Decommissioning: Trust Fund or Slush Fund?

In the first Fairewinds podcast of 2016, the Fairewinds Crew discusses nuclear industry exemptions to regulations allowed by the Nuclear Regulatory Commission – A.K.A. the NRC. For decades, exemptions have been made by the NRC in order for the atomic business to turn a profit from their otherwise too expensive, high risk production of nuclear power. Answering the question, “Why is this shifty NRC practice more pressing than ever?” is Fairewinds Chief Engineer Arnie Gundersen, President and Founder of Fairewinds Maggie Gundersen, Program Administrator Caroline Phillips, and Podcast and Web Producer Toby Aronson. 




MG: Hi. Thanks for tuning into the Fairewinds Energy Education podcast hosted by the Fairewinds crew. I’m Maggie Gundersen, founder of Fairewinds. Welcome to today’s show. This is Fairewinds Energy Education’s first podcast for 2016. Our thanks to the support of listeners like you. You’ve helped us bring back our podcasts that were first started in 2012. Fairewinds’ website now includes a direct RSS feed so you can link up to our Fairewinds Energy Education podcasts and enjoy the infrastructure provided by our website host, Squarespace. So don’t forget. Subscribe on line at and add the Fairewinds crew to your podcast listening favorites. Do you love Fairewinds videos? Don’t worry. During 2016, we aim to provide you with a selection of podcasts and videos. Just keep tuning in and following our breaking news stories by signing up for our Twitter feed, or read it on our home page if you’re not that tech savvy. Today, the Fairewinds crew will be discussing nuclear industry exemptions to regulations allowed by the Nuclear Regulatory Commission, a/k/a the NRC. For decades, exemptions have been made by the NRC in order for the atomic business to turn a profit from their otherwise too expensive, high-risk production of nuclear power. Why is this shifty NRC practice of granting exemptions more pressing to us than ever? Today, Fairewinds Chief Engineer Arnie Gundersen, Program Administrator Caroline Phillips, podcast and web producer, Toby Aronson and I, Maggie Gundersen, will discuss this together and fill you in. Arnie, Caroline and Toby, welcome today. The nuclear industry has always been subsidized. According to the General Accounting Office, 50 percent of all energy R&D during the last 70 years has gone to nuclear power. And then we have the Price Anderson act. Can you talk to our audience about those two things? AG: Yeah. Hi. It’s Arnie. And Hi to Caroline, Toby and Maggie. And hi to our listeners out there. The issue of subsidies in government goes way, way back to the bomb program and as Maggie just said, the General Accounting Office looked at all the subsidies over 70 years and half of the energy subsidies went to nuclear power. That’s not the NRC. That’s the Department of Energy, always funding a new reactor. We have that even today where it’s small modulars or sodium reactors or traveling wave reactors. There’s always another gimmick that gets funded. So these are the subsidies that the Department of Energy doles out to nuclear. In comparison, wind and solar have gotten peanuts compared to nuclear. The other major subsidy is Price Anderson insurance. If you take a look at your insurance policy, you’ll find you’re covered for tornadoes and rain and ice storms and all this kind of stuff; but you’re not covered for nuclear radiation from a nuclear accident. There’s an exclusion in your insurance policy that says they don’t cover it. And the reason is, way back in the 50’s, the nuclear industry realized that it couldn’t build a nuclear plant that was insurable. So Congress stepped in with the biggest subsidy of all and said don’t worry, we’ll pay the insurance if one of these things blows up. That’s called Price Anderson insurance. That doesn’t even factor into that Department of Energy number that we were talking about earlier. That was a gift from Congress. So these subsidies are gifts from Congress and the Department of Energy, but they don’t really have anything to do with the NRC granting exemptions. MG: (4:28) Arnie, when you talk about these subsidies, who’s actually paying for them? You said Department of Energy, but where’s that budget come from? AG: Oh, yeah, it’s the taxpayer. It’s a hidden tax that comes out of our yearly tax bill. And over the last 70 years, we’ve all paid an enormous amount of money to subsidize nuclear power. CP: So we wanted to talk specifically about NRC exemptions. What would be the difference between an NRC exemption and that? AG: Yeah. Let me give you an example. At Diablo Canyon, they were supposed to do a very thorough exam of the vessel welds in 2015. This is to make sure that the vessel is not cracking. Well, the Nuclear Regulatory Commission said we don’t care that you were supposed to do it in 2015. We don’t care that the American Society of Mechanical Engineers Code said you’re supposed to in 2015. We’ll let you do it in 2025. So there’s an expensive process that the NRC basically told them, don’t worry about it; you don’t have to spend the money for another 10 years. That’s just one example of exemptions that the NRC doles out every day. And it’s a ratchet. It only ticks one way. The exemptions only make it easier; they never make it harder. TA: Recently in Vermont Yankee news, NRC spokesman quoted that they continue to believe that the appropriate use of exemptions is an essential part of our regulatory program. Burns also said that the Agency carefully examines exemptions (exceptions? 