5.4 Power and Utilities — Nuclear

The legal obligation associated with the decommissioning of a nuclear power plant arises from the regulations established by the NRC. Before a nuclear power plant begins operations, the NRC requires the licensee to establish or obtain a financial mechanism, such as a trust fund or a guarantee from its parent company, to ensure that there will be sufficient money to cover the cost for the ultimate decommissioning of the facility. The minimum decommissioning funding required by the NRC reflects only the efforts necessary to terminate the NRC license, which is commonly known as the “Part 50 license.”1 This license is not terminated until the licensee has completed all activities included in the approved license termination plan (LTP). Other activities related to facility deactivation and site closure, including operation of the spent fuel storage pool, construction and operation of an independent spent fuel storage installation (ISFSI), demolition of decontaminated structures, and site restoration activities after residual radioactivity has been removed, are not included in the NRC definition of decommissioning. However, costs for the completion of these activities are typically included in the decommissioning cost estimate because there may be a legal obligation imposed by the state or local government, or both, for ultimate release of the property.

Under 10 CFR Section 50.75, each nuclear power plant licensee must report to the NRC every two years the status of its decommissioning fund for each reactor or share of a reactor that it owns. At or about five years before the projected end of operations, each power reactor licensee must submit to the NRC a preliminary decommissioning cost estimate that includes an up-to-date assessment of the major factors that could affect the cost of decommissioning the reactor.

In addition, 10 CFR Section 50.82 requires a nuclear power plant licensee to submit a post-shutdown activities report (PSDAR) to the NRC, as well as a copy to the affected state(s), before or within two years after permanent cessation of operations. The PSDAR must contain the following:

• A description of the planned decommissioning activities.
• A schedule for the accomplishment of significant milestones.
• Documentation that environmental impacts associated with site-specific decommissioning activities have been considered in previously approved environmental impact statements.
• A site-specific decommissioning cost estimate, including the projected cost of managing irradiated fuel.

Under 10 CFR Section 50.82, a nuclear power plant licensee is also required to submit an LTP at least two years before its license is terminated. The LTP must include the following:

• A site characterization.
• Identification of remaining dismantlement activities.
• Plans for site remediation.
• Detailed plans for the final survey of residual contamination at the site.
• A description of the end use of the site, if restricted.
• An updated site-specific estimate of remaining decommissioning costs.
• A supplement to the environmental report.

In general, decommissioning must be completed within 60 years of the plant’s cessation of operations. A time beyond that would be considered only when necessary to protect public health and safety in accordance with NRC regulations. The duration of operations depends on the time prescribed by the operating license. Historically, nuclear facilities have typically been permitted to operate for a period of 60 years based on an initial license of 40 years and a license renewal for an additional 20 years. More recently, some licensees have sought a second license renewal to extend the life of their permitted operating period from 60 years to 80 years. Life extensions affect when a licensed plant is shut down and eventually decommissioned. If a licensee’s application for a life extension is approved, the licensee will need to prepare (1) assumptions about when spent fuel will be removed from the site (i.e., before or after plant shutdown) and (2) a revised decommissioning timeline.

Licensees often change their decommissioning alternative selection during the life of the plant. For example, a licensee that originally anticipated decommissioning a power plant under the DECON alternative may change this decision and select SAFSTOR on the basis of external factors. If the decommissioning alternative is changed, the decommissioning cost estimate must be revised accordingly.

The only way that radioactive waste can become harmless is through decay. However, it can take hundreds of thousands of years for high-level radioactive waste to fully decay. For that reason, high-level radioactive waste must be stored and finally disposed of in a way that provides the public with adequate protection for a very long time.

In 1982, Congress passed the Nuclear Waste Policy Act, assigning the federal government’s long-standing responsibility for disposal of spent nuclear fuel created by commercial nuclear generating plants to the U.S. Department of Energy (DOE). The DOE was to begin accepting spent fuel by January 31, 1998; however, no progress has been made to date in the removal of spent fuel from commercial generating sites. In January 2013, the DOE issued the document Strategy for the Management and Disposal of Used Nuclear Fuel and High-Level Radioactive Waste (the “January 2013 document”). In its January 2013 document, the DOE stated that “[w]ith the appropriate authorizations from Congress, the Administration currently plans to implement a program over the next 10 years that [a]dvances toward the siting and licensing of a larger interim storage facility to be available by 2025 that will have sufficient capacity to provide flexibility in the waste management system and allows for acceptance of enough used nuclear fuel to reduce expected government liabilities.”

Completion of the decommissioning process is dependent on the DOE’s ability to remove spent fuel from the site in a timely manner. As a result of the DOE’s current inability to accept the spent fuel, commercial generating sites have been storing their high-level radioactive waste in the ISFSI, which is typically located on the same property as the nuclear reactor. Costs associated with the long-term storage of the spent fuel are typically included in the decommissioning estimate. Costs for storage include operation and maintenance of the ISFSI and security as required under NRC regulations.

It is important to consider the uncertainties associated with both the requirements related to the storage of spent nuclear fuel and the timing and ultimate disposal of spent fuel, as well as how those uncertainties may affect ARO cost estimates. Three approaches have been observed in industry with respect to the estimation of when the DOE will be able to accept spent fuel from a nuclear power plant:

1. The DOE will not be able to accept spent fuel, and the material will remain on-site indefinitely.
2. The DOE will accept the spent fuel at a later time based on an adjustment to the pickup date provided in the DOE’s July 2004 Acceptance Priority Ranking & Annual Capacity Report, taking into account the 2025 spent fuel pickup start date provided in the DOE’s January 2013 document.
3. An approach similar to that in (2) above, but with a spent fuel pickup start date later than 2025 based on professional judgment.

In addition, many of the commercial generators have entered into settlement agreements with the DOE to obtain reimbursement from the DOE for costs related to spent fuel that were incurred as a result of the DOE’s delay in taking possession of spent fuel. In practice, nuclear power generators have obtained (1) reimbursements from the federal government or state regulatory agencies for operation and maintenance costs or (2) have recovered other monetary damages associated with the federal government’s failure to begin removing spent nuclear fuel and other radioactive waste from former nuclear reactor sites. Reimbursement can be sought through either settlement agreements or damage claims. If a utility has a settlement agreement with the DOE, the utility can seek annual reimbursement for any delay-related nuclear waste storage costs incurred during the year. In the absence of a settlement agreement with the DOE, a utility can file a claim for damages in the U.S. Court of Federal Claims. Unlike settlements, which cover all past and future damages resulting from the DOE’s nuclear waste delays, awards by the U.S. Court of Federal Claims can cover only damages that have already been incurred; accordingly, utilities must continue filing damage claims as they accrue additional delay-related costs.

The NRC is currently developing new regulations that will implement lessons learned from transitioning several plants from operating to decommissioning since 2011. According to an August 2019 report by the NRC’s Office of the Inspector General on the audit of the NRC’s transition process for decommissioning power reactors, the NRC estimates that the new regulations will save licensees, the NRC, and taxpayers approximately $19 million per decommissioning reactor. Issuance of such regulations could potentially be a material triggering event requiring revision of decommissioning cost estimates.