Decommissioning begins when a licensee has filed documentation with NRC to permanently shut down a reactor and the fuel has been removed. NRC requires decommissioning to be completed within 60 years after a reactor permanently shuts down unless additional time is necessary to protect public health and safety. Licensees choose from two decommissioning methods: immediate decontamination and dismantlement (DECON) or safe storage (SAFSTOR). The DECON method calls for the licensee to remove the radioactively contaminated equipment, structures, and parts of the reactor for shipment to a low-level radioactive waste disposal site or for temporary storage. This process generally takes 5 or more years. Under the SAFSTOR method, the reactor is left for up to 60 years in a state that allows the radioactive components to decay while the reactor is maintained and monitored. Once radioactivity has decreased, the reactor is then dismantled in a way similar to the DECON process. After all of the radioactive material has been removed, and NRC has terminated the reactor’s license, the site can be used for other purposes. Licensees can begin decommissioning a reactor while another reactor at the site is operating. Currently, 36 nuclear power plants have more than one reactor at the site, and six of those plants have one reactor that is in the process of decommissioning. In addition to decommissioning, licensees are also responsible for other postshutdown activities. These activities include the management of spent nuclear fuel—a type of high-level radioactive waste—until it can be transferred to the Department of Energy, which is responsible for providing permanent disposal. Site restoration is another such activity, which includes the cleanup of nonradiological contaminants, such as acids and heavy metals, to restore the power plant site to a condition that is safe for public use. However, these activities do not fall within the scope of NRC’s definition of decommissioning or under NRC’s decommissioning oversight authority, and licensees must pay for these costs with funds that are separate from their decommissioning funds. NRC periodically reviews licensees’ decommissioning funds and related licensee data to determine if licensees have provided reasonable assurance that they will accumulate adequate funds for decommissioning. According to NRC guidance, the amount of funds that is considered adequate is established by NRC’s decommissioning formula, which represents the bulk of the funds needed to decommission a specific reactor and is not an estimate of the actual cost. The formula estimates decommissioning costs by reactor type—pressurized water reactor or boiling water reactor—and the reactor’s capacity to generate electricity. The formula is based on two studies, published in 1978 and 1980, that provided information on the technology available at the time, safety considerations, and the probable costs for decommissioning the two types of reactors. NRC codified its decommissioning funding formula in 1988. According to this regulation, the three cost factors identified in the formula—labor, energy, and low-level radioactive waste disposal—are adjusted annually to reflect the effects of inflation. To estimate costs in current year dollars, the labor and energy cost factors are adjusted from the prior year using data from the U.S. Department of Labor’s Bureau of Labor Statistics, while the waste disposal cost factor is adjusted based on actual disposal cost data published by NRC. As part of NRC’s oversight of decommissioning funds, the agency requires licensees to provide decommissioning cost estimates and other information to NRC throughout the life cycle of a nuclear reactor: Initial decommissioning estimate and financial method. Beginning in July 1990, NRC has required licensees to report that they had (1) estimated the amount needed for decommissioning, typically using NRC’s decommissioning funding formula, and (2) developed a plan for accumulating these funds by the projected time of permanent shutdown. Since that date, license applicants have been required to submit this information as part of their license application. NRC regulations allow licensees to use one or more methods as part of their plan to accumulate funds, such as prepayment of the entire estimated decommissioning amount, a trust fund that is separate from other licensee assets and accrues earnings based on investments, parent company guarantees, or letters of credit. The most common financial method is a trust fund that is allowed to grow over the life of the reactor and during the decommissioning process. Once licensees contribute funds to a decommissioning trust fund, funds generally cannot be withdrawn for other purposes.  DFS reports. NRC requires licensees to submit DFS reports at least every 2 years while a reactor is operating, and every year once a reactor is within 5 years of permanent shutdown through license termination. Licensees may report the amount of funds estimated to be needed for decommissioning using the decommissioning funding formula or a licensee-generated site-specific cost estimate if it is greater than the formula amount. According to NRC guidance, NRC staff compare two things in reviewing these reports: (1) the licensee’s accumulated funds plus amounts provided by any other methods in the licensee’s plans to accumulate funds as described above and (2) the amount estimated to be needed for decommissioning, which is the greater of an NRC-generated formula estimate or the licensee- generated site specific cost estimate. If the licensee’s balance is greater than or equal to the estimated amount needed for decommissioning, an NRC reviewer makes a determination of reasonable assurance. If the balance is less than the estimated amount needed for decommissioning, the reviewer projects the licensee’s accumulated funds through the decommissioning period to account for any anticipated growth. If the projected amount plus amounts provided by other methods is less than the estimated amount needed for decommissioning and a second reviewer verifies this finding, then NRC may request additional information from the licensee and repeat the process. According to agency guidance, licensees are expected to make adjustments to correct shortfalls in 2 or 5 years, depending on the type of licensee, from when the DFS report in question is submitted. An NRC official told us that the agency determines on a case-by-case basis if additional actions should be taken to assure the agency that the licensee will have adequate decommissioning funds when needed.  Preliminary decommissioning cost estimate. About 5 years prior to a reactor’s projected permanent shutdown, NRC requires licensees to submit a preliminary decommissioning cost estimate that is more detailed than NRC’s decommissioning funding formula. This cost estimate provides NRC with an up-to-date estimate of expected decommissioning costs and an assessment of the major factors that could affect such costs, as well as the licensee’s plans for adjusting decommissioning funding levels if necessary. Major factors include, but are not limited to, the potential for contamination of the site and the decommissioning method the licensee plans to use. NRC guidance calls for staff to compare the preliminary cost estimate with the decommissioning cost estimate generated by the NRC formula. The licensee’s preliminary cost estimate is deemed acceptable if it is equal to or greater than the formula amount. If it is less than the formula amount, NRC informs the licensee that additional information is needed to assure the agency that the licensee will accumulate adequate funds for decommissioning.  Site-specific cost estimate. NRC requires licensees to submit a site- specific cost estimate prior to or within 2 years following permanent shutdown; licensees may also develop such estimates earlier at their discretion. The intent of this cost estimate is to provide NRC with a more detailed assessment that incorporates the cost impacts of site- specific factors. Site-specific factors include, but are not limited to, an estimate of the volume of radioactive waste and a summary of costs estimated for each major decommissioning activity. According to NRC guidance, the site-specific estimate may be significantly greater than the minimum amount based on the NRC formula. If the site-specific estimate and formula amount differ, NRC requires licensees to provide information on the basis for the difference. If NRC determines that the information provided is insufficient, an agency official told us that the agency decides, on a case-by-case basis, how many information requests it will make and whether it will consider taking additional actions to assure the agency that the licensee will have adequate decommissioning funds when needed.  License termination plan with updated site-specific cost estimate. Toward the end of decommissioning and at least 2 years before termination of the reactor’s license, NRC requires licensees to submit a license termination plan. In this plan, licensees must estimate the remaining costs of decommissioning. NRC guidance calls for agency staff to review this report to independently verify that a reactor can be decommissioned safely and the license terminated. As part of this review, staff are to compare the estimated remaining costs of decommissioning with the licensee’s funds available for decommissioning. If the available decommissioning funds are less than the estimated remaining costs, the plan must indicate the means the licensee will use for ensuring adequate funds to complete decommissioning. Licensees who choose to invest their decommissioning trust funds are generally required to do so in accordance with standards set by NRC. NRC defers to the Federal Energy Regulatory Commission (FERC) for investment standards for reactors that are owned by public utilities, which constitute about half of the 104 operating reactors. FERC requires the utilities it regulates to invest their decommissioning funds in accordance with several standards.