6:10) as a request in order to protect public health and safety. Can you comment on that, Arnie? AG: Yeah. Burns is the top dog at the NRC. He’s the lead commissioner, the chairman. And for him to say that just basically shows what we’ve been saying at Fairewinds for years, that the industry controls the regulator. There’s no careful examination of exemptions. When the industry asks for an exemption, they usually get it. Like I said, the ratchet never turns the other way. The NRC never forces them to do more but it always allows them to do less. And doing less means it’s cheaper and doing less means it’s not as safe. MG: Arnie, before you go back down the trail that Caroline opened about exemptions, could we just hold for a minute and talk about the Nuclear Regulatory Commission itself? Is it true that every commissioner is vetted by the nuclear industry before they’re appointed to the commission? AG: Yeah, you’re right, Maggie. The Nuclear Regulatory Commission has a maximum of five commissioners. Two are Republican, two are Democrat and the Chairman of the Commission is appointed by whoever is President. And they all are approved by Congress, but they all are vetted and approved before they ever get there, by NEI, the Nuclear Energy Institute. So basically, these guys have to be approved by the nuclear industry before Congress approves them to the job. And these are the guys who set the tone for the 400 people at the – the staffers on the commission. MG: (7:53) When you said NEI – I think our listeners should know that NEI is the lobbying arm for the industry. Correct? AG: Yeah, correct. They have about 100 million-dollar budget, and they have advertising on different radio shows and TV shows. They publish very pro-nuclear opinion pieces. And then on top of that, they lobby Congress like crazy. And they lobby the Nuclear Regulatory Commission like crazy. You know, you go to one of these meetings and the NEI reps are on first-name basis with the Nuclear Regulatories. It’s hi, Bill; hi, Joe. But when they talk to me, it’s hi, Mr. Gundersen. That familiarity only goes to people that they support. CP: So Arnie, to get to the question of the day, why are these exemptions more pressing right now than ever? AG: Well, there’s one big one that’s working its way through the process and really, as citizens, we have the chance to stop it. The Nuclear Regulatory Commission is considering re-writing the law concerning decommissioning. Every nuclear plant has a trust fund. And every person who has power coming from nuclear electricity pays into that trust fund, so that when the plant’s ready to shut down, there’s money available to do it. Well, with the use of exemptions, the Nuclear Regulatory Commission has turned the decommissioning trust fund into a decommissioning slush fund. And now they’re talking about avoiding exemptions entirely by changing the law. And it’s really a devastating change and a huge handout on the order of a billion dollars per nuclear reactor. There’s 100 nukes. A 100 billion dollar subsidy that’s working its way through the Nuclear Regulatory commission right now as we speak. TA: Can you talk more about what you mentioned about taxpayers and how we’re actually paying for these trust funds that the nuclear industry is holding? AG: Yeah, when you have a nuclear plant that provides your electricity, something like a tenth of a cent for every kilowatt hour goes into a fund that’s invested in the stock market, and hopefully, it’ll grow over time so that at some point in the future, there’s enough money to tear the plant apart. So the people that use the power in theory are the ones that pay the cost to decommission the plant. And that was the key in regulation before was that the users of the power also had the responsibility to knock the plant down. And what the Nuclear Regulatory Commission now is changing the rules and kicking that can 60 years down the road so that the – my kids and my grandkids will get stuck cleaning up for a nuclear plant that’s providing nuclear power to me, not them. MG: (11:08) I think there’s an economical term for that – am I correct that it’s called intergenerational transfer of risk, right? AG: Yeah, that’s exactly right. We’re just kicking the can down the road. It’s