License transfer for Entergy has Pilgrim critics wary
Federal regulators have approved a plan by the
While Entergy said the change would have no impact on operations, critics say it would reduce the pool of money available to cover the cost of accidents at Pilgrim or its eventual decommissioning.
The transfer is not yet a done deal. While the Nuclear Regulatory Commission staff approved it, it still requires regulatory approvals from the US Securities and Exchange Commission and from state regulators in New York and Vermont, where other plants are affected.
Although the Massachusetts attorney general's office has expressed some concerns about the transfer, it failed in its attempt to intervene in the case at an earlier review stage.
Entergy officials say the ownership restructuring is a just a way to smooth out the company's functioning in two different regions: the South, where power companies are still regulated by states, and the Northeast, where energy suppliers have been deregulated.
"It will be transparent," Pilgrim spokesman David Tarantino said of the company's restructuring. "There won't be any impact. The corporation will still provide grants to charitable organization, will still pay property taxes, and keep people informed of what's going on." As its host community, Plymouth receives annual tax payments from the plant.
The NRC offered its support for Entergy's plan. The staff found that the transfer would not mean a shortage of cash when it comes time to shut down Pilgrim for good, said NRC spokesman Neil Sheehan. The cost is estimated to be $914.4 million.
Each plant has its own decommissioning fund held in a special account that cannot be spent without NRC oversight, Sheehan said.
But critics - including a half-dozen watchdog groups seeking legal status to intervene in the decision - see the change less as an efficiency move, and more as a way to protect Entergy stockholders from bearing potential expenses.
They argue that Enexus will not have enough money to provide liability protection from potential accidents. And because Enexus would be a limited liability corporation, Entergy will no longer be liable for expenses for aging plants such as Pilgrim.
"The purpose is to shield the parent company," said Deb Katz, executive director of Citizens Awareness Network, whose Westchester, N.Y., chapter is one of the intervenors, "and make as much money as they can. They keep trying to cushion themselves." Because of concerns about New York's Indian Point reactors, New York Attorney General Andrew Cuomo is fighting the deal, saying it would cost his state's taxpayers money, Katz said.
Vermont officials, concerned over decommissioning, have also opposed the deal. They say Vermont Yankee faces an estimated $800 million in decommissioning costs, but has only $420 million in its trust fund. Entergy has said that the Vermont Yankee trust fund will grow fast enough to pay for shutdown by the time the plant has to shut down.
Massachusetts is also concerned by the transfer, said Jill Butterworth, a spokeswoman for Attorney General Martha Coakley. Her office sought to intervene when the Federal Energy Regulatory Commission reviewed the license transfer request - saying it has the legal standing to protect the company's customers - but its petition was rejected by the agency.
"We do what we can," Butterworth said. Because of the state's energy deregulation law, Massachusetts doesn't have the "same jurisdiction on spinoff issues that New York and Vermont have," she said.
Despite concerns over the shutdown funds expressed by state officials and watchdog groups, the NRC continued to express confidence in the funds' ability to pay future expenses, even after the Enexus spinoff. The plant owners "meet all federal regulations pertaining to decommissioning funding," Sheehan stated by e-mail. "The proposed corporate restructuring has not changed this finding."
Pilgrim has said it plans to pay for the anticipated $914.4 million cost of decommissioning through the growth of its trust fund, which officials placed at $621.7 million as of last year.
Robert Knox can be contacted at rc.knox@gmail.com. 