Wednesday, February 18, 2015

Entergy Uses Decommissioning Fund: State Officials Are Very Upset

Entergy Keeps Its Promises

In terms of decommissioning, Entergy has kept every one of its promises to the state of Vermont, and even gone beyond its promises.  Here's a list:

1) PSDAR: Entergy said it would finish its PSDAR (Post Shutdown Decommissioning Activity Report) by the end of 2014, although the NRC allows two years (till December 2016) for the report.  Entergy completed and released the PSDAR on December 19, 2014.
2) Fund Payment: Entergy signed an agreement with the state for the last few months of the plant's operation. This agreement required Entergy to send various payments ($2 million for Windham Country economic activity, for example) to the state.  All such payments have been made promptly.
3) Spent Fuel Management Loan: Entergy took out a $143 million dollar loan for spent fuel management, because the state wanted the fuel removed from the fuel pool very promptly.  Strictly speaking, decommissioning funds are not supposed to be used for spent fuel management.  The federal government is legally required to manage the spent fuel.

(Short pause here.  Time to let people get off the ground after the laughing fit. No, this post is not about Harry Reid. Are you standing up now? Onwards.)

Senator Harry Reid
 image from his website
Obtaining spent-fuel management funds from the federal government can be slow.  The company has to sue the federal government, win the lawsuit, and finally obtain the money. Entergy said it would remove spent fuel from the fuel pool very promptly.The state wanted the spent fuel out of the fuel pool ASAP or sooner than ASAP.  Entergy doesn't need to comply with "ASAP" but it is doing so.

Amazingly, Entergy has arranged to borrow $143 million dollars for spent fuel management and moving the spent fuel into dry casks. This borrowed money will be repaid after Entergy sues the federal government.  Note that taking out this loan was not in any agreement that Entergy signed with the state.   Entergy decided to do this to speed up the process.  It is possible that Entergy (with NRC permission) might have been able to borrow this money from the decommissioning fund itself.   Of course, that would have depleted the fund and slowed the decommissioning.

Entergy needs some reimbursement

Entergy has done lots of planning, written reports, taken the fuel out of the reactor, arranged loans.  All activities concerned with decommissioning the plant.  So it requested permission from the NRC to obtain $18 million from the decommissioning fund.  The NRC is in charge of the fund, and of decommissioning, and of ensuring that fund moneys are properly expended.

The state objected.  No, really, it did!  Vermont wants decommissioning very quickly but Vermont believes it has approval rights to determine exactly what the decommissioning funds are used for. In short: Vermont thinks the NRC needs state permission to release decommissioning funds. 

(Short pause here. Vermont has challenged the NRC's authority over nuclear power plants before.  On this subject, how many lawsuits has Vermont won?)

The state is upset!

DPS Commissioner
Chris Recchia
The first thing that I noticed about the state's attitude toward the withdrawal was a Vermont Digger article by John Herrick: Entergy Makes First Withdrawal from Decommissioning Fund.  In this article, Vermont Department of Public Service Commissioner Chris Recchia is quoted: “I am probably more OK with the actual withdrawal than I am with the process….I don’t get to see it in advance.”

Indeed, the attorney general of Vermont and others in state government wrote the NRC to object to this withdrawal. Their letter claimed that the state has the right to review expenditures of decommissioning funds, and the funds should not be released, pending state review of the request.

The state letter is posted in the Document Library of Entergy's VY Decommissioning website. The Document Library is a great boon to anyone who wants to follow this process.

Though the state letter is quite long, the main basis of the letter seems to be the  Memorandum of Understanding under which Entergy purchased the plant in 2002.  A great deal of that memorandum is about decommissioning funds.  The agreement states that, AFTER decommissioning is complete, Entergy must share 50% of whatever decommissioning funds are left over with the state. However, in the recent PSDAR, Entergy does not claim that there will be enough decommissioning funds available until the near the end of sixty years of SAFSTOR.  The funds will grow, and full decommissioning will commence close to 2070, when the funds have grown enough to support it.

In other words, concern with sharing excess funds with the state is a bit early and a bit theoretical!  However, the Memorandum agreement that excess funds "will be shared" seems to have given the state the idea that the state has authority over how the funds are disbursed.

But the state doesn't have authority. Yes, the state does have some limited say over how the funds are disbursed. If you look at item 7 in the Memorandum, the state must approve IF the funds are used for anything other than "qualified expenses."  There is no reason to believe that Entergy's first request to NRC was for not-qualified expenses.

My Conclusion: The Bank of Entergy is Still Closed

Attorney General William Sorrell
Once again, the state is over-reaching.  The state hasn't figured out yet that harassing Entergy with letters to the NRC and so forth will do no good.  The decommissioning funds are the only funds available now for Vermont Yankee (except for the loan, of course). The NRC determines if the decommissioning funds are being used correctly.

To me, this whole thing has unpleasant echoes of the time when the Vermont legislature tried to shut Vermont Yankee. They held a legislative vote  that was basically all about safety. Entergy sued the state, and the legislature reacted swiftly to the lawsuit.  They passed a law that Entergy had to pay the State's expenses in defending against Entergy's lawsuit.

Of course, that law was illegal and nobody in the Attorney General's office would even try to enforce it.  I wrote a blog post about this: Attorney General of Vermont Acknowledges "Shaky Concept" in Charging Entergy for Vermont's Expenses  The Attorney General acknowledged that the the law was unenforceable.  The Bank of Entergy was closed to the state.

It's time for the state to acknowledge that that Bank of Entergy is still closed. I hope they acknowledge this before taxpayers (like me) once again fund a hopeless exercise in which Vermont attempts to change the role of the federal government and the NRC.

These state-sponsored exercises are expensive.


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Meredith Angwin said...

There were a group of comments on this post that I felt were not appropriate. I have deleted those comments (including my own comments).

I have decided not to allow any further comments on this particular post.