Vermont Yankee Decomm Fund Declines Again

March 11, 2009 - McClatchy-Tribune Regional News - Bob Audette Brattleboro Reformer, Vt.
If you've been keeping an eye on Vermont Yankee's decommissioning
trust fund, it has had so many ups and downs in the past year you
might need
to take some anti-nausea medication.
In just the past year, the fund has lost $80 million, from $427
million in March 2008 to $347 million by the end of last month. Since
September 2007, the fund has lost $93 million.
When Entergy bought the plant in 2002, the amount in the fund
was $304
million.
Entergy, which owns and operates Yankee, has applied to the
Nuclear
Regulatory Commission to extend the plant's operating license from
2012 to
2032. Entergy must also receive approval from the state Legislature
and the Vermont Public Service Board.
Both the Legislature and the board have been holding hearings to
discuss the benefits to Vermonters of the plant's continued operation.
Of major concern to many legislators has been the status of the
decommissioning fund and whether any of the cost to clean up the
site could
fall to Vermonters.
Entergy has maintained the trust fund is adequate to pay for
decommissioning and has resisted attempts to ensure it is fully
funded prior
to extended operation.
The NRC has repeated that even if Entergy or one of its
subsidiaries files for bankruptcy, it would hold Entergy responsible for all
clean-up costs.
The decommissioning of Vermont Yankee nuclear power plant in
Vernon is expected to cost anywhere between $600 million and $1 billion.
From March to November 2008, the fund dropped steadily until
December, when it made back $12 million. But by the end of January, the fund
was down to $361 million and lost another $14 million in February.
The trust was funded by a surcharge on ratepayers prior to
Entergy's purchase. Since the purchase, ratepayers have not been obligated to
contribute to the fund, but neither has Entergy.
In November 2008, a consultant testified to the state that the
decommissioning fund "appears to be adequate" to fund all activities
to clean up the site in Vernon when the nuclear power plant shuts down.
However, warned the consultant, his conclusion is based on the
assumption that the plant will close in 2032. The consultant noted that if
the plant is shut down in 2012, with the movement of spent fuel
starting in 2017 or in 2057, the trust fund would not be adequate to begin
decommissioning until 2072.
William Jacobs, Jr., the vice president of Generation Support Services
for GDS Associates, Inc., also wrote that due to recent turmoil in
the stock market, there may be a need for "... potential additional
contributions to the fund ...."
If the plant receives a license extension, it could go immediately
into the clean-up phase in 2032 and would not require SAFSTOR, which
mothballs a nuclear site until a decommissioning fund is adequate
for clean up.  Jacobs recommended Entergy and regulators keep a close watch on
the fund and also suggested that Entergy consider "periodic
contributions."
"While this decline in the decommissioning trust fund is worrisome, it
is reasonable to believe that over the 60-year life of the
decommissioning fund, the earnings would approach historical rates," he stated. "However,
recent experience with the decrease in value of the decommissioning
trust fund and current performance of the equities markets demonstrates the need
for continuous monitoring of fund earnings and the potential for additional
contributions to the fund if conditions warrant."
Since Entergy acquired Vermont Yankee, the fund has grown at an annual
rate of 6.73 percent, but two scenarios involving closure in 2012 would
require growth rates between 12.05 and 13.53 percent, which Jacobs said were "unreasonably high fund earning rates because of the early large
expenditures required (by decommissioning)."
Other scenarios submitted by Entergy were reasonable, he wrote,
with
SAFSTOR alternatives requiring a growth rate of between 4.6 and 7.89
percent. Since 2002, the funds have shown a rate of return of 6.73  percent,
but recent changes in the stock market have lowered that rate of return, resulting in the losses mentioned previously.

Bob Audette can be reached at [email protected], or 802-254-2311, ext. 273.