In SECY-19-0068 dated July 1 but recently made available, the NRC staff has asked the Commission to approve a proposed direct final rule that would eliminate one of the two financial tests used to qualify a company to issue a parent guarantee for decommissioning funding assurance. The NRC staff cites a 2010 Dodd-Frank Act mandate that agencies remove references to credit ratings in their regulations and substitute alternative standards of creditworthiness. However, rather than substituting alternative standards, the NRC staff proposes to simply eliminate one of its two current financial tests, and instead rely upon the single remaining test. Unfortunately, many companies that would qualify under the current financial test based on having an investment-grade credit rating do not qualify under the alternative test that would remain. As such, this change would heighten the credit requirements for using a parent guarantee and limit the availability of parent guarantees to provide financial assurance for decommissioning. Nonetheless, the NRC staff considers the proposal “non‑controversial” and seeks to issue the change to the regulations as a direct final rule.
We believe that many companies and industry groups may seek to oppose the direct final rule. Rather, they may urge the Commission to send the proposed direct final rule back to the NRC staff with a directive to seek public input on an alternative replacement for the existing financial test that is based in part on minimum credit ratings.