ML18096A572

Forwards Proposed Rules Re Nuclear Generating Plant Decommissioning

ML18096A572
Person / Time
Site:	Salem
Issue date:	03/06/1992
From:	Chilton R NEW JERSEY, STATE OF
To:	Delany F, Harlacher M, Nash D ATLANTIC CITY ELECTRIC CO., Office of Nuclear Reactor Regulation, Public Service Enterprise Group
References
NUDOCS 9203200381
Download: ML18096A572 (7)

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STATE OF NEW JERSEY Board of Regulatory Commissioners Two Gateway Center Newark, NJ 07102 TO:

The Attached service List ( J)crr-ra.L Das-/.... *u~ }.)~C - J~,E.4)

RE:

Nuclear Generating Plant Decommissioning Proposed New Rules:

N.J.A.C. 14:5A BRC Docket No. EX91020247 DATE:

March 6, 1992 Attached for your information find a copy of the proposed rules on the above matter which were published in the New Jersey Register of November 4, 1991.

A public hearing will be held on Friday, April 3, 1992 at 10:00 a.m. at the Board's hearing room on the 10th floor, Two Gateway Center, Newark, New Jersey to solicit comments on the proposal.

To inform us of your planned appearance to speak, or if you have any questions, please contact Ms. Margie Christian of my staff at (201)648-3717 by Friday, March 27.

RC/RH:pap Attachment Very truly yours, R~~

Robert Chilton, Director Division of Electric Jlr (vf

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SERVICE LIST NUCLEAR GENERATING PLANT DECOMMISSIONING RULES PROPOSAL N.J.A.C. 14:5A BPU DOCKET NUMBER EX91020247 Francis Delany, Jr.

Corporate Rate Counsel, T5F Public Service Electric & Gas Company P.O. Box 570 Newark, N.J. 07101 Meredith I. Harlacher, Jr.

Senior Vice President Planning and Regulatory Affairs Atlantic City Electric Company 1199 Black Horse Pike Pleasantville, N.J. 08232 Dennis Baldassari, President Jersey Central Power & Light Co.

Madison Avenue & Punch Bowl Road Morristown, N.J. 07960 Mr. Mario DiValentino Vice President - Accounting & Finance Rockland Electric Co.

One Blue Hill Plaza Pearl River, N.Y. 10963 Wilfredo Caraballo Public Advocate*

Department of the Public Advocate Division of Rate Counsel 31 Clinton Street, 11th Floor Newark, N.J. 07102 Nina Mitchell Wells Director Department of the Public Advocate Division of Rate Counsel 31 Clinton Street, 11th Floor Newark, N.J. 07102 Commissioner Thomas Downs NJ Department of Transportation 1035 Parkway Avenue CN 600 Trenton, N.J. 08625

. *Commissioner Frances J. Dunston, M.D.

M.P.H.

NJ Department of Health John Fitch Plaza CN 360 Trenton, N.J. 08625 Nancy Wittenberg Director of Energy NJ Department of Environmental Protection & Energy 401 E. State Street, 2nd Floor CN 027 Trenton, N.J. 08625 Mr. Darral Nash Off ice of Nuclear Reactor Regulation U.S. Nuclear Regulatory Commission Mail Stop 12 E4 Washington, D.C. 20555 Jane F. Kelly, Esq.

Executive Director NJ Utilities Association 50 West State Street - Suite 1106 Trenton, N.j. 08608 William R. Holzapfel, Esq.

LeBoeuf, Lamb, Leiby & Mac Rae, Esqs.

One Gateway Center Newark, N.J. 07102-5311

PROPOSALS

.erested Persons see Inside Front CovJ~ ~*.*

PUBLIC UilUfIES

.

• PUBLIC UTILITIES (a)

ARD OF REGULATORY COMMISSIONERS.

tlce of Pre-Proposal n Network Architecture Requirements Aut rized By: Board of Regulatory Commissioners, Dr. Edw H. almon, Chairman, Jeremiah F. O'Connor, Commissio an armen J. Armenti, Commissioner.

Autho

N.J.S.A. 48:2-13.

BPU D ket Number: TX91061131.

Pre-Pro al Number: PPR 1991-11.

A public earing concerning this pre-proposal will be h Tu day, November 26, 1991 at 10:30 A.M.

