Yankee fund posts another loss
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By Susan Smallheer Herald Staff - Published: November 19, 2008
MONTPELIER — The trust fund that will pay for the eventual shut down and cleanup of Vermont Yankee nuclear plant lost another $33 million last month, bringing the once flush $440 million fund down to $364 million.
It was the second straight month that the fund posted a significant drop.
A little more than a year ago, on Sept. 20, 2007, the fund amounted to $440 million; it dropped to $427 million by March 31, $397 million by Sept. 30 and a $33 million drop in one month to $364 million. Overall, the fund has dropped about 18 percent in the past year.
The money had been set aside by the previous owners of the Vernon reactor from a surcharge on electrical bills. Since 2002, when Entergy Nuclear bought the plant, it has not made a contribution to the fund, letting the fund grow in the bond and stock market.
Stephen Wark, spokesman for the Department of Public Service, said the state remained concerned about the continuing drop in the fund, but he noted that the overall decrease was less than some funds were sustaining in the overall financial turmoil facing the country and the world.
"The state will continue to remain vigilant," Wark said, noting that the state had requested monthly updates from Entergy Nuclear about the status of the fund, rather than wait for annual reports. "But the fund is doing a lot better than some private funds," he said.
Wark said the state would be seeking a requirement that the fund be "topped off" during upcoming hearings before the Vermont Public Service Board on whether Vermont Yankee can keep operating for another 20 years. He said the state wanted the fund to be fully funded so the plant could be shut down and cleaned up immediately in 2012, rather than wait for the fund to grow.
Entergy Nuclear plans to put the reactor into a temporary shut down, letting the fund grow for 60 years before fully dismantling the plant and cleaning it up.
Wark refused to say what level funding the department would be seeking from Entergy, since estimates vary on exactly how much money would be needed to shut down and clean up the reactor.
Estimates range from $875 million to $1.2 billion, but he said the department had decided to bring the issue up during those hearings, rather than negotiate some settlement with Entergy for new potential power agreements.
"The fund is invested conservatively and we expect over time that the fund will continue its long-term growth such that we can fully fund decommissioning. The fund is overseen by the NRC and so are the decommissioning cost estimates," said Entergy Nuclear spokesman Robert Williams in an e-mail. "The fund fully meets the NRC's requirements. Ratepayers no longer have any obligation for decommissioning. That was a major sale benefit to the state."
Last month, in a filing with the NRC, Entergy said even if the reactor shut down in 2012 when its current license to operate expires, it wouldn't clean up the plant for another 60 years, starting the process in 2067, finishing in 2072. The company said it would have to contribute $60 million to the fund — but in 2026.
But the company's estimates were based on a decommissioning fund at $440 million, and the cost of cleanup and dismantling was put at $875 million.
The NRC hasn't approved Entergy's plan.
Wark said the Public Service Board has to issue Entergy Nuclear a certificate of public good before the state approves the license extension. The issue also has to go before the 2009 Legislature.
He said he expected Entergy to argue that there are three key economic benefits to the state from Yankee's continued operation: a financially beneficial power contract, the profit-sharing provision for the state's two largest utilities and the traditional economic benefits of being a large employer.
Contact Susan Smallheer at susan.smallheer@rutlandherald.com.
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