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Lawyer: Vt. Yankee deal lacks financial safeguards

  • The Vermont Yankee Nuclear Power plant along the banks of the Connecticut River in Vernon, Vt., photographed in 2013. The hearings over the sale of the plant ended this week. AP PHOTO



Vermont Public Radio
Thursday, May 17, 2018

Hearings on the sale of the closed Vermont Yankee nuclear plant ended on Monday as a witness for an environmental group testified the deal lacks protections for the public.

Michael Hill is a lawyer, insurance broker and expert in the field of environmental liability transfers.

He was brought in by the Conservation Law Foundation to support the group’s argument that the sale of the shuttered Vermont Yankee plant could pose problems for taxpayers and the environment as the site is cleaned up.

Hill testified to the Public Utility Commission by video link from Washington, D.C.

He said an additional insurance policy agreed to by the parties to the sale is still not enough to cover all the potential liability issues at the Vernon site.

“To present this to the commission, as something that should change its mind in terms of financial assurances, is in my opinion and speaking bluntly and under oath a terrible thing to do,” he said. “I think the commission would be very ill-advised to accept this as any sort of evidence of any sort of protection.”

NorthStar Decommissioning Holdings wants to buy the plant.

The company says it can dismantle and decommission Vermont Yankee faster than the timetable planned by Entergy, the current owner.

A recent settlement agreement between the state office that represents ratepayers, Entergy, NorthStar, and several interveners in the case, added more money and financial assurances to cover clean-up costs.

Under the settlement, NorthStar agreed to provide an initial $30 million contribution, plus payments totally an additional $25 million to an escrow fund that can be drawn on to pay for unanticipated costs.

The company also agreed to obtain a pollution liability policy with $30 million in coverage, and provide a $140 million “support agreement” that requires NorthStar’s parent company to provide additional funds as needed.

Entergy agreed to put in $60 million more to a site restoration trust fund, and it commits to providing an additional $40 million if by 2023 certain conditions covering decommissioning are not met.

But in testimony Monday, Hill was critical of the settlement package.

He sought to draw the distinction between what he called a clean, “baton” transfer and a “chickenpox” transfer which — as the analogy suggests — carries additional risk of liability.

James Porter, director of public advocacy for the state Department of Public Service, said the deal was improved with the additional insurance coverage.

“The MOU (memorandum of understanding) provides adequate financial assurances that decommissioning can take place as anticipated and on the timetable that’s anticipated,” Porter said.

And Michael Twomey, vice president for external affairs at Entergy Wholesale Commodities, said Hill’s testimony “reflected extreme positions that are at odds with all of the other parties.” “For example, he criticized the Public Service Board’s order shielding Vermont ratepayers from liability for decommissioning costs when Entergy bought Vermont Yankee in 2002,” Twomey said by email. “He also admitted that no commercial insurer offers the type of insurance policy that he says the PUC should require as a condition of its approval of the transaction.”