Dep ment of Personnel Hear g Room, 1st Floor Three. tation Plaza Building 44 Sou Clinton Avenue Trenton New Jersey 08625 Submit written * *mments by Deeember 4, Michael P Gallagher, Director Division o lfelecommunications Board of R ullJtory Commissioners Two Gatewa Center

• Newark, New. ersey 07102

-~:

. Take no~ice th~t.the. ard of Regulatory C ' missioners (Board) is mterested m rece1vmg co* ments on the possi

• ity of establishing rules governing the intrastate i pact of the 0

• n Network Architecture (ONA) requirements for tel mmunications' rriers in the State of New Jersey.

ONA involves a proceeding' efore the F era! Communications Com-mission (FCC) involving the im ementati of policies intended to boost the efficiency of the telecom nicatio.

network by unbundling the compo~e.nts of th~ netwo.rk and rmit g service providers to purchase the mdJVJduil.l Basic.Service Elem ts SEs) or Basic Service Arrange-ments (BSAs) and to combine tli s elements with other features to produce and market new services. S., Report and Order, In re Amend-ment of Section 64. 702 of the Com,

ion's Rules and Regulations (Thiid Computer Inquiry), Docket No. 85-*

104 F.C.C. 2d 958 (1986) ("Com-puter III").. I~ the FCC's ruling,. e r ulation of enhanced services by state comm1ss10ns was preempt.. Ho ver, in California v. F.C.C., 905 F. 2d 1217 (9th Cir. 1990), th Ninth

. cuit Court of Appeals found that 47 U.s.. c. Sec~ion 152(b 1) did no' permit the FCC to preempt state regulation of mtrastate nhanced se 'ces. See, 905 F.2nd at 1240.

Enhanced services use the t phone networ to convey information from remote computers to a cu omer's terminal' quipment. These services combine basic telephone rvice with compu r processing applications to act on the format, c. tent, code, protoco or other aspects of the transmitted informatio or provide the sub r with additional, dif-ferent or restructured

• formation, or involve su

'ber interaction with stored information. L' at 1223, n.3. The cone t of ONA and the development of enh, ced services are related p of the developing telecommunication ield.

In light of the C rt's decision and the developme of an ONA policy at the ~<?C, the ard believes it is appropriate to n a proceeding and solicit com nt on the proper nature of the Boar role in regulat-ing enhanced

'ces and/or developing a State-spec c ONA policy.

Therefore, e Board seeks comment on the follow g:

1. What is e appropriate definition for an "enhan service" for both inters e and intrastate purposes?

2. What the appropriate means to separate or meas and inte te traffic of enhanced services?

3. Sho d the Board differentiate its regulatory treatment o enhanced service oviders (ESPs) based on the type of telecommunicati s carrier providi the service, for example, local exchange carrier (LEC)

• terex-chang carrier (IXC), or other entities? If so, how?

4.

ould the Board require enhanced services to be tariffe ?

5

.hould the Board adopt a* State-specific ONA policy? If s is it es tJal that such a policy be uniform with the FCC's policy 1 all a ects?

6. Should IXCs and LECs be required to provide unbundled B ursuant to a tariff? If so, what fonn shoul~* such a tariff take?

What other jurisdictional questions and issues need to be res~~d prior deYe!o;:ing a.".? ON.. A.. policy?

7"'~

8. W structural or non-structural safeguards are approp

• on the state level.

9. Describe hether the FCC's Customer Proprieta etwork In-formation (CP requirement is adequate on the e level.

10. Describe an ternatives and/or additions the FCC's CPNI requirement which w d be appropriate for Jersey.

l~. What is the app riate pricing m odology for enhanced services?

12. What is the appropriate used by enhanced service provi

13. Should the Board require I ESPs to locate their equipment the tion)?

14.. What measures sh a the Board e to prevent potential neg~t1~e consequ~nces o ny development of O subs1d1es and tariff pping?

15. How shoul ordering and billing for enh provided?

. 16. What i

e. appro~riate level of uniformity on a stat ide region-w1de and 1onw1de basis? This information should include t not be limited

, price, terms and conditions and nomenclature.'

17.

ease explain whether the FCC's requirement regardin he de yment of technoiogy is adequate at the state level. If not w aitional requirements are necessary?

18. Any relevant issues not previously discussed.

(b)

BOARD -OF REGULATORY COMMISSIONERS Nuclear Generating Plant Decommissioning

. Proposed New Rules: N.J.A.C.14:5A Authorized By: Board of Regulatory Commissioners, Dr. Edward H. Salmon, Chairman.

