Up & Atom


The US Nuclear Regulatory Commission (NRC) requires nuclear power reactor licensees to maintain decommissioning cost estimates and to adjust those estimates periodically to account for inflation and other matters, pursuant to Title 10 of the Code of Federal Regulations (10 CFR) 50.75, “Reporting and Recordkeeping for Decommissioning Planning.” These periodic updates must consider various factors, including: (1) increased labor costs; (2) increased energy costs; and (3) increased waste burial costs.

Labor and energy cost escalation factors used in estimating the total decommissioning cost are based on the US Department of Labor, Bureau of Labor Statistics (BLS) national producer price indexes, national consumer price indexes, and local conditions for a given site. Updated waste burial escalation costs are calculated by licensees using the formula, coefficients, and burial/disposition cost escalation factors in a guidance document known as NUREG-1307, “Report on Waste Burial Charges: Changes in Decommissioning Waste Disposal Costs at Low-Level Waste Burial Facilities.”

The NRC initially developed the formula based on assumptions for reference pressurized water reactors (PWRs) and boiling water reactors (BWRs) in 1986, and periodically updates the information in NUREG-1307. On February 13, 2023, the NRC published Revision 19 of that guidance document to provide burial cost escalation factors updated to the year 2022 for both PWRs and BWRs. The year-over-year change from 2021 varies based on the circumstances of each licensee. However, for most licensees, estimated 2022 disposal costs are approximately 7.2% higher for PWRs and 4.2% lower for BWRs.

Some nuclear power reactor licensees may have the flexibility to make business choices that impact the minimum decommissioning funds that are required under 10 CFR § 50.75(c). For example, disposal fees for low level waste (LLW) vary between the four LLW disposal facilities currently operating in the United States, which are located in Washington, Utah, South Carolina, and Texas. Depending on the location of the licensee, state-based restrictions may dictate where waste may be sent. As a result, when a disposal facility increases its fees, a “captive” licensee’s costs may be impacted, whereas a “non-captive” licensee may have other commercial options.

The nuclear industry submitted comments on the draft version of Revision 19 expressing concern that the numbers used as a basis for the formula calculations were not accurately updated to reflect true decommissioning costs. For example, in a comment letter submitted on December 16, 2022, the Nuclear Energy Institute (NEI) argued that “additional language is needed to accurately reflect currently allowed disposal practices thus reducing the calculated decommissioning funding amounts.” The NEI letter also pointed to a statement in draft guidance acknowledging that waste disposal costs continue to be overestimated (to the detriment of licensees) because they do not consider the possibility of disposing of very-low-level waste at facilities other than LLW sites. However, in the final document, the NRC declined to make any changes in response to that comment.

Morgan Lewis regularly counsels clients on matters related to decommissioning, including decommissioning cost estimates, and will continue to monitor developments in this area.