State Involvement Key for Decommissioning Old Nuclear Plants

This article was written by Oilprice.com -- the leading provider of energy news in the world

The beginning of 2014 marks the final year of operation for the Vermont Yankee Nuclear Power Plant, ending a contentious battle between the state and the plant's owner. On December 23, Entergy (NYSE: ETR  ) and the state of Vermont announced a deal that will end all litigation surrounding the plant's operation, shut down the plant at the end of 2014, and lead to a compressed schedule to study decommissioning.

The conflict started when Entergy sought a 20-year license renewal to keep the Yankee plant operating into the 2030's. Vermont, however, requires approval from the state legislature for license renewal, the only state in the country that does so. Yet Entergy sued the state, arguing that authority over nuclear license renewals rests only with the Nuclear Regulatory Commission (NRC), and that federal authority trumps state authority.

Although a series of court decisions affirmed Entergy's position, the company ultimately decided to close the plant anyway, largely due the inability to compete with cheap natural gas. In August 2013 it announced that it would cease operations at the end of 2014.

The single-unit 605-megawatt Vermont Yankee plant accounts for about three-fourths of the state's electricity generation – the largest share in the country. Vermont also imports a significant quantity of hydroelectric power from Canada. Together nuclear and hydropower allows Vermont to rank lowest in greenhouse gas emissions in the nation.

Vermont has banned hydraulic fracturing and produces no natural gas. It imports some natural gas from Canada, but still consumes the second lowest amount in the country. That is set to change with the closure of Vermont Yankee. Vermont will increasingly rely on power plants from out of state, leaning more heavily on the New England grid. With the abundance of shale gas in states like Pennsylvania and Ohio, New England is adding pipeline capacity to bring that gas to market. Vermont has a goal of sourcing 75% of its electricity from renewable energy by 2032, but in the short-term, the Yankee closure means an increasing reliance on natural gas for Vermont, and higher emissions as a result.

The deal to close Vermont Yankee does offer a useful model for decommissioning as it tackles some of the key areas of conflict between the industry and the areas in which it operates. Entergy agreed to complete a decommissioningstudy in one year, much quicker than the four years allotted for by the NRC. It also agreed to move nuclear waste from onsite pool storage into dry casks within seven years, even though the NRC allows the company to keep waste in pools for sixty years. The deal also calls for Entergy to pay millions of dollars to the state for economic development for the county in which Vermont Yankee is located.  

One of the interesting features of the deal is that it allowed for active involvement of the state in shaping the path toward decommissioning and waste disposal, which is often absent elsewhere. To be sure, huge question marks remain, including how the state will makeup for the shortfall in electricity generation, and where funding for decommissioning will come from. But, the U.S. has thus far failed to implement a strategy to decommission old nuclear power plants. And with most of the 100 or so nuclear power plants obtaining 20-year license renewals, that conversation has been pushed off into the future. The Vermont Yankee deal, while incomplete, does offer lessons for decommissioning.

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