Holtec and state agree on safety and financial terms for decommissioning Pilgrim nuclear plant

The plan is to eventually reuse the Pilgrim Nuclear Power Station site in Plymouth for other purposes.David L. Ryan/Globe Staff

After months of negotiations, Massachusetts has reached a settlement with the New Jersey company that has pledged to decommission Pilgrim Nuclear Power Stationin eight years although it has never owned or decommissioned a nuclear plant, officials said Wednesday.

State officials had previously filed a petition with the federal Nuclear Regulatory Commission to challenge Holtec International’s application to take over Pilgrim’s operating license from the plant’s previous owner.

The settlement resolved two lawsuits the state filed to challenge the NRC’s approval of the license transfer as well as administrative challenges Holtec had filed to contest the terms of a state water permit for the Plymouth plant.

“This agreement represents a critical step toward the safe decommissioning and cleanup of the Pilgrim site,” Governor Charlie Baker said in a statement.

Attorney General Maura Healey had previously called Holtec’s plan a “wholly misguided premise” that asked local and federal officials to trust that the plant’s decommissioning trust fund had enough money for Holtec “on its first attempt, to decommission and restore the site . . . at a pace never previously achieved.”

In a statement, Healey said the agreement provides environmental, public safety, and financial protections during the dismantling and cleanup of the plant.

“Since the beginning of this proposed transfer, we have prioritized the health, safety, and other important interests of our residents, and took steps to ensure that the local community and environment are protected,” she said. “This agreement provides critical protections, includes compliance measures stricter than federal requirements, and secures the funds necessary to safely and properly clean up this site.”

Officials at Holtec, which took over Pilgrim in August after receiving the NRC’s approval, said the agreement reflected that the company has been “true to our word.”

The company has begun the decommissioning process, which includes removing spent nuclear fuel and placing it in a new storage facility. That work should be completed in two years, officials said.

“The path to returning the site to a decontaminated state, which allows us to spawn new economic activity on the property that is beneficial to both the community and our company, has been made clearer in this agreement,” said Kris Singh, president of Holtec International.

The settlement established “financial assurances and related reporting mechanisms” to ensure the work is completed, Healey said.

The agreement requires Holtec to maintain at least $193 million in reserve until it completes most of the cleanup and site-restoration work. Afterward, it must maintain $38.4 million in reserve until the spent nuclear fuel is removed from the plant.

The reserves would cover cost increases, project delays, and other unforeseen contingencies, such as newly discovered contamination, Healey said. They would also pay to transport the spent fuel out of state and clean the land.

Under the agreement, Holtec is required to secure $30 million in pollution liability insurance and performance bonds for certain contracts. In addition, Holtec must send monthly reports to the state, allowing regulators to monitor the company’s progress.

The agreement also requires Holtec to comply with the state’s cleanup standards for radiological and non-radiological hazardous materials, such as oil and polychlorinated biphenyl, or PCBs.

Holtec will be required to submit a site assessment to state regulators. The goal is to help officials understand what’s contaminated on the property and establish guidelines for removal and decontamination.

The cleanup will be overseen by the departments of Environmental Protection and Public Health, ensuring the property is cleaned to a level that allows it to be reused for the “benefit of surrounding local communities,” according to the attorney general’s office.

The settlement, which includes undisclosed security requirements, also requires increased funding for the Department of Public Health and the Massachusetts Emergency Management Agency.

Over the next seven years, Holtec will provide the DPH with nearly $2 million and will pay MEMA roughly the same amount, depending on federal emergency planning requirements.

The agreement drew a mix of praise and concern from local activists who have criticized the sale of Pilgrim to Holtec.

Sean Mullin, a Plymouth resident and chairman of the state’s Nuclear Decommissioning Citizens Advisory Panel, said he wanted to applaud the agreement.

“Their collective approach is a model for other sites across the nation,” he said. “I will not second-guess the specific agreements they reached regarding financial assurances, cleanup requirements, and public safety.”

But he said he was “extremely disappointed” that the agreement “completely fails to address or mitigate” the public safety, environmental, and financial needs of the surrounding communities.

“It’s absurd that all Holtec agreed to for the Town of Plymouth and surrounding communities is to plant trees and some year-round foliage,” he said.

Diane Turco, executive director of Cape Downwinders, urged the state to keep a close eye on the process.

“Holtec came to town professing to be open and transparent during decommissioning, but it took a long struggle by the attorney general’s office to get a semblance of cooperation,” she said. “With the state now in a better position to oversee the process, Holtec must continue to be under heavy scrutiny.”