Why would anyone want to buy a closed nuclear power plant, along with its long legacy of radioactive waste?
NorthStar Group Services, the company that wants to buy the closed Vermont Yankee nuclear power plant, says it's because success in Vermont could lead to similar work at other shuttered nuclear plants.
The company recently promised regulators it will have more money available to safely manage radioactive fuel and swiftly decommission the plant ahead of schedule.
Commercial nuclear plant decommissioning is a new field for NorthStar.
Neil Sheehan, spokesman for the Nuclear Regulatory Commission, has an insider’s perspective on why NorthStar is getting into the business.
“Well, obviously there are a number of companies that are interested in this field because it’s the only growth area in nuclear power right now,” Sheehan said.
The NRC is now reviewing NorthStar’s proposal to buy Vermont Yankee and decommission the plant.
Sheehan said a big part of NorthStar’s job is to convince regulators it has the technical expertise and the financial wherewithal to do the job even without much of a track record.
“They have not explicitly focused on commercial nuclear power plant decommissioning in the past,” Sheehan said. “This is a new animal for us, which is why we’re taking so much time to get this right.”
Vermont Yankee stopped making electricity in 2014. And as other aging nuclear plants shut down, companies like NorthStar see a robust business opportunity. Scott State, NorthStar’s CEO, said success in Vermont is critical because it will show what it hopes to accomplish elsewhere.
“It is a model for us," said State. "And we view Vermont as our first opportunity to demonstrate our capabilities in executing a project under this transaction structure."
The transaction involves NorthStar taking over the NRC license from Entergy, the plant’s current owner, along with its obligation to decommission the plant safely and manage spent fuel.
NorthStar focused much of its latest filing with the NRC on its plans to pay for and manage spent nuclear fuel at the site.
Part of the plan to pay for the storage involves seeking a settlement with the U.S. Department of Energy. The federal government had promised to provide a long-term repository for spent fuel but has yet to build a facility.
NorthStar CEO Scott State said other nuclear plant owners have obtained similar settlements.
“And we’ve simply looked at precedent of claims made to the Department of Energy for those costs,” he said.
State said he’s confident that the company’s latest financial package will assure both the NRC and state regulators. For example, the company has now added a $140 million support agreement to bolster money needed for decommissioning.
A key selling point for NorthStar is that it plans to decommission Yankee decades earlier than the 60-year timeframe planned by Entergy, the plant’s current owner.
“And once we begin active decommissioning, we’ll be on a track to have the site fully decommissioned other than the spent fuel storage facility in the mid-2020s,” he said.
State said decommissioning will begin shortly after the deal closes, which is expected by the end of the year.
The decommissioning trust fund – money that has been set aside to pay for the eventual dismantling of the plant and cleanup of the site – now totals about $570 million. NorthStar is obligated to use the money first for decommissioning but could also get some of that money if decommissioning costs less.
Sheehan, the NRC spokesman, said NorthStar likely has its eyes on the fund.
“They would be interested in pursuing that,” he said. “For us, it’s really a matter of: Can you successfully dismantle all the buildings, at least all the nuclear-related buildings at the site, and demonstrate to us that you have you done a radiological cleanup that complies with the federal regulations?”
And Sheehan noted, NorthStar has committed to additional site restoration, beyond the federal requirements, under an agreement with the state of Vermont.
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