the same as an intergenerational transfer of risk. We’re forcing my grandkid to pay for power that I used. CP: So in the instance of Vermont Yankee, we’re currently – am I correct in saying we’re currently in decommissioning? Or has that yet started? AG: Yeah, the plant has shut down forever, so that means it’s in the decommissioning phase. And what the Nuclear Regulatory Commission allows is for a plant to sit for as long as 60 years before it’s destroyed and decontaminated. They call that – they call that SAFE store – S-A-F-S-T-O-R. Well, your third grade teacher would be rolling over in her grave if you pronounced that that way. It really should be pronounced SAF store. And SAF rhymes with SAP. And I’m afraid that we’re all being taken as saps because of the 60-year delay. TA: Can you explain what kind of impact on the communities surrounding a nuclear power plant and the kinds of danger that one would be worried about amidst the fact that storing nuclear waste is called SAFE store according to the NRC? AG: Yeah, that’s really the heart of this whole argument. The concept of waiting 60 years has no basis in physics. It’s only there to let funds that were not adequate build up in the stock market. The former chairman of the Nuclear Regulatory Commission, Greg Jaczko, had a great quote, and I’m going to read it directly. “From a technical perspective and a safety perspective, there really is no rationale for a 60-year waste disposal. If you push people on these factors, they come back with – we can’t decommission sooner because we don’t have the money.” So we’re carrying risks for 60 years because the people that built the plant didn’t accrue enough money now to pay for its dismantlement right now. CP: So if it takes 60 years, what are communities around these decommissioning plants looking at? What happens with the land that these nuclear reactors are operating on? What does that entail for the next 60 years? AG: Decommissioning a nuke is like decommissioning a facility that’s got asbestos or hazardous chemicals. This is not rocket science. You’ve got to keep the people who are working there protected, but it could be done in 10 years. You could completely dismantle Vermont Yankee or any power plant in the country in about 10 years. So what’s happening, though, is that by allowing 60 years, there’s several things that happen. The first is that productive property – a lot of these plants are in beautiful locations on the ocean or on rivers – that productive property can’t be used for anything. So things that could be in the tax base for another purpose are removed from the tax base because they’re not a performing asset. The second thing is that nuclear utilities use this as a threat. When they talk about closing a nuclear plant down, the community goes, oh, my God, we’re going to lose jobs immediately. Well, if the NRC said, no, when you decide to shut a nuke down, you have to pay for it and clean it up in 10 years, there would be money available to bring in hundreds and hundreds of people for the next 10 years, which would cushion the blow to the surrounding community. So the nuclear community doesn’t want to hear that. The people that own these reactors want to use this 60-year delay and all these losses of jobs as a sledgehammer to prevent local opposition. But in fact, it could be done in 10 and it would be a boon to the community to allow it to plan for an orderly transition. So I think those are the two big issues. By waiting 60 years, you’ve got a workforce that could be deployed that isn’t, and you’ve got a productive asset that’s removed from society. MG: (15:53) As I think more about this issue, Arnie, I want to talk about the overall safety of SAFSTORE. My understanding is, in addition to the waivers the NRC has given, it’s also eliminated the emergency planning in existence around any of the nuclear plants that are being decommissioned. AG: Yeah, you know, Toby mentioned at the beginning of the story that the Chairman of the NRC said that these exemptions have nothing to do with public safety. And that’s simply not true. There’s been near misses at nuclear plants that have been in SAFSTORE that we need to address and the nuclear industry ignores. The first one was in Dresden, which is out in Illinois – back in the 90’s. When the plant was decommissioned, they turned the heat off and walked away and a pipe froze and began to drain the water in the spent fuel pool. They lost like 60,000 gallons of water in the fuel pool and were within a day of creating so much radiation that the entire site would have been uninhabitable. The Nuclear Regulatory Commission seems to forget that. The other one is right here in Vermont with Vermont Yankee. There’s a crane, a very heavy crane. It’s designed to lift 150 tons. And Vermont Yankee was going to use that crane to move spent fuel. Well, they tested the brakes at 70 tons but they forgot to test