According to Callan Investment Institute, underfunded decommissioning costs could amount to $23 billion from investor-owned utilities. The industry has already set aside $50 billion to fund specific trust funds designated exclusively for decommissioning expenses, mostly collected from ratepayers….
As part of the Nuclear Regulatory Commission commissioning and licensing of a power plant, the plant owners establish a trust fund, known as the Nuclear Decommissioning Trust, or NDT. The sole purpose of this trust fund is to provide funds for the cost to decommission the facility when that time comes. The owners contribute annually to the fund, in relationship to the percent ownership, based on projected costs and length of the license. The companies are the final backstop to shortfalls in funding to these trusts.
The origin of the capital for fund contributions is from customer rate cases – in other words, NDT funding is part of our monthly electric bills. Owners are required to review annually and submit every two years to the NRC both the fund balance and cost estimates for decommissioning. The NRC provides a formula of costs for operators to compare with the balances on the NDT, or the companies can file site-specific cost projections for each facility.
The total industry-wide decommissioning costs are estimated by Callan to be $80 billion….[For instance] Entergy, according to the study, their NDT could be short by about $2 billion and to make up this difference over the average life remaining of their licenses, management should be setting aside $186 million a year rather than the $39 million currently. However, ETR is not alone in the study. The industry contributed $315 million in 2013 when Callan calculates the amount should be closer to $1.6 billion. Below are some shortfall numbers for the five largest nuclear power generators,…
According to Callan, Exelon has potential net deficiencies of $7.7 billion including Constellation Energy; Duke has a potential net deficiency of $2.3 billion; Entergy of $2.0 billion; Dominion Resources of $1.3 billion; and NextEra has a potential surplus of $208 million. Combined, the largest five producers of nuclear power have a potential decommissioning deficit of $13.1 billion, or 57% of the projected total industry-wide.
Excerpts from George Fisher, A $23 Billion Potential Shortfall For 27 Utilities With Nuclear Power Plants, Seeking Alpha,May. 15, 2015
Full Study (pdf)