The NRC’s Reactor Decommissioning Financial Assurance Working Group recently held a public meeting to receive comments on potential guidance updates before publishing its final report. Prior to the public meeting, the working group shared a presentation summarizing its findings and proposals.
As background, the working group was established in September 2019 to review the NRC’s current decommissioning financial assurance processes in response to the growing use of third-party decommissioning business models. In general, this business model has the licensee sell its assets, including the decommissioning trust fund, and transfer its license—either temporarily or permanently—to a third party who then performs the decommissioning work before the license is terminated and the site released for unrestricted use. The working group was tasked with identifying potential regulatory gaps or policy issues related to adequate financial assurances and making recommendations to address them.
In this context, the working group reviewed the NRC’s financial assurance requirements and guidance and found no regulatory gaps in the current financial assurance review process. That said, the working group plans to make several recommendations to improve the financial assurance oversight process. One recommendation is to better integrate the inspections of decommissioning sites with the NRC’s financial analysis. This will provide financial analysts with information on the progress of the decommissioning activities documented in the inspection reports, with the goal that the NRC’s financial analysts will be better informed about actual decommissioning progress as compared to the use of trust funds. The working group stated that it would recommend updating Inspection Procedure 36801 to accomplish this goal.
The working group also plans to recommend revisions to the NRC’s reporting guidance to allow for more detail in the financial assurance annual reports and in the 30-day pre-withdrawal notices to improve oversight. This area has been a frequent topic of public criticism. That said, the working group did not indicate whether the revised guidance would require licensees to provide more detail in their reports or just grant them the flexibility to do so if circumstances warrant.
The working group specifically identified Office of Nuclear Reactor Office Instruction LIC-205, “Procedures for NRC’s Independent Analysis of Decommissioning Funding Assurance for Operating Nuclear Power Reactors,” and Regulatory Guide 1.159, “Assuring the Availability of Funds for Decommissioning Nuclear Reactors,” as candidates for revision. The working group may also recommend revisions to Regulatory Guide 1.202, “Standard Format and Content of Decommissioning Cost Estimates for Nuclear Power Reactors.”
After presenting its initial proposal, the working group received public comments. Although comments covered many issues, some beyond the scope of the working group’s purview, the comments generally followed those expressed on individual decommissioning transactions, and included the following:
- The limited liability companies established for decommissioning are not sufficiently capitalized, and the NRC does not require these companies to post a bond for their work. As a result, if the decommissioning trust fund were exhausted, these companies would not have other income or assets to pay to complete the decommissioning.
- The NRC allows licensees to withdraw money from the decommissioning trust fund for spent fuel management but does not require that the licensee return any amounts recovered from the US Department of Energy to the trust fund.
- The NRC’s decommissioning regulations and guidance ignore the long-term costs of managing spent fuel at the sites. As a result, there could be significant future costs for recanistering fuel that the NRC does not account for when determining whether sufficient decommissioning funds exist.
- The financial analysis does not account for construction and industrial accidents that could occur and the costs associated with litigation for such events.
The working group stated that it would address comments generally in its final report but would not provide specific responses to each comment it received.
The working group plans to release its final report in March 2020. We will continue to follow this issue and summarize the final report when issued.