The NRC published a draft interim staff guidance (ISG) on June 15, 2023, reemphasizing limitations on the use of funds previously reported to the NRC as providing radiological decommissioning funding assurance (DFA).
In particular, the ISG reiterates the NRC’s position that funds set aside in nuclear decommissioning trusts (NDTs) and reported by licensees under 10 CFR 50.75(f) may be used solely for “decommissioning” expenses as defined in 10 CFR 50.2. The use of funds in NDTs for other purposes, even NRC-regulated activities—such as the disposal of major radioactive components (MRCs) (steam generators, reactor vessel heads etc.)—prior to permanent cessation of operations is prohibited unless a licensee has received an exemption or has established a dedicated NDT subaccount to fund the other purpose. The ISG, which is consistent with the NRC’s general position on the use of NDTs, provides some desirable clarity on what factors NRC will consider exemption requests.
Decommissioning Requirement
The NRC’s regulations in 10 CFR 50.75 require that an NRC licensee provide DFA at all times prior to NRC license termination. Commercial nuclear power reactors have established NDTs to satisfy this requirement. In turn, 10 CFR 50.82(a)(1)(8)(i)(A) limits the withdrawal of funds from an NDT unless they are for “decommissioning activities consistent with the definition of decommissioning” in 10 CFR 50.2. Section 50.2 defines “decommissioning” as “remov[ing] a facility or site safely from service and reduc[ing] residual radioactivity to a level” that permits termination of the NRC license.
In addition, 10 CFR 50.82(a)(1)(8)(ii) limits expenditures of NDT funds to 3% of the generic formula amount in 10 CFR 50.75 (other than administrative costs for the NDT itself) until the licensee has certified the permanent cessation of operations, with 10 CFR 50.82(a)(1)(8)(iii) placing an additional cap of 20% of the generic formula until submittal of a post-shutdown decommissioning activities report. In other words, the licensee is limited from withdrawing funds from the NDT until after permanent cessation of operations and transitioning to the decommissioning process. Operating licensees are required by 10 CFR 50.75(f)(1) to periodically report the amount of funds in the NDT that are relied upon for DFA.
Exemptions
In recent years the NRC has granted a number of exemptions allowing licensees to repurpose NDT funds that had previously been reported as providing for radiological DFA toward irradiated fuel management and site restoration beyond radiological decommissioning. Some of these exemptions were issued at plants that had permanently ceased operations and where the NDT was the main source of operating and maintenance costs.
Licensees requesting the exemptions have been able to demonstrate that there were more than adequate funds in the NDT—well beyond estimates of funds necessary to complete radiological decommissioning—including projected cash flows that demonstrate adequate radiological DFA through license termination even after the repurposing.
Draft ISG
In this vein, the ISG is only the NRC’s most recent pronouncement on the use of NDT funds prior to permanent cessation of operations. Most relevantly, the NRC received a petition for rulemaking in 2019 requesting that 10 CFR 50.75 and 10 CFR 50.82 be revised to allow the use of NDT funds to pay for the disposal of MRCs. These components, which become radioactive during normal plant operations, may need to be replaced during normal plant operations and to extend plant life.
Ultimately, the NRC denied the petition in February 2022, reasoning that it had not raised a “significant safety or security concern, and this subject area is adequately covered by existing regulations.” In particular, the NRC explained that licensees could seek to use “excess” NDT funds, i.e., those for amounts in excess of what is required to provide radiological DFA, by requesting an exemption under 10 CFR 50.12.
The ISG reminds industry that licensees can establish NDT “subaccounts designated for activities other than radiological decommissioning,” including for MRC disposal, if so desired. The NRC has authorized the creation of subaccounts within the NDT where funds are set aside to provide for non-radiological (i.e., environmental) site restoration activities and for spent fuel management (i.e., managing irradiated fuel at the site until its ultimate removal), provided that these subaccounts are separately accounted for. These subaccounts may be managed by the same trustee and investment manager of the NDT, reducing administrative expenses and encouraging growth of all the subaccounts.
However, the NRC has repeatedly taken the position that funds previously reported to the NRC as providing radiological DFA pursuant to 10 CFR 50.75(f) should not be included in these subaccounts. Absent clear accounting and reporting, the NRC treats the funds reported to it under 10 CFR 50.75(f) as jurisdictionally locked and exclusively available for radiological decommissioning.
Some licensees have been successful in recapturing previously reported funds by presenting orders of state commissions under whose jurisdiction the funds were collected from ratepayers, indicating that some portion of those funds collected were intended for these other non-radiological purposes. The ISG cautions that it is “not permissible under the NRC’s regulations” to reallocate funds within a merchant (i.e., non–cost of service) plant’s NDT subaccounts unless the NRC grants an exemption under 10 CFR 50.12. Licensees that attempt to unilaterally reclassify funds could receive a request for additional information or other investigation request from the NRC upon receipt of their biannual funding reports.
Seeking Exemptions
If a licensee wants to seek an exemption, the guidance lays out illustrative factors that the NRC considers relevant to such a request, including the following:
- There is a “large projected surplus” in the NDT
- The site-specific cost estimate specifically accounts for the withdrawal prior to commencing decommissioning
- The licensee can demonstrate that the funds in the commingled NDT “were collected or set aside for specific [non-radiological] decommissioning” activities
- The licensee demonstrates that current and projected NDT funds will provide adequate DFA throughout the decommissioning period
- There is sufficient time for growth of the NDT to cover the withdrawal amount before the NDT will be needed again
The NRC is reviewing the use of NDTs as part of the pending “Regulatory Improvements for Production and Utilization Facilities Transitioning to Decommissioning” rulemaking. We frequently advise NRC licensees on preparing for and funding decommissioning, and will continue to monitor developments with respect to the use of NDT funds.