Authority: N.J.S.A. 48:2-13 and 48:2-21.

BRC Docket Number: EX91020247.

Proposal Number: PRN 1991~530.

Submit written comments by December 4, 1991 to:

Robert Chilton, Director Division of Electric Board of Regulatory Commissioners Two Gateway Center Newark, New Jersey 07102 The agency proposal follows:

Summary On April 1, 1991, the Board published, in the New Jersey Register (23 N.J.R. 942(a)) a rulemaking pre-proposal to solicit preliminary com-ments on a suggested format for a periodic review mechanism of nuclear plant decommissioning cost estimates. Comments were received from Public Service Electric & Gas Company, Atlantic City Electric Company, Jersey Central Power & Light Company, and the Department of the Public Advocate, Division of Rate Counsel. Based upon review of the comments received, as well as further deliberations by the Board concern-ing these and related issues, the Board has developed the following proposed new rules.

While it is the responsibility of the Board to implement a process that will provide secure and adequate funds for decommissioning activities, the Board notes that there is presently an uncertainty with respect to the magnitude of funds needed due, in large measure, to the lack of experience with regard to large (over 200 megawatt) plant decommission-ing. Therefore, to the greatest extent possible, accurat~ and timely cost estimates are required if the Board is to properly balance the need for providing sufficient funds for the safe arid timely decommissiooing of nuclear facilities against the need to fairly assess current ratepayers for their share of these costs. The present funding levels for decommission*

ing costs provided for in New Jersey base rates generally reflect generic Nuclear Regulatory Commission Guidelines and utility estimates.

Although review of decommissioning cost estimates has historicallv taken place within the context of electric utility base rate proceeding;,

the timing of base rate filings can vary substantially and can be driven by factors that have little to do with developments related to nuclear NEW JERSEY REGISTER. MONDAY, NOVEMBER 4, 1991 (CITE 23 N.J.R. ~239)

• • • ~

PUBLIC lITILITIES *

-plant'decommissioning. Accordingly, the Board believes that there is a need for a mechanism !o ensure periodic review Qf decommis.~ioning cost estimates. Moreover, it is the Board's intent to ensure that the electric utilities properly manage the decommissioning trust funds into which ratepayer monies are placed. Said management includes the selec-tion of fund trustees and investment managers, as well as the establish-ment of investment guidelines. It is intended that the utilities maximize the returns on set-aside decommissioning funds while protecting the integrity of those funds to ensure their availability to finance plant decommissioning.

The proposed rules would require electric utilities to concurrently file once every three years and, within 10 years of scheduled shut-down every 18 months, the latest estimates for decommissioning costs at their respec-tively owned nuclear generating plants.* The Board would then conduct an administrative review within the context of these filings to assess all decommissioning activity developments since the prior review and de-termine the need for more formal review prior to the filing of future base rate cases.

The purpose of the Board's review would be to verify and/or identify a need to revisit the. magnitude of decommissioning funds required. The proposed rules would allow the joint submission of generic industry information by the affected utilities. The proposed rules also provide for a written comment process. At the conclusion ofthis procedure, and subsequent to its review of the generic state of the decommissioning experience and technology, the Board would reach findings as to the need to formally review the continued efficacy of present decommission-ing funding levels at each of the subject nuclear facilities and explore methods for revising funding levels where appropriate. If it is determined that there is a need to formally review the funding levels at any or all of the nuclear facilities prior to a future base rate filing, the board would initiate a proceeding including a discovery process, rights of intervention, and public and/or evidentiary hearings.

The proposed rules also require electric utilities to file annually decom-missioning trust fund reports including information regarding fund asset value and portfolio mix, achieved returns on the trust funds, earnings indices used to benchmark trust fund performance and decommissioning investment manager and trustee fee structures and charges. The proposed rules also require electric utilities to notify the Board in writing of all changes in decommissioning trust fund agreements, investment managers and trustees prior to i!Jlplementing the change, as well as establishing guidelines for manager and. trustee procurement to ensure competitive solicitations. Upon receipt of the initial trust fund reports, the Board will review utilities' fund investment guidelines and consider the need to adopt definitive generic guidelines.

