MONTPELIER, V t . — Entergy Corp.’s soon-to-close Vermont Yankee nuclear plant could cost up to $1.24 billion for a decommissioning of its reactor, and plant officials said they currently have about half that much in a fund dedicated to paying for that work.
The figure was contained in a “site assessment study” drafted by officials at the Vernon plant, which will cease operations at the end of this year.
Entergy reported Friday the cost will mean a lower third-quarter profit.
The New Orleans-based utility said it expects third-quarter as-reported earnings of about $1.26 per share, compared with $1.34 per share a year ago.
Higher-than-expected decommissioning costs for Vermont Yankee will chop approximately 37 cents per share out of Entergy’s earnings.
Entergy also expects its 2014 operational earnings to fall in the previous forecast’s range of $5.55 to $6.75 per share. Operating earnings are the profit less expenses directly associated with running the business.
Entergy said activity in the Gulf Coast region helped boost industrial sales growth.
Entergy will report third-quarter earnings results before the market opens Nov. 4.
Bill Mohl, president of Entergy Wholesale Commodities, a subsidiary of Vermont Yankee owner Entergy Corp., said the Yankee shutdown tally is based on federal Nuclear Regulatory Commission rules allowing a reactor owner to mothball the plant for up to 60 years to allow radioactive components to become less so and to allow the fund to grow.
But Mohl also said Entergy hopes not to take that long to dismantle Vermont Yankee and restore the site. Rather than getting the job done in 2075, as would be allowed by the NRC, Mohl said Entergy hopes to finish the work in the 2030s or 2040s, depending on how fast the fund grows.
A key to achieving that goal is a plan for Entergy to lend itself money to store the highly radioactive spent fuel from Vermont Yankee, and then pay itself back from an expected settlement of a lawsuit against the U.S. Department of Energy, which has failed to meet a long-standing promise to take possession of spent nuclear fuel and ship it to a national storage site.
Mohl cautioned that dollar figures and dates are based on assumptions about investment growth. For example, he said, the NRC assumes that if prudently invested, decommissioning funds will grow about 2 percent faster each year than the costs of decommissioning reactors.
“When you actually can begin this process is based on a wide range of outcomes, cost estimates and how they increase over time and how your funds grow over time,” Mohl said. He added that the Vermont Yankee decommissioning fund had grown from about $427 million in January 2010 to about $642 million as of Sept. 20.
Nuclear critics, meanwhile, questioned the propriety of using decommissioning funds to pay for spent fuel management, something federal law originally contemplated as separate from decommissioning. One also warned that costs might appear unexpectedly.