the brakes when the cask was fully loaded at about 110 tons. And when they lifted the 110-ton object, the brakes didn’t work. So here we had a nuclear fuel canister loaded with nuclear fuel, and the brakes didn’t work. So even though those two events happened – and more – I could go on forever about the near misses – even though those two events and more happened, the Nuclear Regulatory Commission said oh, don’t worry, you don’t need to have any emergency planning any more. MG: So what you’re saying is that nuclear emergency planning should still be in place at all of these nuclear plants while they’re moving the spent fuel and getting ready to do the actual decommissioning of each reactor. AG: Yeah, that’s exactly right. You have to keep the emergency plan until the fuel pool is empty. The key here is that the radiation from these fuel canisters, if one were to break, would leave the property of the plant and get into the community, perhaps 10 or 20 or 30 miles away. But the Nuclear Regulatory Commission has fudged the analysis so that they claim that no radiation leaves the site; and therefore, you don’t need an emergency plan. But here’s the ironic twist. The people that own these plants don’t want to spend money on the emergency plan, but they still want to keep their Price Anderson insurance. That was the insurance we talked at the top of the show. So they want to be protected in the even that they do drop a cask, but at the same time, they don’t want to have emergency plans in place in the event they drop a cask. And to my mind, you can’t have it both ways. If you want to eliminate the emergency plan, fine. But then say we’re renouncing our Price Andersen insurance and we’re going to self-insure from this point forward. CP: (19:31) And if I’m not mistaken, Vermont Yankee is located right across the street from an elementary school. Correct? AG: Yeah. It’s 4,500 feet away from an elementary school. So they’ll be moving nuclear spent fuel with a crane whose brakes have already failed once while 6-year-olds are in school across the street. CP: And this decommissioning fund is supposed to pay for what part exactly? There’s a lot of discussion right now, especially in Vermont news, about what – the decommissioning fund – am I correct in saying it’s been – the money raised has been by the rate payers, people like you and me. So what exactly are they paying for when they put money into the decommissioning fund? AG: That’s a great question. It’s a decommissioning trust fund and the key is decommissioning. It’s made to pay to dismantle the plant. And it’s a public trust. But with the new NRC exemptions, they’re turning it into a decommissioning slush fund. What they’re allowing the nuclear utilities to do is to tap into the fund for as much as half a billion dollars – 400 million dollars roughly, to move spent fuel. That was never in the law. And it’s clearly a financial incentive for the nuclear industry. Let me get a little geeky here and a little financial, but what happens is that when Yucca Mountain was slowed down and perhaps delayed – Yucca Mountain is the repository in Nevada where the government thinks they’re going to ship all the nuclear waste – when that was delayed, nuclear fuel pools began to fill. And the owners of the plants had a choice. They could continually empty the pools by putting the fuel into these dry casks and lifting them out, or they could allow the pools to fill up. And the difference is, who pays. If they had continually removed the fuel from the nuclear fuel pools, then they would have had to pay yearly out of their operating budgets. But by waiting until decommissioning, what the NRC is allowing them to do, is to pass that cost onto the people that carried the fund. So they’re making the plant less safe. Some of these fuel pools are full. And that’s the equivalent of about 700 nuclear bombs worth of cesium in the fuel pool. Let’s get that 700 bombs of cesium out of the fuel pool and on the ground as quickly as possible. The Nuclear Regulatory Commission is saying to these reactor owners, no, you don’t have to do that. You can wait until the plant is ready to shut down and then empty the pool. The owners love it because then they can take our cash to pay for their cost. TA: Arnie, do you feel that the people surrounded by nuclear power plants that are in the process of decommissioning are aware of the risks that are at stake? AG: (22:57) Well, Fairewinds wrote a report that’s up on our website and we actually presented it to the Nuclear Regulatory Commission in February of last year. We mailed it to the Nuclear Regulatory Commission in March of last year. And here it’s been almost a year and the Nuclear Regulatory Commission has failed to respond. Almost all the things we’re talking about today were in that report. So the NRC continues to grant waivers at Vermont Yankee about the very issues we’re talking about. It was