Social Impact The intent of the proposed new rules is to currently assess contem-porary electric ratepayers for only their fair share of those funds to cover costs that will be associated with subsequent nuclear plant deC:<Jmmission-ing. In doing so, the Board, through these rules, is attempting to institute a procedure that will provide for periodic review and. adjustment, where necessary, to ensure that adequate decommissioning funds are available at the cessation of operations of each nuclear generating plant. Through such procedure, the Board will be able to balance the interests of existing ratepayers and future ratepayers by timely adjustments to the amounts collected to fund decommissioning cost based upon the most recent costs estimates and technical information available. The implementation of the proposed rules will assist the Board in minimizing the possibility that either current or future ratepayers will be under or over assessed for their share of these costs.

Economic Impact Those New Jersey electric utilities that have an ownership interest in nuclear generating plants will incur expenses in complying with the filing requirements imposed by the proposed rules. The Board would note that expenses incurred under the proposed rules can be substantially reduced through the option provided to the affected utilities for joint filing and the sharing of information. Any reasonable level of expenses incurred in the compliance of the proposed rules will be considered to be a business expense and can be recovered in an appropriate rate proceeding.

Regulatory Flexibility Statement The proposed new rules do not impo5e any recordkeeping, reporting or other compliance requirements. on small businesses, as that term is defined under the Regulatory Flexibility Act, N.J.S.A. 52:14B-16 et seq.

The proposed new rules affect only major New Jersey electric utilities, namely Public Service Electric and Gas Company, Jersey Central Power PROPOSALS

& Light Company and Atlantic City Electric Company. l11erefore, a regulatory flexihiHty ini~~is is n0! required.

Full text of the proposal follows:

CHAPTER 5A NUCLEAR PLANT DECOMMISSIONING COST AND TRUST FUND REVIEW SUBCHAPTER 1.

PURPOSE, SCOPE AND DEFINmONS 14:5A-1.1 Purpose and scope The rules contained in this chapter are designed to provide a mechanism of periodic review of the estimated costs of decom-missioning nuclear generating stations owned by New Jersey electric utilities for the purpose of assuring that adequate funds are available at the cess~tion of commercial operation of each of the facilities to assure completion of decommissioning activities. The rules also set forth decommissioning trust fund reporting requirements for electric utilities and procurement guidelines for the selection of investment managers and trustees, in order to provide the Board timely information related to its oversight of the utilities' manage-ment of the funds.

14:5A-l.2 Definitions The following words and terms, when used in this chapter, shall have the following meanings unless the context clearly indicates otherwise.

"Board" means the New Jersey Board of Regulatory Com-missioners or its successor.

"Decommissioning" means to remove a facility safely from service and reduce residual radioactivity to a level that permits release of the property for unrestricted use and termination of NRC operating license.

"DECON" means the method of decommissioning in which the equipment, structures, and portions of a facility and site containing radioactive contaminants are removed or decontaminated to a level that permits the property to be released for unrestricted use shortly after cessa-tion of operations.

"DEPE" means the New Jersey Department of Environmental Protection and Energy or its successor.

"DOH" means the New Jersey Department of Health or its successor.

"DOTNJ" means the New Jersey Department of Transportation or its successor.

"DOTUS" means the United States Department of Transporta-tion or its successor.

"Electric public utility" means all electric public utilities as defined by N.J.S.A. 48:2-13, but does not mean municipally owned electric public utilities.

"ENTOMB" means the method by which radioactive contami-nants are encased in a structurally long-lived material, such as concrete. The entombed structure is appropriately maintained, and continued surveillance is carried out until the radioactivity decays to a level permitting unrestricted release of the property.

"NRC" means the United States Nuclear Regulatory Commission or its successor.

"Public Advocate" means the New Jersey Department of the Public Advocate or its successor.

"SAFSTOR" means the method by which the nuclear facility is placed and maintained in a condition that allows the nuclear facility to be safely stored and subsequently decontaminated (deferred de-contamination) to levels that permit release for unrestricted use.

SUBCHAPTER 2.

DECOMMISSIONING COST 'CJPDA TE 14:5A-2.l Filing (a) Every New Jersey electric public utility having an o-...nership interest in one or more nuclear generating stations shall file by January 1, 1993, and every three years thereafter, unless otherwise directed by the Board, a "Decommissioning Cost Update ( L'pJate) with the Board for its consideration.

