Vermont Yankee Wants To Use Decommissioning Fund To Pay Its Property Tax

Oct 29, 2015

Entergy Vermont Yankee wants to use money from its decommissioning trust fund to pay a property tax bill it received from Vernon.

When VY was generating power the property was not included on Vernon's grand list of local property taxpayers and Entergy paid an electric generation tax which went into the state education fund.

With the plant now shut down, the Department of Taxes informed Vernon that the property would have to be put on the grand list and Vernon sent Entergy a tax bill earlier this month.

Entergy owes the state about $2.5 million, and if the company refused to pay the bill Vernon taxpayers would be on the hook for paying the money into the statewide education fund.

Entergy Spokesman Martin Cohn says the company is going to use about $1.2 million from the decommissioning fund to pay the first installment on the tax bill before the Nov. 4 deadline.

Cohn says Entergy is permitted to use the decommission fund to pay property taxes under Nuclear Regulatory Commission guidelines

"The fact is, when we were an operating plant we paid property tax, and now that we're decommissioned we're going to be paying property tax," Cohn said. "The difference being, when you're not operating, the only place to pay that money is from the nuclear trust fund."

Entergy has been battling the state over the company's use of its decommissioning fund.

Entergy wanted to amend its license and eliminate a requirement that it provide a 30-day advance notice when it was withdrawing money from the decommissioning trust fund.

The state challenged Entergy's request, and the company ultimately gave up its fight.

"The fact is, when we were an operating plant we paid property tax, and now that we're decommissioned we're going to be paying property tax. The difference being, when you're not operating, the only place to pay that money is from the nuclear trust fund." - Martin Cohn, Entergy spokesman

The request to withdraw money for the education tax bill was included in the 30-day advance notice Entergy wrote to the NRC on Oct. 27.

The company says  it will be taking $6.6 million out of the decommission fund to pay for emergency planning contractor costs, insurance and property taxes, among other costs associated with decommissioning the plant.

The fund has about $600 million in it.

It is expected that Entergy will need up to $1.6 billion to fully decommission Vermont Yankee over the next 40 years.

Vermont House Speaker Shap Smith says Entergy should not be using the fund to cover its tax payments.

"Entergy's proposal undermines the fund's purpose and threatens to delay the restoration of the Vernon nuclear site." - House Speaker Shap Smith

“I am deeply concerned that Entergy has proposed to tap the decommissioning trust fund to pay its bills," Smith wrote in press release. "The decommissioning fund was established for the sole purpose of paying for the cleanup and restoration of the grounds where Vermont Yankee operated. As speaker, I have repeatedly cautioned against misuse of this resource. Entergy’s proposal undermines the fund’s purpose and threatens to delay the restoration of the Vernon nuclear site. I call on Entergy to reconsider its position and stop raiding the fund to pay its bills.”

In an email messageNRC Spokesman Neil Sheehan said, "the NRC staff's reviews are ongoing with respect to Entergy's use of money from Vermont Yankee's decommissioning trust fund."

Cohn said the company would probably not dispute the tax, though he said the company was looking into the legitimacy of the new payment for the company.

"In our MOU it said that we wouldn't pay any new taxes and the state is saying, even though you never paid it, it's not a new  tax, the education tax has existed," Cohn said. "So, yes, the education tax has existed, but they're also acknowledging that this is the first time we are paying it."