Federal regulators have rejected a bid by the owner of Vermont Yankee to cancel a $40 million guarantee on the fund that will pay to mothball the nuclear power plant when it closes.
Rejecting Entergy Corp.'s contention that a new 20-year federal license extension assures the fund will have enough money to decommission the plant, the U.S. Nuclear Regulatory Commission notified the New Orleans-based company Wednesday that its application to cancel the guarantee had been turned down.
The NRC says it would be premature to cancel the payment, since the nuclear power plant in Vermont's southeastern corner may have to close in March, when its state license expires.
According to the NRC, the fund had $474 million in it as of Dec. 31, well short of the $564 million the NRC says it will take to decommission.
Federal regulators have granted Vermont Yankee a license to operate for 20 more years, but state officials want it shut down. Entergy is suing the state in U.S. District Court, saying that the jurisdiction for nuclear plant licensing lies with the federal government and that Vermont doesn't have the power to close it.
The suit goes to trial next month.
"Depending on the outcome of Vermont's review and (the suit), Vermont Yankee may no longer operate after March 21, 2012," NRC project manager James Kim wrote in a letter to Entergy. "Under that condition, the anticipated earnings during the renewal period would not be realized. Because of the uncertainty surrounding the plant's future, cancellation of the guarantee at this time would be premature."
In April, Entergy applied for the break, saying that Vermont Yankee's continued operation through 2032 would provide a $211 million surplus over the minimum funding amount required by the NRC.
The NRC says no dice.
"We're telling Entergy that cancellation of the $40 million parent company guarantee for the Vermont Yankee decommissioning fund would be premature given the unresolved legal challenge," NRC spokesman Neil Sheehan said Thursday.
Larry Smith, a spokesman for Vermont Yankee, said the company had no immediate response to the NRC's denial.
"We've received the letter and we're reviewing it," he said.