(CITE 23 N,J.R. 3240)

NEW JERSEY REGISTER, 'MONDAY, NOVEMBER 4, 1991

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.;,.,.I PROPOSALS

.terested Persons see Inside Front Cover

• PUBLIC UTILITIES

~ {b) 'Not.Vithstanding the provisions of (a) above, at such time as the' scheduled cessation of commercial ooeration of a nuclear generating station is within 10 years, a Dec0mmissioning Cost Up-date shall be filed for that station(s) at 18 month intervals.

14:5A-2.2 Update elements (a) The Update filing shall consist of the following elements, each of which shall be accompanied by technical support sufficient to provide the Board with a basis to evaluate the filing:

1. For the initial filing on Janaury 1, 1993, a generic assessment of the current status and developing trends on all activities that affect the costs of nuclear facility decommissioning. For each subsequent filing made pursuant to this chapter, an update of the current status and trends which have developed concerning all activities that affect the cost of nuclear facility decommissioning since the previous filing or more recent base rate case review. The activities required to be assessed under this paragraph shall include, at a minimum, the following:

i. Actual facility decommissioning costs both foreign and domestic; ii. Development and use of state of the art equipment and tech-niques such as robotics, heavy duty cutting methods, computer monitoring, remote observation systems and chemical cleaning methods which will increase efficiency and/or reduce radiation ex-posures, waste processing methods which reduce the volume of decommissioning wastes, and other innovations which have been developed since the last estimate; iii. Development of both high level and low level radioactive waste disposal sites* and their cost or pricing structures; iv. Transportation methods and hardware;

v. Applicable regulatory changes undertaken or specific clean up standards adopted by the NRC, DEP, DOH, DOTNJ, DOTUS or other appropriate governmental bodies; and vi. Insurance cost estimates.

2. For each nuclear generating facility owned in whole or in part by an electric public utility, the utility shall provide the latest cost estimate for decommissioning, along with all supporting documenta-tion. In support of the information filed under this paragraph each utility shall indicate the following for each facility:

i. The current projected date for cessation of commercial opera-tion and the current projected date for commencement of decom-missioning activities; ii. The status of any efforts by the utility to extend the date for cessation of commercial operation, and changes in plant status in-cluding extended plant shutdowns, expected levels of contamination, life extension programs and plant operability after license termina-tion; iii. The planned decommissioning option to be employed upon cessation of commercial operation, from the following list of options:

(1) DECON; (2) ENTOMB; (3) SAFSTOR; or (4) Other options as deemed appropriate by the NRC, electric public utility and/or other applicable entities; iv. The source of and supporting data for the decommissioning cost estimate, either resulting from a site-specific study of the particular facility or via generic NRC guidelines or some.other means:

(1) In the event that the decommissioning cost estimate provided pursuant to this chapter is based upon a site-specific study, the electric piµ,lic utility must provide that study, as well as any such studies previously performed for that facility.

(2) In the event that the decommissioning cost estimate provided pursuant to this chapter is based upon generic NRC guidelines, the electric public utility must provide all information which led the utility to translate these guidelines into the particular cost estimate along with an explanation and supporting documents of all adjust-ments made to the NRC generic guidelines for each facility;

v. The decommissioning cost estimate and assumed commercial operation cessation date which formed the basis for the existing level of decommissioning funding in the public electric utility's base rates; vi. A description of the specific manner in which the information filed pursuant to (a)l above affects the decommissioning cost

~stim?.t~ proYided pursu:!~t to thi~ i:h~pt~:-;

vii. An explanation of the method used to calculate the annual contribution to the external funds including inflation rates used to estimate future value and yield rates estimated for the external fund; and viii. The remaining spent fuel storage capacity and need, if any, for expanded storage capacity.

14:5A-2.3 Joint submissions (a) For purposes of avoiding the filing of duplicative information, the electric public utilities subject to this chapter may jointly file information with respect to the following:

1. The generic industry activities required in N.J.A.C..

14:5A-2.2(a)l; or

2. In the event of co-ownership of a nuclear facility, the informa-tion concerning cost estimates pursuant to N.J.A.C. 14:5A-2.2(a)2, excluding N.J.A.C. 14:5A-2.2(a)2v and vi which is required to be filed by each public electric utility.

SUBCHAPTER 3.

