Power company Entergy on Friday completed the sale of its shuttered Vermont Yankee nuclear power plant to NorthStar Group Services, a deal more than two years in making.
The announcement closes a first-of-its-kind deal for managing post-closure cleanup of these facilities, with the owner passing full responsibility for decommissioning, site restoration, and spent fuel management to another entity. This method appears to be catching on, with two similar deals already awaiting federal regulatory approval.
NorthStar has said it can complete decommissioning at Vermont Yankee as early as 2026, and no later than 2030, at a cost of $495 million. The decommissioning trust fund for the site, which has now passed to its new owner, held $506.7 million as of Oct. 31, 2018.
“We’re full-bore now, we’re there doing the decommissioning we all signed up for,” NorthStar CEO Scott State told RadWaste Monitor on Friday.
Entergy retired the boiling water reactor in the town of Vernon in December 2014 after 42 years of service. Like other plant operators, it cited high costs and an energy market balanced against nuclear power.
In November 2016, the New Orleans-based company said it would sell the facility to NorthStar, a decommissioning and demolition specialist headquartered in New York City.
NorthStar would pay $1,000 and take over management of the property, including the trust fund that all nuclear plants must carry to pay for decommissioning once their operational life ends. The idea is that NorthStar will eventually earn a profit by retaining some portion of the trust once it completes decommissioning.
The deal required state and federal regulatory approval. In October, the U.S. Nuclear Regulatory Commission authorized the transfer of Entergy’s licenses for the plant’s reactor and spent fuel storage pad. Last month, the Vermont Public Utility Commission issued an updated certificate of public good for the sale.
At that point the companies needed to wrap up a few administrative measures and wait to see if anyone would appeal the VPUC decision by the Jan. 7 deadline, Michael Twomey, vice president for external affairs at Entergy Wholesale Commodities, said Friday. There was no appeal.
“Prior to closing, both parties completed the various commercial commitments set forth in their agreement and in the regulatory approval orders,” Twomey said by email.
Both approvals required additional financial and performance commitments beyond the initial agreement between Entergy and NorthStar.
In the state proceeding, the companies in March 2018 agreed to a memorandum of understanding with several Vermont government agencies and a number of other organizations. Among the terms of the agreement: NorthStar’s financial assurance package will encompass the plant’s decommissioning and site restoration trusts, assumed from Entergy, along with $400 million in performance bonds or corresponding assurance for subcontracted operations; and a $140 million support agreement payable to the Vermont Yankee Decommissioning Trust.
Conditions of NRC approval included NorthStar’s demonstration that it has adequate insurance for the site; its site-specific subsidiaries at Vermont Yankee cannot in any way undercut the $140 million support agreement without agency authorization; and the company must secure a $4.3 million performance bond if it cannot reach agreement with the Department of Energy on reimbursement for spent fuel management costs by Jan. 1, 2022.
Thirteen Entergy employees remained at Vermont Yankee when the sale closed. Two have moved to other company sites, four have left the company, and seven are shifting to NorthStar, according to Twomey.
NorthStar is working with three partner companies to carry out decommissioning: nuclear company Orano USA for reactor vessel segmentation and used fuel management support; Waste Control Specialists for packaging, transport, and disposal of radioactive waste; and Burns & McDonnell for engineering and regulatory support.
Within a couple months, 60 to 65 workers from the companies will be on-site, State said. The maximum number of workers is expected to reach 150 as decommissioning advances.
NorthStar and its partners have spent a year preparing for decommissioning. They expect to mobilize within 30 to 45 days to begin removal of the reactor vessel and reactor segmentation, State said. While a more specific schedule for completing decommissioning won’t be known for about 12 months, NorthStar is confident it can complete work closer to 2026 than 2030, he added.
The company will remain responsible for the plant’s used reactor fuel, now in 58 dr- storage casks, until the Department of Energy arranges for an off-site storage or disposal site.
NorthStar and Orano are partnering in Accelerated Decommissioning Partners to pursue additional nuclear facility acquisitions in this business model. To date, the venture has not announced any deals.
Meanwhile, energy technology firm Holtec International has already announced agreements to buy three plants for decommissioning: Exelon’s Oyster Creek Nuclear Generating Station in New Jersey, which closed in September 2018; Entergy’s Pilgrim Nuclear Power Station in Massachusetts, due to shut down by June 1; and Entergy’s Palisades Power Plant, which is expected to cease operations in 2022.
Holtec and the energy companies have already filed license transfer applications with the NRC for Oyster Creek and Pilgrim.
The Vermont Yankee sale is consistent with Entergy’s intention to exit its merchant nuclear power business. “The VY transaction establishes a precedent for a post-shutdown sale of a nuclear plant,” the spokesperson said.
Entergy also plans to sell its Indian Point plant to a decommissioning provider after its two reactors are retired in 2020 and 2021.
