The Federal Energy Regulatory Commission (FERC) has adopted a final rule for nuclear plant decommissioning trust funds that will allow greater investment flexibility and enable funds to take advantage of changing market conditions (Docket No. RM94-14-000). The rule aims to improve the returns earned on funds contributed through wholesale electric rates, thereby decreasing the amount collected from ratepayers. The FERC rejected current "black lung" guidelines, adopting instead a "prudent investor standard" with no restrictions.The black lung rules had limited trust fund investment to public debt securities of the federal government, obligations of a state or local government, and time or demand deposits of banks and insured credit unions.
Commissioner Donald F. Santa, Jr. admitted that greater flexibility creates more risk, but explained that the new rules will help nuclear plants from becoming stranded investment when the market becomes competitive. Commissioner William L. Massey will write a concurring opinion on what he believes a "reasonable person" standard means. He believes nuclear assets should be phased out of equity investments and limitations placed on investments in derivatives.
Articles found on this page are available to Internet subscribers only. For more information about obtaining a username and password, please call our Customer Service Department at 1-800-368-5001.