DECOMMISSIONING COST UPDATE PROCEDURES l 4:5A-3. l Public notification (a) Concurrent with the filing with the Board as required in this chapter, each utility shall provide public notice of said filing in newspapers of general circulation in its service territory.

(b) A copy of the filing shall also be provided to the Public Advocate, NRC and DEPE.

(c) Each utility shall make available for distribution to members of the public upon request an Executive Summary of the filing made pursuant to this chapter. Said Executive Summary shall:

1. Summarize the information ~upplied pursuant to each section of NJ.AC. 14:5A-l and 2;

2. Indicate procedures for comment as set forth in NJ.AC.

14:5A-3.2; and

3. Not exceed 10 pages in length.

14:5A-3.2 Comment period and Board review (a) For a period ending 60 days from filing of the Update or as otherwise extended by action of the Board, interested parties may submit comments to the Board.

(b) Upon receipt and review of comments as well as the Update and other related additional information as requested, the Board shall make a determination as to the need to initiate a proceeding to formally review the present funding level for any of the trusts.

Such a determination shall be set forth in a Board order and shall be based upon the following considerations:

1. A sufficient showing to provide a reasonable question as to the consistency of present funding levels with the most up-to-date estimates of decommissioning costs; and

2. The absence of an alternative proceeding or expected proceed-ing. such as a base rate case, in which a full review of the cost estimates is being or will be undertaken.

(c) In the event that the Board determines a need for a formal proceeding, said proceeding shall follow the procedures set forth 1n N.J.A.C. 14:5A-3.3 through NJ.AC. 14:5A-3.6.

l. Within 10 days of the Board's determination of the need fur a formal proceeding, the utility shall file with the Board a propo,eJ form of public notice.

14:5A-3.3 Party status and intervention (a) The Public Advocate and the Department of Environment.ii Protection and Energy shall be granted party status.

(b) Any person may make a Motion for Intervention to the Board with respect to the Update proceeding. Such Motion shall be de..:1JeJ pursuant to rules set forth in N.J.A.C. 1:1-16.

l 4:5A-3.4 Discovery (a) Any party or intervenor as established in N.J.A.C. 14:5..\\-: ;

may propound discovery upon any public electric utility regarJ1r~

its respective filings.

(b) The schedule for the filing of supplemental informatt<ln..;

testimony or propounding discovery and for responses thereto,~' i NEW JERSEY REGISTER, MONDAY, NOVEMBER 4, 1991 (CITE 23 NJ.R. J!411

PUBLIC UTILITIES

.... _ *iw ~.hablished by the Board su~sequent to its determination as to the need for a formal proceeding.

14:5A-3.5 Public and evide~ti~ _hearings (a) Within 90 days of the 1muauon of ~ forma_l proceeding, the Bo d shall schedule and convene a puph_c. hea(mg, upon proper t~e at which members of the public and interested parties shall

note, b *

"h be provided the opportumty to su m1t comments wit respect to the filing.

(b) The Board shall convene ev1dent1ary heanngs and add1t1onal public hearings as necessary concerning the filing, and entertain written position papers from the parties.

(c) All notices of public or evidentiary hearings shall be published by the utility in conformance with the requirements set out in N.J.S.A. 48:2-32.2 and 48:2-32.4 and N.J.A.C. 14:1-5.12(b) through (e).

14:5A-3.6 Findings (a) Subsequent to the conclusion of hearings, the Board shall issue a Nuclear Facility Decommissioning Report (Report) which will address the following issues:

1. A summary of the state of industry experience and technology concerning nuclear facility decommissioning;

2. Proposed findings as to the continued efficacy of present de-commissioning funding levels for each of the nuclear fadlities wholly or partly owned by New Jersey electric utilities and subject to the formal review; and

3. Proposed methods for revising funding levels where deemed appropriate.

(b) In the event evidentiary hearings are held and the Board determines that decommissioning costs and related funding should be changed, a Board order shall be issued.

SUBCHAPTER 4.

DECOMMISSIONING TRUST FUND REVIEW 14:5A-4.1 Investment manager and trustee procurement procedures (a) In the procurement, by an electric utility, of any new decom-missioning fund trustees and investment managers, bidding procedures which include public notification must be employed.