well publicized. It was a public meeting with hundreds of people where I talked about it. We spoke to the Vermont Senate where we talked about it. But the Nuclear Regulatory Commission using Commissioner Burns’ own comment that granting waivers is part of the business, and they’re going to continue to do so. MG: Well, here in Vermont, Arnie, there are two things that come to mind. One is our current congressional delegation has taken legal moves against the NRC over this issue, and has been joined by part of the congressional delegation in Massachusetts. Am I correct on that? AG: A little bit different. The Public Service Commission here in Vermont and the Public Service Commissions in Massachusetts and I think Connecticut, have all sued the NRC to prevent these exemptions. Our congressional delegation wrote to the NRC and told them these exemptions are nuts. So the Commissioner wrote back to Patrick Leahy, Bernie Sanders and Congressman Welch and told them we’re going to continue to use exemptions, thank you very much. So the only recourse we have now is this lawsuit that the Public Service Commission here in Vermont is pushing through the courts to prevent the NRC from granting exemptions. MG: Other issues that I want our audience to be clear about because we do have limited time here today, but I want our audience to understand that there’s no real financial planning or review for the whole decommissioning process, there’s no allowance for state audits even though each state will be holding the bag on these LLC’s and Vermont Yankee, for example, is an LLC – limited liability corporation – and so is Indian Point right outside of New York City. I mean it could be that throughout the country as these plants shut down, taxpayers are going to have to pick up the cleanup. And we as taxpayers, not just the ratepayers in a particular utility, but we as taxpayers will have to absorb that loss. So my question for you before we wrap up, how many plants are slated for shutdown now? And how many others are being considered? And don’t you think – at least it’s my – maybe I should just take credit for what my belief is – my belief is that the NRC is pushing back so hard on Vermont Yankee, against our state, our small state and our congressional delegation because we’re first to criticize what they’re doing and they want to make sure they can get away with this crap with all of their utility industry cronies. AG: (26:36) Yeah, you’re absolutely right. Vermont is at the bow wave of the decommissioning of nuclear power plants. There’s 100 nukes roughly and 40 of them are owned by limited liability corporations. And here in Vermont, the president of Entergy – Vice president of Entergy – told the legislature that if it’s not done in 60 years, they’re walking away and go sue me. Basically, we called him Sue Me Toomey. That was his name, Mr. Toomey. And he basically threatened the state legislature by saying if we don’t get it done in 60 years, hey, we’re a limited liability corporation, we’re out of here. So there’s another 4 or 5 plants that are already shut down, another 3 that will be shutting down in the next year, and there’s another 20 that are on the ropes financially and may shut down as well. So there’s a huge number of plants that will be entering decommissioning in the next couple of years. And if Vermont wins – if Vermont stops these exemptions, then 20 other plants will also have to pony up the bill and protect the public as opposed to protect the financial interests of the owners. CP: I have to ask, which do you think might be decommissioned first? AG: That’s a great question. Vermont Yankee could be completely decommissioned by 2032. We’ve done the numbers here at Fairewinds and if anybody wants them, we can provide hard numbers to show 2032. It’s back to a productive asset; beautiful piece of waterfront property on the Connecticut River. But Entergy is saying they’re not going to do it until 2056. You know, every single plant is using the entire 60-year period, and the reason they’re using that 60-year period is because they’re ripping off $400 million from the fund to pay for spent fuel storage, which should come out of another pocket. The Department of Energy should be paying for that and has been paying for that. So that it’s critical that we push the burden back on the Department of Energy and decommission the plants with the decommissioning trust fund. What the owners are trying to do is turn it into a slush fund. CP: I’m especially interested to see how it plays out with Indian Point and its proximity to Manhattan, if that 60-year SAFSTORE thing will really ring true with that. It sounds like we have a lot more to discuss on this issue. This is Caroline Phillips, program administrator for Fairewinds Energy Education. Thanks for listening and remember to subscribe to the Fairewinds Energy Education podcasts on line at We’ll keep you informed.