Nuclear Regulation:

NRC's Assurances of Decommissioning Funding During Utility Restructuring Could Be Improved

GAO-02-48: Published: Dec 3, 2001. Publicly Released: Dec 20, 2001.

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In most of the requests approved by the Nuclear Regulatory Commission (NRC) to transfer licenses to own or operate nuclear power plants, the financial arrangements have sought to ensure that adequate funds will be available to decommission those plants. However, when new owners proposed to continue relying on periodic deposits to external sinking funds, NRC's reviews were not always rigorous enough to ensure that decommissioning funds would be adequate. Varying cleanup standards and proposed new decommissioning methods introduce additional uncertainty about the future costs of decommissioning nuclear power plants. Changes to the Financial Accounting Standards Board's financial reporting standard will require, for the first time, owners of facilities that require significant end-of-life cleanup expenditures--such as nuclear power plants--to consistently report estimated decommissioning costs as liabilities in their financial statements. However, the new accounting standard is not intended to, and will not, establish a legal requirement that these licensees set aside adequate funding for decommissioning costs.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: The Nuclear Regulatory Commission (NRC) disagreed with the specific action that GAO had recommended because of the uniqueness of individual license transfers. NRC believed that the best approach to addressing GAO's concern was to ensure that reviews of the transfers are conducted and proper documentation is maintained according to the processes and considerations discussed in the agency's standard review plan. NRC has taken action to eliminate the review documentation deficiencies that GAO had identified.

    Recommendation: To ensure that the decommissioning assurance methods and financial qualifications of all new plant owners are consistently verified, validated, and documented, the Chairman of the National Regulatory Commission (NRC) should revise the Commission's standard review plan and related management controls for reviewing license transfers to include a checklist or step-by-step process for its staff, its management, and prospective owners to follow.

    Agency Affected: Nuclear Regulatory Commission

  2. Status: Closed - Implemented

    Comments: After considering public comments on an advance notice of proposed rulemaking on the use of entombment as a decommissioning option, the Nuclear Regulatory Commission (NRC) determined that there are insufficient technical bases to support an entombment license rule at this time. Although utilities and industry stated they would like to have entombment available as a decommissioning option, NRC found that no licensee is unequivocally committed to using the entombment option in its decommissioning process. As a result, NRC decided to defer its activities in this area but will request funding in the future to perform the basic research in support of performance criteria for entombment if the situation changes.

    Recommendation: The Chairman, NRC, in the Commission's ongoing consideration of modifications to radiological criteria for terminating licenses and alternative decommissioning approaches, should address how the burial or entombment of low-level radioactive waste at nuclear plant sites, leading to a potentially large number of contaminated sites scattered around the country, affects the federal policy under the Low-Level Radioactive Waste Policy Act to manage radioactive waste on a regional basis.

    Agency Affected: Nuclear Regulatory Commission

  3. Status: Closed - Implemented

    Comments: After considering public comments on an advance notice of proposed rulemaking on the use of entombment as a decommissioning option, the Nuclear Regulatory Commission (NRC) determined that there are insufficient technical bases to support an entombment license rule at this time. Although utilities and industry stated that they would like to have entombment as a decommissioning option, NRC found that no licensee is unequivocally committed to using the entombment option in its decommissioning process. NRC said that it was deferring its activities in this area but will request funding to perform the basic research in support of performance criteria for entombment if the situation changes.

    Recommendation: The Chairman, NRC, in the Commission's ongoing consideration of modifications to radiological criteria for terminating licenses and alternative decommissioning approaches, should address concerns about whether these decommissioning approaches are technically compatible with provisions of the Low-Level Radioactive Waste Policy Act, the interstate compact agreements that implement the act, and the NRC's technical regulations on licensing disposal facilities for low-level radioactive waste.

    Agency Affected: Nuclear Regulatory Commission

  4. Status: Closed - Not Implemented

    Comments: In a March 1, 2002 letter to congressional committees and GAO, the Chairman of NRC stated that NRC continues to "have concerns" about GAO's recommendation. The Chairman stated that implementation of GAO's recommendation would place a substantial burden on licensees with no resultant benefit. In the Chairman's view, a survey at the cessation of operations may serve little purpose, while such a survey near the end of the decommissioning process is likely to be cost effective.

    Recommendation: To reduce the likelihood that site contamination will go undetected until late in the cleanup process, the Chairman, NRC, should require licensees to survey their plant sites for radiation immediately following the announcement of their intentions to permanently cease operations, rather than allowing them to wait until two years before decommissioning is supposed to be complete.

    Agency Affected: Nuclear Regulatory Commission

 

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