1. The selection process must take into account, but is not necessarily limited to, the following considerations:

i.. Existing knowledge or demonstration of ability to obtain knowledge of Internal Revenue Service Rules relating to Nuelear Decommissioning Costs (26 CFR parts 1 and 602 SEC 468A);

ii. Performance record in fJXed income area; iii. Cash management capabilities; iv. Investment manager and trustee fee structures;

v. Organizational commitment to keep abreast and maintain a presence in issues related to nuclear decommissioning trust fund management; vi. Demonstration of sufficient resources.to satisfactorily service the fund; vii. Demonstration of a firm's ability to ensure that the assets contained in the Fund are clearly pledged to the utility and will not be considered assets of the managing or trustee institution; and viii. The extent to which a particular firm expands the market of existing managers or trustees or otherwise provides a unique quality or creates a new and useful niche.

2. The selection process employed pursuant to (a)l above shall be designed such that any one criteria is not the sole basis for rejection of a firm if the firm offers other unique and offsetting benefits.

3. Each electric utility must demonstrate that requests for proposals are made widely av_ailable to interested and qualified investment managers and trustees, both in and out of state.

(b) Electric utilities shall notify the Board at least four weeks prior to the solicitation of new investment managers or trustees. Said notification shall include:

i. A copy of the Requests for Proposals (RFPs) to be sent to potential investment managers and trustees; PROPOSALS ii. A list of firms that will be sent RFPs and the manner in which the utility chose the distribution; and iii. Toe specific manner of public not1t1cat1on.

( c) Further notification to the Board is required as follows:

1. Identification of the firms chosen to be interviewed and the reason for selection; and

2. Final selection of the firms arid the reason for selection includ-ing a.discussion of the criteria as established pursuant to (a) above.

( d) Copies of all executed trust or fund management agreements, or material amendments thereto, shall be filed with the Board.

14:5A-4.2 Decommissioning trust annual reports (a) Within 60 days of the effective date of this chapter, and annually each February 15 thereafter each electric utility shall file with the Board:

1. An annual decommissioning trust fund report which shall provide for each nuclear generating station in which the electric utility has an ownership interest:

i. The total end of year market value of the Internal Revenue Service qualified and non-qualified trust funds; ii. The monthly pretax and after tax return earned on each fund for the year as well as the cumulative returns from the inception of the decommissioning trust fund through the end of the calendar year for which the decommissioning annual report is being issued; iii. A comparison of the information provided in (a)lii above to an appropriate performance benchmark, as well as description and support for the benchmark; iv. The utility's strategy for maximizing return while monitoring and managing portfolio risk and specific investment guidelines im-posed on fund managers;

v. The portfolio's asset mix, indicating types of securities, dura-tions and quality ratings where appropriate; vi. A financial reconciliation from the beginning of the current 12 month investment period through the end of the current 12 month period reflecting each plant's qualified and non-qualified funding history listed separately for the year to* date and since inception; vii. An accounting of all fees, commissions and other adminis-trative costs incurred for the year; viii. A statement of the assumed return built into the calculation of the funding annuity built into present rates; ix. For the prior calendar year and on a cumulative basis since the fund's inception, a computation of the shortfall or excess between the actual market value of the fund and the value of the fund had the rate of return embedded in annual annuities built into rates been realized; and

x. For jointly-owned stations in which there is shared ownership with one or more out-of-State utilities, the present amount of funds set-aside by each out-of-State utility for decommissioning each sta-tion as well as the annual level of contribution toward a decom-missioning fund; and

2. A copy of the utility's JilOSt recent annual certification reports to the NRC for each wholly or partially-owned station.

(b) Upon receipt of the initial Annual Reports filed punuant to (a) above, the Board shall review the trust fund '""e'tment guidelines of each electric utility and consider the need for c<>l.lblish-ment of definitive generic investment guidelines.

(c) The apportionment of responsibility between elcctrn:..111lity shareholders and ratepayers for shortfalls or exccSSC1 1n

• ~ ~ u:ved returns on trust funds as reported pursuant to

" J.\\.C.

14:5A-4.l(a)lix shall be considered by the Board m 11' ri:"cw of proposed adjustments to the nuclear decommissioning *11nu111es embedded in customer rates.

14:5A-4.3 Distribution of trust fund report A copy of the reports required by N.J.A.C. l-l:5A--l ~. *

• l

.~J ~

shall also. be provided, by each utility, to the Pubhc A4'....... 1c Jnd DEPE.

(CITE 23 N.J.R. 3242)

NEW JERSEY REGISTER, MONDAY, NOVEMBER 4, 1991