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NRC Reconsiders Decommissioning Funding

Fortnightly Magazine - June 1 1996

The Nuclear Regulatory Commission (NRC) is considering revising its regulations on nuclear plant decommissioning funding. Under current NRC regulations, adopted in 1988, an electric utility may set aside decommissioning funds annually over the estimated life of a plant. In a deregulated environment, however, a nuclear power licensee could lose its regulated rate base as a source to fund the balance of decommissioning expenses. Thus, the NRC may alter its rules to require licensees to prove they can finance the full decommissioning cost independently.

The NRC also proposes to require utilities to report periodically on the status of their decommissioning funds. Current rules also do not require reports because state and federal agencies actively monitor decommissioning funds, but the NRC believes a deregulated nuclear utility would escape such monitoring.

Further, the new rules may allow licensees to take credit for a positive, real rate of return on decommissioning trust funds during a period of safe storage. Licensees are currently denied such a credit, because the NRC assumes that inflation and taxes would erode any investment return. The NRC also will examine whether federal government nuclear licensees may continue to rely on statements of intent to meet decommissioning financial assurance requirements for their power reactors.

The NRC will accept comments until June 24 before issuing a proposed rule. t

Lori A. Burkhart is an associate legal editor of PUBLIC UTILITIES FORTNIGHTLY.

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