Angela Sicker

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Governmental interest in cleaning up a polluted site is not a new topic. Congress, in implementing statutes like the Resource Conservation and Recovery Act (RCRA) and the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), “makes the polluter pay” while encouraging quick and cost-effective cleanups.[1] There are many benefits to remediating a contaminated site.[2] The redevelopment of brownfield sites provides a great example. Studies show that brownfield remediation can lead to increases in tax revenue for local governments due to the increase in property value near cleanup sites.[3] Environmental liability transfers (ELCs) provide a mechanism for private industries to clean up hundreds of contaminated sites and have done so for the past two decades.[4] An environmental liability transfer is “a transaction in which certain environmental liabilities and the risks of certain contingent environmental liabilities are transferred from one party to another.”[5]

Currently, a new type of environmental liability transfer is being discussed in Vermont. The Vermont Public Utility Commission recently held a hearing to determine whether Entergy (owner of Vermont Yankee Nuclear Plant) can transfer its liability to NorthStar Decommissioning Holdings (NSDH), LLC.[6] The decommissioning of a nuclear facility brings serious public health risks.[7] For example, exposure to radiation causes cancer or radiation sickness.[8] Decommissioning a nuclear facility is also very expensive.[9] This begs the question, should liability transfers occur in the context of nuclear facilities, and if so, what would that look like?

 

This Note will provide background information on environmental liability transfers and nuclear decommissioning programs. It uses an ongoing case occurring in Vermont to explore whether nuclear liability transfers should occur and provides a model of what a nuclear liability transfer should look like. Part I will provide a background of nuclear energy in the United States and show the number of plants approaching retirement. Part II will offer an overview of environmental liability transfers and nuclear decommissioning standards in the United States. Part III will explore the nuclear liability transfer of the Vermont Yankee nuclear facility and analyze the potential problems that this liability transfer faces. Part IV will provide recommendations for the Vermont Yankee case as well as provide suggestions for a model nuclear liability transfer.

 

[1] Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. § 9601 (2002); Resource Conservation and Recovery Act, 42 U.S.C. § 6901 (1984).

[2] Karen A. Sullivan, Brownfields Remediation: Impact of Local Residential Property Tax Revenue, 19 J. Envtl. Assessment Pol’y & Mgmt. 1, 17 (2017).

[3] Id.

[4] Michael O. Hill & C. Gregory Rogers, Using Insured Fixed-Price Cleanups to Respond to New Accounting Standards, Gain Tax Savings, and Lower Cleanup Costs While Increasing Cost Certainty, 202 Bureau of Nat’l Affairs, Envtl. Due Diligence Guide, 231:2065, 2070 (Nov. 2008).

[5] Joshua A. Bloom, Environmental-liability Buyouts: How to Know When It’s the Real Thing, Nat. Resources & Env’t 37, 37 (2006).

[6] Mike Faher, Vermont Yankee Buyer Seeks ‘Reasonable’ Deal with State, VT Digger (Jun. 18, 2017), https://vtdigger.org/2017/06/18/vermont-yankee-buyer-seeks-reasonable-deal-state/#.Wc3N90yZNsM.

[7] See, Radiation Health Effects, Envtl. Protection Agency, https://www.epa.gov/radiation/radiation-health-effects.

[8] Id.

[9] Dan Drollette, Jr., The Rising Costs of Decommissioning a Nuclear Power Plant, Bull. Atomic Scientists (Apr. 28, 2014), https://thebulletin.org/rising-cost-decommissioning-nuclear-power-plant7107. (noting that it took $608 million to decommission the Yankee Nuclear Plant in Massachusetts).