Nuclear Decommissioning Trust Funds: Rethinking the Approach

Fortnightly Magazine - November 15 1996
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Analogous to a pension fund,

a decommissioning trust suffers the same vulnerabilities. That suggests a need for termination insurance.With the growing prospect of some form of electric utility deregulation, and the possible end of rate regulation (em with no guaranteed source of income for utilities that hold licenses to operate nuclear reactors (em it's high time to reexamine the funding process for nuclear decommissioning and consider a policy alternative to ensure that funds will be available when needed to retire the nation's nuclear plants.

Investor-owned utilities with nuclear power plants are accumulating billions of dollars through the ratemaking process to fund Nuclear Decommissioning Trusts (NDTs). The U.S. Nuclear Regulatory Commission (NRC) mandates NDTs as an alternative to the two other decommissioning assurance options (em i.e., use of prepayment or surety bond.

When a nuclear plant is permanently shut down, several alternatives are available to handle decontamination, dismantling, and site restoration. But no matter what alternative is chosen, the responsibility to provide funds for future decommissioning currently falls to the nuclear plant owner (em a liability accepted as a condition of holding an operating license.

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