A working group of staff at the Nuclear Regulatory Commission is scheduled in March to issue a formal set of recommendations to enhance financial assurances for decommissioning of nuclear power plants.
Senior managers at the agency established the working group last September to consider the matter in the face of a growing trend in the nuclear industry, in which owners sell retired reactor facilities to third parties for decommissioning rather than handling cleanup themselves.
This approach is aimed at accelerating the time frame for decommissioning, but also creates new wrinkles in the NRC’s mandate to ensure a project is financed through completion. Expedited decommissioning reduces time for growth in the mandatory trust funds that pay for the work. The new owners, typically limited liability companies, also employ different financial assurance instruments than the power companies that previously owned the plants and could obtain additional money from ratepayer fees.
In a Feb. 5 presentation, agency staff said the working group had identified no gaps in the existing regulatory framework for financial assurance and determined there is a low risk of a company failing to have the necessary resources to complete decommissioning.
“Any transfer of a license to a third party to complete decommissioning requires prior NRC approval, and the NRC can only grant this approval if the third party demonstrates it has sufficient financial resources to complete decommissioning,” working group Chairman Ted Smith, a project manager with the NRC’s Reactor Decommissioning Branch, said during the webinar.
There are also a broad set of federal regulations covering financial assurance, Smith noted. Among these: Facility owners are required to submit annual updates to their reactor decommissioning cost estimate and to cover the anticipated expense; the funds are managed by a bank or other trustee that is separate from the property owner, under oversight by the NRC; and withdrawals from the fund can only be used for radiological decommissioning, though the agency can grant exemptions for related operations – management of spent fuel from reactors and site restoration for the property.
The NRC currently lists 21 nuclear power reactors in some stage of decommissioning, a number that will grow in coming years as more facilities shut down. Federal regulations allow up to 60 years to complete the process, after which radioactively levels must be reduced to the point at which the license can be terminated and the property released for restricted or unrestricted use.
Decommissioning can cost hundreds of millions of dollars, or even exceed $1 billion for a property with more than one reactor.
The working group has four recommendations for financial assurance, according to the presentation: integrating NRC on-site inspections of decommissioning with operations of the agency’s program office and financial analysts; updating NRC reporting guidance to encourage additional detail in the yearly cost decommissioning estimate reports and 30-day withdrawal notices from the decommissioning trusts; and establishing a “spot check program” for reactors undergoing decommissioning.
“Inspection activities will feed into the annual review process, by documenting completed decommissioning activities in the inspection reports. Likewise, the annual review process will feed into inspections, so that any activities listed as completed in the annual report, because they were completed after the last site inspection, are reviewed at the next inspection,” NRC spokesman David McIntyre said by email Wednesday. “We also anticipate that there will be trigger criteria in the inspection program for initiating a proposed decommissioning reactor financial assurance spot check activity.”
The report will be submitted on March 20 to John Lubinski, director of the Office of Nuclear Material Safety and Safeguards. With his approval, the regulator will begin making the changes laid out in the paper.
The webinar offered the public an opportunity to comment on the recommendations and decommissioning funding assurance more generally ahead of publication of the final report.
Concerns aired by callers were similar to those that have been discussed as the NRC has received applications for license transfers at retired nuclear power plants. Approval of the license transfers is necessary for a sale to go through, but local stakeholders have often worried the new owner does not have sufficient financial resources and expertise to complete the job.
The first license transfer approved by the agency was for the Vermont Yankee nuclear power plant, which Entergy sold to New York City-based environmental solutions specialist NorthStar Group Services in January 2019. Decommissioning of the single-reactor facility has been underway for more than a year.
Also last year, after receiving license-transfer approval from the regulator, energy technology company Holtec International bought Exelon’s Oyster Creek Nuclear Generating Station in New Jersey and Entergy’s Pilgrim Nuclear Power Station in Massachusetts. It also aims in coming years to acquire Entergy’s Indian Point Energy Center in New York state and Palisades Power Plant in Michigan.
Nuclear services firm EnergySolutions is seeking the license and ownership of FirstEnergy Corp.’s reactor Unit 2 at the Three Mile Island nuclear plant in Pennsylvania.
NorthStar is partnering with the U.S. branch of French nuclear company Orano in Accelerated Decommissioning Partners. The venture has a contract to decommissioning the Duke Energy’s Crystal River reactor in Florida, but has yet to outright buy a facility to date.
In each case, the new owner expects to earn a profit by keeping a portion of the trust fund once decommissioning is complete – with projections generally within 10 years.
Holtec International has taken the most heat to date, with the commonwealth of Massachusetts and state of New York both petitioning for hearings to address their concerns about the respective license transfers for the Pilgrim and Indian Point sites. Massachusetts took the NRC to federal court last year after agency staff approved the license transfer before the commission ruled on the hearing petition – which still hasn’t happened.
At the top of their lists of concerns are whether Holtec will have enough money to complete decommissioning, and whether the states could be left holding the bag if it does not. The company says its acquired trusts are sufficient to cover cleanup.
“My general concern is … there’s a basic issue: If, as in the case of a decommissioning company that’s an LLC and takes over a reactor site to decommission it, gets the decommissioning trust fund to do the job, they bring no other assets, that’s all they have is the decommissioning trust fund,” Mary Lampert, director of the advocacy group Pilgrim Watch, said during the webinar. “What can the NRC do if they run out of money, because then they have nothing left unless there is something enforceable that the parent company has formally agreed to.”
Pilgrim Watch is also waiting on an NRC ruling regarding its petition for intervention in the license transfer for the Pilgrim plant.
Holtec Decommissioning International LLC is the licensed operator for its parent company’s nuclear plants. The actual decommissioning is carried out by another LLC, Comprehensive Decommissioning International, a joint venture of Holtec and Canadian engineering form SNC-Lavalin.
