Vermont Yankee says new decommissioning cost estimate is $1.24 billion

Officials with the soon-to-close Vermont Yankee nuclear plant said Friday it could cost up to $1.24 billion to decommission the reactor, and that they currently have about half that much in a fund dedicated to paying for that work.

The figure was contained in a "site assessment study" drafted by officials at the Vernon plant, which will cease operations at the end of this year.

Bill Mohl, president of Entergy Wholesale Commodities, a subsidiary of Vermont Yankee owner Entergy Corp., said the tally is based on federal Nuclear Regulatory Commission rules allowing a reactor owner to mothball the plant for up to 60 years to allow radioactive components to become less so and to allow the fund to grow.

But Mohl also said Entergy hopes not to take that long to dismantle Vermont Yankee and restore the site. Rather than getting the job done in 2075, as would be allowed by the NRC, Mohl said Entergy hopes to finish the work in the 2030s or 2040s, depending on how fast the fund grows.

A key to achieving that goal is a plan for Entergy to lend itself money to store the highly radioactive spent fuel from Vermont Yankee, and then pay itself back from an expected settlement of a lawsuit against the U.S. Department of Energy, which has failed to meet a long-standing promise to take possession of spent nuclear fuel and ship it to a national storage site.

Mohl cautioned that dollar figures and dates are based on assumptions about investment growth. For example, he said, the NRC assumes that if prudently invested, decommissioning funds will grow about 2 percent faster each year than the costs of decommissioning reactors.

"When you actually can begin this process is based on a wide range of outcomes, cost estimates and how they increase over time and how your funds grow over time," Mohl said. He added that the Vermont Yankee decommissioning fund had grown from about $427 million in January 2010 to about $642 million as of Sept. 20.

Nuclear critics, meanwhile, questioned the propriety of using decommissioning funds to pay for spent fuel management, something that federal law originally contemplated as separate from decommissioning. One also warned that costs might appear unexpectedly.

Arnold Gundersen, a former nuclear industry executive who lives in Burlington and has been an outspoken critic of Vermont Yankee, raised the first issue.

Barrett Green, director of decommissioning at Vermont Yankee, responded to the Gundersen's concern by pointing to an agreement the state and Entergy entered in 2002. That agreement said if there were extra funds left in the decommissioning fund, they would be shared by the company and electric ratepayers, "less those funds necessary for management of spent nuclear fuel."

As for possible unexpected costs, raised by Raymond Shadis of the nuclear watchdog group New England Coalition, Mohl said the plant tried to account for every known risk.

"We provided people with the very best knowledge we have with what the site conditions are at this point," he said.