Nuclear power plant decommissioning fund should not be cancelled, NRC said

The U.S. Nuclear Regulatory Commission (NRC) told Entergy Corp. (NYSE: ETR) not to cancel a $40 million guarantee for the 605 MW Vermont Yankee nuclear power plant’s decommissioning fund.

On April 29, Entergy told the NRC that since the commission approved a 20-year license extension, the decommissioning fund would accrue enough funds to assure adequate clean up of the site when the plant shuts down in 2032. Entergy said it would no longer need to provide a parent company guarantee. The fund currently has $211 million over the minimum requirement without the parent company guarantee.

NRC responded in a letter dated August 10 saying external factors, including a lawsuit Entergy filed against the state of Vermont, could make the requested cancellation a hasty decision. The NRC said that if Entergy cancels the guarantee, it will be required to provide adequate financial assurance within 90 days. When the litigation is resolved, Entergy may resubmit notice of its intent to cancel the guarantee.

“Vermont Yankee may no longer operate after March 21, 2012,” the letter said. “Because of the uncertainty surrounding the plant’s future, cancellation of the guarantee at this time would be premature.”

In early 2010, Entergy agreed to fund a $40 million parental guarantee to insure the plant’s cleanup fund would meet NRC requirements. The guarantee followed the recession during which the decommissioning fund sustained an $84 million loss.

The Vermont Yankee decommissioning fund was established by a fee charged to ratepayers and supplemented by Vermont Yankee Nuclear Power Corp. Since Entergy bought the plant in 2002 however, the company has not contributed and has relied on investment returns to fund its growth.

In a press release, Gov. Peter Shumlin accused Entergy of trying to cut the state out of the process.

"Once again Entergy has tried to avoid taking full responsibility for its actions and sought to cut the state process out of the equation,” Shumlin said. “I'm deeply concerned that Vermont Yankee doesn't have the money to decommission the plant, including closing the facility and cleaning up the site, quickly and efficiently when it shuts down on schedule, and I'm grateful that the NRC hasn't let Entergy off the hook."

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