To comply with the provisions of the Dodd-Frank Act, the NRC must amend its decommissioning financial assurance mechanisms in 10 CFR Part 30. The NRC promulgated these regulations in the 1980s and 1990s to allow licensees to use parent company and self-guarantee decommissioning financial assurance mechanisms. Owners and/or operators and parent company guarantors could qualify to use these guarantee mechanisms by either meeting financial test metrics or minimum guarantor bond credit rating criteria.
But following the financial crisis of 2007–2008, Congress determined that “ratings on structured financial products have proven to be inaccurate” and that “[t]his inaccuracy contributed significantly to the mismanagement of risks by financial institutions and investors, which in turn adversely impacted the health of the economy.” Accordingly, Section 939 of the Dodd-Frank Act directed each federal agency, including the NRC, to remove any reference to or requirement of reliance on credit ratings and to substitute standards of creditworthiness as each respective agency shall determine as appropriate for such regulations. In accordance with the Dodd-Frank Act, the NRC is proposing to amend 10 CFR Part 30 to remove these credit rating–based requirements.
In July 2019, NRC staff provided a direct final rule package to the Commission intended to comply with provisions of Dodd-Frank by simply eliminating the credit rating option but without providing other suitable alternatives as authorized by the act. Based on substantial industry opposition to the proposed direct final rule, the staff withdrew the package.
Industry participants recommended that the NRC instead examine approaches taken by other federal agencies for implementing the Dodd-Frank requirements to identify alternative approaches for assessing a licensee’s creditworthiness that do not significantly alter the availability of these guarantee mechanisms. Participants also recommended issuing an advanced notice of public rulemaking (ANPR) to solicit early stakeholder views to inform the development of the proposed rule.
Consistent with these recommendations, the NRC recently sought Commission approval to issue an ANPR to solicit further public input on decommissioning financial assurance mechanisms to comply with the Dodd-Frank Act. Once issued, the ANPR would provide a 75-day comment period, and NRC plans to hold public meetings to gather further input.
Given the growing importance of an effective and workable nuclear decommissioning regulatory regime in the United States, the decision to pursue the ANPR is a substantial positive development.
There is currently no date for issuance of the ANPR, but we continue to follow this issue closely and are working with the industry to develop workable financial assurance alternatives. In the meantime, please contact Paul Bessette if you have any questions.