On Friday, April 5, UBS Securities, LLC sponsored a conference call to share perspectives on nuclear decommissioning funding issues. Nuclear Regulatory Commission (NRC) staff members responsible for power reactor decommissioning funding participated in the call and started things off by explaining their mission of protecting public health and safety and how NRC decommissioning funding rules satisfy that mission.
The first topic of discussion was the minimum funding requirement methodology. The NRC stressed that the minimum formula amount is not a cost estimate, nor is it expected to cover the entire costs of decommissioning, since the NRC only oversees radiological costs. The NRC did note that they are considering whether the minimum funding amount formula should be revised. The staff hopes to provide any recommendations to the Commission later this year. The NRC emphasized that the minimum formula amount will increase in the future due to increases in the adjustment factors, regardless of what the agency does with the question concerning adjustments to the formula. The NRC also addressed the use of parent company guarantees, an issue that has garnered much attention in recent history. According to the staff, the parent guarantee option was intended to be a band-aid until the total funding returns in the trust fund. However, they acknowledged there was no actual time limit on its use, so long as applicable financial tests continue to be met. And, in response to a question regarding whether a parent guarantee could substitute for cash presently in a fund and allow a withdrawal of cash from the fund, the NRC indicated that this was not permitted – only the minimum withdrawals allowed by regulation for decommissioning costs are permitted from the fund.
The second topic of discussion was the nuclear decommissioning trust fund impacts from early retirements. The NRC observed that previous large power reactor early shutdowns have all been in regulated environments and have been funded, but noted that ongoing experience with merchant plant shutdowns is being evaluated on a case-by-case basis. Related to the impact of pending license renewal applications, the staff indicated that the NRC only looks at the current period of the license. Thus, only when the licensee obtains an extension will the NRC consider an extended funding period. The NRC noted that when a license extension is pending within the 5-year period prior to scheduled shutdown, it may be an opportune time to consider a parent company guarantee.
Lastly, the NRC was asked about accounting for the ongoing costs during SAFSTOR. The NRC noted that those costs would need to be covered in the site-specific studies to be submitted, and would include property taxes, monitoring, and security. The staff also observed that licensees are ultimately responsible for assuring that they have the funds available when needed to decommission, and that the NRC only reviews whether licensee plans are in conformance with NRC requirements for meeting the minimum funding amounts, until such time as site-specific studies are required.
Overall, the NRC focused its portion of the investment-based conference call on its own regulatory mission of determining for each licensee that there is reasonable assurance that necessary decommissioning funds will be available at the time of decommissioning.