Milestone agreements for Vermont Yankee transfer

07 March 2018

Affiliates of Entergy Corporation and NorthStar Group Services Inc have signed agreements with State of Vermont agencies and other parties on terms for the sale approval of the shut-down Vermont Yankee nuclear power plant to NorthStar. The sale will enable the accelerated decommissioning of the single-unit boiling water reactor plant.

Vermont Yankee (Image: Entergy)

Entergy's affiliates and NorthStar announced on 3 March the signature of a settlement agreement and memorandum of understanding (MoU) on the terms for approval of the proposed sale of Entergy Nuclear Vermont Yankee, the entity that owns plant. The agreements were signed with Vermont's Department of Public Service, Agency of Natural Resources (ANR), Department of Health, and Attorney General's Office. They have also been signed by the Town of Vernon Planning and Economic Development Commission, the Windham Regional Commission, the Abenaki Nation of Missisquoi and the Elnu Abenaki Tribe, and the New England Coalition on Nuclear Pollution (NEC).

Entergy in November 2016 announced the sale of Vermont Yankee to NorthStar. NorthStar has committed to start decontamination and dismantling work at Vermont Yankee by 2021 and to complete decommissioning and site restoration - with the exception of the Independent Spent Fuel Storage Installation (ISFSI) - by 2030, 45 years sooner than under Entergy's original decommissioning schedule for the plant. The companies said the settlement agreement and MoU are significant milestones towards the approval of the proposed transaction by the Vermont Public Utility Commission (PUC) and the Nuclear Regulatory Commission (NRC).

As part of the MoU and settlement agreement, NorthStar has agreed to provide additional financial assurances for the project. These include an increase in NorthStar's support agreement from USD120 million to USD140 million; the establishment of an interest-bearing escrow account initially funded with USD30 million, eventually increasing to USD55 million through additional contributions from NorthStar and from which withdrawals may only be made with the approval of the Department of Public Service and ANR; a USD25 million subcontractor guarantee; and USD130 million of pollution legal liability insurance.

Entergy has agreed to bring the balance of the Site Restoration Trust, established through a 2013 settlement agreement with the State of Vermont, to USD160 million. This is expected to entail a contribution of about USD30 million, the company said. It has also conditionally agreed to contribute USD40 million of proceeds from Department of Energy litigation expected in 2023.

The parties have agreed to detailed site restoration standards including key terms on: radiological dose limits; compliance with ANR regulations and state radiological health rules; groundwater sampling of non-radiological contamination and characterisation of underground structures and fill materials used on site; the standards to which different segments of the property must be remediated; the removal of all above-ground structures with the exception of the ISFSI and certain other structures; and the removal of all underground structures to agreed depths.

The parties have now submitted an MoU to the PUC reflecting these increased financial assurances and restoration standards. PUC approval of the MoU is a pre-condition to the closing of the transaction between Entergy and NorthStar, and the companies have requested a decision from the commission by 31 July. The transaction is also subject to approval by the NRC. As part of the settlement agreement, the State of Vermont and the NEC are to withdraw requests for hearing in the NRC proceeding.

The companies anticipate the transaction will close by the end of this year, if all regulatory approvals are obtained.

Vermont Yankee, near the town of Vernon, entered commercial operation in 1972. Entergy purchased the plant from the Vermont Yankee Power Corporation in 2002, but in 2013 announced its closure for economic reasons. The 600 MWe plant was permanently shut down on 29 December 2014.

Under the proposed transaction, NorthStar intends to begin decontamination and dismantlement of the plant by 2021 and to complete the decommissioning and restoration of the site by 2030. The company says these dates could potentially be brought forward to 2019 and 2026, respectively.

Researched and written
by World Nuclear News