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Monday, April 8, 2013

TVA and NRC Nuclear Power Plant Decommissioning Fund Negligence

A picture of TVA negligence, the Kingston Coal Ash Dam Collapse
TVA's nuclear power plant decommissioning fund reflects negligence and mismanagement on the part of TVA and the requirements of the regulator, the NRC.
TVA's Nuclear Decommissioning Fund status, 2012 Annual Financial Report, page 98, concerns deferred costs only. No where in the financial report are the actual decommissioning funds on hand listed. Pg 73 contains a discussion.  http://investor.shareholder.com/tva/secfiling.cfm?filingID=1376986-12-43 TVA officials report the 2012 fund status as $1.165 billion as reflected in the required report to the NRC.
"GAO investigated 12 reactors’ trust funds, comparing company-prepared site-specific decommissioning cost estimates to NRC’s formula. For nine reactors, NRC’s formula resulted in funds below the companies’ estimates. In one case, a company believed it needed $836 million, which was $362 million more than NRC’s formula figure. GAO also noted NRC’s funding formula was more than 30 years old." http://cen.acs.org/articles/91/i13/Nuclear-Retirement-Anxiety.html

"Decommissioning a Nuclear Plant Can Cost $1 Billion and Take Decades:" http://www.reuters.com/article/2011/06/13/idUS178883596820110613
Who manages TVA's nuclear decommissioning fund? Students at 25 of the Southeast's Universities manage TVA's Nuclear Decommissioning funds - in part. http://www.tva.com/investmentchallenge/pdf/ic_brochure.pdf

"As a public entity, TVA has an inherent duty to accurately and plainly inform its stakeholders about its financial condition. This entails more than merely doing what the law requires in the way of disclosures to potential investors. In our view, most members of Congress and the general public do not have the time to decipher TVA's 10Q to the SEC. Our report is intended to make TVA's finances more transparent to the Congress and the general public."
Summary: TVA's nuclear decommissioning fund is seriously underfunded. The current estimated cost to decommission a nuclear power plant is reflected in the "Chemical & Engineering News" article, $840 million.
The nuclear decommissioning under-funding status is reflective of negligence on the part of several parties, TVA & the NRC, who are the decision makers and regulators in this matter. To decommission 3 of TVA's 6 current operating nuclear power reactors would cost over $2.5 billion dollars. If we utilize TVA's financial figures they have a serious deficit for the decommissioning fund, $1.165 billion funded (Sep 2012). TVA needs over 4 times that amount for 6 plants. This deficit stands to significantly effect TVA ratepayer electricity costs in the future if TVA and/or the NRC does not take appropriate action to correct the seriously underfunded status of TVA's decommissioning account.
The NRC must bear part of this negligent action due to their failure to update the 30 year old decommissioning fund requirement. Information from the NRC site regarding decommissioning sums up this problem: OIG/95A-20 - NRC's Decommissioning Financial Assurance Requirements for Federal Licensees May Not Be Sufficient - "We found that NRC's decision to allow Federal licensees to use a statement of intent to meet decommissioning funding requirements for their nuclear power plants was based primarily on the assumption that the Federal Government would pay the financial obligations of the lone Federal licensee, the Tennessee Valley Authority (TVA), should it be unable to do so. However, based on our review of the U.S. Code and discussions with officials from the Department of Treasury, the Office of Management and Budget and TVA, we believe NRC's assumption is questionable. We also believe the NRC staff responsible for developing and reviewing the rule did not conduct sufficient analysis to determine whether allowing Federal licensees to use a statement of intent was appropriate."

"We also found that, although not required, TVA has established a fund dedicated to meet its decommissioning obligations. However, because this is an internal fund it can be used for other purposes. In fact, TVA had at one time temporarily depleted its decommissioning fund." http://www.nrc.gov/reading-rm/doc-collections/insp-gen/1996/95a-20.html

GAO Report Recommendation on Nuclear Decommissioning Funds: "To further strengthen NRC’s oversight of decommissioning funding assurance, the NRC Commissioners should better ensure that licensees are providing reasonable assurance that they will have the necessary funds and improve the consistency of information the agency collects by continuing these reviews of fund balances in a way that is most efficient and effective for the agency." http://www.gao.gov/products/GAO-12-258

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