Corporation Promises "Financial Mechanism" to Cover Fund Shortfall

Rutland Herald     Aug. 20, 2009

Entergy: Yankee shortfall less short

By Susan Smallheer STAFF WRITER

BRATTLEBORO — Entergy Nuclear has claimed the $87 million gap between what it has saved for the decommissioning of Vermont Yankee and what it needs to do the job has shrunk to $58 million.

In a filing with the Nuclear Regulatory Commission, the owner of the Vernon reactor said it would provide federal regulators with an unspecified "financial assurance mechanism" later this year to prove it was good for the money.

Entergy said the value of the decommissioning fund, which had fallen to $372 million in December, had climbed back to $402 million in July. The NRC says Entergy Nuclear should have $513 million by 2012.

Robert Williams, spokesman for Entergy Nuclear, said the financial mechanism was unspecified at this time, but he said it would ultimately conform to NRC requirements.

"It's not specified at this point. Our letter says it will conform with NRC requirements. It will either be a single mechanism or a combination," Williams said.

A lot of the uncertainty about the costs of decommissioning, Williams said, is because Entergy doesn't know when the federal Department of Energy will finally take control of the used high-level radioactive waste – the used nuclear fuel from the reactor – that is stored at the Vernon reactor site, either in the spent fuel pool or in five concrete-and-steel casks outside the plant.

The status of Vermont Yankee's decommissioning fund will be discussed at a meeting Thursday morning at NRC headquarters, according to Neil Sheehan, spokesman for the NRC.

The NRC has determined that Entergy Nuclear needs $513 million to perform the radiological cleanup when the reactor is finally shut down.

But Entergy will need to come up with a lot more than the $513 million, because the NRC standard for cleaning up the nuclear site is not as strict or ambitious as Vermont wants. Those costs are estimated at anywhere from $800 million to $1 billion, according to filings with state regulators.

Stephen Wark, spokesman for the Department of Public Service, said the state was committed to the Vernon site being returned to a "green field," the standard that the original owners of Vermont Yankee agreed to back in the late 1960s, when the plant was built.

"Vermont requires a greener, cleaner level," Wark said, adding that he didn't know the current cost for that higher standard.

Exactly how Entergy will provide funding for that level of cleanup, as well as eliminating the long-term mothballing of the reactor that Entergy wants to do, is part of the negotiation process over the future of the plant, Wark said.

Wark said issues remaining between the state and Entergy isn't just the power contract, but how Entergy is going to cover the additional Vermont-standard decommissioning costs, as well as the issue of SAFSTORE, the federal name for the long-term mothballing of the plant.

Under SAFSTORE, Yankee would be shut down, but dismantling and cleaning up of the site would be delayed for decades to allow the decommissioning fund to grow.

Entergy Nuclear wants to keep Vermont Yankee operating for 20 years beyond its original shutdown date of 2012. It has all but secured federal approval for another 20 years of operation, but it still has to obtain the approval of both the Vermont Legislature and the Vermont Public Service Board.

So far, the Douglas administration has refused to formally endorse continued operation, saying there is no signed power contract between Entergy and the state's utilities for Yankee's power.

susan.smallheer@rutlandherald.com