New York, Holtec reach deal on Indian Point nuclear power plant sale, clearing way for cleanup
Some local schools and municipalities will reap millions under a separate agreement.
New York has dropped its challenge to the sale of the Indian Point nuclear power plant in return for the new owner’s guarantee to keep $400 million in a decommissioning trust fund for the next 10 years.
The agreement reached Wednesday appears to resolve the state’s biggest concern with the Indian Point sale – that trust fund money could dry up during the teardown, sticking ratepayers with the tab for a cleanup expected to take at least 12 years.
The last of Indian Point’s two working reactors are slated to shut down at the end of the month, when ownership of the Buchanan plant shifts from Entergy to Holtec International, a New Jersey-based decommissioning firm.
But the sale had been complicated by a series of legal challenges by the state and environmental groups, as well as neighboring municipalities and a school district facing the loss of $32 million in annual property taxes.
All parties with pending state or federal legal challenges agreed to drop their opposition in return for the settlement reached Wednesday.
The most vocal opposition had come from New York State Attorney General Letitia James, who last year called the deal “very risky.” Among James' concerns was the Nuclear Regulatory Commission's decision last year allowing Holtec to use some $630 million in trust fund money to manage spent nuclear fuel at the site.
On Thursday, James praised the settlement.
“We have worked hard to ensure that Indian Point is dismantled and cleaned up responsibly and safely,” James said. “Once fully approved, this agreement will result in a safer, faster, and more thorough decommissioning process that exceeds stringent federal standards.”
Holtec said it will demolish the reactors and clear the 240-acre site along the Hudson River of radiological contamination by 2036, with a possibility of finishing by 2033.
Gov. Andrew Cuomo, who helped broker the 2017 deal to shut down Indian Point, joined James in backing the settlement.
"Since my time as Attorney General I have been deeply concerned with the safety of the Indian Point nuclear power facility given its proximity to the most densely populated area in the country," Cuomo said.
"Shuttering Indian Point was, at one time, one of the main progressive causes in New York, and after years of relentless work, we've finally reached an agreement to close it safely and responsibly.”
Under the terms of a separate agreement, Holtec has agreed to negotiate a PILOT (Payment in Lieu of Taxes) that would provide more than $7.5 million to the schools and municipalities when their current agreements expire next year.
The municipalities in schools would be able to extend the current deal automatically for one year if a new agreement isn't reached. During that period, the Hendrick Hudson School District would receive $4 million; Westchester County $1.8 million; Buchanan $1.2 million and the Town of Cortlandt $550,000
Among the other details in the settlement:
- Holtec will keep a minimum of $360 million in the trust funds for waste management and radiological cleanup after it finishes the decommissioning.
- Holtec will file a complaint against the U.S. Department of Energy for having to store spent nuclear fuel at the site, a responsibility of the federal government. Fifty percent of the amount Holtec receives will be placed in the decommissioning trust funds.
- The state Department of Environmental Conservation will oversee the cleanup of hazardous materials at the site.
- A public website with updates on the decommissioning will be created.
The decommissioning trust funds currently hold $2.4 billion, money collected from ratepayers during the plant's 60 years generating electricity for Westchester County and New York City. Holtec has estimated its costs at $2.3 billion.
In January, Cuomo signed into law a bill sponsored by Democrats Pete Harckham in the state Senate and Sandra Galef in the Assembly, which will, for the first time, give local communities the ability to collect taxes for the spent nuclear fuel that will remain at Indian Point.
Buchanan Mayor Theresa Knickerbocker said the settlement will help the village weather financial shortfalls in the coming years while it waits to see how much tax money it can collect from spent fuel taxes. Buchanan was among those who joined the state’s legal challenge last year.
“We are the host community and needed to have input, but if we did not intervene we would not have any input in these negotiations,” Knickerbocker said. “The closure agreement would have been very different if the host community was involved… This agreement will provide more certainty in preparing the 2022-2023 budget and a number of other positive items that are included in the agreement and the safety of the Village.”
The village is facing the loss of $3.5 million – nearly half its annual budget – once Indian Point shuts down.
The settlement awaits the approval of the state Public Service Commission as well as the governing bodies for the Town of Cortlandt, the village of Buchanan and the Hendrick Hudson School District.
The Public Service Commission will accept comments on the settlement until April 29.