Vermont Yankee decommissioning cost to reach $1.7 billion, but is there enough money?

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(Host) The cost of decommissioning the Vermont Yankee nuclear plant is expected to reach $1.7 billion. And there are new questions about whether the fund to pay for it is keeping pace with the growing cost.

But state and federal regulators aren’t worried. They say they’re monitoring the situation, and would require the plant’s owners to add more to the fund if it’s needed.

VPR’s John Dillon reports:

(Dillon) In the 1990s Vermont’s only nuclear power plant was owned by local utilities. And the state of Vermont had substantial oversight of the plant’s decommissioning fund. That’s the pool of money held in reserve to clean up and restore the site when the reactor is permanently shut down.

At the time, Richard Sedano was commissioner of the Public Service Department, the agency that represents consumers in utility issues. Sedano said the state’s goal was to make sure that Yankee had enough money on hand to decommission the plant when its license expires in 2012.

(Sedano) “There was the expectation that the money to be raised for decommissioning would be raised by the time of the end of the license, to make sure that the users of the power were also paying for the decommissioning  process.”

(Dillon) That’s not the state’s expectation any longer. Steve Wark is spokesman for the Douglas Administration’s Department of Public Service. He says there’s no legal requirement that Yankee have enough money on hand to begin decommissioning in 2012.

(Wark) “There has been discussion that people assumed that in 2012 that the fund would be sufficient to meet a decommissioning deadline. And there’s nothing in any of the records that indicate that that was ever the intent.”

(Dillon) Entergy, the company that owns Vermont Yankee, has not put any money into the fund since it bought the plant five years ago.

But Wark says the fund is growing as its investments appreciate.

(Wark) “When can the plant be decommissioned becomes a function of affordability, when the price of the fund matches the cost of decommissioning. And by our estimates that’s 2031.”

(Dillon) After the plant was sold, oversight of the decommissioning fund shifted to the Nuclear Regulatory Commission. The NRC requires reactor owners to file reports on the fund status. Yankee says it now has $440 million in the fund. NRC spokesman Neal Sheehan said that under commission regulations, Yankee should have $484 million set aside.

(Sheehan) “Based on their filing with us, they are behind, and they need to obviously keep a very close watch on the accumulation of funds. So that’s something that we’ll be paying very close attention to.”

(Dillon) But both the NRC and Yankee also say that the growth in the fund will eventually cover the increased cost. Yankee spokesman Rob Williams says ratepayers will be protected.

(Williams) “The decommissioning cost and the decommissioning fund growth are closely reviewed by state and federal regulators. And the Public Service Board order that approved the sale to Entergy ensured that ratepayers are not obligated for any further contributions to decommissioning, and that’s regardless to costs, whether they increase or not.”

(Dillon) Many of the questions about the decommissioning fund have been raised by Arnie Gundersen. He’s a nuclear engineer living in Burlington who has worked on decommissioning projects.

(Gundersen) “Well, the secret is in the assumption. In my opinion, the prudent thing to do would be to take an assumption of about 5 percent rate of growth – after tax – in the fund and a 3 percent rate of growth in inflation. And if that’s the case, it’s about 2060 before there’s ever a chance to dismantle the plant, or another … 55 more years.”

(Dillon) Vermont regulators assume that the fund will grow faster, and that decommissioning costs won’t increase as much. That’s how they get to the prediction that there will be enough money to dismantle the plant by 2031.

For VPR News, I’m John Dillon in Montpelier.


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