Nuclear Watchdogs Wary Of Proposed Deal For Vermont Yankee

Jan 12, 2017

A New York firm says it can decommission the Vermont Yankee nuclear power plant for far less money, and in much less time, than previously projected. But nuclear watchdogs say the “seductive” proposal needs intense scrutiny before regulators allow the deal to proceed.

After 42 years in operation, the Vermont Yankee nuclear power plant shut down for good at the end of 2014. Until recently, it looked like the facility, and all of its radioactive waste, might remain in place for another 60 years. But a New York company called NorthStar Group Services says it’s prepared to complete that task in about a decade.

News of this significant development in the tortuous Vermont Yankee saga arrived via press release on Nov. 8, when Entergy Nuclear Vermont Yankee, the company that owns the Vernon plant, announced it had entered into an agreement to sell the nuclear facility to NorthStar.

For longtime critics of the nuclear plant, the deal was intriguing: Entergy has previously said that it might not decommission the plant until 2075. NorthStar says it’ll be done with the job by 2030.

“Don’t get me wrong, I would like to know that there’s a wholly competent dream team that’s coming to the rescue here in Vermont,” says Chris Williams, an organizer at Citizens Awareness Network.

But, Williams says, “before we celebrate, we have to ask certain significant questions.”

"I understand how seductive it is for the state of Vermont to want to believe that this will work." — Deb Katz, with the Citizens Action Network

Deb Katz is also a member of the Citizens Awareness Network, a group that has been following nuclear issues in New York and New England for more than two decades. Katz has one question in particular.

“If Entergy didn’t feel it had enough money in the decommissioning fund to clean up the site in a reasonable period of time, why should we believe that NorthStar could be able to?” Katz says.

Williams and Katz say they’re worried the answer involves cutting corners in ways that favor profit margins for the new owners over environmental responsibility to Vermont.

Entergy had forecast decommissioning costs in excess of $1.2 billion. NorthStar says it can do the job with the $575 million that’s in the decommissioning fund now, plus whatever gains that fund accrues between now and 2021, which is when the company says it would start in on the job.

Scott State, CEO of NorthStar, says that with annual revenues of $650 million, NorthStar is the largest deconstruction and demolition firm in the world. He says the company’s specialized know-how in energy-facility decommissioning will allow it to enjoy financial efficiencies unavailable to Entergy.

“We’re not looking to take shortcuts,” State told the Vermont Nuclear Decommissioning Citizens Advisory Panel at a meeting in Brattleboro on Dec. 1. “We’re not looking to do this project in a way that’s unprofessional or otherwise not industry standard.”

The Citizens Advisory Panel was set up by the Legislature to oversee decommissioning of Vermont Yankee. State assured its members last month that NorthStar is up for the job.

"We believe that it's really a nuclear decommissioning dream team that we've been able to put together here." — Scott State, CEO of NorthStar Group Services

While NorthStar hasn’t ever handled a nuclear plant that produces electricity, it has decommissioned smaller reactors at academic facilities. It’s also decommissioned massive coal-fired generation plants. And Scott says the firm has brought on other partners, notably a French company called Areva, that have long nuclear-decommissioning track records.

“We believe that it’s really a nuclear decommissioning dream team that we’ve been able to put together here,” State said last month.

Chris Williams and Deb Katz aren’t convinced. They say the fact that NorthStar hasn’t ever decommissioned an electricity-generating nuclear power plant should give regulators pause. They’re also worried about how intensive a radioactive remediation job NorthStar is prepared to do.

The company’s proposal would allow for maximum background radiation levels of 15 millirems when the decommissioning is complete. That’s below the 25 millirem standard used by the federal government, as well as the 20 millirem cap in place under Vermont regulations.

But it’s higher than the 10 millirem standard that was used at a previously decommissioned plant in Massachusetts.

Katz says she’s worried about what exactly NorthStar will do with high-level radioactive waste at the Vernon plant. She says she fears NorthStar plans to save on overall costs by transporting that waste to a temporary holding facility in Texas.

“And this is the most dangerous waste that we’ve ever created. It should only be moved once, and it should in fact be moved to a deep geological site that meets the standards that are necessary to protect it from the environment,” Katz says.

The other major concern for Williams and Katz: what happens if NorthStar runs out of money before the job is complete?

If the deal goes through, Vermont would be the first “merchant” nuclear plant to go through the decommissioning process. Utility-owned plants have seen decommissioning funds run dry before the process is complete, but it’s a problem that’s been solved by imposing a surcharge on ratepayers’ energy bills.

That option isn’t available at Vermont Yankee.

“We don’t want be in a position where we’re left with a half-baked, half-done project,” Williams says.

State assured members of the Citizens Advisory Panel that the deal will be structured in a way that would avert that kind of scenario. He says the decommissioning process will be compartmentalized into 900 discrete tasks. Each task will be assigned a dollar value ahead of time, and if NorthStar can’t complete the task under the agreed-upon amount, then it will have to pull from its own resources – not the decommissioning fund – to complete the task.

State, a nuclear engineer who would serve as chief nuclear officer for the Vermont Yankee project, if it goes through, says past decommissioning experiences offer a cautionary tale.

“And at the end of the day, everybody looks around and says, ‘Hey, we’re out of money, but we haven’t gotten rid of this plant yet,’” State says. “With our approach, that’s not going to happen.”

NorthStar has also agreed to enter into a $125 million “support agreement,” money that NorthStar would have to disburse for project completion in the event the fund did run dry.

Katz says she worries the allure of a quick decommissioning could cloud regulators’ judgment.

“And it’s hard, because I understand how seductive it is for the state of Vermont to want to believe that this will work,” Katz says.

With 40 other nuclear power plants set for decommissioning in the near future, Williams and Katz say the process in Vermont is critical.

“And what happens at Vermont Yankee and what happens before the Public Service Board and the NRC with regard to Vermont Yankee are going to be pointed to in this process,” Williams says.

State says his company has a self-interest in doing the job well. NorthStar will be the new owner, after all.

“And when we get done with the site we’d like it to be worth something. We’d like it to have a future use, and we’d like to put it to that future use,” State says.

The federal Nuclear Regulatory will begin hearings to review the proposed sale later this month.

This story was edited at 8:50 a.m. on 1/13/2016