Vt. Yankee buyer NorthStar sold to investment firm

  • The containment building and the turbine building of the now decommissioned Vermont Yankee Nuclear Power Plant in Vernon, VT, January 25, 2017. Recorder Staff/Paul Franz

Recorder Staff
Tuesday, August 08, 2017

VERNON, Vt. — The company planning to buy and decommission the Vermont Yankee nuclear plant has itself been bought by a private equity firm.

NorthStar Group Holdings LLC and its subsidiary, NorthStar Group Services Inc. was purchased June 12 by J.F. Lehman & Company and recapitalized in partnership with Medley Capital Corporation. All are based in New York.

NorthStar, which describes itself as a leader in core decommissioning and remediation, has proposed purchasing Entergy Vermont Yankee LLC to decommission the shuttered plant. Approval of the purchase and reactor license transfer are pending before the Nuclear Regulatory Commission and the Vermont Public Utility Commission.

Scott State, NorthStar chief executive officer, said, “NorthStar’s recent recapitalization greatly increased our financial capacity and backing to better position NorthStar to support the work at Vermont Yankee and other decommissioning projects of its type. It should not have any effect on the specific details of our proposal to acquire Vermont Yankee for purposes of accelerating the decommissioning and decontamination process and safely returning the site to conditions for productive economic use decades ahead of schedule.”

Regulators, interveners and critics have questioned the financial capability of NorthStar — which has proposed partnering with AREVA, Waste Control Specialists and Burns & McDonnell to perform specialized services to have the plant demolished and the site cleaned up by 2026 for just under $500 million. Entergy had estimated after the plant shut down at the end of 2014 that decommission would cost about $1.2 billion and not be completed for as long as 60 years.

As part of the proceeding before the Vermont Public Utilities Commission, NorthStar vice president and chief financial officer Jeff Adix wrote that the infusion of capital “was part of an overall strategy to obtain additional resources and financing access to support the nuclear decommissioning business and other strategic initiatives. This transaction brought new capital into the company, de-leveraged its balance sheet, and extended the company’s existing senior credit agreement on more favorable terms.”

NorthStar hopes to complete the purchase of Entergy Vermont Yankee, with its plant, spent fuel and its purchase and decommissioning trust fund — now totaling about $580 million — by the end of 2018, contingent on Nuclear Regulatory Commission and state Public Utility Commission approval.

NorthStar has said it plans to use “performance-bonded, fixed-price contracts” as well as an approach of drawing money from the trust fund, with an additional $125 million from the corporation set aside as a buffer should the trust fund be insufficient for the overall decommissioning and cleanup.

Joseph R. Lynch, Entergy Vermont Yankee’s senior government affairs manager for decommissioning, refused to comment on the effect of the sale to Lehman.