SAFSTOR, decommissioning can take up to 60 years.

At the same time, though, a 2013 settlement between Entergy and the state says that, “to facilitate the prompt economic redevelopment of the VY Station site, the decommissioning process should occur without unreasonable delay, as soon as there are sufficient funds in the Nuclear Decommissioning Trust.”

So state officials have objected to many of Entergy's proposed uses of the trust fund, including payments for spent fuel management, property taxes, and insurance.

In their January letter, Griffin and Recchia argued that any trust-fund use should be limited – as per federal regulations and the fund's master agreement – to activities that reduce radiological contamination at Vermont Yankee. That does not include spent-fuel management, officials argued.

“The state of Vermont has a direct interest in the NRC abiding by its statutory duty to ensure that Vermont Yankee's owners and operators have – and will continue to have – the ability to pay for (decommissioning) activities,” the state's letter says.

Griffin and Recchia noted that attorney general's offices in New York and Massachusetts previously had asked the NRC to investigate Entergy's finances.

“To determine whether Entergy – either through its subsidiaries or the parent corporation – has adequate financial means without undue or unauthorized reliance on the (decommissioning trust) fund, the NRC should fully investigate the financial qualifications of Entergy and its subsidiaries, including directing Entergy to respond to issues raised by the attorneys general of New York and Massachusetts,” Vermont's letter says.

In his Oct. 27 response, Dean notes that the NRC staff already has granted Entergy a regulatory exemption allowing the company to use the trust fund for spent-fuel management at Vermont Yankee. The state has contested that ruling in a federal appeals court, but Dean writes that the NRC's review “found that the exemption ... will not adversely impact Entergy's ability to complete radiological decommissioning and terminate the Vermont Yankee operating license.”

“The staff's conclusion was based on its determination that there are sufficient funds in the Vermont Yankee decommissioning trust fund to complete radiological decommissioning activities, as well as to conduct spent fuel management,” Dean wrote.

Dean also said an annual review of Vermont Yankee finances “must indicate that there are sufficient funds to complete radiological decontamination first and then pay for any granted regulatory exemption, until the NRC license is terminated.”

“If, at any time, there would be insufficient funding for radiological decommissioning, then the exemption (for spent fuel management) would be rescinded,” Dean wrote.

Dean further underlines the NRC's confidence in Entergy's financial status by referencing an August decision he authored. The document, spurred by concerns raised by the Shelburne Falls, Mass.-based Citizens Awareness Network, addresses Entergy's operation of Vermont Yankee; Pilgrim Nuclear in Plymouth, Mass.; and FitzPatrick Nuclear in Oswego, N.Y.

In addition to shutting Yankee, Entergy has announced that it will close the Pilgrim plant by 2019. As for FitzPatrick, Entergy announced Nov. 2 that the plant will be shut down in late 2016 or early 2017.

Dean writes that “Entergy (has) provided reasonable assurance that sufficient funding for radiological decommissioning of FitzPatrick, Pilgrim and VY will be available for the decommissioning process.”

“Therefore, the NRC staff determined that no further investigation into Entergy's financial status was necessary to ensure the protection of the public health and safety and the environment,” Dean's letter says.

None of this means, however, that the NRC has issued a blanket endorsement of Entergy's trust-fund plans at Vermont Yankee. NRC spokesman Neil Sheehan has said the agency still is reviewing all of the company's withdrawal requests.

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