Missouri Code of State Regulations › Title 20 - DEPARTMENT OF COMMERCE AND INSURANCE › Division 4240 - Public Service Commission › Chapter 20 - Electric Utilities › Section 20 CSR 4240-20.070 - Decommissioning Trust Funds

Current through Register Vol. 49, No. 14, July 15, 2024
PURPOSE: This rule is promulgated pursuant to section
				  393.292,
				  RSMo to-1) govern the review and authorization of changes to the rates and
				  charges contained in the tariff(s) of an electric corporation as a result of a
				  change in the level or annual accrual of funding necessary for its nuclear
				  power plant decommissioning trust fund, 2) govern the procedure for the
				  submission, examination, hearing, and approval for the tariff changes, and 3)
				  ensure that the amounts collected from ratepayers and paid into the trust funds
				  will be neither greater nor lesser than the amounts necessary to carry out the
				  purposes of the trust. Additional requirements pertaining to this subject
				  matter are also found at
				  4 CSR
				  240-3.185.
(1) As used in this rule, decommissioning
				means those activities undertaken in connection with a nuclear generating
				unit's retirement from service to ensure that the final removal, disposal,
				entombment, or other disposition of the unit and of any radioactive components
				and materials associated with the unit, are accomplished in compliance with all
				applicable laws, and to ensure that the final disposition does not pose any
				undue threat to the public health and safety. Decommissioning includes the
				removal and disposal of the structures, systems, and components of a nuclear
				generating unit at the time of decommissioning.
(2) As used in this rule, decommissioning
				costs means all reasonable costs and expenses incurred in connection with
				decommissioning, including all expenses to be incurred in connection with the
				preparation for decommissioning, including, but not limited to, engineering and
				other planning expenses; and to be incurred after the actual decommissioning
				occurs, including, but not limited to, physical security and radiation
				monitoring expenses, less proceeds of insurance, salvage or resale of
				machinery, construction equipment, or apparatus the cost of which was charged
				as a decommissioning expense.
(3)
				As used in this rule, utility(ies) means all electrical corporations subject to
				the jurisdiction of the Missouri Public Service Commission (commission) that
				own, in whole or in part, or operate nuclear generating units in Missouri or
				elsewhere and that have costs of these units reflected in the rates charged to
				Missouri ratepayers.
(4) Every
				three (3) years, utilities with decommissioning trust funds shall perform and
				file with the commission cost studies detailing the utilities' latest cost
				estimates for decommissioning their nuclear generating unit(s) along with the
				funding levels necessary to defray these decommissioning costs. These studies
				shall be filed along with appropriate tariff(s) effectuating the change in
				rates necessary to accomplish the funding required. In addition, the
				commission, at any time for just cause, may require a utility to file an
				updated decommissioning cost study, funding requirement, and associated
				tariff(s).
(5) Each utility shall
				establish a tax-qualified externally managed trust fund for the purpose of
				collecting funds to pay for decommissioning costs. The tax-qualified trust
				shall be established and maintained in accordance with the provisions of the
Internal Revenue Code
. If the utility has collected funds in
				excess of the Internal Revenue Service's (IRS) tax-qualified amount, a
				nontax-qualified externally managed trust fund shall be established and
				maintained for all these funds. These trust funds shall be administered
				pursuant to the following requirements:
(A)
				Each utility shall submit a copy of the decommissioning trust agreement and any
				other agreement entered into between the utility, trustee, and investment
				manager(s) for approval by the commission. The listing of trustee fees shall be
				contained in or attached to the trust agreement itself. Any change in the trust
				agreement, trustee, or investment manager(s) also shall be submitted to the
				commission for approval;
(B) The
				commission shall have the authority to require each utility to change the
				trustee or investment manager(s) of a decommissioning trust for good cause
				shown. The commission shall be informed of any significant disputes between the
				utility, the trustee, or investment manager(s);
(C) Each utility shall maintain separate tax
				qualified trusts for each nuclear generating unit. All decommissioning trusts
				shall be maintained to show the amounts contributed annually by Missouri
				jurisdictional customers. Amounts to be contributed annually for Missouri
				jurisdictional customers shall be computed based on the jurisdictional
				allocator used in the company's last general rate proceeding unless otherwise
				ordered by the commission;
(D) The
				decommissioning trust shall be funded through no less than quarterly payments
				by the utility. The tax-qualified trust shall be funded with the lesser of the
				utility's decommissioning costs reflected in its cost of service or the maximum
				amount allowable by the IRS. All funds in excess of the IRS's ruling amount
				shall be placed in a nonqualified trust;
(E) The trustee or investment manager(s)
				shall invest the tax-qualified trust assets and nontax-qualified trust assets
				only in assets that are prudent investments for assets held in trust and in a
				manner designed to maximize the after-tax return on funds invested, consistent
				with the conservation of the principal, subject to the limitations specified as
				follows:
1. The trustee and investment
				manager(s) shall not invest any portion of the tax-qualified or
				nontax-qualified trust's funds in the securities or assets of the following:
A. Any owner or operator of a nuclear power
				plant;
B. Any index fund, mutual
				fund, or pooled fund in which more than fifteen percent (15%) of the assets are
				issued by owners or operators of nuclear power plants;
C. Any affiliated company of the utility;
				or
D. The trustee or investment
				manager's(s') company or affiliated companies (This limitation does not include
				time or demand deposits offered through the trustee or investment manager's(s')
				affiliated banking operations.);
2. The nontax-qualified trust shall be
				subject to the prohibitions against self-dealing applicable to the tax
				qualified trust as specified in the
Internal Revenue Code
;
				and
3. A utility's total book value
				of investments in equity securities in all of its decommissioning trusts shall
				not exceed sixty-five percent (65%) of the trust funds' book value;
				and
(F) All income earned
				by a trust's funds shall become a part of that trust's funds.