The 40+ year-old Vermont Yankee Nuclear plant will shut down by Q4 2014 due to high cost structure and low natural gas and wholesale energy prices.
On August 27, 2013, Entergy Corporation announced plans to close and decommission the Vermont Yankee Nuclear Power Station in Vernon, Vermont in Q4 2014, after the current fuel cycle. Once the plant ceases power production and enters the safe shutdown phase, the Nuclear Regulatory Commission (NRC) will oversee the decommissioning process.
Vermont Yankee Nuclear Power Station (NRC)
Citing the financial factors behind its decision, Entergy highlighted the shale gas impact, which has resulted in sustained low natural gas prices and wholesale energy prices. According to Entergy, high cost structure and regulation-related financial impacts also pose significant challenges to the relatively small-sized unit. Since 2002, the company spent more than $400 million for safe and reliable plant operation. The company also cited inadequate compensation to merchant plants due to wholesale market design flaws that have resulted in artificially low energy prices.
According to Entergy, operating through Q4 2014 will provide sufficient time to prepare NRC filings and facilitate safe and orderly shutdown. To end operations by the end of 2014, the company must have $566 million to meet NRC’s minimum decommissioning finance assurance requirements. As of July 31, 2013, the Vermont Yankee decommissioning trust had approximately $582 million balance, excluding Entergy Corporation’s $40 million guarantee to meet NRC’s 2009 financial assurance requirements. NRC filings will determine other financial assurance requirements and funding for spent fuel management until the federal government takes control and removes the fuel from the site.
Vermont Yankee began commercial operation in 1972. After the shutdown, the plant will be defueled and placed in SAFSTOR phase, whereby it will be secured, monitored, and stored to ensure containment and decay of all remaining radiation. The company will establish an organization to manage the decommissioning process.
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