State agencies view sale of VY with skeptical eye

Officials see financial, environmental risks

VERNON — State officials are expressing serious doubts about the proposed sale of Vermont Yankee, contending that the deal “raises numerous, thus-far-unanalyzed health, safety, and environmental concerns.”

Those concerns surfaced in documents filed June 13 by the Vermont Public Service Department and attorney general's office. The state agencies want to intervene in the federal Nuclear Regulatory Commission's review of the plant's license transfer, and they're also requesting that the NRC hold a hearing on the matter.

State officials previously have expressed skepticism about certain aspects of Entergy's plan to sell the former nuclear plant to NorthStar Group Services. But the new documents detail numerous financial and environmental questions that the agencies believe must be addressed before the Vernon property changes hands.

“There is a significant risk that, if approved, the sale of Vermont Yankee to NorthStar will lead to a shortfall in the amount of funding available to fully and safely decommission and radiologically decontaminate Vermont Yankee and manage its spent nuclear fuel,” Bill Irwin of the Vermont Department of Health wrote in the state's filings.

“This would place public health, safety, and the environment at risk,” Irwin added.

NorthStar Chief Executive Officer Scott State declined to respond to specific points raised by Vermont officials. But he reiterated his company's detailed financial and technical planning, a process that began long before the proposed sale was publicly disclosed.

“We're approaching two years of direct activity,” State said. “We've got people on site on a regular basis now. We're working on various activities that would benefit the accelerated [decommissioning] that we've proposed.”

He added that “we're continuing to gather information and work on project planning today under the assumption that reasonable agreements can be reached to satisfy the state's concerns.”

NorthStar's plan

After stopping power production at Vermont Yankee in December 2014, Entergy wants to sell the plant to NorthStar by the end of next year. The New York company has pledged to speed decommissioning by decades and to make most of the site available for redevelopment by 2030.

Both the NRC and the Vermont Public Service Board must approve the transaction.

Entergy and NorthStar in February filed an application asking the NRC to approve the Vermont Yankee license transfer. Late last month, NRC staffers traveled to Brattleboro to answer questions and take public comment on the issue.

But the state attorney general and Public Service Department aren't content to let the NRC take it from here.

In a motion filed with the Atomic Safety and Licensing Board - an independent judicial body of the NRC - the state agencies argue that NorthStar's plan is incomplete and flawed.

“In general, the state supports moving into immediate decommissioning and restoring the Vermont Yankee site as soon as possible,” officials wrote. “The state does not, however, believe that such a transaction should be structured to create a significant risk that a new entity begins decommissioning and then runs out of money.”

Financial concerns dominate the state's filings.

NorthStar has touted its detailed decommissioning planning, with company Chief Executive Officer Scott State saying the job has been divided into more than 900 components, each with its own budget. NorthStar has promised that any cost overruns will come out of the company's coffers, not the plant's decommissioning trust fund.

But the state agencies list eight scenarios in which the company could see “significant, unaccounted for” expenses. Those include “discovery of previously unknown radiological or nonradiological contamination”; a radiological incident at Vermont Yankee; and complications with long-term storage of spent nuclear fuel.

The latter topic continues to be a sore spot for the state, which argues - contrary to NRC rulings - that the Vermont Yankee decommissioning trust fund shouldn't be used for spent fuel management.

Overruns on other jobs

State officials also note that there have been major cost overruns at other nuclear decommissioning jobs including those at Connecticut Yankee, Maine Yankee, and Yankee Rowe in Massachusetts.

“The nature of a decommissioning cost estimate is that it is precisely that - an estimate,” state officials wrote. “It is not a guarantee. It is reasonably foreseeable that an estimate will turn out to be wrong.”

NorthStar has said there is a contingency built into the Vermont Yankee job in case of unforeseen expenses. The company also has offered a $125 million “support agreement” as a backup.

In the new filings, however, state officials say they aren't confident that such a support agreement will be available or sufficient to cover decommissioning expenses.

The state also is concerned that the corporate entities set up to own and operate Vermont Yankee won't have assets beyond the decommissioning trust fund and the property itself.

“This raises a significant risk that the owner and operator could at some point have liabilities that outstrip its assets and could therefore choose to file for bankruptcy before site cleanup is complete,” officials wrote.

Such a scenario “could leave the state hosting a partially dismantled industrial site contaminated with radiological and nonradiological hazardous waste,” the state's filing says.

In addition to the state's financial arguments, officials also contend that NorthStar's plans require a thorough environmental review that the NRC hasn't yet undertaken.

Federal law mandates “an environmental impact statement, with a full list and analysis of alternatives, before the NRC can approve of the proposed license transfer and amendment and the significant shift in decommissioning methods that NorthStar proposes,” the state says.

At this point, the NRC isn't required to allow the state to intervene in its review or to grant the state a hearing.

NRC spokesman Neil Sheehan said the Atomic Safety and Licensing Board will consider Vermont's requests via a three-judge panel. That panel “will need to determine that the state has standing and that at least one of its contentions merits further scrutiny,” Sheehan said.

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