By John Stang
FirstEnergy Nuclear Operating Co. (FENOC) says it will ensure its decommissioning trust funds are up to snuff for covering costs for cleanup of its three nuclear power plants in Ohio and Pennsylvania.
However, the company has not yet determined whether it will move to immediately decommission the facilities or let them sit for several decades first, which will ultimately affect the final costs, according to a March 15 decommissioning funding status report to the agency.
FENOC operates the reactors for Akron, Ohio-based parent FirstEnergy Solutions, which in March 2018 both declared bankruptcy and announced plans to by 2021 shut down the four reactors at three facilities. FirstEnergy Solutions, itself a branch of FirstEnergy Corp., says the plants cannot economically compete with low natural gas prices and other market forces.
In Ohio, the Davis-Besse Nuclear Power Station in Oak Harbor is set to close in May 2020, followed by the Perry Nuclear Power Plant in Perry in May 2021. In Pennsylvania, the two reactors at the Beaver Valley plant are due to close in May and October 2021.
FENOC’s March 15 filing with the U.S. Nuclear Regulatory Commission said the company is on track to have sufficient balances in its separate trusts to cover the cost of decommissioning each reactor.
The trust fund breakdown, as of Dec. 31, 2018, is:
- Perry: There is $517.1 million in the trust, with a $1.6 billion preliminary project estimate for license termination, site restoration, and spent fuel management under SAFSTOR;
- Davis-Besse: $562.9 million in the trust, with a $1.1 billion preliminary project estimate for license termination, site restoration, and spent fuel management under SAFSTOR;
- Beaver Valley No. 1: $286.9 million in the trust, with a $969.9 million preliminary estimate for license termination, site restoration, and spent fuel management under SAFSTOR
- Beaver Valley No. 2: $383.2 million in the trust, with a $999.4 million preliminary project estimate for license termination, site restoration, and spent fuel management under SAFSTOR
Reactors’ owners are supposed to grow the trusts over time to eventually cover the full cost of decommissioning, which the NRC defines as a plant’s safe removal from service and the reduction of radioactivity levels to the property can be released for restricted or unrestricted use.
In the March letter, FENOC Vice President for Nuclear Support and Regulatory Affairs Darin Benyak acknowledged that Beaver Valley No. 1 and the Perry reactor failed to meet federal regulations for minimum funding criteria at the end of 2018. However, a January market boost lifted the Perry fund balance into adherence, while the company is considering options for addressing the Beaver Valley shortfall, Benyak wrote.
FIrstEnergy Solutions’ ability to clean up its nuclear properties has been a worry for the Chicago-based Environmental Law & Policy Center (ELPC), which in March 2018 petitioned the NRC to find that the decommissioning trusts were $350 million short of the funding needed to cover costs and to take various actions against the company. That would have included suspending the operations licenses for the four reactors.
Earlier this week, the NRC formally rejected the ELPC petition. In a notice posted in the Federal Register, the agency said it had had not found that FirstEnergy and the subsidiaries that own and operate the nuclear power plants have violated federal regulations or been found to have short-changed the decommissioning trusts. “Therefore, there is an insufficient basis on which to take enforcement action, issue civil penalties, or suspend a license.”
The ELPC said it is pondering its next move. “We are evaluating our options, and we remain very concerned about FES’s financials ability to pay for decommissioning,” said Margrethe Kearney, senior staff attorney at ELPC.
FENOC’s March 15 report to the NRC said the it still needs pick whether to adopt a SAFSTOR or accelerated cleanup approach for the four reactors. It will also have to tailor its finances accordingly. No timeline is set for those decisions. The accelerated approach, DECON, calls for decommissioning to begin as soon as the reactor permanently shuts down. SAFSTOR, or safe storage, allows the operator to delay completion of decommissioning for up to 60 years as trust funds grow and radiation levels decrease.
The other moving part in this picture is FirstEnergy Solutions’ bankruptcy plan, which U.S. Bankruptcy Court Judge Alan Koschik in Ohio rejected on April 4. The judge said the plan was too vague and let corporate parent FirstEnergy Corp. off the hook for cleanup costs of the four reactors if its subsidiary falls short.
The proposed reorganization calls for separating FirstEnergy Solutions and FENOC from FirstEnergy Corp, which includes shielding the parent corporations legally and financially from many of the bankrupt subsidiaries’ creditors.
Technically, Koschik rejected the disclosure statement for FES’s proposed plan of reorganization. The disclosure statement is essentially a plain-language version of the plan of reorganization. When the judge approves a disclosure statement, FES’ creditors can vote on the proposed plan of reorganization. If the plan passes that vote, that will send the plan to a hearing before the judge.
“Working with our advisors, we have already initiated action to address the Court’s ruling and will submit a new request to have the disclosure statement approved in a timely manner,” FirstEnergy Solutions President and CEO John Judge said in a written statement. “The company remains focused on a plan that will significantly strengthen its financial position and allow it to exit Chapter 11 in 2019.”
FirstEnergy Solutions is using Koschik’s ruling as a map to revise its disclosure statement. It has not indicated when it will submit a revised plan.
FirstEnergy has consistently said it needs federal help and aid from the governments of Ohio and Pennsylvania to keep the reactors afloat. A plea to the Trump administration a year ago for help in guaranteeing customers for FirstEnergy Solutions has not to translated to any formal federal action.
State legislation filed this year in Pennsylvania is intended to help prop up FirstEnergy’s Beaver Valley plant and the Three Mile Island facility operated by Exelon.
A bill to allow FirstEnergy to raise power rates to help the Davis-Besse and Perry reactors never made it out of committee in 2018. The Cleveland Plain Dealer recently reported similar legislation is being worked on this year, but a bill has not been introduced yet.
