NRC criticizes Vermont Yankee plan for funds

Federal regulators have turned down the Vermont Yankee nuclear plant's plan to use some of the money from its decommissioning fund for management of the plant's nuclear waste, and say the plant has been overestimating the fund's likely earnings.

Entergy had been hoping to use some of the money from its decommissioning fund _ already hundreds of millions of dollars short of what it needs, by some estimates _ to cover the costs of storing and disposing of highly radioactive spent fuel from the Vernon reactor.

But in a notice made public Thursday, the Nuclear Regulatory Commission said Entergy failed "to provide reasonable assurance the spent fuel management withdrawals would not inhibit the ability of the licensee to complete radiological decommissioning."

It ordered Vermont Yankee to "provide a revised spent fuel management plan within 90 days."

"Radiological decommissioning" refers to the process, after the plant shuts down for the last time, of dismantling Vermont Yankee and removing its radioactive components.

Decommissioning has been a hot issue in recent months, with the Vermont Legislature this year passing _ and Gov. Jim Douglas vetoing _ a bill that would have required Vermont Yankee owner Entergy Nuclear to ensure there would be enough money in the decommissioning fund before being allowed to sell Vermont Yankee and four other nuclear plants to a newly created company.

Unlike the group of New England utilities that owned Vermont Yankee until 2002, Entergy has not been making regular deposits into the decommissioning fund since the sale. The NRC reported that there was about $440 million in the fund as of Dec. 31, while other estimates put the cost of decommission at $800 million or more.

The NRC also told Entergy that it had run afoul of rules requiring it to get a separate regulatory review if it wanted to estimate growth in the decommissioning fund at more than 2 percent a year.

"A licensee may use a credit of greater than 2 percent and only up to the time of license expiration, if the licensee's rate-setting authority has specifically authorized a higher rate. This is not the case for Entergy VY," the NRC said.

Vermont Yankee spokesman Robert Williams said plant officials had not had time to review the NRC's decision. "We will review the NRC issues and ensure we meet all regulatory and financial obligations regarding the decommissioning trust fund," Williams said in an e-mail.