United States Nuclear Regulatory Commission

Office of Public Affairs

Washington, DC 20555

Phone 301-415-8200 Fax 301-415-2234

Internet:opa@nrc.gov

No. 97-122 FOR IMMEDIATE RELEASE

(Friday, August 15, 1997)

NRC ISSUES FINAL POLICY STATEMENT

ON ECONOMIC DEREGULATION OF NUCLEAR POWER PLANTS

The Nuclear Regulatory Commission has issued a final policy

statement on its expectations and intended approach to nuclear

power plant licensees as the electric utility industry moves from

an environment of rate regulation toward greater competition.

The policy statement addresses NRC's concerns about the

adequacy of decommissioning funds and about the potential impact

of economic deregulation and various industry restructuring

actions on the operational safety of reactors.

The statement indicates that the NRC believes that its

current regulatory framework is generally sufficient to address

the expected changes, but in order to remove any ambiguities in

its regulations and address situations that may not be adequately

covered, the Commission is considering revising its financial and

decommissioning funding assurance requirements.

The agency published an advance notice of proposed

rulemaking in the Federal Register on April 8, 1996, to examine

issues related to decommissioning funding, and is developing a

proposed rule in response to comments received.

Increasing competition may force some utilities to separate

their systems into functional areas, causing some licensees to

cease being an "electric utility," as defined in NRC regulations.

If this occurs, NRC will require the licensees to meet the more

stringent decommissioning funding assurance requirements that

apply to non-electric utilities. Electric utilities are

permitted to accumulate funds for decommissioning over the

remaining terms of their operating licenses. NRC regulations

require most other licensees to provide funding assurance for the

full estimated cost of decommissioning, either through full upfront funding or by some allowable guarantee or surety mechanism.

In addition, the policy statement emphasizes that the NRC

retains the right to assess the timing of decommissioning trust

fund deposits and withdrawals and the liquidity of

decommissioning funds for licensees that no longer are subject to
rate regulatory oversight.

If nuclear power plants no longer meet NRC's definition of

an electric utility, NRC will require them to submit proof that

they remain financially qualified to operate their plants. The

agency is evaluating the need to develop additional requirements

to ensure against potential dilution of the capability for safe

operation and decommissioning that could arise from rate

deregulation and restructuring.

The Atomic Energy Act and NRC regulations provide that no

license may be transferred, directly or indirectly, without

Commission consent. Consent is clearly required when a corporate

entity seeks to transfer a license it holds to a different

corporate entity. The NRC staff has advised licensees that

agency consent must also be sought for the formation of a new

holding company over an existing licensee. The NRC is evaluating

what other types of transfers or restructuring should be subject

to review. The NRC staff will inform the Commission of any

unique or unusual licensee restructuring actions.

The NRC policy statement notes that many NRC licensees own

their nuclear power plants jointly with other, unrelated

organizations. NRC is concerned about the division of

responsibility for operating and decommissioning funds, if coowners file for bankruptcy or otherwise encounter financial

difficulties. The agency recognizes that co-owners generally

divide costs and output from their facilities by contract, using

a pro rata share standard. However, in highly unusual situations

ˇ where adequate protection of public health and safety would be

compromised if such action were not taken ˇ the NRC reserves the

right to consider imposing joint and several liability on coowners of more than minor shares when one or more co-owners have

defaulted.

The NRC recognizes the primary role that state public

utility commissions and the Federal Energy Regulatory Commission

have served, and in many cases will continue to serve, in setting

rates that include appropriate levels of funding for safe

operation and decommissioning. The agency intends to continue to

coordinate activities and exchange information with state and

federal agencies.

In the area of antitrust reviews, the NRC will explore, with

the Federal Energy Commission, Securities and Exchange Commission

and Department of Justice, methods for minimizing duplication of

effort. The agency will consider seeking legislation

eliminating its review requirements to the extent that its

reviews are duplicated by other agencies. The NRC anticipates

that antitrust reviews over the next 5 to 10 years will arise

primarily from changes in control of licensed facilities.
The policy statement is expected to be published in the

Federal Register shortly. A draft version was published on

September 23. Changes made as a result of comments received are

described in the forthcoming notice.

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